______________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest Event
Reported) October 27, 1997
LEHMAN ABS CORPORATION, (as depositor under the Trust
Agreement, dated as of September 1, 1997, providing for
the issuance of the Mortgage Index Amortizing Trust 1997-
1, $250,000,000 6.682% Fixed Rate Asset Backed Notes,
Class A1 and $7,735,000 Floating Rate Asset Backed
Certificates, Class A2).
LEHMAN ABS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 333-14293 13-3447441
- ---------------------------- ------------- -------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
Three World Financial Center
200 Vesey Street
New York, New York 10285
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (212) 526-7000
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_____________________________________________________________________
Item 5. Other Events.
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On September 25, 1997, Mortgage Index Amortizing Trust 1997-1 (the
"Trust"), a Delaware business trust for which Lehman ABS Corporation (the
"Company") acted as a depositor, issued $250,000,000 6.682% Fixed Rate Asset
Backed Notes, Class A1 and $7,735,000 Floating Rate Asset Backed
Certificates, Class A2.
On October 10, 1997 the Company filed a Trust Agreement and an
Indenture on Form 8-K with the Securities and Exchange Commission. In
connection therewith, the current filing contains the Indenture, as amended.
Amendment No. 1 to the Indenture is annexed hereto as Exhibit 4.3.
Item 7. Financial Statements, Pro Forma Financial
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Information and Exhibits.
------------------------
(a) Not applicable.
(b) Not applicable.
(c) Exhibit:
4.3 Amendment No. 1 to the Indenture filed on October 10, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
LEHMAN ABS CORPORATION
By: /s/ Martin Harding
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Martin Harding
Senior Vice President
Dated: October 24, 1997
Exhibit Index
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Exhibit
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4.3 Amendment No. 1 to the Indenture filed on October 10, 1997.
MORTGAGE INDEX AMORTIZING TRUST 1997-1,
ISSUER
AND
THE BANK OF NEW YORK,
INDENTURE TRUSTEE
AND LEHMAN BROTHERS SPECIAL FINANCING INC.,
SWAP COUNTERPARTY
_________________________________________
INDENTURE
Dated as of September 1, 1997
__________________________________________
$250,000,000 6.682% FIXED RATE
ASSET BACKED NOTES, CLASS A1
TABLE OF CONTENTS
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Section Page
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ARTICLE I
Definitions
1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 2
1.02. Other Definitional Provisions. . . . . . . . . . . . . . 17
1.03. Rules of Construction . . . . . . . . . . . . . . . . . . 17
ARTICLE II
Original Issuance of Notes
2.01. Form . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.02. Execution, Authentication and Delivery . . . . . . . . . . 18
2.03. Opinions of Counsel . . . . . . . . . . . . . . . . . . . 19
ARTICLE III
Administration of the CABS;
Application of Trust Funds
3.01. Collection of Payments on CABS; Collection
Account . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.02. Maintenance of Office or Agency . . . . . . . . . . . . . 20
3.03. Money for Payments To Be Held in Trust . . . . . . . . . . 21
3.04. Existence . . . . . . . . . . . . . . . . . . . . . . . . 22
3.05. Application of Trust Funds . . . . . . . . . . . . . . . . 22
3.06. Protection of Trust Estate . . . . . . . . . . . . . . . . 27
3.07. Performance of Obligations . . . . . . . . . . . . . . . . 28
3.08. Negative Covenants . . . . . . . . . . . . . . . . . . . . 28
3.09. Transfer of Assets . . . . . . . . . . . . . . . . . . . . 29
3.10. Transferee . . . . . . . . . . . . . . . . . . . . . . . . 30
3.11. No Other Business . . . . . . . . . . . . . . . . . . . . 30
3.12. No Borrowing . . . . . . . . . . . . . . . . . . . . . . . 30
3.13. Guarantees, Loans, Advances and Other
Liabilities . . . . . . . . . . . . . . . . . . . . . . . 30
3.14. Capital Expenditures . . . . . . . . . . . . . . . . . . . 31
3.15. Removal of Administrator . . . . . . . . . . . . . . . . . 31
3.16. Restricted Payments . . . . . . . . . . . . . . . . . . . 31
3.17. Notice of Events of Default . . . . . . . . . . . . . . . 31
3.18. Further Instruments and Acts . . . . . . . . . . . . . . . 31
3.19. Statements to Noteholders . . . . . . . . . . . . . . . . 31
3.20. Notices to Indenture Trustee . . . . . . . . . . . . . . . 32
3.21. Custodianship, Transfer of CABS and Eligible
Investments . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
4.01. The Notes . . . . . . . . . . . . . . . . . . . . . . . . 35
4.02. Registration of and Limitations on Transfer and
Exchange of Notes . . . . . . . . . . . . . . . . . . 36
4.03. Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . 37
4.04. Persons Deemed Owners . . . . . . . . . . . . . . . . . . 38
4.05. Cancellation . . . . . . . . . . . . . . . . . . . . . . . 38
4.06. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . 39
4.07. Notices to Depository . . . . . . . . . . . . . . . . . . 40
4.08. Definitive Notes . . . . . . . . . . . . . . . . . . . . . 40
4.09. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . 40
4.10. Satisfaction and Discharge of Indenture . . . . . . . . . 40
4.11. Application of Trust Money . . . . . . . . . . . . . . . . 42
4.12. Repayment of Moneys Held by Administrator . . . . . . . . 42
4.13. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE V
Remedies
5.01. Events of Default . . . . . . . . . . . . . . . . . . . . 43
5.02. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee . . . . . . . . . . . . . 43
5.03. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.04. Enforcement of Swap Agreement . . . . . . . . . . . . . . 46
5.05. Modification and Amendment of Swap Agreement . . . . . . . 46
5.06. Limitation of Suits and Liability . . . . . . . . . . . . 46
5.07. Unconditional Rights of Noteholders To
Receive Principal and Interest . . . . . . . . . . . . . . 47
5.08. Restoration of Rights and Remedies . . . . . . . . . . . . 48
5.09. Rights and Remedies Cumulative . . . . . . . . . . . . . . 48
5.10. Delay or Omission Not a Waiver . . . . . . . . . . . . . . 48
5.11. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 48
5.12. Undertaking for Costs . . . . . . . . . . . . . . . . . . 49
5.13. Waiver of Stay or Extension Laws . . . . . . . . . . . . . 49
5.14. Action on Notes . . . . . . . . . . . . . . . . . . . . . 49
5.15. Sale of CABS . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE VI
The Indenture Trustee
6.01. Duties of Indenture Trustee . . . . . . . . . . . . . . . 50
6.02. Rights of Indenture Trustee . . . . . . . . . . . . . . . 51
6.03. Individual Rights of Indenture Trustee . . . . . . . . . . 51
6.04. Indenture Trustee's Disclaimer . . . . . . . . . . . . . . 52
6.05. Notice of Event of Default . . . . . . . . . . . . . . . . 52
6.06. Reports by Indenture Trustee to Holders . . . . . . . . . 52
6.07. Compensation and Indemnity . . . . . . . . . . . . . . . . 52
6.08. Replacement of Indenture Trustee . . . . . . . . . . . . . 53
6.09. Successor Indenture Trustee by Merger . . . . . . . . . . 54
6.10. Appointment of Co-Indenture Trustee or
Separate Indenture Trustee . . . . . . . . . . . . . . . . 55
6.11. Eligibility; Disqualification . . . . . . . . . . . . . . 56
6.12. Representation and Warranty . . . . . . . . . . . . . . . 56
6.13. Directions to Indenture Trustee . . . . . . . . . . . . . 56
6.14. Representations, Warranties and Covenants of
the Indenture Trustee and of . . . . . . . . . . . . . . 57
ARTICLE VII
Noteholders' Lists and Reports
7.01. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders . . . . . . . . . . . . . . . . . 58
7.02. Preservation of Information; Communications
to Noteholders . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VIII
Accounts, Disbursements and Releases
8.01. Collection of Money . . . . . . . . . . . . . . . . . . . 58
8.02. Trust Accounts . . . . . . . . . . . . . . . . . . . . . . 59
8.03. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 59
8.04. Termination Upon Distribution to Noteholders . . . . . . . 59
8.05. Release of Trust Estate . . . . . . . . . . . . . . . . . 60
8.06. Surrender of Notes Upon Final Payment . . . . . . . . . . 60
ARTICLE IX
Supplemental Indentures
9.01. Supplemental Indentures Without Consent of
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 60
9.02. Supplemental Indentures With Consent of
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 62
9.03. Execution of Supplemental Indentures . . . . . . . . . . . 63
9.04. Effect of Supplemental Indenture . . . . . . . . . . . . . 64
9.05. Reference in Notes to Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE X
Miscellaneous
10.01. Form of Documents Delivered to Indenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.02. Acts of Noteholders . . . . . . . . . . . . . . . . . . . 65
10.03. Notices, etc., to Indenture Trustee, Issuer,
Swap Counterparty and Rating Agencies . . . . . . . . . . 66
10.04. Notices to Noteholders; Waiver . . . . . . . . . . . . . . 67
10.05. Alternate Payment and Notice Provisions . . . . . . . . . 68
10.06. Effect of Headings . . . . . . . . . . . . . . . . . . . . 68
10.07. Successors and Assigns . . . . . . . . . . . . . . . . . . 68
10.08. Separability . . . . . . . . . . . . . . . . . . . . . . . 68
10.09. Benefits of Indenture . . . . . . . . . . . . . . . . . . 68
10.10. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . 68
10.11. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 68
10.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 68
10.13. Recording of Indenture . . . . . . . . . . . . . . . . . . 69
10.14. Trust Obligation . . . . . . . . . . . . . . . . . . . . . 69
10.15. No Petition . . . . . . . . . . . . . . . . . . . . . . . 69
Signatures and Seals . . . . . . . . . . . . . . . . . . . . . . . . . __
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . __
EXHIBITS
Exhibit A - Form of Notes
Exhibit B - Prepayment Calculation Table
This is an Indenture, dated as of September 1, 1997, among Mortgage
Index Amortizing Trust 1997-1, a Delaware business trust, as issuer (the
"Issuer"), The Bank of New York, a New York banking corporation, as indenture
------
trustee (the "Indenture Trustee") and Lehman Brothers Special Financing Inc.,
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as Swap Counterparty.
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Issuer's
Fixed Rate Asset Backed Notes, Class A1 (the "Notes").
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GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as Indenture Trustee for the benefit of the Holders of the Notes, and
the Swap Counterparty, as their interests appear herein, and in the Trust
Agreement, which interest in the case of the Certificateholders shall be
subject to the prior interests of both the Swap Counterparty and the
Noteholders to the extent provided herein and in the Trust Agreement, all of
the Issuer's right, title and interest in and to (a) the CABS and all monies
and proceeds due thereon after the Closing Date; (b) all funds on deposit
from time to time in the Collection Account and in all proceeds thereof; (c)
any Eligible Investments purchased with funds on deposit in the Collection
Account; (d) the Swap Agreement and any amounts received pursuant thereto or
any proceeds thereof; (e) the Swap Policy and any amounts received pursuant
thereto or any proceeds thereof; and (f) all present and future claims,
demands, causes and choices in action in respect of any or all of the
foregoing and all payments on or under, and all proceeds of every kind and
nature whatsoever in respect of, any or all of the foregoing and all payments
on or under, and all proceeds of every kind and nature whatsoever in the
conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, checks, deposit accounts, rights to payment of any and every
kind, and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "Trust Estate" or the
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"Collateral").
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The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Swap Agreement, the Swap Policy, the Notes and the Certificates, and to
secure compliance with the provisions of this Indenture, all as provided in
this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, the Certificateholders, the Swap Counterparty and the Swap
Counterparty, as their interests appear herein and in the Trust Agreement,
acknowledges such Grant, accepts the trust under this
Indenture in accordance with the provisions hereof and agrees to perform its
duties as Indenture Trustee as required herein to the best of its ability to
the end that the interests of the Noteholders and Certificateholders, the
Swap Counterparty and the Swap Guarantor may be adequately and effectively
protected.
ARTICLE I
Definitions
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Section 1.01. Definitions. Whenever used in this Indenture, the
-----------
capitalized words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Administration Agreement": The Administration Agreement dated as of
------------------------
eptember 1, 1997 among the Trust, The Bank of New York, as Indenture Trustee
and The Bank of New York, as Administrator, as amended, supplemented or
otherwise modified from time to time pursuant to the terms thereof.
"Administrator": Initially, The Bank of New York, and, thereafter, any
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successor appointed under the Administration Agreement.
"Affected Party": The meaning specified in the Swap Agreement.
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"Affiliate": With respect to any specified Person, any other Person
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controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer": With respect to the Issuer, any officer of the
------------------
Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee and the Swap
Counterparty on the Closing Date (as such list may be modified or
supplemented from time to time thereafter) and, so long as the Administration
Agreement is in effect, any Responsible Officer of the Administrator who is
authorized to act for the Administrator in matters relating to the Issuer and
to be acted upon by the Administrator pursuant to the Administration Agree-
ment and who is identified on the list of Authorized Officers delivered by
the Administrator to the Indenture Trustee and the Swap Counterparty on the
Closing Date (as such list may be modified or supplemented from time to
time thereafter).
"Basic Documents": The Certificate of Trust, the Trust Agreement, the
---------------
Indenture, the Administration Agreement, the Note Depository Agreement, the
Swap Agreement, the Swap Policy, the Market Agent Agreement and other
documents and certificates delivered in connection therewith.
"Beneficial Owner": With respect to any Note, the Person who is the
----------------
beneficial owner of such Note, as reflected on the books of the Depository or
on the books of a Person maintaining an account with such Depository
(directly as a Depository Participant or indirectly through a Depository
Participant, in accordance with the rules of such Depository).
"Book-Entry Notes": A beneficial interest in the Notes, ownership and
----------------
transfers of which shall be made through book entries by the Depository as
described in Section 4.06.
"Book-Entry Regulations": With respect to any Government Security, the
----------------------
applicable regulations of the appropriate governmental authority, governing
the creation of interests in such Government Security, including for U.S.
Treasury bills, bonds and notes, 31 C.F.R. Part 357, and, with respect to
other Government Securities, substantially similar regulations thereto.
Terms defined in the Book-Entry Regulations and used herein have the meanings
provided therein. Terms used in "Revised Article 8" of the Uniform
Commercial Code as defined and incorporated by reference therein have the
meaning provided in such Revised Article 8; provided that such terms used
--------
herein although not capitalized therein are capitalized herein for conformity
with the analogous defined terms of the Book-Entry Regulations.
"Business Day": Any day other than a Saturday or a Sunday, or another
------------
day on which banking institutions in the City of New York, New York or the
city in which the Corporate Trust Office of the Owner Trustee or the
Indenture Trustee is located are authorized or obligated by law, regulations
or executive order to be closed.
"Business Trust Statute": Chapter 38 of Title 12 of the Delaware Code,
----------------------
12 Del. Code Section 3801 et seq., as the same may be amended from time
-- ----
to time.
"CABS": The $100,145,000 First USA Credit Card Master Trust, Class A
----
Floating Rate Asset Backed Certificates, Series 1997-5, the $50,000,000 First
USA Credit Card Master Trust, Class A Floating Rate Asset Backed
Certificates, Series 1997-2, the $13,000,000 First USA Credit Card Master
Trust, Class A Floating Rate Asset Backed Certificates, Series 1997-1, the
$94,590,000 First USA Credit Card Master Trust, Class A Floating Rate Asset
Backed Certificates, Series 1996-4, and certain other floating rate asset
backed credit card securities that may be added to the Trust Estate in the
event of a CABS Early Amortization Event as provided in Section 3.01(c).
"CABS Amortization Schedule": For any Payment Date, the following order
--------------------------
of priority: the CABS and Eligible Investments with the earliest maturity
shall be sold first and the remaining CABS and Eligible Investments will be
sold in order of their maturity; provided that if a CABS Early Amortization
--------
Event occurs and is continuing with respect to any CABS, the CABS
Amortization Schedule shall not be applicable with respect to such CABS, and
such CABS may be sold at any time as provided in this Indenture and the Basic
Documents; provided further that if an Event of Default occurs and principal
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and interest in respect of the Notes is accelerated as provided in this
Indenture or if there is a Mandatory Prepayment, no CABS Amortization
Schedule shall be applicable and all CABS and Eligible Investments may be
sold at any time as provided in this Indenture and the Basic Documents.
"CABS Distribution Date Statement": The statement provided by the
--------------------------------
paying agent for the CABS on each distribution date for the CABS pursuant to
the related Underlying Agreement reporting certain information with respect
to such CABS, which report may be obtained by the Indenture Trustee, as
holder of the CABS, upon request.
"CABS Early Amortization Event": Shall occur if, at any time with
-----------------------------
respect to any CABS, a Rapid Amortization Period (as defined in the
applicable Underlying Agreement) (or, if such term is not defined in the
applicable Underlying Agreement, any other similar period of rapid or early
payment of principal) commences with respect to such CABS.
"Calculation Agent": Initially, Lehman Brothers Special Financing Inc.,
-----------------
and thereafter, any successor appointed under the Calculation Agent
Agreement.
"Calculation Agent Agreement": The Calculation Agent Agreement dated
---------------------------
as of September 1, 1997 among the Trust, the Indenture Trustee, the Swap
Guarantor and the Calculation Agent, as amended, supplemented or otherwise
modified from time to time pursuant to the terms thereof.
"Cash": Such coin or currency of the United States of America as at the
----
time shall be legal tender for payment of all public and private debts.
