SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12 (b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
STRUCTURED PRODUCTS CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3692801
_______________________________________ ________________________________
(State of incorporation or organization) (IRS Employer Identification No.)
Seven World Trade Center
Room 33-130, 33rd Floor
New York, New York 10048
(Address of principal executive offices) (Zip Code)
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If this form relates to the registration of a class If this form relates to the registration of a class
of debt securities and is effective upon filing of debt securities and is to become effective
pursuant to General Instruction A(C)(1) please check simultaneously with the effectiveness of a
the following box. <checked-box> concurrent registration statement under the
Securities Act of 1933 pursuant to General
Instruction A(C)(2) please check the following box.
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Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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$352,980,000 aggregate TIERS{SM}
Asset-Backed Securities, Series
CHAMT Trust 1997-7, Fixed Rate
Notes, Class A New York Stock Exchange
____________________________________________________________________________
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
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Item 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The description of the Notes to be registered hereunder is set forth
under the captions entitled: "Summary of Terms"; "Description of
the Notes"; "Risk Factors"; "Mandatory Prepayment of the Notes";
"Description of the Indenture"; "ERISA Considerations"; and "Federal
Income Tax Considerations" in Registrant's Prospectus Supplement
dated September 15, 1997 to Registrant's Prospectus dated September
15, 1997, which description is incorporated herein by reference.
Registrant filed the Prospectus Supplement with the Securities and
Exchange Commission on September 17, 1997, pursuant to Rule
424(b)(5) under the Securities Act of 1933.
Item 2. EXHIBITS.
1. Certificate of Incorporation of Structured Products Corp. is
set forth as Exhibit 3.1 to the Registration Statement on Form
S-3 and is incorporated herein by reference.
2. By-laws, as amended, of Structured Products Corp. are set forth
as Exhibit 3.2 to the Registration Statement and are
incorporated herein by reference.
3. Series Trust Indenture, dated as of September 15, 1997,
incorporating the Standard Terms of the Trust Indenture, dated
as of September 15, 1997, by and between First Trust of New
York, National Association, as Indenture Trustee, and TIERS
Asset-Backed Securities, Series CHAMT Trust 1997-7, including
the Form of Class A Note.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
STRUCTURED PRODUCTS CORP.
Date: September 22, 1997 By: /S/ TIMOTHY P. BEAULAC
----------------------------
Timothy P. Beaulac
Assistant Vice President and
Finance Officer
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Exhibit 3
_____________________________________________________________________
SERIES TRUST INDENTURE
between
TIERS ASSET-BACKED SECURITIES,
SERIES CHAMT TRUST 1997-7,
as Issuer,
and
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION,
as Indenture Trustee
FIXED RATE NOTES, Class A
_____________________________________________________________________
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT ........................................ 1
GRANTING CLAUSES ............................................. 1
Section 1. Definitions ................................... 3
Section 2. Terms of the Notes ............................ 8
a. Designation .............................. 8
b. Delivery ................................. 8
c. Aggregate Principal Amount; Classes ...... 8
d. Places of Payment of Principal ........... 8
e. Denominations of Notes ................... 9
f. Authentication of Notes .................. 9
Section 3. Payment Dates; Computations of Interest;
Prepayments; Payment of Principal............. 9
a. Payments of Interest ..................... 9
b. Mandatory Prepayment of Notes ............ 9
c. Optional Redemption of Notes ............. 10
d. Final Payment of Principal ............... 10
Section 4. Collections and Distributions ................. 10
a. Collection Account; Priority of Payments . 10
b. Collateral Account; Investments .......... 11
Section 5. Sale Procedures ............................... 12
Section 6. Final Scheduled Payment Date................... 12
Section 7. Events of Default ............................. 13