"Certificate": Any one of the Floating Rate Asset Backed Certificates,
-----------
Class A2, each evidencing fractional undivided beneficial interests in
amounts to be distributed pursuant to the Trust Agreement and executed by the
Owner Trustee in substantially the form set forth in Exhibit A to the Trust
Agreement.
"Certificate Amortization Amount": With respect to each Payment Date,
-------------------------------
an amount equal to the Face Amount of the Certificates immediately prior to
such Payment Date multiplied by 71.60% of the Monthly Amortization Rate that
corresponds to the PSA Index Rate for such month as shown in the Prepayment
Calculation Table attached to this Indenture at Exhibit B and rounded up to
the nearest $1000.
"Certificate of Trust": The Certificate of Trust filed for the Trust
--------------------
pursuant to Section 3810 (a) of the Business Trust Statute.
"Certificate Register": The meaning provided in Section 3.09 of the
--------------------
Trust Agreement.
"Certificated Security": The meaning specified in Section 8-102(1)(a)
---------------------
of the UCC.
"Certificateholder" or "Holder": The Person in whose name a Certificate
-----------------------------
is registered in the Certificate Register.
"Clearing Corporation": The meaning specified in Section 8-102(3) of
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the UCC.
"Clearing Corporation Custodian": The meaning specified in Section 8
------------------------------
102(4) of the UCC to the extent such custodian acts for or on behalf of a
Clearing Corporation pursuant to Section 8-320 of the UCC.
"Clearing Corporation Security": Any CABS or Eligible Investment that
-----------------------------
is either (a) an Uncertificated Security that is (i) issued by an issuer
organized under the laws of the State of New York and (ii) registered in the
name of a Clearing Corporation or its Clearing Corporation Custodian or a
nominee of either subject to the exclusive control of the Clearing
Corporation or (b) a Certificated Security that is (i) held in the State of
New York in the custody of a Clearing Corporation or its Clearing Corporation
Custodian or a nominee of either subject to the exclusive control of the
Clearing Corporation, (ii) in bearer form or endorsed in blank by an
appropriate Person or registered in the name of the Clearing Corporation or
its Clearing Corporation Custodian or the nominee of either subject to the
exclusive control of such Clearing Corporation; and (c) in each case, shown
on the account of a participant of or member in such Clearing Corporation on
the books of the Clearing Corporation.
"Closing Date": September 25, 1997.
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"Code": The Internal Revenue Code of 1986, as amended, and the rules
----
and regulations promulgated thereunder.
"Collateral": The meaning specified in the Granting Clause of this
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Indenture.
"Collection Account": The trust account created and maintained with the
------------------
Indenture Trustee pursuant to Section 3.01 and referred to as the Collection
Account. Funds deposited in the Collection Account shall be held in trust
for the Noteholders and the Swap Counterparty, and on a subordinated basis,
for the Certificateholders, for the uses and purposes set forth in Article
III of this Indenture.
"Corporate Trust Office": Either (i) the principal corporate trust
----------------------
office of the Owner Trustee at which at any particular time its corporate
trust business shall be administered, which office at the date of the
execution of the Trust Agreement is located at 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration or
(ii) the principal corporate trust office of the Indenture Trustee and Note
Registrar at which at any particular time its corporate trust business shall
be administered, which office at the date of the execution of this instrument
is located at 101 Barclay Street, Floor 12E, New York, New York 10286,
Attention: Corporate Trust-Trustee Department Administration.
"Credit Loss": The meaning provided in Section 3.05(b)(v).
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"Custodial Account": A custodial account at the Custodian, established
-----------------
in the name of the Issuer and the Indenture Trustee.
"Custodian": The Bank of New York, a New York banking corporation.
---------
"Default": Any event or circumstance which, with the giving of notice,
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the lapse of time, or both, would (if not cured or otherwise remedied during
such time) constitute an Event of Default.
"Definitive Notes": The meaning provided in Section 4.06.
----------------
"Denomination": For each Note or Certificate, as applicable, the amount
------------
designated as such on the face thereof, the aggregate of the Denominations of
all Notes and Certificates on the Closing Date being equal to the aggregate
of the principal balance of the CABS.
"Depositor": Lehman ABS Corporation, a Delaware corporation, or its
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successor in interest.
"Depository": The Depository Trust Company or a successor appointed by
----------
the Indenture Trustee with the approval of the Issuer. Any successor to the
Depository shall be an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended,
and the regulations of the Securities and Exchange Commission thereunder.
"Depository Participant": A Person for whom the Depository maintains
----------------------
one or more securities accounts on its books and records.
"Eligible Investments": Any one of the following: (a) negotiable
--------------------
instruments or securities represented by instruments in registered form which
evidence (1) obligations fully guaranteed as to timely payment by the United
States of America; (2) certificates of deposits of, or bankers' acceptances
(having original maturities of no more than 180 days) issued by, any
depositary institution or trust company, subject to supervision or
examination by Federal or state banking or depositary institution
authorities; provided, however, that, at the time of the Trust's investment
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or contractual commitment to invest therein, (x) such depositary institution
or trust company shall have a credit rating with respect to commercial paper
in the highest available rating category of each Rating Agency applicable to
commercial paper and a credit rating with respect to long-term unsecured debt
obligations in the highest available rating category of each Rating Agency
applicable to long-term unsecured debt obligations, or (y) such deposits are
fully insured by the FDIC; (3) commercial paper (having original maturities
of not more than 180 days) having, at the time of the Trust's investment or
contractual commitment to invest therein, a credit rating in the highest
available rating category of each Rating Agency applicable to money market
funds; and (4) investments in money market funds having a rating in the
highest available rating category of each Rating Agency applicable to money
market funds, (b) demand deposits or time deposits in the name of the Trust
or the Administrator in any depository institution or trust company referred
to in (a)(2) above, and (c) floating rate securities rated AAA or A-1+ by
Standard & Poor's and Aaa or P1 by Moody's.
"Event of Default": Any one of the following events (whatever the
----------------
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a
period of five Business Days; or
(b) default in the payment of the principal of or any installment
of the principal of any Note when the same becomes due and payable; or
(c) default in the observance or performance of any covenant or
agreement of the Issuer made in the Indenture, or any representation or
warranty of the Issuer made in the Indenture or in any certificate or
other writing delivered pursuant hereto or in connection herewith
proving to have been incorrect in any material respect as of the
time when the same shall have been made, and such default shall
continue or not be cured, or the circumstance or condition
in respect of which such representation or warranty was incorrect shall
not have been eliminated or otherwise cured, for a period of 30 days
after there shall have been given, by registered or certified mail, to
the Issuer by the Indenture Trustee, the Swap Counterparty or the Swap
Guarantor or to the Issuer, the Swap Counterparty, the Swap Guarantor
and the Indenture Trustee by the Holders of at least 25% of the
Principal Amount of the Notes, a written notice specifying such default
or incorrect representation or warranty and requiring it to be remedied
and stating that such notice is a notice of default hereunder; or
(d) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or
for any substantial part of the Trust Estate, or ordering the winding-up
or liquidation of the Issuer's affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(e) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by the Issuer to the entry of
an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the assets
of the Trust Estate, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer
generally to pay its debts as such debts become due, or the taking of
any action by the Issuer in furtherance of any of the foregoing; or
(f) the occurrence and continuation of a Replacement Event which
does not result in the entry into a Replacement Swap in accordance with
the terms of the Swap Agreement; or
(g) the declaration of an Early Termination Date under and as
defined in the Swap Agreement as a result of a Termination Event with
respect to the Issuer under and as specified under Subsection 5(b)(i)
(Illegality) under the Swap Agreement.
"Exchange Act": The Securities Exchange Act of 1934, as amended, and
------------
the rules and regulations promulgated thereunder.
"Extraordinary Expenses": All costs, charges and expenses incurred by
----------------------
the Issuer in connection with the issue of the Notes or Certificates or
otherwise relating to the Notes or Certificates that do not constitute
Ordinary Expenses, including (i) any expenses incurred by the Issuer
resulting from legal actions against the Issuer, the Indenture Trustee, the
Administrator or the Owner Trustee (ii) any expenses resulting from legal
actions by or on behalf of the Issuer in connection with the enforcement of
this Indenture or any other the Basic Document.
"Face Amount": On any day, the aggregate unpaid face amount of all
-----------
Certificates outstanding on such day, which amount shall be reduced by any
Credit Loss as described in Section 3.05 herein; provided that it is
--------
understood and acknowledged that when used in this Indenture with respect to
the Certificates, "face amount" means "outstanding principal amount."
"FHLMC" The Federal Home Loan Mortgage Corporation.
-----
"FRBNY": The Federal Reserve Bank of New York.
-----
"Global Note": The meaning provided in Section 4.01.
-----------
"Government Security": A security (other than a security issued by the
-------------------
Government National Mortgage Association) issued or guaranteed by the United
States of America or an agency or instrumentality thereof representing a full
faith and credit obligation of the United States of America and, with respect
to each of the foregoing, that is maintained in book-entry form on the
records of FRBNY pursuant to the applicable Book-Entry Regulations.
"Grant": Means mortgage, pledge, bargain, sell, warrant, alienate,
-----
remise, release, convey, assign, transfer, create, and grant a lien upon and
a security interest in and right of set-off against, deposit, set over and
confirm pursuant to this Indenture. A Grant of the Collateral or of any
other agreement or instrument shall include all rights, powers and options
(but none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give
receipt for principal and interest payments in respect of the CABS or the
Eligible Investments and all other moneys payable thereunder, to give and
receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring proceedings in the
name of the granting party or otherwise, and generally to do and receive
anything that the granting party is or may be entitled to do or receive
thereunder or with respect thereto.
"Indenture": This Indenture dated as of September 1, 1997 among the
---------
Trust, The Bank of New York, as Indenture Trustee, and the Swap Counterparty,
as it may be amended, supplemented or otherwise modified from time to time
pursuant to the terms hereof.
"Indenture Trustee": The meaning provided in the preamble.
-----------------
"Independent": When used with respect to any specified Person, means
-----------
that the Person (i) is in fact independent of the Issuer and any Affiliate of
the Issuer, (ii) does not have any direct financial interest or any material
indirect financial interest in the Issuer or any Affiliate of any of the
foregoing Persons and (iii) is not connected with the Issuer or any Affiliate
of the Issuer as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
"Instrument": The meaning ascribed thereto in Section 9-104(i) of the
----------
UCC.
"Interest Accrual Period": The meaning specified in Section 3.05(a).
-----------------------
"Issuer": The meaning provided in the preamble.
------
"Issuer Order" and "Issuer Request": means a written order or request
------------ --------------
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Mandatory Prepayment": The meaning provided in Section 3.05(b).
--------------------
"Market Agent": Lehman Brothers Inc. or its successor in interest, or
------------
such other party as may be appointed pursuant to the Market Agent Agreement.
"Market Agent Agreement": The Market Agent Agreement dated as of
----------------------
September 1, 1997 among Lehman Brothers Inc., as market agent, the Trust, the
Indenture Trustee and the Swap Guarantor, as amended, supplemented or
otherwise modified from time to time pursuant to the terms thereof.
"Money": The meaning specified in Section 1-201(24) of the UCC.
-----
"Monthly Amortization Rate": With respect to any Payment Date, the
--------------------------
percentage corresponding to the applicable PSA Index Rate for such Payment
Date, as shown in the Prepayment Calculation Table attached hereto as
Exhibit B.
"Moody's": Moody's Investors Service, Inc. or any successor thereto.
-------
"Note": Any one of the 6.682% Fixed Rate Asset Backed Notes, Class A1,
----
each secured by the specified assets of the Trust pursuant to this Indenture
and executed by the Indenture Trustee in substantially the form set forth in
Exhibit A to this Indenture.
"Note Accrual Rate": A rate per annum equal to 6.682%, calculated on
-----------------
the basis of a 360-day year consisting of twelve 30-day months.
"Note Amortization Amount": With respect to each Payment Date, an
------------------------
amount equal to the Principal Amount of the Notes immediately prior to such
Payment Date multiplied by the Monthly Amortization Rate that corresponds to
the PSA Index Rate for such month as shown in the Prepayment Calculation
Table attached hereto as Exhibit B and rounded up to the nearest $1,000.
"Note Depository Agreement": The Letters of Representations dated
-------------------------
September 25, 1997 (as amended and supplemented from time to time pursuant to
the terms thereof) one, with respect to the Notes, among the Issuer, the
Indenture Trustee, and the Depository, and another, with respect to the
Certificates, among the Issuer, the Administrator, and the Depository.
"Note Owner": The Beneficial Owner of a Note.
----------
"Note Register": The meaning provided in Section 4.02.
-------------
"Note Registrar": The Indenture Trustee, in its capacity as Note
--------------
Registrar.
"Noteholder" or "Holder": The Person in whose name a Note is registered
----------------------
in the Note Register, except that, solely for the purpose of giving any
consent pursuant to this Indenture, any Note registered in the name of the
Depositor or the Indenture Trustee or any affiliate of either shall be deemed
not to be Outstanding.
"Officer's Certificate": A certificate signed by any Authorized Officer
---------------------
of the Issuer and delivered to the Indenture Trustee. Unless otherwise
specified, any reference in this Indenture to an Officer's Certificate shall
be to an Officer's Certificate of any Authorized Officer of the Issuer.
"Opinion of Counsel": A written opinion of counsel, who may be counsel
------------------
for the Issuer, the Depositor, the Owner Trustee or the Indenture Trustee.
"Ordinary Expenses": Shall mean (i) all costs, charges and expenses
-----------------
incurred by the Issuer in connection with the issue of the Notes and the
Certificates that were incurred or were reasonably quantifiable or could
reasonably be anticipated on or before the Closing Date, (ii) all customary
ongoing expenses of the Issuer and (iii) any fees, expenses or amounts
properly incurred by the Indenture Trustee or the Note Registrar in
connection with their actions pursuant to this Indenture, by the Owner
Trustee or the Certificate registrar in connection with their actions
pursuant to the Trust Agreement, by the Market Agent in connection with its
actions pursuant to the Market Agent Agreement, and by the Administrator in
connection with its actions pursuant to the Administration Agreement.
"Outstanding": With respect to the Notes, as of the date of
-----------
determination, all Notes theretofore executed, authenticated and delivered
under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to
the Indenture Trustee for cancellation;
(ii) Notes in exchange for or in lieu of which other Notes have been
executed, authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a holder in due course; and
(iii) solely for the purpose of giving any consent pursuant to this
Indenture, any Note registered in the name of the Depositor, the Owner
Trustee or any affiliate thereof.
"Owner Trustee": Wilmington Trust Company in its capacity as owner
-------------
trustee or its successor in interest, or any successor owner trustee
appointed as provided in the Trust Agreement.
"Pay Down Amount": For any Payment Date, an amount equal to the sum of
----------------
the Note Amortization Amount plus the Certificate Amortization Amount.
"Payment Amount": As to any Payment Date with respect to the Notes,
--------------
the amount due and payable pursuant to Section 3.05 of this Indenture.
"Payment Date": The 25th day of each month, or, if any such date is not
------------
a Business Day, the next succeeding Business Day, commencing October 25,
1997.
"Percentage Interest": As to any Note, the percentage interest in the
-------------------
applicable Payment Amount represented thereby, such percentage interest being
equal to the percentage obtained by dividing the then outstanding principal
amount of such Note by the Principal Amount of the Notes, or as to any
Certificate, the percentage interest represented thereby, such percentage
interest being equal to the percentage obtained by dividing the then
outstanding face amount of such Certificate by the aggregate Face Amount of
all Certificates.
"Person": Any individual, corporation, partnership, limited liability
------
company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Note": 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 4.03 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.
"Prepayment Determination Date": With respect to any Payment Date on
-----------------------------
which a payment or prepayment of principal on the Notes is due, the fourth
Business Day of the month in which such Payment Date occurs.
"Principal Amount": On any day, the aggregate unpaid principal amount
----------------
of all Notes Outstanding on such day, which amount shall be reduced by any
Credit Loss as provided in Section 3.05.
"Principal Balance": As to any Payment Date and for each Note, the
-----------------
aggregate Denomination of such Notes, reduced by any distributions of
principal thereof.
"Pro Rata Share": With respect to any Note, the percentage obtained by
--------------
dividing the then outstanding principal amount of such Note by the then
Principal Amount of all of the Notes.
"Program Agreement" The Program Agreement dated September 25, 1997
-----------------
between the Lehman Brothers Special Financing Inc. and the Swap Guarantor, as
amended, modified or otherwise supplemented from time to time pursuant to the
terms thereof.
"Priority of Payments": The meaning provided in Section 3.05(d).
--------------------
"Proceeding": Any suit in equity, action at law or other judicial or
----------
administrative proceeding.
"PSA Index Rate": With respect to any Payment Date (in the following
--------------
order of priority):
(i) the rate that appears as of 3:00 p.m. (New York City time) on
the related Prepayment Determination Date on the Reference Bloomberg Page
under the column heading "1 MO" opposite the row "PSA";
(ii) if such rate does not appear on the Reference Bloomberg Page
as of 3:00 p.m. (New York City time) on such Prepayment Determination Date,
the Calculation Agent shall request FHMLC to provide a quotation of the
monthly prepayment speed (calculated according to the PSA Standard
Prepayment Model) for the Reference Collateral Pool for the applicable
month. If FHMLC provides such quotation, the PSA Index Rate shall be
the quotation provided by FHMLC;
(iii) if the Calculation Agent determines that FHMLC has not
provided such quotation by 5:00 p.m. on the second Business Day following
such Prepayment Determination Date, the Calculation Agent shall request five
major securities dealers selected by the Calculation Agent to provide a
quotation of the monthly prepayment speed (calculated according to the PSA
Standard Prepayment Model) for the Reference Collateral Pool for the
applicable month. If at least two such quotations are so provided, then the
PSA Index Rate shall be the arithmetic mean (rounded to the nearest whole
integer) determined by the Calculation Agent of the quotations so obtained
(and, if five such quotations are provided, eliminating the highest quotation
(or, in the event of equality, one of the highest) and lowest quotation (or,
in the event of equality, one of the lowest)); if only one quotation is so
provided, the PSA Index Rate shall be the quotation so provided; and
(iv) if no such quotation is provided as requested in clause (iii)
above, then the PSA Index Rate shall be the PSA Index Rate determined with
respect to the Payment Date preceding the applicable Payment Date (or, in the
case of the first Payment Date, the monthly prepayment speed (calculated
according to the PSA Standard Prepayment Model) for the Reference Collateral
Pool obtained from the sources specified in clauses (i)-(iii) above, in that
order, with respect to the most recent month for which such information is
available.
"PSA Standard Prepayment Model" or "PSA": The methodology set forth
---------------------------------------
under "Mortgage Prepayment Models--The PSA Standard Prepayment Model" in the
"Uniform Practices for the Clearance and Settlement of Mortgage-Backed
Securities and Other Related Securities of the Public Securities
Association."
"Rating Agency": Moody's and Standard & Poor's. If no such
-------------
rganization or successor is any longer in existence, "Rating Agency" shall
be a nationally recognized statistical rating organization or other
comparable Person designated by the Owner Trustee, notice of which
designation shall be given to the Indenture Trustee, the Owner Trustee, the
Swap Counterparty, the Swap Guarantor and the Depositor.
"Record Date": The close of business on the day immediately preceding
-----------
such Payment Date, or, if Definitive Notes are issued, the close of business
15 days prior to such Payment Date or, with respect to the first Payment
Date, the Closing Date.
"Reference Bloomberg Page": The display designated as page "FMAC A017"
------------------------
nd titled "Reference Collateral 30-year 8.00, Issued in 1996" (or such other
page selected by the Calculation Agent as may replace page FMAC A017 for the
purpose of displaying the monthly prepayment speed (calculated based on the
PSA Standard Prepayment Model) for the Reference Collateral Pool) on
the Bloomberg Financial Markets Service (or such other service selected by
the Calculation Agent as may replace such service).
"Reference Collateral Pool": The outstanding 30-year Federal Home Loan
-------------------------
Mortgage Corporation 8.0% mortgage participation certificates issued in
calendar year 1996.
"Registered Holder": The Person in whose name a Note is registered in
-----------------
the Note Register on the applicable Record Date.
"Responsible Officer": With respect to the Owner Trustee, any officer
-------------------
of the Owner Trustee identified on its certificate of incumbency which was
furnished to the Indenture Trustee on the Closing Date, as such certificate
shall be updated from time to time by the Owner Trustee. With respect to the
Indenture Trustee and the Administrator, any officer within the corporate
trust department of the Indenture Trustee or the Administrator, as the case
may be, including any vice president, assistant vice president, secretary,
assistant secretary, treasurer, assistant treasurer, trust officer or any
other officer of the Indenture Trustee or the Administrator, as the case may
be, who customarily performs functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such officer's knowledge or and
familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture and/or the
Administration Agreement, as the case may be.
"Replacement Event": The meaning provided in the Swap Agreement.
-----------------
"Replacement Swap": The meaning provided in the Swap Agreement.
----------------
"Revised Article 8": The meaning provided in the Book-Entry
-----------------
Regulations.
"Sale Procedures": On each Solicitation Date, and as soon as
---------------
racticable in the case of acceleration of amounts due in respect of the
Notes pursuant to this Indenture, the Indenture Trustee shall direct the
Market Agent, on behalf of the Issuer, to sell the CABS and/or Eligible
Investments in accordance with the CABS Amortization Schedule in a face
amount equal to the Pay Down Amount (or, in the case of a Mandatory
Prepayment or Event of Default and acceleration of Notes hereunder, all CABS
and Eligible Investments) to the highest bidder of not less than three
solicited bidders for such CABS and/or Eligible Investments (which bidders
may include the Depositor, the Swap Counterparty, the Swap Guarantor or their
respective affiliates, provided that the Depositor, the Swap Counterparty,
the Swap Guarantor and their respective affiliates, shall not be obligated to
bid, and bidders need not be limited to recognized broker-dealers). In the
sole judgement of the Market Agent, bids may be evaluated on the basis of
bids for the CABS or Eligible Investments or a portion of the CABS or
Eligible Investments being sold or on any other basis selected in good faith
by the Market Agent.
"Scheduled Final Payment Date": The August 2004 Payment Date.
----------------------------
"Securities": The Notes and the Certificates.
----------
"Securityholder": Any Holder of the Notes and Certificates.
--------------
"Single Note": A Note in the Denomination of $1,000.
-----------
"Standard & Poor's": Standard & Poor's Ratings Services, a division of
-----------------
The McGraw Hill Companies.
"Solicitation Date": Four Business Days prior to each Payment Date
-----------------
beginning with the Payment Date in September 1999.
"Swap Agreement": The 1992 ISDA (Multicurrency - Cross Border) Master
--------------
greement dated as of September 1, 1997, including any schedules attached
thereto and confirmation letters executed in connection therewith, between
the Swap Counterparty and the Trust, and (2) any Replacement Swap which may be
entered into pursuant to the terms of the Swap Agreement referred to in clause
(1); provided that if a Replacement Event occurs and an assignment by the Trust
of the Swap Agreement referred to in clause (1) is required pursuant to the
terms of the Swap Agreement and/or the Swap Policy, (i) the Indenture Trustee
shall take actions required to effect such assignment, (ii) after all
conditions precedent to the effectiveness of such assignment have been
satisfied, (x) the security interest in such Swap Agreement created by the
Granting Clause of this Indenture shall automatically and without further
action be released and (y) the Indenture Trustee shall take actions
requested by the Swap Guarantor to effect such release and (iii) if a
Replacement Swap is entered into pursuant to the terms of such Swap Agreement
and following the entry into such Replacement Swap, as used in this Indenture
the term Swap Agreement shall mean only the Replacement Swap.
"Swap Counterparty": Lehman Brothers Special Financing Inc. as swap
-----------------
counterparty under the Swap Agreement and any successor or replacement swap
counterparty pursuant to the terms thereof and hereof.
"Swap Default": An Event of Default under and as defined in the Swap
------------
Agreement.
"Swap Early Termination": A Termination Event under and as defined in
----------------------
the Swap Agreement.
"Swap Guarantor": AMBAC Assurance Corporation.
--------------
"Swap Policy": The financial guaranty insurance policy issued on
-----------
September 25, 1997 by the Swap Guarantor (Policy No. SF0046BE) and any
successor or replacement financial insurance policy issued by the Swap
Guarantor pursuant to the terms thereof and the Swap Agreement.
"Swap Termination Event": A Termination Event under and as defined in
-----------------------
the Swap Agreement.
"Trust": Mortgage Index Amortizing Trust 1997-1; the trust created by
-----
the Trust Agreement and by the filing with the Secretary of State of the
State of Delaware a Certificate of Trust of the Trust.
"Trust Agreement": The trust agreement entered into between the Owner
---------------
Trustee and the Depositor, dated as of September 1, 1997, as amended,
supplemented or otherwise modified from time to time pursuant to the terms
thereof.
"Trust Estate": The meaning specified in the Granting Clause.
------------
"UCC": The Uniform Commercial Code as in effect in the State of New
---
York as of the date hereof.
"Uncertificated Security": The meaning specified in Section 8-102(1)(b)
-----------------------
of the UCC.
"Underlying Agreement": The Pooling and Servicing Agreement dated as
--------------------
of September 1, 1992 as supplemented by the series supplements thereto
relating to Series 1997-5, Series 1997-2, Series 1997-1 and Series 1996-4,
between First USA Bank, as transferor and servicer, and The Bank of New York
(Delaware), as trustee pursuant to which the CABS were originally issued.
Section 1.02. Other Definitional Provisions. (a) The words
-----------------------------
"certificated security", "clearing corporation", "custodian", "financial
--------------------- -------------------- --------- ---------
intermediary", "general intangibles", "instrument", "proceeds", "purchase",
- - ------------ ------------------- ---------- -------- --------
"security", "uncertificated security" and "transfer" each have the meaning
-------- ----------------------- -------- ascribed thereto in the
UCC.
(b) The words "Entitlement Holder", "Entitlement Order", "Participant",
------------------ ----------------- -----------
"Securities Intermediary", "Revised Article 8", "Securities Account" and
----------------------- ----------------- ------------------
"Security Entitlement" each have the meaning ascribed thereto in the Book
--------------------
Entry Regulations.
(c) The terms "entitlement holder", "entitlement order", "Investment
------------------ ----------------- ----------
Property", "securities account", "securities intermediary" and "security
- - -------- ------------------ ----------------------- ---------
entitlement" each have the meaning ascribed thereto in Revised Article 8.
-----------
Section 1.03. Rules of Construction. Unless the context otherwise
---------------------
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) references to Sections mean Sections of this Indenture;
(vi) words in the singular include the plural and words in the
plural include the singular; and
(vii) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.
ARTICLE II
Original Issuance of Notes
--------------------------
Section 2.01. Form. The Notes, together with the Indenture Trustee's
----
certificate of authentication, shall be in substantially the form set
forth in Exhibit A, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture and may
have such letters, numbers or other marks of identification and such legends
or endorsements placed thereon as may, consistently herewith, be determined
by the officers executing such Notes, as evidenced by their execution of the
Notes. Any portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing such Notes,
as evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibit A are part of the terms of
this Indenture.
Section 2.02. Execution, Authentication and Delivery. The Notes shall
--------------------------------------
be executed on behalf of the Issuer by any of its Authorized Officers and
delivered to the Indenture Trustee for authentication as provided in this
Indenture. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
The Indenture Trustee shall, upon Issuer Order, authenticate and deliver
the Notes for original issue in an aggregate principal amount of
$250,000,000. The aggregate principal amount of Notes outstanding at any
time may not exceed such amounts.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $10,000
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 on 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 upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 2.03. Opinions of Counsel. On the Closing Date, the Indenture
-------------------
rustee shall have received: (i) an Opinion of Counsel, in form and
substance reasonably satisfactory to the Indenture Trustee and its counsel,
with respect to securities law matters; (ii) an Opinion of Counsel, in form
and substance reasonably satisfactory to the Indenture Trustee and its
counsel, with respect to the tax status of the Notes; and (iii) an Opinion of
Counsel to the Issuer, in form and substance reasonably satisfactory to the
Indenture Trustee and its counsel, with respect to the due authorization,
valid execution and delivery of this Indenture and with respect to its
binding effect on the Issuer.
ARTICLE III
Administration of the CABS;
Application of Trust Funds
Section 3.01. Collection of Payments on CABS; Collection Account.
--------------------------------------------------
(a) The Indenture Trustee shall establish and maintain with itself a
segregated trust account (the "Collection Account") which shall be held in
------------------
trust in the name of the Trust for the benefit of the Noteholders, the
Certificateholders, the Swap Counterparty and the Swap Guarantor, into which
the Indenture Trustee shall, subject to the terms of this paragraph, deposit,
on the same day as it is received, each distribution received by the
Indenture Trustee with respect to the CABS or any Eligible Investments and
each payment received by the Indenture Trustee pursuant to the Swap Agreement
and the Swap Policy. The Indenture Trustee shall make all payments of
principal of, and interest on, the Notes, as provided in Section 3.05 herein,
and all payments to the Swap Counterparty or the Swap Guarantor pursuant to
the Swap Agreement, and all payments to the Administrator of principal of and
interest on the Certificates as provided in Section 5.02 of the Trust
Agreement, from moneys on deposit in the Collection Account in accordance
with the Priority of Payments.
If the Indenture Trustee shall not have received a distribution with
respect to the CABS by the fifth Business Day after the date on which such
distribution was due and payable pursuant to the terms of such CABS, the
Indenture Trustee shall, subject to the penultimate sentence of this
paragraph, take such action as may be directed by the Swap Counterparty or
the Swap Guarantor in writing including taking such legal action as the Swap
Counterparty or the Swap Guarantor shall deem appropriate under the
circumstances, and prosecuting any claims in connection therewith. In the
event that the Indenture Trustee reasonably believes that there may not be
sufficient funds available to reimburse it for its projected legal fees and
expenses in accordance with the Priority of Payments, the Indenture Trustee
shall notify the Noteholders, the Swap Counterparty and the Swap Guarantor
that it is not obligated to pursue any such available remedies unless
indemnity satisfactory to the Indenture Trustee for its legal fees and
expenses is provided or procured by Noteholders, the Swap Counterparty or the
Swap Guarantor. In the event any such indemnity is provided to the Indenture
Trustee, the Indenture Trustee shall take such action as shall be appropri-
ate, or as the Swap Counterparty or the Swap Guarantor shall direct in
writing, under the circumstances.
(b) The amounts on deposit in the Collection Account shall be invested
by the Market Agent, on behalf of the Indenture Trustee in Eligible
Investments. The Indenture Trustee shall instruct the Market Agent to
purchase the highest yielding Eligible Investments available from a
recognized broker-dealer. The Market Agent shall determine which are the
highest yielding Eligible Investments on any reasonable basis selected in
good faith.
(c) If a CABS Early Amortization Event occurs with respect to any CABS,
the Indenture Trustee shall invest all the proceeds derived from the
amortization of such CABS in Eligible Investments or replacement CABS;
provided that, in the case of such replacement CABS, (i) such replacement
- - --------
CABS must have final maturities that are the same as, or prior to, the
Scheduled Final Payment Date, (ii) such replacement CABS must have
outstanding principal amounts in the aggregate at least equal to that of the
CABS being replaced and (iii) the Indenture Trustee shall have received prior
written confirmation from each Rating Agency that the investment in such
replacement CABS shall not cause a reduction, withdrawal or suspension of the
ratings assigned to Notes or the Certificates.
Section 3.02. Maintenance of Office or Agency. The Issuer shall
-------------------------------
maintain in the Borough of Manhattan, the City of New York, an office or
agency where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Issuer hereby initially
appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the
address thereof, such surrenders, notices and demands may be made or served
at the Corporate Trust Office, and the Issuer hereby appoints the Indenture
Trustee as its agent to receive all such surrenders, notices and demands.
Section 3.03. Money for Payments To Be Held in Trust. As provided in
--------------------------------------
Section 3.01, all payments of amounts due and payable with respect to any
Notes and Certificates that are to be made from amounts withdrawn from the
Collection Account pursuant to Section 3.01 shall be made on behalf of the
Issuer by the Indenture Trustee, and no amounts so withdrawn from the Collec-
tion Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03.
The Issuer shall cause the Administrator (unless the Indenture Trustee
is acting as Administrator, in which case the Indenture Trustee) to execute
and deliver to the Indenture Trustee, the Swap Counterparty and the Swap
Guarantor an instrument in which such Administrator shall agree with the
Indenture Trustee (and if the Indenture Trustee acts as Administrator, it
hereby so agrees), subject to the provisions of this Section 3.03, that such
Administrator shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes and the Certificates 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, the Swap Counterparty and the Swap
Guarantor notice of any default by the Issuer of which it has actual
knowledge in the making of any payment required to be made with respect
to the Notes or the Certificates;
(iii) at any time during the continuance of any such default, upon
the request of the Indenture Trustee, the Swap Counterparty or the Swap
Guarantor, forthwith pay to the Indenture Trustee all sums so held in
trust by such Administrator;
(iv) immediately resign as Administrator and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes
and the Certificates if at any time it ceases to meet the standards
required to be met by an Administrator at the time of its appointment;
and
(v) notify the Issuer with respect to any applicable withholding
taxes imposed on the Notes and no earlier than 5 Business Days
thereafter comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes or Certificates of
any applicable withholding taxes (including backup withholding) imposed
thereon and with respect to any applicable reporting requirements in
connection therewith and, in the event the Administrator does not
receive a copy of a properly completed (i) IRS Form W-8, (ii) IRS Form
1001, (iii) IRS Form 4224, or (iv) IRS Form W-9 with respect to any
Noteholder or Certificateholder, shall treat payments to such Noteholder
or Certificateholder, as the case may be, as being subject to
withholding and backup withholding taxes and shall retain from amounts
otherwise distributable to such Noteholder or Certificateholder, as the
case may be, an amount sufficient for the payment of such withholding or
backup withholding tax (as applicable).
The Indenture Trustee may at any time, in connection with obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct the Administrator to pay to the Indenture Trustee all
sums held in trust by such Administrator, such sums to be held by the
Indenture Trustee upon the same trusts as those upon which the sums were
held by such Administrator; and upon such payment by the Administrator
to the Indenture Trustee, such Administrator shall be released from all
further liability with respect to such money.
Section 3.04. Existence. The Issuer shall keep in full effect its
---------
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, with the prior consent of the Swap Counterparty and the Swap
Guarantor, organized under the laws of any other state or of the United
States of America, in which case the Issuer shall keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction)
and shall obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect
the validity and enforceability of this Indenture, the Notes, the CABS, the
Swap Agreement, the Swap Policy and each other instrument or agreement
included in the Trust Estate.
Section 3.05. Application of Trust Funds. (a) The Notes shall accrue
--------------------------
interest at the Note Accrual Rate, calculated on the basis of a 360 day year
consisting of twelve 30-day months. Such amounts shall be due and payable on
each Payment Date. Interest shall accrue with respect to each Payment Date
from and including the preceding Payment Date (or in the case of the first
Payment Date, from and including the Closing Date) to but excluding such
current Payment Date (each, a "Interest Accrual Period"). Interest on the
-----------------------
Notes shall be payable solely from amounts in the Collection Account, inc-
luding mounts received pursuant to the Swap Agreement or the Swap Policy, and
shall be subject to the Priority of Payments. Unless the entire unpaid
principal amount of the Notes shall become due and payable upon the occ-
urrence of an Event of Default in accordance with the provisions of
Section 3.05(c) hereof, prior to the September 1999 Payment Date, no
principal shall be payable on the Notes until the September 1999 Payment
Date. Beginning on the September 1999 Payment Date and on each Payment
Date thereafter, principal payable on the Notes as described in Section
3.05(b) on any Payment Date shall be calculated by the Calculation Agent,
and shall be paid to the Noteholders in accordance with the Percentage
Interest represented by each such Note. Any Principal Amount of the Notes
that remains outstanding on the Scheduled Final Payment Date shall be due in
full on the Scheduled Final Payment Date. Any installment of interest or
principal, if any, payable on any Note that is punctually paid or duly
provided for by the Issuer on the applicable Payment Date shall be paid to
each Noteholder of record on the preceding Record Date, by wire transfer
to an account specified in writing by such Noteholder reasonably
satisfactory to the Indenture Trustee as of the preceding Record Date or
by check to such Noteholder mailed to such Holder's address as it appears
in the Note Register if no such instructions have been delivered to
the Indenture Trustee.
(b) (i) Principal due on the Notes shall be payable solely from amounts
in the Collection Account, including amounts, if any, received pursuant to
the Swap Agreement or the Swap Policy, and shall be subject to the Priority
of Payments. Beginning on the September 1999 Payment Date and on each
Payment Date thereafter, principal payable on the Notes on any Payment Date
shall be equal to the Note Amortization Amount with respect to such Payment
Date, as determined by the Calculation Agent.
(ii) In addition, if the then Principal Amount of the Notes immediately
after any Payment Date would be less than or equal to 10% of the aggregate
original principal amount of the Notes, the Issuer shall, subject to the
Priority of Payments, prepay 100% of the Principal Amount of the Notes (and
100% of the Face Amount of the Certificates (as provided in the Trust
Agreement)) on such Payment Date (the "Mandatory Prepayment").
--------------------
(iii) The Issuer has no optional prepayment rights with respect to the
Notes.
(iv) In connection with each prepayment, repayment or other payment of
principal in respect of the Notes as required by Section 3.05, the Indenture
Trustee shall instruct the Market Agent to sell CABS and/or Eligible
Investments in accordance with the Sale Procedures.
(v) In the event that a CABS Early Amortization Event has occurred, if
the Trust receives proceeds from any CABS in an amount that is less than the
face amount of such CABS (a "Credit Loss"), pursuant to the Trust Agreement,
-----------
the Face Amount of the Certificates will be reduced by the amount of such
Credit Loss until it is reduced to zero. In the event that such Credit Loss
is greater than the Face Amount of the Certificates, the Principal Amount of
the Notes will be reduced (in accordance with their respective Pro Rata
Shares) by any remaining amount of such Credit Loss. Any such principal
reduction will not be reinstated. It is understood and acknowledged that
such reduction of the Principal Amount of the Notes shall be effective to
reduce the outstanding principal amount of each Note, and that all references
to Principal Amount, principal amount, outstanding principal amount and other
references to the principal due in respect of a Note or the Notes shall take
into effect to such reduction. Similarly, it is understood and acknowledged
that the above-referenced reduction of the Face Amount of the Certificates
shall be effective under the Trust Agreement to reduce the outstanding face
amount of each Certificate, and that all references to Face Amount, face
amount, principal amount, outstanding principal amount and other references
to the principal due in respect of a Certificate or the Certificates shall
take into effect to such reduction.
(vi) The Calculation Agent shall calculate the PSA Index Rate and the
Monthly Amortization Rate on the Prepayment Determination Date and shall
promptly notify the Indenture Trustee, the Administrator as provided in the
Trust Agreement, the Swap Counterparty and the Swap Guarantor of the results
thereof. The determination of the PSA Index Rate, the Monthly Amortization
Rate, the Note Amortization Amount and the Principal Amount of Notes each
month as provided herein shall, absent manifest error, be final and binding.
(vii) The Calculation Agent reserves the right to determine whether any
modification in PSA methodology or in the timing or procedures affecting
publication or dissemination of the PSA prepayment rate for the Reference
Collateral Pool warrants an adjustment to the foregoing calculation
procedures, whereupon such procedures shall be deemed to be amended as so
determined by the Calculation Agent; provided that no change in such
--------
procedures shall be effective without the written consent of the Swap
Counterparty and the Swap Guarantor.
(c) Upon the occurrence and continuance of any Event of Default (other
than one specified in clause (d), (e) or (g) of the definition of Event of
Default), the Indenture Trustee, upon the written request of the Holders of
not less than a majority of the then Principal Amount of the Notes (or, in
the case of an Event of Default described in clause (c) in the definition
thereof, all Securityholders), shall, by notice in writing to all
Securityholders, the Swap Counterparty and the Swap Guarantor, declare the
principal of all Notes then Outstanding (if not then due and payable) to be
due and payable immediately, and upon such declaration the same shall become
and be immediately due and payable, anything contained in the Notes or in the
Basic Documents to the contrary notwithstanding. Immediately upon such
declaration, the Indenture Trustee shall direct the Market Agent to sell and
liquidate the CABS and Eligible Investments in accordance with the Sale
Procedures and the Calculation Agent shall calculate the Distributable
Amount. Such declaration shall also be effective under and as provided in the
Trust Agreement to cause the entire Face Amount of the Certificates to
become similarly due and payable, subject to the Priority of Payments.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee, the Noteholders representing a majority of
the then Principal Amount of the Notes, with the consent of the Swap
Counterparty and the Swap Guarantor, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on the
Securities and all other amounts that would then be due hereunder
and otherwise upon the Securities if the Event of Default giving
rise to such acceleration had not occurred;
(B) all amounts due to the Swap Counterparty under the Swap
Agreement or the Swap Guarantor; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Securities that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.11.
Such rescission shall also be effective under and as provided in the
Trust Agreement to rescind and annul the declaration of an Event of Default
and acceleration of the Face Amount of the Certificates as provided therein.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
The entire unpaid principal amount of the Notes shall become immediately
due and payable automatically upon the occurrence of an Event of Default
specified in clause (d), (e) or (g) of the definition thereof. Immediately
after the occurrence of an Event of Default described in clause (d), (e) or
(g) of the definition of Event of Default, the Indenture Trustee shall direct
the Market Agent to sell and liquidate the CABS and Eligible Investments in
accordance with the Sale Procedures and the Calculation Agent shall calculate
the Distributable Amount.
Any amounts in respect of the Notes not paid when due under this
Indenture (including any overdue interest) shall accrue interest, to the
extent permitted by applicable law, at the Note Accrual Rate until paid as
provided in this Indenture.
(d) The Indenture Trustee shall apply all monies received by it under
this Trust Indenture, including proceeds of the CABS, proceeds of Eligible
Investments, payments made by the Swap Counterparty to the Issuer under the
Swap Agreement, payments made by the Swap Guarantor pursuant to the Swap
Policy, amounts realized by the Indenture Trustee upon the sale or other
liquidation of CABS or Eligible Investments and proceeds of any other
property included in the Trust Estate in accordance with the following
priorities (the "Priority of Payments"):
--------------------
FIRST: the following distributions shall be made pari passu and
ratably in accordance with the following amounts: (i) to the Swap
Counterparty or the Swap Guarantor for amounts due under the Swap
Agreement and (ii) to Noteholders for amounts due and unpaid on the
Notes for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
interest from amounts available in the Trust Estate for the
Noteholders;
SECOND: to Noteholders in payment of amounts due and unpaid on
the Notes for principal, by reason of mandatory prepayment or
otherwise, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal
from amounts available in the Trust Estate for the Noteholders;
THIRD: to the Administrator or the Owner Trustee to be
distributed to the Holders of the Certificates as a distribution of
interest then payable on the Certificates, ratably, without
preference or priority of any kind, according to the amounts due
and payable on the Certificates from amounts available in the Trust
Estate for the Certificateholders;
FOURTH: to the Administrator or the Owner Trustee to be
distributed to the Holders of the Certificates as a distribution of
principal then payable on the Certificates by reason of mandatory
prepayment or otherwise, ratably, without preference or priority of
any kind, according to the amounts due and payable on the
Certificates for principal from amounts available in the Trust
Estate for the Certificateholders.
FIFTH: to the Administrator, the Swap Counterparty or the Swap
Guarantor to be used to satisfy obligations of the Swap
Counterparty to the Swap Guarantor arising from or related to the
Program Agreement.
SIXTH: to the Swap Counterparty, if there shall be any excess
remaining.
(e) All principal payments on the Notes shall be made to the
Noteholders entitled thereto in accordance with the Percentage Interests
represented by such Notes. The Indenture Trustee shall send a notice to each
Person in whose name a Note is registered at the close of business on the
Record Date preceding the Scheduled Final Payment Date or other earlier date
of prepayment of the entire Principal Amount of the Notes. Such notice shall
be mailed no later than five Business Days prior to such Scheduled Final
Payment Date or such other earlier date and shall specify that payment of the
principal amount and any interest due with respect to such Note at the
Scheduled Final Payment Date or such other earlier date shall be payable only
upon presentation and surrender of such Note to the Indenture Trustee and
shall specify the place where such Note may be presented and surrendered for
such final payment.
Section 3.06. Protection of Trust Estate.
--------------------------
(a) The Issuer shall from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other
instruments, and shall take such other action as may be necessary or
advisable or desirable to secure the rights and remedies of the Noteholders,
the Swap Counterparty and the Swap Guarantor hereunder and to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or to carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture (including any and all actions
necessary or desirable as a result of changes in law or regulations);
(iii) enforce any of the CABS or Eligible Investments or other
instruments or property included in the Collateral;
(iv) preserve and defend title to the Collateral and the rights
therein of the Indenture Trustee, the Noteholders, the Swap Counterparty
and the Swap Guarantor against the claims of all persons and parties; or
(v) pay or cause to be paid any and all taxes levied or assessed
upon all or any part of the Collateral.
The Issuer hereby designates the Indenture Trustee, its agent and
attorney-in-fact to execute any financing statement, continuation statement
or other instrument required pursuant to this Section 3.06 which is delivered
to the Indenture Trustee for execution.
(b) The Indenture Trustee shall not (i) remove any portion of the
Collateral that consists of Cash or is evidenced by an instrument,
certificate or other writing from the jurisdiction of the State of New York
or (ii) cause or permit ownership or the pledge of any portion of the
Collateral that consists of Government Securities to be recorded in a
securities account on the books of a Person located in a jurisdiction other
than the State of New York, unless the Indenture Trustee shall have first
received an opinion of counsel to the effect that the lien and security
interest created by this Indenture with respect to such property shall
continue to be maintained after giving effect to such action or actions.
Section 3.07. Performance of Obligations. (a) The Issuer and the
--------------------------
Indenture Trustee shall not take any action and shall use their best efforts
to not 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 expressly provided in this Indenture or such other instrument or
agreement.
(b) The Issuer has contracted with the Administrator to assist the
Issuer in performing its duties under this Indenture. The Administrator, on
behalf of the Issuer, may contract with other Persons to assist it or the
Issuer in performing its duties under this Indenture, and any performance of
such duties by a Person identified in writing to the Indenture Trustee, the
Swap Counterparty and the Swap Guarantor in an Officer's Certificate of the
Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the applicable Basic
Documents and in the instruments and agreements included in the Trust Estate.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Holders of at least a majority of the then
Principal Amount of the Notes, the Swap Counterparty and the Swap Guarantor
and receiving notification from a Rating Agency that such waiver, amendment,
modification, supplement or termination shall not cause the rating of the
Notes or the Certificates to be reduced, suspended or withdrawn.
Section 3.08. Negative Covenants. So long as any Securities are
------------------
outstanding or any amounts are owed to the Swap Counterparty or the Swap
Guarantor, the Issuer shall not:
(i) except as expressly permitted by this Indenture, sell,
transfer, exchange or otherwise dispose of the Trust Estate or any
interest therein, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes or in respect of amounts
payable under the Swap Agreement or the Swap Policy (other than amounts
properly withheld from such payments under the Code or under applicable
state law) or assert any claim against any present or former Noteholder,
the Swap Counterparty or the Swap Guarantor by reason of the payment of
the taxes levied or assessed upon any part of the Issuer or the Trust
Estate;
(iii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to
the Notes under this Indenture except as may be expressly permitted
hereby, (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 or (C) permit the lien of this Indenture not to constitute a
valid first priority security interest in the Trust Estate except as
permitted herein or in the Trust Agreement;
(iv) except as contemplated herein, dissolve or liquidate in whole
or in part; or
(v) incur, assume or guarantee any indebtedness other than
indebtedness incurred pursuant hereto.
Section 3.09. Transfer of Assets. The Issuer shall not convey or
------------------
transfer any of its properties or assets, including those included in the
Trust Estate, to any Person, unless:
(a) the Person that acquires by conveyance or transfer all
properties and assets of the Issuer, and the conveyance or transfer of
which is to a Person that (i) is a United States citizen or a Person
organized and existing under the laws of the United States of America or
any state, (ii) expressly assumes, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, the Swap Counterparty
and the Swap Guarantor in form satisfactory to the Indenture Trustee,
the Swap Counterparty and the Swap Guarantor, the due and punctual
payment of the principal of and interest on all Notes and Certificates
and the performance or observance of every agreement and covenant of
this Indenture, the Swap Agreement and the Swap Policy on the part of
the Issuer to be performed or observed, all as provided herein,
(iii) expressly agrees by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Holders of the Notes and the
Certificateholders, the Swap Counterparty and the Swap Guarantor, as
their interests appear herein and (iv) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer, the Swap Counterparty and the Swap Guarantor
against and from any loss, liability or expense arising under or related
to this Indenture, the Swap Agreement, the Swap Policy, the Notes and
the Certificates;
(b) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(c) the Rating Agencies shall have notified the Issuer that such
transaction shall not cause the rating of the Notes or the Certificates
to be reduced, suspended or withdrawn;
(d) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee, the Swap
Counterparty and the Swap Guarantor) to the effect that such transaction
will not have any material adverse tax consequence to the Issuer, any
Noteholder, any Certificateholder, the Swap Counterparty or the Swap
Guarantor;
(e) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(f) the Issuer shall have delivered to the Indenture Trustee, the
Swap Counterparty and the Swap Guarantor an Opinion of Counsel stating
that such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with.
Section 3.10. Transferee. Upon a conveyance or transfer of all the
----------
assets and properties of the Issuer pursuant to Section 3.09, Mortgage Index
Amortizing Trust 1997-1 shall be released from every covenant and agreement
of this Indenture to be observed or performed on the part of the Issuer with
respect to the Notes immediately upon the delivery of written notice to the
Mortgage Index Amortizing Trust 1997-1 that it is to be so released.
Section 3.11. No Other Business. The Issuer shall not engage in any
-----------------
siness other than financing, purchasing, owning and selling the CABS and
Eligible Investments in the manner contemplated by this Indenture and the
other Basic Documents; issuing the Notes and Certificates; entering into and
performing under the Swap Agreement and the Swap Policy; and all activities
incidental thereto.
Section 3.12. No Borrowing. The Issuer shall not issue, incur, assume,
------------
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Securities.
Section 3.13. Guarantees, Loans, Advances and Other Liabilities.
-------------------------------------------------
Except as contemplated by this Indenture, the Issuer shall not make any loan
or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on
any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire
(or agree contingently to do so) any stock, obligations, assets or securities
of, or any other interest in, or make any capital contribution to, any other
Person.
Section 3.14. Capital Expenditures. The Issuer shall not make any
--------------------
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.15. Removal of Administrator. So long as any Notes are
------------------------
Outstanding, the Issuer shall not remove the Administrator without cause
unless consented to in writing by the Swap Counterparty and the Swap
Guarantor and so long as such removal shall not cause the rating of the Notes
or the Certificates to be reduced, suspended or withdrawn.
Section 3.16. Restricted Payments. The Issuer shall not, directly or
-------------------
ndirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer, (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 and that the Certificateholders as contemplated by, and to the
- - --------
extent funds are available for, such purpose under this Indenture and
the Trust Agreement. The Issuer shall not, directly or indirectly, make
payments to or distributions from the Collection Account except in
accordance with this Indenture and the other Basic Documents.
Section 3.17. Notice of Events of Default. The Indenture Trustee shall
---------------------------
give the Issuer, the Swap Counterparty, the Swap Guarantor and the Rating
Agencies prompt written notice of each Event of Default hereunder of which it
has actual knowledge. The Issuer shall give the Indenture Trustee, the Swap
Counterparty, the Swap Guarantor and the Rating Agencies prompt written
notice of each Event of Default hereunder of which it has knowledge.
Section 3.18. Further Instruments and Acts. Upon request of the
----------------------------
Indenture Trustee, the Issuer shall 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. Statements to Noteholders. (a) The Indenture Trustee
-------------------------
shall prepare and, at the Swap Counterparty's, the Swap Guarantor's, any
Noteholder's or any Rating Agency's written request, forward by mail a
monthly statement to the Swap Counterparty, the Swap Guarantor, such Note-
holder or the Rating Agencies, as applicable, stating with respect to the
Notes:
(i) the amount of principal, if any, distributable on the most
recent Payment Date to the Holder of a Single Note;
(ii) the amount of interest distributable on the most recent
Payment Date to the Holder of a Single Note;
(iii) the then Principal Amount of the Notes after giving effect to
any distribution of principal (and the amount of any Credit Losses
applied to the Principal Amount of the Notes as provided in Section
3.05);
(iv) the aggregate principal balance of the CABS as of such Payment
Date after giving effect to any sale of CABS, and after giving effect to
the distribution of principal made thereon (if any), on or prior to or
on such Payment Date; and
(v) the aggregate principal balance of any Eligible Investments as
of such Payment Date after giving effect to any sale of Eligible
Investments, and after giving effect to the distribution of principal
made thereon (if any), on or prior to such Payment Date.
(b) The Indenture Trustee shall forward by mail to (i) the
Administrator and (ii) the Swap Counterparty, the Swap Guarantor and each
Noteholder with each statement described in this Section 3.19 a copy of the
most current CABS Distribution Date Statement delivered to the Indenture
Trustee.
(c) Within a reasonable time after the end of each calendar year, the
Indenture Trustee shall furnish, pursuant to the Code, such statements as
shall be required thereby and shall file or cause to be filed such tax
returns and reports with respect to such statements as are required to be
filed in respect of the Trust.
Section 3.20. Notices to Indenture Trustee. Upon receipt of any notice
----------------------------
with respect to the CABS, the Indenture Trustee shall promptly transmit such
notice to the Administrator, the Swap Counterparty and the Swap Guarantor.
Section 3.21. Custodianship, Transfer of CABS and Eligible
--------------------------------------------
Investments. (a) The Indenture Trustee shall hold all Certificated
- - -----------
Securities (that are not Clearing Corporation Securities) and Instruments in
physical form at the office of a custodian appointed by it in the Borough of
Manhattan, City of New York. Initially, such Custodian shall be The Bank of
New York with its address at 101 Barclay Street, New York, New York 10286.
Any successor custodian shall be a State or national bank or trust company
which is not an Affiliate of the Issuer and has capital surplus of at least
$10,000,000.
(b) On the Closing Date, the Issuer shall cause the transfer of the
CABS to the Custodian to be held in the Custodial Account for the benefit of
the Indenture Trustee in accordance with the terms of this Indenture. Each
time that the Swap Counterparty shall direct the acquisition of any Eligible
Investment, the Administrator shall, if such Eligible Investment has not
already been transferred to the Custodial Account, cause the transfer of such
Eligible Investment to the Custodian to be held in the Custodial Account for
the benefit of the Indenture Trustee in accordance with the terms of this
Indenture. The security interest of the Indenture Trustee in the funds or
other property utilized in connection with such acquisition shall,
immediately and without further action on the part of the Indenture Trustee,
be released. The security interest of the Indenture Trustee shall
nevertheless come into existence and continue in the Eligible Investment so
acquired, including all rights of the Issuer in and to any contracts related
to and proceeds of such Eligible Investment. CABS and Eligible Investments
acquired in accordance with this Indenture by or on behalf of the Issuer
shall be transferred to the Custodian for the benefit of the Indenture
Trustee as follows:
(i) in the case of each Certificated Security (other than a
Clearing Corporation Security) or Instrument, by (A) causing the
delivery of such Certificated Security or Instrument to the Custodian
registered in the name of the Custodian or its affiliated nominee or
endorsed to the Custodian or in blank, (B) causing the Custodian to
continuously identify on its books and records that such Certificated
Security or Instrument is being held by it for the account of the
Indenture Trustee, (C) causing the Custodian to send a confirmation to
the Indenture Trustee that the Custodian is holding such Certificated
Security and, in the case of an Instrument, acknowledge that it is
holding such Instrument, for the account of the Indenture Trustee, and
(D) causing the Custodian to maintain continuous possession of such
Certificated Security or Instrument in the State of New York;
(ii) in the case of each Uncertificated Security, by (A) causing
such Uncertificated Security to be continuously registered on the books
of the issuer thereof to the Custodian or its affiliated nominee, (B)
causing the Custodian to continuously identify on its books and records
that such Uncertificated Security is being held by it for the account of
the Indenture Trustee, and (C) causing the Custodian to send a
confirmation to the Indenture Trustee that the Custodian is holding such
Uncertificated Security for the account of the Indenture Trustee;
(iii) in the case of each Clearing Corporation Security, by
causing (A) the relevant Clearing Corporation to make appropriate
entries on its books reducing the appropriate securities account of the
transferor and increasing the appropriate securities account of The Bank
of New York at such Clearing Corporation by the amount of such Clearing
Corporation Security, (B) The Bank of New York to continuously identify
on its books and records that such Clearing Corporation Security is
being held by it for the account of the Custodian and send a
confirmation to the Custodian that The Bank of New York is holding such
Clearing Corporation Security for the account of the Custodian, (C) the
Custodian to continuously identify on its books and records that such
Clearing Corporation Security is being held by it for the account of the
Indenture Trustee, (D) the Custodian to send a confirmation to the
Indenture Trustee that the Custodian is holding such Clearing
Corporation Security for the account of the Indenture Trustee and (E)
such Clearing Corporation Security to be (1) for an Uncertificated
Security or a Certificated Security in registered form, continuously
registered to the Clearing Corporation or its Clearing Corporation
Custodian or the nominee of either subject to the exclusive control of
such Clearing Corporation or, in the case of an Uncertificated Security,
in bearer form or endorsed in blank by an appropriate person and, in the
case of a Certificated Security, continuously maintained in the State of
New York in the possession of such Clearing Corporation or its Clearing
Corporation Custodian or the nominee of either subject to the exclusive
control of such Clearing Corporation and (2) in any case, continuously
identified on the books and records of such Clearing Corporation for the
sole and exclusive account of The Bank of New York;
(iv) in the case of each Government Security, by causing (A) the
creation of a Security Entitlement to such Government Security in favor
of the Indenture Trustee when the Custodian indicates by book entry that
such Government Security has been credited to the Securities Account
maintained by the Custodian as Securities Intermediary for the Indenture
Trustee (as each such term not defined herein is defined in Revised
Article 8), and (B) such Securities Intermediary to continuously
identify such Government Security as held for the Indenture Trustee as
Entitlement Holder (as defined in Revised Article 8);
(v) in the case of any Custodial Account which constitutes a
"deposit account" under the UCC, by causing the Custodian to
continuously identify in its books and records the security interest of
the Indenture Trustee in such Custodial Account and, except as may be
expressly provided herein to the contrary, relinquishing dominion and
control over such account to the Indenture Trustee.
(c) The Indenture Trustee shall hold the Swap Agreement in the State of
New York.
(d) Without limiting the foregoing, the Issuer and the Indenture
Trustee agree, and the Indenture Trustee shall cause the Custodian, to take
such different or additional action as the Indenture Trustee may reasonably
request in order to maintain the perfection and priority of the security
interest of the Indenture Trustee in the event of any change in applicable
law or regulation, including Articles 8 and 9 of the UCC, the Book-Entry
Regulations and Revised Article 8.
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
--------------------------------------------------
Section 4.01. The Notes. The aggregate Denominations of all Notes
---------
ssued as of the Closing Date shall be $250,000,000. Beneficial Owners shall
hold interests in the Global Notes through the book-entry facilities of the
Depository in minimum Denominations of $10,000 and integral multiples of
$1,000 in excess thereof.
All Notes shall be issued initially in the form of one or more permanent
Global Notes in definitive, fully registered form without interest coupons
with the applicable legend set forth in Exhibit A hereto, respectively, added
to the form of such Notes (each, a "Global Note"), which shall be deposited
-----------
n behalf of the subscribers for such Notes represented thereby with the
Indenture Trustee as custodian for the Depository and registered in the name
of a nominee of the Depository, duly executed by the Owner Trustee and
authenticated by the Indenture Trustee as hereinafter provided. The
aggregate principal amount of the Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Indenture
Trustee or the Depository or its nominee, as the case may be, as hereinafter
provided.
The Indenture Trustee may for all purposes (including the making of
payments due on the Global Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Global Notes for
the purposes of exercising the rights of Noteholders hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Global Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive notes for the Global
Notes as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Noteholder shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners.
The Indenture Trustee may establish a reasonable record date in connection
with solicitations of consents from or voting by Noteholders and give notice
to the Depository of such record date. Without the consent of the Issuer and
the Indenture Trustee, no Global Note may be transferred by the Depository
except to a successor Depository that agrees to hold such Global Note for the
account of the Beneficial Owners.
In the event The Depository Trust Company resigns or is removed as
Depository, the Depositor may appoint a successor Depository. If no
successor Depository has been appointed within 30 days of the effective date
of the Depository's resignation or removal, each Beneficial Owner shall be
entitled to certificates representing the Global Note it beneficially owns in
the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Trust
by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Indenture Trustee and delivered by the
Indenture Trustee to or upon the order of the Issuer upon receipt by the
Indenture Trustee of the CABS.
Section 4.02. Registration of and Limitations on Transfer and Exchange
--------------------------------------------------------
of Notes. The Note Registrar shall cause to be kept at
- - --------
Trusts Corporate Trust Office a note register in which, subject to such
reasonable regulations as it may prescribe, the Note Registrar shall provide
for the registration of Notes and of transfers and exchanges of Notes as
herein provided (the "Note Register").
-------------
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office, the Indenture Trustee shall execute and the Note Registrar shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes in authorized Denominations evidencing the
same aggregate Percentage Interests.
At the option of the Noteholders, Notes may be exchanged for other Notes
in authorized Denominations evidencing the same aggregate Percentage
Interests upon surrender of the Notes to be exchanged at the Corporate Trust
Office of the Note Registrar. Whenever any Notes are so surrendered for
exchange, the Owner Trustee on behalf of the Issuer shall execute and the
Indenture Trustee shall authenticate and deliver the Notes which the
Noteholder making the exchange is entitled to receive. Each Note presented
or surrendered for registration of transfer or exchange shall be duly
endorsed by, or be accompanied by a written instrument of transfer in form
reasonably satisfactory to the Note Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing. Notes delivered upon any
such transfer or exchange shall evidence the same obligations, and shall be
entitled to the same rights and privileges, as the Notes surrendered.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall be
cancelled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
------------------------------------------
mutilated Note is surrendered to the Note Registrar, or the Note Registrar
receives evidence to its satisfaction of the destruction, loss or theft of
any Note, and (ii) there is delivered to the Indenture Trustee such security
or indemnity as may be required by it to hold the Issuer, the Note Registrar
and the Indenture Trustee harmless, then, in the absence of notice to the
Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, and provided that the requirements of
Section 8-405 of the UCC are met, the Issuer, shall execute, and the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note of
like tenor (including the same date of issuance) and equal principal amount,
provided that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven days shall be due and payable, or
shall have been called for redemption, instead of issuing a replacement Note,
the Issuer may pay such destroyed, lost or stolen Note when so due or payable
or upon the Redemption Date without surrender thereof. If, after the
delivery of such replacement Note or payment of a destroyed, lost or stolen
Note pursuant to the proviso to the preceding sentence, a bona fide purchaser
of the original Note in lieu of which such replacement Note was issued
presents for payment such original Note, the Issuer, the Note Registrar and
the Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was delivered or any Person taking
such replacement Note from such Person to whom such replacement Note was
delivered or any assignee of such Person, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor
to the extent of any loss, damage, cost or expense incurred by the Issuer,
the Note Registrar or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Indenture Trustee may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee or the Note Registrar) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not
the mutilated, destroyed, lost or stolen Note shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly
issued hereunder.
The provisions of this Section 4.03 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 4.04. Persons Deemed Owners. Prior to due presentment for
---------------------
egistration of transfer of any Note, the Issuer, the Indenture Trustee, the
Note Registrar and any agent of the Issuer, the Note Registrar or the Inden-
ture Trustee shall treat the Person in whose name any Note is registered (as
of the day of determination) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any, on such Note and
or all other purposes whatsoever, whether or not such Note be overdue,
and neither the Issuer, the Indenture Trustee, the Note Registrar nor any
agent of the Issuer, the Note Registrar or the Indenture Trustee shall be
affected by notice to the contrary.
Section 4.05. Cancellation. All Notes surrendered for payment,
------------
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly cancelled by the Indenture Trustee. The Issuer
may at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Indenture Trustee. No Notes shall be authenticated
in lieu of or in exchange for any Notes cancelled as provided in this Section
4.05, except as expressly permitted by this Indenture. All cancelled Notes
may be held or disposed of by the Indenture Trustee in accordance with its
standard retention or disposal policy as in effect at the time, unless the
Issuer shall direct by an Issuer Order that they be destroyed or returned to
it; provided that such Issuer Order is timely and the Notes have not been
--------
previously disposed of by the Indenture Trustee.
Section 4.06. Book-Entry Notes. This section shall apply only to
----------------
Global Notes deposited with or on behalf of the Depository.
The Owner Trustee shall execute, on behalf of the Issuer, and the
Indenture Trustee shall authenticate and deliver initially one or more Global
Notes that (i) shall be registered in the name of the nominee of the
Depository for such Global Notes and (ii) shall be delivered by the Indenture
Trustee to such Depository or pursuant to such Depository's instructions or
held by the Indenture Trustee's agent as custodian for the Depository. Such
Global Notes shall initially be registered on the Note Register in the name
of Cede & Co., the nominee of the initial Depository, and no Beneficial Owner
shall receive a Definitive Note representing such Beneficial Owner's interest
in such Note, except as provided in Section 4.08. Unless and until
definitive, fully registered Notes (the "Definitive Notes") have been issued
----------------
to Beneficial Owners pursuant to Section 4.08:
(i) the provisions of this Section 4.06 shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Depository for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the
giving of instructions or directions hereunder) as the sole holder of
the Global Notes, and shall have no obligation to the applicable Note
Owners;
(iii) to the extent that the provisions of this Section 4.06
conflict with any other provisions of this Indenture, the provisions of
this Section 4.06 shall control;
(iv) the rights of Beneficial Owners shall be exercised only
through the Depository and shall be limited to those established by law
and agreements between such Note Owners and the Depository and/or the
Depository Participants pursuant to the Note Depository Agreement.
Unless and until Definitive Notes are issued pursuant to Section 4.08,
the initial Depository shall make book-entry transfers among the
Depository Participants and receive and transmit payments of principal
of and interest on the Global Notes to such Depository Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Global Notes
evidencing a specified percentage of the Principal Amount of the Notes,
the Depository shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Beneficial
Owners and/or Depository Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Global Notes and has delivered such instructions in writing to the
Indenture Trustee.
Section 4.07. Notices to Depository. Whenever a notice or other
---------------------
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Beneficial Owners pursuant
to Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Global Notes to
the Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08. Definitive Notes. If (i) the Administrator advises the
----------------
Indenture Trustee in writing that the Depository is no longer willing or able
to properly discharge its responsibilities with respect to the Global Notes
and the Administrator is unable to locate a qualified successor, (ii) the
Administrator at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system of registration through the
Depository or (iii) after the occurrence of an Event of Default, the
Noteholders evidencing not less than 50% of the then Principal Amount advise
the Indenture Trustee and the Depository through Depository Participants in
writing that the continuation of a book-entry system through the Depository
is no longer in the best interests of the Noteholders, then the Depository
shall be expected to notify all Beneficial Owners of the availability of
Definitive Notes to Beneficial Owners requesting the same. Upon surrender to
the Indenture Trustee of the typewritten Notes representing the Book-Entry
Notes by the Depository, accompanied by re-registration instructions, the
Issuer shall execute and the Indenture Trustee shall authenticate the
Definitive Notes in accordance with the written instructions of the
Depository. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Indenture Trustee
shall recognize the Holders of the Definitive Notes as Noteholders.
Section 4.09. Tax Treatment. The Issuer has entered into this
-------------
Indenture, and the Notes shall be issued, with the intention that, for
federal, state and local income, single business and franchise tax purposes,
the Notes shall qualify as indebtedness. The Issuer, by entering into this
Indenture, and each Noteholder, by its acceptance of its Note (and each
Beneficial Owner by its acceptance of an interest in the applicable Book-
Entry Note), agree to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness.
Section 4.10. Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall cease to be of further effect, as set forth in Section 8.04, 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 3.03, 3.04, 3.06, 3.08, 3.09, 3.10 and 3.12,
(v) the rights, obligations and immunities of the Indenture Trustee hereunder
(including the rights of the Indenture Trustee under Section 6.07 and the
obligations of the Indenture Trustee under Section 4.11) and (vi) the rights
of Noteholders, the Swap Counterparty and the Swap Guarantor 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, at the expense of
the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than
Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 4.03) have been delivered to the
Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation
(a) have become due and payable, or
(b) shall become due and payable at the Scheduled Final
Payment Date within one year, and the Issuer, in the case of (a) or
(b) above, has irrevocably deposited or caused to be irrevocably
deposited with the Indenture Trustee cash or direct obligations of
or obligations guaranteed by the United States of America (which
shall mature prior to the date such amounts are payable), in trust
for such purpose, in an amount sufficient to pay and discharge the
entire indebtedness on such Notes not theretofore delivered to the
Indenture Trustee for cancellation when due on the Scheduled Final
Payment Date, and the Indenture Trustee or the Issuer has received
prior written confirmation from each Rating Agency that the
satisfaction and discharge of this Indenture pursuant to this
Section 4.10 in connection therewith shall not result in a
reduction, withdrawal or suspension of the ratings assigned to the
Notes or the Certificates;
(B) the Issuer has paid or caused to be paid all amounts due or
which may become due by the Issuer to the Swap Counterparty or the Swap
Guarantor under the Swap Agreement or the Swap Policy;
(C) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(D) in the case of a deposit made in connection with Section
4.10(A)(2)(b) above, the Indenture Trustee shall have received an
Opinion of Counsel and (if required by the Indenture Trustee, the Swap
Counterparty or the Swap Guarantor) a certificate from a firm of
Independent certified public accountants, each stating that all condi-
tions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with and such Opinion of
Counsel shall further be to the effect that such deposit shall not have
any material adverse tax consequences to the Issuer, any Noteholders,
any Certificateholders, the Swap Counterparty or the Swap Guarantor.
Section 4.11. Application of Trust Money. All moneys deposited with
--------------------------
the Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Notes, the Swap
Agreement, the Swap Policy and this Indenture, to the payment, either
directly or through the Administrator, as the Indenture Trustee may
determine, to the Swap Counterparty, the Swap Guarantor and the Holders of
the particular Notes for the payment or redemption of which such moneys have
been deposited with the Indenture Trustee, of all sums due and to become due
thereon for principal and interest.
Section 4.12. Repayment of Moneys Held by Administrator. In
-----------------------------------------
onnection with the satisfaction and discharge of this Indenture with respect
to the Notes, the Swap Agreement and the Swap Policy, all moneys then held by
the Administrator other than the Indenture Trustee under the provisions of
this Indenture with respect to such Notes, the Swap Agreement and the Swap
Policy shall be paid to the Indenture Trustee to be held and applied
according to Section 3.05 and thereupon such Administrator shall be released
from all further liability with respect to such moneys.
Section 4.13. CUSIP Numbers. The Issuer in issuing the Notes may use
-------------
CUSIP" numbers (if then generally in use), and, if so, the Indenture Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to
Noteholders; provided that any such notice may state that no representation
--------
was made as to the correctness of such numbers either as printed on the Notes
or as contained in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the Notes, and any such
redemption shall not be affected by any defect in or omission of such
numbers. The Issuer will promptly notify the Indenture Trustee of any change
in the "CUSIP" numbers, and the Indenture Trustee shall notify each affected
Noteholder, subject to the provisions of this Section 4.13.
ARTICLE V
Remedies
--------
Section 5.01. Events of Default. Event of Default shall have the
-----------------
meaning given to such term in Article I.
Section 5.02. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Indenture Trustee. (a) Upon an Event of Default, principal, interest and
- - -----------------
other amounts in respect of the Notes shall become due and payable as
provided in Section 3.05. Interest shall accrue on all amounts not paid when
due (including any overdue interest), to the extent legally enforceable, at
the Note Accrual Rate and the Issuer agrees to pay such additional amounts in
respect thereof to the extent necessary to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel.
(b) If the Notes are due and payable following an Event of Default with
respect thereto, the Indenture Trustee, as more particularly provided in
Section 5.03, in its discretion, may proceed to protect and enforce its
rights and the rights of the Noteholders and the Swap Counterparty, by such
appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law,
including any remedy provided in any Underlying Agreement to a holder of the
CABS; provided that if the Swap Counterparty or the Swap Guarantor has given
--------
written instructions to the Indenture Trustee with respect to such
proceedings, remedies or actions, then the Indenture Trustee shall follow
such instructions.
(c) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or in respect of the Swap Agreement or any Person
having or claiming an ownership interest in the Trust Estate, Proceedings
under Title 11 of the United States Code or any other applicable federal or
state bankruptcy, insolvency or other similar law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator
or similar official shall have been appointed for or taken possession of the
Issuer or its property or such other obligor or Person, or in case of any
other comparable judicial Proceedings relative to the Issuer or other obligor
upon the Notes or in respect of the Swap Agreement or Swap Policy, or to the
creditors or property of the Issuer, the Indenture Trustee, irrespective
of whether the principal of any Notes shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes or in
respect of the Swap Agreement or Swap Policy and to file such other
papers or documents as may be necessary or advisable in order to have
the claims of the Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee and each predecessor Indenture
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses, fees and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith), the Swap
Counterparty and the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes and the Swap Counterparty in any
election of a trustee, a standby trustee or Person performing similar
functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and the Swap Counterparty
and of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the
Indenture Trustee, the Swap Counterparty or the Holders of Notes allowed
in any judicial proceedings relative to the Issuer, its creditors and
its property; and any trustee, receiver, liquidator, custodian or other
similar official in any such Proceeding is hereby authorized by each of
such Noteholders and by the Swap Counterparty to make payments to the
Indenture Trustee, and, in the event that the Indenture Trustee shall
consent to the making of payments directly to such Noteholders or the
Swap Counterparty, as applicable, to pay to the Indenture Trustee such
amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their
respective agents, attorneys and counsel, and all other expenses, fees
and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith.
(d) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any Noteholder, the Swap Counterparty or Swap Guarantor any plan of
reorganization, arrangement, adjustment or composition affecting the Notes,
the rights of any Holder thereof, the Swap Counterparty or the Swap Guarantor
or to authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder, the Swap Counterparty or the Swap Guarantor in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this Indenture,
under any of the Notes, or under the Swap Agreement or Swap Policy, may be
enforced by the Indenture Trustee without the possession of any of the Notes
or the production thereof in any trial or other Proceedings relative thereto,
and any such action or proceedings instituted by the Indenture Trustee shall
be brought in its own name as trustee of an express trust, and any recovery
of judgment, subject to the payment of the expenses, disbursements and
compensation of the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents and attorneys, shall be for the ratable benefit of
the Holders of the Notes and the Swap Counterparty.
(f) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall
be held to represent all the Holders of the Notes and the Swap Counterparty,
and it shall not be necessary to make any Noteholder or the Swap Counterparty
a party to any such Proceedings.
Section 5.03. Remedies. If an Event of Default shall have occurred and
--------
nterest and principal in respect of the Notes has been accelerated pursuant
to this Indenture, the Indenture Trustee (or shall if required pursuant to the
terms of this Indenture) do one or more of the following:
(i) liquidate the CABS as provided in Section 5.15 hereof;
(ii) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer upon such Notes or in respect of the Swap Agreement or
the Swap Policy moneys adjudged due;
(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 UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee, the Swap Counterparty, the Swap
Guarantor and the Holders of the Notes;
(v) 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; and
(vi) institute Proceedings in its own name and as trustee of an
express trust and take any other appropriate action to protect and
enforce the rights and remedies of the Issuer under the Swap Agreement
and Swap Policy.
Immediately after the occurrence of an Event of Default described in clause
(vi) of the definition of Event of Default, the Indenture Trustee shall sell
and liquidate the CABS.
Section 5.04. Enforcement of Swap Agreement. Notwithstanding any other
-----------------------------
provision of this Indenture requiring the consent of the Swap Counterparty or
the Swap Guarantor or directing the Indenture Trustee to follow the
instructions of the Swap Counterparty or the Swap Guarantor, if a Swap
Default or Swap Termination occurs which does not result in the entry into a
Replacement Swap in accordance with the terms of the Swap Agreement, the
Indenture Trustee shall, if directed by the Holders of at least a majority of
the then Principal Amount of the Notes, proceed to protect and enforce the
rights of the Issuer under the Swap Agreement and the Swap Policy by such
appropriate Proceedings as the Holders of at least a majority of the then
Principal Amount of the Notes shall direct, without regard to any
instructions of the Swap Counterparty or the Swap Guarantor.
Section 5.05. Modification and Amendment of Swap Agreement. The Owner
--------------------------------------------
Trustee may enter into any amendment of the Swap Agreement requested by the
Swap Counterparty to cure any ambiguity in, or to correct or supplement any
provision of, such Swap Agreement, so long as (i) the Owner Trustee and the
Indenture Trustee determine, based on an Opinion of Counsel, that such
amendment shall not adversely affect the interests of the Noteholders and the
Certificateholders and (ii) it obtains the prior written consent of the
Swap Guarantor.
Section 5.06. Limitation of Suits and Liability. (a) No Holder of any
---------------------------------
Note shall have any right to institute any Proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the then Principal Amount
of the Notes have made 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;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request satisfactory to the Indenture
Trustee;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders
of a majority of the then Principal Amount of the Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes, the Swap Counterparty or the Swap Guarantor or to
obtain or to seek to obtain priority or preference over any other Holders,
the Swap Counterparty or the Swap Guarantor or to enforce any right under
this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the then Principal Amount of
the Notes, the Indenture Trustee may (but shall not be obligated) determine
what action, if any, shall be taken, notwithstanding any other provisions
--------
of this Indenture; provided that if the Swap Counterparty or the Swap
Guarantor has given instructions to the Indenture Trustee with respect to
any such determination, then the Indenture Trustee shall follow such
instructions.
(b) With respect to the Issuer, neither the Indenture Trustee nor the
Owner Trustee in their capacities as trustees, nor any Holder of a
Certificate representing an ownership interest in the Issuer, nor the
Administrator nor any of their respective owners, beneficiaries, agents,
officers, directors, employees, affiliates, successors or assigns shall, in
the absence of an express agreement to the contrary, be personally liable for
the payment of the principal of or interest on the Notes or for the
agreements of the Issuer contained in this Indenture.
Section 5.07. Unconditional Rights of Noteholders To Receive Principal
--------------------------------------------------------
and Interest. Notwithstanding any other provisions in this Indenture, the
- - ------------
Holder of any Note shall have the right, which is absolute and unconditional,
to receive payment of the principal of and interest, if any, on such Note on
or after the respective due dates thereof expressed in such Note or in this
Indenture and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture
----------------------------------
Trustee, the Swap Counterparty, the Swap Guarantor or any Noteholder has
instituted any Proceeding to enforce any right or remedy under this Indenture
and such Proceeding has been discontinued or abandoned for any reason or has
been determined adversely to the Indenture Trustee, to the Swap Counterparty,
to the Swap Guarantor or to such Noteholder, then and in every such case the
Issuer, the Indenture Trustee, the Swap Counterparty 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 Swap Counterparty, the Swap
Guarantor and the Noteholders shall continue as though no such Proceeding had
been instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy
------------------------------
herein conferred upon or reserved to the Indenture Trustee, the Swap
Counterparty, the Swap Guarantor or to the Noteholders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of
------------------------------
the Indenture Trustee, the Swap Counterparty, the Swap Guarantor or any
Holder of any Note to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy
given by this Article V or by law to the Indenture Trustee, the Swap
Counterparty, the Swap Guarantor or to the Noteholders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture
Trustee, the Swap Counterparty, the Swap Guarantor or by the Noteholders, as
the case may be.
Section 5.11. Waiver of Past Defaults. Prior to the declaration of
-----------------------
the acceleration of the maturity of the Notes, the Holders of Notes of not
less than a majority of the then Principal Amount of the Notes may waive any
past Event of Default and its consequences except an Event of Default
(a) with respect to payment of principal of or interest on any of the Notes,
(b) in respect of a covenant or provision hereof which cannot be modified or
amended without the consent of the Holder of each Note or (c) specified in
paragraph (vi) of the definition thereof. In the case of any such waiver,
the Issuer, the Indenture Trustee, the Swap Counterparty, the Swap Guarantor
and the Holders of the Notes shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event
of Default or impair any right consequent thereto.
Section 5.12. Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of any Note by such Holder'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 and expenses, 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 5.12 shall not apply to (a) any
suit instituted by the Indenture Trustee, (b) any suit instituted by the Swap
Counterparty or the Swap Guarantor, (c) any suit instituted by any
Noteholder, or group of Noteholders, in each case holding in the aggregate
more than 10% of the then Principal Amount of the Notes or (d) 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.
Section 5.13. Waiver of Stay or Extension Laws. The Issuer covenants
--------------------------------
(to the extent that it may lawfully do so) that it shall 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 materially affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not hinder, delay or impede the execution of
any power herein granted to the Indenture Trustee, but shall suffer and
permit the execution of every such power as though no such law had been
enacted.
Section 5.14. Action on Notes. The Indenture Trustee's right to seek
---------------
and recover judgment on the Notes, in respect of the Swap Agreement, the Swap
Policy 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 Swap Counterparty, the Swap Guarantor or the
Noteholders shall be impaired by the recovery of any judgment by the
Indenture Trustee against the Issuer or by the levy of any execution under
such judgment upon any portion of the Trust Estate or upon any of the assets
of the Issuer. Any money or property collected by the Indenture Trustee
shall be applied in accordance with Section 3.05(d).
Section 5.15. Sale of CABS. Any sale or liquidation of the CABS and/or
------------
Eligible Investments by the Indenture Trustee (or the Market Agent on the
Indenture Trustee's behalf) shall be conducted by the Indenture Trustee (or
the Market Agent on the Indenture Trustee's behalf) in accordance with the
Sale Procedures. The settlement of the sale shall occur no later than the
close of business on the Business Day prior to the related Payment Date or,
if earlier, on the date (and the time (if any)) provided in the Swap
Agreement.
ARTICLE VI
The Indenture Trustee
---------------------
Section 6.01. 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 use the same degree of
care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith 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 to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts
stated therein).
(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 6.01;
(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; and
(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 the this Indenture.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b) and (c) of this Section
6.01.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(f) 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 adequate indemnity against such risk or liability
is not reasonably assured to it.
Section 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee
---------------------------
may rely conclusively and shall be protected in acting or refraining from
acting upon any document 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) 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, and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of, or
for the supervision of, any such agent, attorney, custodian or nominee
appointed with due care by it hereunder.
(c) 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 that the Indenture Trustee's conduct does not
--------
onstitute willful misconduct, negligence or bad faith.
(d) The Indenture Trustee may consult with counsel of its selection,
and the advice or opinion of counsel shall be full and complete authorization
and protection from liability in respect to any action taken, omitted
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(e) Any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by a Issuer Request or Issuer Order.
(f) Whenever in the administration of this Indenture the Indenture
Trustee shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Indenture Trustee
(unless other evidence be herein specifically prescribed) may, in the absence
of bad faith on its part, conclusively rely upon an Officers' Certificate.
(g) The Indenture Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have offered to the Indenture Trustee reasonable security
or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(h) The Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Indenture Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Indenture Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books and
records and premises of the Issuer, personally or by agent or attorney at
the sole cost of the Issuer and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation;
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
--------------------------------------
Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. The
Administrator, Note Registrar or co-registrar may do the same with like
rights. However, the Indenture Trustee must comply with Section 6.11.
Section 6.04. 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 or the Notes, it shall not be accountable for
the Issuer's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes
other than the Indenture Trustee's certificate of authentication.
Unless The Bank of New York is the Administrator, the Indenture Trustee
shall not be deemed to have notice or knowledge of any Event of Default
(other than as described in clauses (i) and (ii) of the definition thereof)
unless a Responsible Officer assigned to and working in the Corporate Trust
Department has actual knowledge or has received written notice thereof.
The Indenture Trustee shall not be responsible for any errors or
omissions contained in the CABS Distribution Date Statements or for any
errors or omissions in the statements furnished to any Noteholder pursuant to
Section 3.19 to the extent such error or omission results from information
contained in or omitted from the CABS Distribution Date Statement.
Section 6.05. Notice of Event of Default. If an Event of Default
--------------------------
occurs and is continuing and if it is known to a Responsible Officer of the
Indenture Trustee, the Indenture Trustee shall mail to each Noteholder, the
Swap Counterparty and the Swap Guarantor notice of the Event of Default
within five Business Days after it obtains written notice thereof. Except in
the case of an Event of Default in payment of principal of or interest on any
Note (including payments pursuant to the mandatory redemption provisions of
such Note), the Indenture Trustee may withhold the notice from the
Noteholders 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 6.06. Reports by Indenture Trustee to Holders. The Indenture
---------------------------------------
Trustee shall deliver to each Noteholder such information as may be required
to be provided in respect of its Note under the Code.
Section 6.07. Compensation and Indemnity. The Indenture Trustee shall
--------------------------
receive from Lehman Brothers Inc. as compensation for its services hereunder
such fees as have been separately agreed upon in writing on or before the
date hereof among the Depositor, Lehman Brothers Inc. and the Indenture
Trustee. The Indenture Trustee shall be obligated to perform its obligations
under this Indenture whether or not it actually receives the compensation
referred to in the preceding sentence. The Indenture Trustee agrees that it
shall not have recourse to the Issuer for its compensation hereunder. The
Indenture Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall or shall
cause the Administrator to reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
in addition to the compensation for its services. Such expenses shall
include the reasonable compensation and expenses, disbursements and advances
of the Indenture Trustee's agents, counsel, accountants and experts. The
Issuer shall or shall cause the Administrator to indemnify the Indenture
Trustee against any and all loss, liability or expense (including attorneys'
fees) incurred by it in connection with the administration of this trust and
the performance of its duties hereunder. The Indenture Trustee shall notify
the Issuer and the Depositor promptly of any claim for which it may seek
indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Depositor shall not relieve the Issuer (or Lehman Brothers Inc.) of its
obligations hereunder. The Issuer shall or shall cause the Lehman Brothers
Inc. or its designee to defend any such claim, and the Indenture Trustee may
have separate counsel and the Issuer shall or shall cause the Lehman Brothers
Inc. to pay the fees and expenses of such counsel. Neither the Issuer nor
the Lehman Brothers Inc. need reimburse any expense or indemnify against any
loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith. The
Issuer (and the Indenture Trustee acting on behalf of the Issuer) shall not
incur Extraordinary Expenses unless 100% of the Securityholders consent to
provide indemnification for such Extraordinary Expenses.
Section 6.08. Replacement of Indenture Trustee. No resignation or
--------------------------------
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture
Trustee may resign at any time by so notifying the Issuer. The Holders of a
majority in Principal Amount of the Notes, the Swap Counterparty or the Swap
Guarantor may remove the Indenture Trustee by so notifying the Indenture
Trustee and, in the case of such a removal by the Holders, the Swap Counter-
party, and the Swap Guarantor, and the Holders of a majority in Principal
Amount of the Notes with the prior consent of the Swap Counterparty and
the Swap Guarantor may appoint a successor Indenture Trustee. The
Administrator shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
(with the prior consent of the Swap Counterparty and the Swap Guarantor), may
appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and the Swap Counterparty and
the Swap Guarantor. Thereupon the resignation or removal of the retiring
Indenture Trustee shall become effective, and the successor Indenture Trustee
shall have all the rights, powers and duties of the Indenture Trustee under
this Indenture. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders and the Rating Agencies. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee
to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer, the Swap Counterparty, the Swap Guarantor or
the Holders of a majority in Principal Amount of the Notes may petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder, the Swap Counterparty or the Swap Guarantor may petition any
court of competent jurisdiction for the removal of the Indenture Trustee and
the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for
the benefit of the retiring Indenture Trustee.
Section 6.09. Successor Indenture Trustee by Merger. 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 such corporation or banking association shall be otherwise
- - --------
qualified and eligible under Section 6.11. The Indenture Trustee shall
provide the Rating Agencies, the Swap Counterparty and the Swap Guarantor
prior written notice of any such transaction.
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 Estate may at the time be located, the Indenture
Trustee shall have the power and may, with the prior consent of the Swap
Counterparty and the Swap Guarantor 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, and
to vest in such Person or Persons, in such capacity and for the benefit of
the Noteholders, the Swap Counterparty and the Swap Guarantor, such title to
the Trust Estate, or any part hereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Indenture Trustee or separately, as may be provided therein, subject to
all the provisions of this Indenture, specifically including every provision
of this Indenture relating to the conduct of, affecting the liability of, or
affording protection to, the Indenture Trustee. Every such instrument shall
be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification. The Indenture Trustee
-----------------------------
shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it or its
arent shall have a long-term debt rating of Baa3 or better by Moody's and BBB-
or better by S&P.
Section 6.12. Representation and Warranty. The Indenture Trustee
---------------------------
represents and warrants to the Issuer, the Swap Counterparty, the Swap
Guarantor and for the benefit of the Noteholders, that this Indenture has
been executed and delivered by one of its Responsible Officers who is duly
authorized to execute and deliver such document in such capacity on its
behalf.
Section 6.13. Directions to Indenture Trustee. The Issuer hereby
-------------------------------
directs the Indenture Trustee:
(a) to accept assignment of the CABS and hold the assets of the Issuer
in trust for the Noteholders, the Certificateholders, the Swap Counterparty
and the Swap Guarantor, as their interests appear herein;
(b) to issue, authenticate and deliver the Notes substantially in the
form prescribed by Exhibit A in accordance with the terms of this Indenture;
and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
Section 6.14. Representations, Warranties and Covenants of the
------------------------------------------------
Indenture Trustee and of The Bank of New York. The Indenture Trustee
- - ---------------------------------------------
represents, warrants and covenants that The Bank of New York:
(a) is, and at all times will continue to be, a bank, broker-
dealer or trust company which regularly accepts in the ordinary course
of its business securities as a custodial service for customers and
maintains securities accounts for its customers;
(b) will act in the capacity of a "financial intermediary" as
defined in Section 8-313(4) of the UCC with respect to certificated
securities identified on its books and records;
(c) will maintain an account with and be a Depository Participant;
(d) is not and will not be a "clearing corporation" as defined in
Section 8-102(3) of the UCC;
(e) will acquire its interest in the CABS and Eligible Investments
in good faith and without notice or knowledge of any "advance claim" (as
defined in Section 8-302(2) of the UCC).
The Indenture Trustee warrants and covenants:
(a) the CABS and Eligible Investments (if any) are and will be
identified on the books and records of The Bank of New York for the sole
and exclusive benefit of the Trust, and that the book-entries made by
The Bank of New York with respect to the CABS and Eligible Investments
(if any) are complete and accurate in all respects;
(b) The Bank of New York is current with respect to all fees and
expenses owed by it as a Depository Participant, and it will continue to
pay such fees and expenses promptly when they become due;
(c) The Bank of New York hereby waives any lien it may have on the
CABS and the Eligible Investments (if any) and the proceeds thereof for
its fees and expenses for holding the CABS and Eligible Investments (if
any); and
(d) upon The Bank of New York's account with the Depository being
credited with a distribution in respect of the CABS and Eligible
Investments (if any), The Bank of New York will cause such amounts to be
immediately deposited to the Collection Account.
The Bank of New York hereby (i) confirms the Trust's purchase of the
CABS and Eligible Investments (if any) and (ii) acknowledges that the CABS
and Eligible Investments (if any) are identified by book-entry as belonging
to the Trust.
ARTICLE VII
Noteholders' Lists and Reports
------------------------------
Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
-------------------------------------------------------
of Noteholders. The Note Registrar shall furnish or cause to be furnished
- - --------------
to the Indenture Trustee (a) not more than five days after the earlier of
(i) each Record Date and (ii) three months after the last Record Date, a
list, in such form as the Indenture Trustee may reasonably require, of the
names and addresses of the Holders of Notes 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 Note Registrar of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; provided that so long as the Indenture Trustee is the
--------
Note Registrar, no such list shall be required to be furnished to the
Indenture Trustee.
Section 7.02. Preservation of Information; Communications to
----------------------------------------------
Noteholders. The Indenture Trustee shall preserve, in as current a form as
- - -----------
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
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 7.01 upon receipt of a new list so furnished.
ARTICLE VIII
Accounts, Disbursements and Releases
------------------------------------
Section 8.01. 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. The
Indenture Trustee shall apply all such money received by it as provided in
this Indenture. Except as otherwise expressly provided in this Indenture, if
any default occurs in the making of any payment or performance under any
agreement or instrument that is part of the Trust Estate, the Indenture
Trustee may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to
claim a Default or Event of Default under this Indenture and any right to
proceed thereafter as provided in Article V.
Section 8.02. Trust Accounts. (a) On or prior to the Closing Date,
--------------
the Indenture Trustee shall establish and maintain, in the name of the
Issuer, for the benefit of the Noteholders, the Certificateholders, the Swap
Counterparty and the Swap Guarantor, as their interests appear herein, the
Collection Account as provided in Section 3.01.
(b) The Indenture Trustee shall deposit all distributions of interest
and principal that it receives on the CABS and Eligible Investments, and any
amounts received under the Swap Agreement or the Swap Policy, into the
Collection Account. On or prior to the Scheduled Final Payment Date, the
Indenture Trustee shall distribute, as received, all amounts received in
respect of interest on the CABS and Eligible Investments (but excluding
accrued interest received on any Eligible Investment to the extent such
accrued interest represents interest paid by the Issuer as a portion of the
purchase price of such Eligible Investment) to the Swap Counterparty or the
Swap Guarantor in accordance with the Swap Agreement or the Swap Policy, as
the case may be.
Section 8.03. Opinion of Counsel. The Indenture Trustee shall receive
------------------
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.05(a) and (b), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, as a condition to
such action, an Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such
action shall not materially and adversely impair the security for the Notes,
Swap Counterparty or the Swap Guarantor or the rights of the Noteholders or
Certificateholders, Swap Counterparty or the Swap Guarantor in contravention
of the provisions of this Indenture; provided 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.
Section 8.04. Termination Upon Distribution to Noteholders. This
--------------------------------------------
Indenture and the respective obligations and responsibilities of the Issuer
and the Indenture Trustee created hereby shall terminate upon the
distribution to Noteholders, Certificateholders, Swap Counterparty, the Swap
Guarantor and the Indenture Trustee of all amounts required to be distributed
pursuant to Article III; provided that in no event shall the trust created
--------
hereby continue beyond the expiration of 21 years from the death of the
survivor of the descendants of Joseph P. Kennedy, the late ambassador of the
United States to the Court of St. James, living on the date hereof.
Section 8.05. Release of Trust Estate. (a) Subject to the payment of
-----------------------
its fees and expenses, the Indenture Trustee when required by the provisions
of this Indenture shall execute instruments to release property from the lien
of this Indenture, or convey the Indenture Trustee's interest in the same, in
a manner and under circumstances that are not inconsistent with the
provisions of this Indenture. No party relying upon an instrument executed
by the Indenture Trustee as provided in Article IV hereunder 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 moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes or
Certificates outstanding, all sums due the Indenture Trustee pursuant to this
Indenture have been paid, and all sums due the Swap Counterparty and the Swap
Guarantor have been paid, release any remaining portion of the Trust Estate
that secured the Notes from the lien of this Indenture. The Indenture
Trustee shall release property from the lien of this Indenture pursuant to
this Section 8.05 only upon receipt of an request from the Issuer accompanied
by an Officers' Certificate, an Opinion of Counsel and a letter from the
President or any Vice President or any Secretary of the Swap Counterparty and
the Swap Guarantor, stating that the Swap Counterparty (or the Swap
Guarantor, as the case may be) has no objection to such request from the
Issuer.
Section 8.06. Surrender of Notes Upon Final Payment. By acceptance of
-------------------------------------
any Note, the Holder thereof agrees to surrender such Note to the Indenture
Trustee promptly, prior to such Noteholder's receipt of the final payment
thereon.
ARTICLE IX
Supplemental Indentures
-----------------------
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
------------------------------------------------------
(a) Without the consent of the Holders of any Notes or the Swap
Counterparty, but with the prior written consent of the Swap Guarantor, the
Issuer and the Indenture Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto in form satisfactory to
the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required
to be subjected to the lien of this Indenture, or to subject to the lien
of this Indenture additional property;
(ii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, the Swap Counterparty and the Swap Guarantor, or
to surrender any right or power herein conferred upon the Issuer;
(iii) to convey, transfer, assign, mortgage or pledge any property
to or with the Indenture Trustee;
(iv) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture that may be inconsistent with
any other provision herein or in any supplemental indenture or to make
any other provisions with respect to matters or questions arising under
this Indenture or in any supplemental indenture; provided that such
--------
action shall not adversely affect the interests of the Holders of the
Notes, the Swap Counterparty or the Swap Guarantor; or
(v) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee 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;
provided that no such indenture supplements shall be entered into unless the
- - --------
Indenture Trustee, the Swap Counterparty and the Swap Guarantor shall have
received an Opinion of Counsel satisfactory to the Swap Counterparty, the
Swap Guarantor and the Indenture Trustee that entering into such
indenture supplement shall not materially and adversely affect the interest
of any Noteholder or the Swap Counterparty and shall not have any material
adverse tax consequences to the Noteholders, the Swap Counterparty or the
Swap Guarantor.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer, the Swap Counterparty and the Indenture Trustee may,
also without the consent of any of the Holders of the Notes but with the
prior written consent of the Swap Guarantor and prior notice to the Rating
Agencies, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes, the Swap Counterparty or the Swap
Guarantor under this Indenture; provided that such action shall not, as
--------
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Noteholder, the Swap Counterparty or the Swap Guarantor.
Section 9.02. Supplemental Indentures With Consent of Noteholders. The
---------------------------------------------------
Issuer, the Swap Counterparty and the Indenture Trustee, also may, with prior
confirmation by each Rating Agency that such action shall not cause a
withdrawal, reduction or suspension of the ratings assigned to the Notes or
the Certificates, and with the consent of the Swap Guarantor and the Holders
of not less than a majority of the then Principal Amount of Notes, enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes or the Swap Counterparty under this Indenture; provided that,
--------
without the consent of the Holder of each Outstanding Note affected thereby,
no such supplemental indenture shall:
(i) change the due 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 or
change the provisions 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, or 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;
(ii) reduce the percentage of the Principal Amount of the Notes,
the consent of the Holders of which is required for any supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture;
(iii) modify or alter the provisions of this Indenture regarding the
definition of the term Outstanding;
(iv) reduce the percentage of the Principal Amount of the Notes
required to direct the Indenture Trustee to sell or liquidate the Trust
Estate pursuant to Section 5.03;
(v) modify any provision of this Section 9.02 except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified
or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(vi) 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
(vii) 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,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture.
It shall not be necessary for Noteholders under this Section 9.02 to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Noteholders shall approve the substance thereof.
Promptly after the execution by the Issuer, the Swap Counterparty and
the Indenture Trustee of any supplemental indenture pursuant to this Section
9.02, the Indenture Trustee shall mail to the Holders of the Notes to which
such amendment or supplemental indenture relates and the Swap Counterparty
and the Swap Guarantor 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 9.03. Execution of Supplemental Indentures. In executing, or
------------------------------------
ermitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to
receive, and subject to Sections 6.01 and 6.02, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. 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 9.04. Effect of Supplemental Indenture. Upon the execution of
--------------------------------
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer, the
Swap Counterparty, the Swap Guarantor and the Holders of the Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
Section 9.05. Reference in Notes to Supplemental Indentures. Notes
---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
Miscellaneous
-------------
Section 10.01. Form of Documents Delivered to Indenture Trustee;
-------------------------------------------------
Delivery. In any case where several matters are required to be certified by,
- - --------
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his 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 Issuer or the Administrator, stating that the information
with respect to such factual matters is in the possession of the Issuer or
the Administrator, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof,
it is intended that the truth and accuracy, at the time of the granting of
such application or at the effective date of such certificate or report (as
the case may be), of the facts and opinions stated in such document shall in
such case be conditions precedent to the right of the Issuer to have such
application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion
contained in any such document as provided in Article VI.
Delivery of the Notes hereunder by the Indenture Trustee and the Note
Registrar shall be accomplished through the Depository or at the Corporate
Trust Office of the Indenture Trustee and/or the Note Registrar, as
applicable.
Section 10.02. Acts of Noteholders. (a) Any request, demand,
-------------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective
when such instrument or instruments are delivered to the Indenture Trustee,
and, where it is hereby expressly required, to the Issuer. 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 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if
made in the manner provided in this Section 10.02.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgements of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of
every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
Section 10.03. Notices, etc., to Indenture Trustee, Issuer, Swap
-------------------------------------------------
Counterparty and Rating Agencies. Any request, demand, authorization,
- - --------------------------------
direction, notice, consent or waiver of Noteholders or other documents
provided or permitted by this Indenture shall be in writing and if such
request, demand, authorization, direction, notice, consent, waiver or act of
Noteholders is to be made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder, by the Swap
Counterparty, by the Swap Guarantor, by a Rating Agency or by the Issuer
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at The
Bank of New York, 101 Barclay Street, Floor 12E, New York, New York
10286, Attention: Corporate Trust-Trustee Administration, or
(ii) the Issuer by the Indenture Trustee, by the Swap Counterparty,
by the Swap Guarantor, or by any Noteholder shall be sufficient for
every purpose hereunder if in writing and mailed first-class, postage
prepaid to the Issuer addressed to: Mortgage Index Amortizing Trust
1997-1, in care of the Wilmington Trust Company, 1100 North Market
Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration, or at any other address previously furnished in writing
to the Indenture Trustee, the Swap Counterparty and the Swap Guarantor
by the Issuer or the Administrator. The Issuer shall promptly transmit
any notice received by it from the Noteholders to the Indenture Trustee,
or
(iii) the Swap Counterparty by the Indenture Trustee, by the Issuer,
by the Swap Guarantor or by any Noteholder shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or
with the Swap Counterparty at Lehman Brothers Special Financing Inc.,
Three World Financial Center, New York, New York 10285; Attention:
Derivative/Swap Confirmations Group, Facsimile No. (212) 528-7097, or
(iv) the Swap Guarantor by the Swap Counterparty, the Indenture
Trustee, the Issuer or any Noteholder shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or
with the Swap Guarantor at Ambac Assurance Corporation, One State Street
Plaza, 18th Floor, New York, New York 10004, Attention Managing
Director, Financial Institutions, Facsimile No.: (212) 208-3113.
Notices required to be given to the Rating Agencies by the Issuer, the
Swap Counterparty, the Swap Guarantor, the Indenture Trustee or the Owner
Trustee shall be in writing, personally delivered or mailed by first class
mail, to (i) in the case of Moody's, at the following address: Moody's
Investors Service, Inc., 4th Floor, 99 Church Street, New York, New York
10007 and (ii) in the case of Standard & Poor's, at the following address:
Standard & Poor's Ratings Services, 26 Broadway, 15th Floor, New York,
New York 10004; or as to each of the foregoing, at such other address as
shall be designated by written notice to the other parties.
Section 10.04. 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.
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, and shall not under any circumstance constitute an Event of
Default.
Section 10.05. Alternate Payment and Notice Provisions.
---------------------------------------
Notwithstanding any provision of this Indenture or any of the Notes
on the contrary, the Issuer may enter into any agreement with any Holder of a
Note providing for a method of payment, or notice by the Indenture Trustee or
the Administrator to such Holder, that is different from the methods provided
for in this Indenture for such payments or notices. The Issuer shall furnish
to the Indenture Trustee a copy of each such agreement and the Indenture
Trustee shall cause payments to be made and notices to be given in accordance
with such agreements.
Section 10.06. Effect of Headings. The Article and Section headings
------------------
herein are for convenience only and shall not affect the construction hereof.
Section 10.07. Successors and Assigns. All agreements of the Indenture
----------------------
Trustee in this Indenture shall bind its successors, co-trustees and agents.
The parties hereby expressly agree that the Issuer and the Swap Counterparty
may assign their respective rights hereunder and Swap Agreement in connection
with a Replacment Event under and as provided herein and the Basic Documents.
Section 10.08. Separability. In case any provision in this Indenture
------------
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 10.09. Benefits of Indenture. Nothing in this Indenture or in
---------------------
the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, the Swap
Guarantor, 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.
Section 10.10. Legal Holidays. In any case where the date on which any
--------------
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the 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 10.11. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.12. Counterparts. This Indenture may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 10.13. Recording of Indenture. If this Indenture is subject to
----------------------
recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee, the Swap Counterparty
or the Swap Guarantor) to the effect that such recording is necessary either
for the protection of the Noteholders, the Swap Counterparty or any other
Person secured hereunder or for the enforcement of any right or remedy
granted to the Indenture Trustee under this Indenture.
Section 10.14. Trust Obligation. No recourse may be taken, directly or
----------------
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Indenture Trustee, the Swap Counterparty or the Swap Guarantor on the
Notes or under this Indenture or any certificate or other writing delivered
in connection herewith or therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent,
officer, director, employee or agent of the Indenture Trustee, the Owner
Trustee in its individual capacity , the Swap Counterparty or the Swap
Guarantor, or any holder of a beneficial interest in the Issuer, the Owner
Trustee, the Indenture Trustee, the Swap Counterparty or the Swap Guarantor,
except as any such Person may have expressly agreed (it being understood that
the Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any
unpaid consideration for stock, unpaid capital contribution or failure to pay
any installment or call owing to such entity. For all purposes of this
Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Article VI, VII and VIII
of the Trust Agreement.
Section 10.15. No Petition. The Indenture Trustee and the Swap
-----------
Counterparty, by entering into this Indenture, and each Noteholder, by
accepting a Note, hereby covenant and agree that they shall not at any time
institute against the Depositor or the Issuer, or join in any institution
against the Depositor or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings
under any United States federal or state bankruptcy or similar law in
connection with any obligations relating to the Notes, this Indenture or any
of the other Basic Documents.
IN WITNESS WHEREOF, the Issuer, the Indenture Trustee and the Swap
Counterparty have caused their names to be signed hereto by their respective
officers thereunto duly authorized, all as of the day and year first above
written.
MORTGAGE INDEX AMORTIZING TRUST 1997-1,
as Issuer
By: WILMINGTON TRUST COMPANY, not in it's
individual capacity, but solely as Owner
Trustee
By:___________________________________
Name:
Title:
THE BANK OF NEW YORK, as Indenture Trustee
By:____________________________________
Name:
Title:
LEHMAN BROTHERS SPECIAL FINANCING INC.,
as Swap Counterparty
By:____________________________________
Name:
Title:
(FORM OF NOTE)
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE UNPAID PRINCIPAL AMOUNT OF THIS NOTE MAY BE LESS THAN THAT SET FORTH
BELOW. ANYONE ACQUIRING THIS NOTE MAY ASCERTAIN ITS CURRENT PRINCIPAL
BALANCE BY INQUIRY OF THE INDENTURE TRUSTEE. THE RIGHTS OF A HOLDER OF THIS
NOTE ARE SUBJECT TO THE PROVISIONS OF THE WITHIN REFERENCED INDENTURE.
MORTGAGE INDEX AMORTIZING TRUST 1997-1
Fixed Rate Asset Backed Notes, Class A1
Registered Principal Amount: $________________
Note No. _
CUSIP No.
Mortgage Index Amortizing Trust 1997-1, a business trust duly organized
and existing under the laws of the State of Delaware (herein referred to as
the "Issuer"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, in accordance with the terms of an Indenture, dated as of
September 1, 1997 as supplemented or amended, among the Issuer, the Swap
Counterparty and The Bank of New York, as indenture trustee (the "Indenture
Trustee," which term includes any successor Indenture Trustee under the
Indenture), the principal sum of_______________________________ or such
lesser amount payable pursuant to the Indenture, and interest on the unpaid
amount hereof in the manner hereinafter described until this Note has been
paid in full.
The Issuer will pay interest on this Note as described in the Indenture
on each Payment Date until the principal of this Note (as may be reduced
pursuant to the terms of the Indenture) is paid or made available for
payment, on the outstanding principal amount of this Note (as may be reduced
pursuant to the terms of the Indenture) during the preceding Interest Accrual
Period (as defined below), subject to certain limitations contained in the
Indenture. Interest on this Note will accrue from the Closing Date at a rate
per annum equal to ____%, calculated on the basis of a 360-day year
consisting of twelve 30-days months (the "Note Accrual Rate"). Interest in
respect of a Payment Date will accrue on this Note from and including the
preceding Payment Date (or in the case of the first Payment Date, from and
including the Closing Date) to but excluding such current Payment Date (each
an "Interest Accrual Period") and will be payable to Noteholders monthly in
arrears on each Payment Date. "Payment Date" means the 25th day of each
month or, if such day is not a Business Day, the next succeeding Business
Day. A failure to pay interest due on the Notes on any Payment Date, which
failure continues for five Business Days, constitutes an Event of Default (as
defined herein) under the Indenture.
Principal of this Note (as may be reduced pursuant to the terms of the
Indenture) will be payable as described on the reverse hereof and in the
Indenture.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
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.
The terms of this Note shall be governed by the Indenture and in case of
any inconsistency between the terms set forth herein and those set forth in
the Indenture, those provisions of the Indenture shall govern.
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.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed, as of the date set forth below.
Date: September 25, 1997 MORTGAGE INDEX AMORTIZING TRUST 1997-1,
by WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement,
by _____________________________
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
Date: September 25, 1997 The Bank of New York, not in its
individual capacity but solely as
Indenture Trustee,
by ___________________________
Authorized Signatory
(Reverse of Note)
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Fixed Rate Asset Backed Notes, Class A1 (herein called the
"Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee, the Swap Counterparty, the Swap Guarantor and the Holders of the
Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the Collateral
(as defined in the Indenture) pledged as security therefor as provided in the
Indenture. The Notes are payable solely from proceeds of the Collateral
owned by the Issuer in accordance with the Priority of Payments (as defined
in the Indenture).
The Notes are subject to prepayment as described in the Indenture.
Principal of the Notes is expected to be prepaid beginning on the September
1999 Payment Date, as described in the Indenture.
The entire unpaid principal amount of this Note shall be due and payable
on the Final Scheduled Payment Date pursuant to the Indenture, or the date of
any Mandatory Prepayment as provided in the Indenture. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee shall have declared the Notes to be
immediately due and payable in the manner provided in the Indenture. All
principal payments on the Notes shall be made pro rata to the Noteholders
entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by wire transfer to an account specified
in writing by the Holder and reasonably satisfactory to the Indenture Trustee
or by check mailed to the Person whose name appears as the Registered Holder
of this Note (or one or more predecessor Notes) on the Note Register as of
the close of business on each Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Depository
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by the
Depository or 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, or by the application of Credit Losses (as defined
in the Indenture) thereto as provided in the Indenture, shall be binding upon
all future Holders of this Note and of any Note issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
noted hereon. The Indenture Trustee, in the name of and on behalf of the
Issuer, will notify the Person who was the Registered Holder hereof as of the
Record Date preceding the Final Scheduled Payment Date by notice mailed or
transmitted by facsimile prior to such Payment Date, and the amount then due
and payable shall be payable only upon presentation and surrender of this
Note at the Indenture Trustee's principal Corporate Trust Office or as may be
otherwise provided in the Indenture.
The Issuer shall pay interest on overdue installments of interest and
principal at the Note Accrual Rate to the extent lawful.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee, the Indenture Trustee, the Swap
Counterparty or the Swap Guarantor on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against
(i) the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director or employee of the Indenture
Trustee, the Owner Trustee in its individual capacity, the Swap Counterparty
or the Swap Guarantor, or any holder of a beneficial interest in the Issuer,
the Owner Trustee, the Indenture Trustee, the Swap Counterparty or the Swap
Guarantor, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
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 by
accepting the benefits of this Note and the Indenture that such Noteholder or
Note Owner will not at any time institute against the Depositor or the
Issuer, or join in any institution against the Depositor or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
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 other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness secured by the
Trust Estate (as defined in the Indenture). Each Noteholder, by acceptance
of a Note (and each Note Owner by acceptance of a beneficial interest in a
Note), agrees to treat the Notes for federal, state and local income, single
business and franchise tax purposes as indebtedness.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee 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 none of the Issuer, the Indenture Trustee or
any such agent shall be affected by notice to the contrary.
Subject to certain terms, conditions and exceptions therein provided,
the Indenture permits the amendment thereof and the modification of the
rights and obligations of the Issuer and the rights of the Holders of the
Notes under the Indenture as provided in the Indenture. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Principal Amount of the Notes, on behalf of the Holders of
all the Notes, with the prior consent of the Swap Counterparty and the Swap
Guarantor, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. The Indenture also permits the Indenture Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder. Any amendment,
modification, consent or waiver by the Holder of this Note (or any one of
more predecessor Notes) (or otherwise pursuant to the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Notes are issuable only in book-entry 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, 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 Issuer, which is
absolute and unconditional, to pay the principal of (as may be reduced
pursuant to the Indenture) 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 Basic Documents, none of Wilmington Trust Company, in its
individual capacity, The Bank of New York, in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, 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 this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
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:
-----------------------------------------------
*/
- - ----
________________________
*/ 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. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership
or participation in 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 Securities Exchange Act of 1934, as
amended.
(ADD IN EXHIBIT A HERE)
Exhibit B
---------
PREPAYMENT CALCULATION TABLE
<TABLE>
<CAPTION>
PSA MONTHLY PSA MONTHLY PSA MONTHLY
INDEX AMORTIZATION INDEX AMORTIZATION INDEX AMORTIZATION
RATE RATE RATE RATE RATE RATE
<S> <C> <C> <C> <C> <C>
0-125 0.118 152 1.621 179 2.187
126 0.174 153 1.677 180 2.204
127 0.229 154 1.732 181 2.220
128 0.285 155 1.788 182 2.237
129 0.341 156 1.805 183 2.253
130 0.396 157 1.821 184 2.270
131 0.452 158 1.838 185 2.287
132 0.508 159 1.854 186 2.303
133 0.563 160 1.871 187 2.320
134 0.619 161 1.888 188 2.337
135 0.675 162 1.904 189 2.353
136 0.730 163 1.921 190 2.370
137 0.786 164 1.938 191 2.386
138 0.842 165 1.954 192 2.403
139 0.897 166 1.971 193 2.420
140 0.953 167 1.987 194 2.436
141 1.009 168 2.004 195 2.453
142 1.064 169 2.021 196 2.470
143 1.120 170 2.037 197 2.486
144 1.176 171 2.054 198 2.503
145 1.231 172 2.071 199 2.519
146 1.287 173 2.087 200 2.536
147 1.343 174 2.104 201 2.556
148 1.398 175 2.120 202 2.576
149 1.454 176 2.137 203 2.596
150 1.510 177 2.154 204 2.616
151 1.565 178 2.170 205 2.637
205 2.637 235 3.240 415 4.051
206 2.657 236 3.260 416 4.085
207 2.677 237 3.280 417 4.119
208 2.697 238 3.300 418 4.153
209 2.717 239 3.320 419 4.187
210 2.737 240 3.340 420 4.221
211 2.757 241 3.360 421 4.255
212 2.777 242 3.380 422 4.289
213 2.797 243 3.400 423 4.323
214 2.817 244 3.420 424 4.357
215 2.838 245 3.441 425 4.392
216 2.858 246 3.461 426 4.426
217 2.878 247 3.481 427 4.460
218 2.898 248 3.501 428 4.494
219 2.918 249 3.521 429 4.528
220 2.938 250-400 3.541 430 4.562
221 2.958 401 3.575 431 4.596
222 2.978 402 3.609 432 4.630
223 2.998 403 3.643 433 4.664
224 3.018 404 3.677 434 4.698
225 3.039 405 3.711 435 4.732
226 3.059 406 3.745 436 4.766
227 3.079 407 3.779 437 4.800
228 3.099 408 3.813 438 4.834
229 3.119 409 3.847 439 4.868
230 3.139 410 3.881 440 4.902
231 3.159 411 3.915 441 4.936
232 3.179 412 3.949 442 4.970
233 3.199 413 3.983 442 4.970
234 3.219 414 4.017 443 5.004
444 5.038 474 6.058 504 8.432
445 5.072 475 6.093 505 8.804
446 5.106 476 6.127 506 9.176
447 5.140 477 6.161 507 9.549
448 5.174 478 6.195 508 9.921
449 5.208 479 6.229 509 10.293
450 5.242 480 6.263 510 10.665
451 5.276 481 6.297 511 11.038
452 5.310 482 6.331 512 11.410
453 5.344 483 6.365 513 11.782
454 5.378 484 6.399 514 12.154
455 5.412 485 6.433 515 12.526
456 5.446 486 6.467 516 12.899
457 5.480 487 6.501 517 13.271
458 5.514 488 6.535 518 13.643
459 5.548 489 6.569 519 14.015
460 5.582 490 6.603 520 14.388
461 5.616 491 6.637 521 14.760
462 5.650 492 6.671 522 15.132
463 5.684 493 6.705 523 15.504
464 5.718 494 6.739 524 15.876
465 5.752 495 6.773 525 16.249
466 5.786 496 6.807 526 16.621
467 5.820 497 6.841 527 16.993
468 5.854 498 6.875 528 17.365
469 5.888 499 6.909 529 17.738
470 5.922 500 6.943 530 18.110
471 5.956 501 7.315 531 18.482
472 5.990 502 7.687 532 18.854
473 6.024 503 8.060 533 19.227
534 19.599 564 30.766 594 41.932
535 19.971 565 31.138 595 42.305
536 20.343 566 31.510 596 42.677
537 20.715 567 31.882 597 43.049
538 21.088 568 32.255 598 43.421
539 21.460 569 32.627 599 43.794
540 21.832 570 32.999 600 44.166
541 22.204 571 33.371 601 44.538
542 22.577 572 33.743 602 44.910
543 22.949 573 34.116 603 45.282
544 23.321 574 34.488 604 45.655
545 23.693 575 34.860 605 46.027
546 24.065 576 35.232 606 46.399
547 24.438 577 35.605 607 46.771
548 24.810 578 35.977 608 47.144
549 25.182 579 36.349 609 47.516
550 25.554 580 36.721 610 47.888
551 25.927 581 37.093 611 48.260
552 26.299 582 37.466 612 48.633
553 26.671 583 37.838 613 49.005
554 27.043 584 38.210 614 49.377
555 27.416 585 38.582 615 49.749
556 27.788 586 38.955 616 50.121
557 28.160 587 39.327 617 50.494
558 28.532 588 36.999 618 50.866
559 28.904 589 40.071 619 51.238
560 29.277 590 40.444 620 51.610
561 29.649 591 40.816 621 51.983
562 30.021 592 41.188 622 52.355
563 30.393 593 41.560 623 52.727
624 53.099 654 64.266 684 75.433
625 53.472 655 64.638 685 75.805
626 53.844 656 65.011 686 76.177
627 54.216 657 65.383 687 76.550
628 54.588 658 65.755 688 76.922
629 54.960 659 66.127 689 77.294
630 55.333 660 66.499 690 77.666
631 55.705 661 66.872 691 78.039
632 56.077 662 67.244 692 78.411
633 56.449 663 67.616 693 78.783
634 56.822 664 67.988 694 79.155
635 57.194 665 68.361 695 79.527
636 57.566 666 68.733 696 79.900
637 57.938 667 69.105 697 80.272
638 58.310 668 69.477 698 80.644
639 58.683 669 69.850 699 81.016
640 59.055 670 70.222 700 81.389
641 59.427 671 70.594 701 81.761
642 59.799 672 70.966 702 82.133
643 60.172 673 71.338 703 82.505
644 60.544 674 71.711 704 82.878
645 60.916 675 72.083 705 83.250
646 61.288 676 72.455 706 83.622
647 61.661 677 72.827 707 83.994
648 62.033 678 73.200 708 84.366
649 62.405 679 73.572 709 84.739
650 62.777 680 73.944 710 85.111
651 63.149 681 74.316 711 85.483
652 63.522 682 74.688 712 85.855
653 63.894 683 75.061 713 86.228
714 86.600 743 97.394 715 86.972
744 97.767 716 87.344 745 98.139
717 87.716 746 98.511
718 88.089 747 98.883
719 88.461 748 99.256
720 88.833 749 99.628
721 89.205 750
722 89.578 and up 100.00
723 89.950
724 90.322
725 90.694
726 91.067
727 91.439
728 91.811
729 92.183
730 92.555
731 92.928
732 93.300
733 93.672
734 94.044
735 94.417
736 94.789
737 95.161
738 95.533
739 95.905
740 96.278
741 96.650
742 97.022
743 97.394
</TABLE>