a. Events of Default ........................ 13
b. Sale of Assets Upon Event of Default ..... 13
c. Distributions after an Event of Default .. 14
d. Optional Preservation of the Collateral
Obligations............................. 14
Section 8. Appointment of Indenture Trustee as Paying
Agent and Note Registrar..................... 14
Section 9. Miscellaneous. ................................ 14
SCHEDULE A Prepayment Calculation Table
APPENDIX 1 Form of Fixed Rate Note, Class A
EXHIBIT A Standard Terms and Provisions of the Trust Indenture
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TIERS ASSET-BACKED SECURITIES,
SERIES CHAMT TRUST 1997-7 INDENTURE
This TIERS Asset-Backed Securities, Series CHAMT Trust 1997-7
Indenture (the "Series Trust Indenture"), dated September 15, 1997, by and
between TIERS Asset-Backed Securities, Series CHAMT Trust 1997-7, a
Delaware business trust (the "Issuer"), and First Trust of New York,
National Association, as trustee and not in its individual capacity (the
"Indenture Trustee"), provides for the issuance of Fixed Rate Notes, Series
A (the "Notes") and incorporates by reference the Standard Terms and
Provisions of the Trust Indenture (the "Standard Terms") attached as
Exhibit A hereto (the Series Trust Indenture and the Standard Terms are
sometimes collectively referred to as the "Indenture"), and is governed by
the Standard Terms as fully as if set forth herein at length. All
capitalized terms not defined herein shall have the same meaning as set
forth in the Standard Terms.
PRELIMINARY STATEMENT
The Standard Terms permit the Indenture Trustee to authenticate and
deliver, to the order of the Issuer, Notes, in exchange for the Collateral
Obligations sold, assigned and transferred to the Indenture Trustee
pursuant to this Series Trust Indenture.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, each party hereto agrees for the benefit of each other
party hereto and for the equal and ratable benefit of the Holders of the
Notes as follows:
GRANTING CLAUSES
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as trustee for the benefit of the Noteholders (as their interests
appear herein) all of the Issuer's right, title and interest in and to (a)
the Collateral Obligations; (b) the Swap Agreement; (c) all Eligible
Investments acquired by the Issuer; (d) the Collection Account, the
Collateral Account and all funds from time to time on deposit therein; and
(e) all payment and future claims, demands, causes and chooses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and
receivables, instruments and other property which at any time constitute
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all or part of or are included in the proceeds of any of the foregoing
(collectively, the "Collateral").
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 Notes, equally and ratably without prejudice, priority or distinction,
and to secure compliance with the provisions of this Indenture, all as
provided in this Indenture. The Indenture Trustee, as trustee on behalf of
the Noteholders and (only to the extent expressly provided herein) the
Certificateholders, acknowledges such Grant and accepts the trusts under
this Indenture in accordance with the provisions of this Indenture.
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as collateral agent for the Swap Counterparty (as its interests
appear herein) all of the Issuer's right, title and interest in and to (a)
the Collateral Obligations; (b) the Swap Agreement; (c) any Eligible
Investments acquired by the Issuer; (d) the Collection Account, the
Collateral Account and all funds from time to time on deposit therein; and
(e) all payment and future claims, demands, causes and chooses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and
receivables, instruments and other property which at any time constitute
all or part of or are included in the proceeds of any of the foregoing.
The foregoing Grant is made to secure the payment of all amounts
due by the Issuer under the Swap Agreement, but is subject to the priority
of payments set forth herein.
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Section 1. DEFINITIONS. Terms used and not defined herein
shall have the meanings specified in the Trust Agreement referred to below.
"ADMINISTRATION AGREEMENT" means the Administration Agreement
dated as of September 15, 1997 among the Issuer, First Trust in its
capacity as Indenture Trustee and as Administrator pursuant to such
Administration Agreement, and the Trustee.
"ADMINISTRATOR" means First Trust of New York, National
Association, as administrator under the Administration Agreement.
"ALLOCABLE CHARGE-OFF AMOUNT" means, as of any Payment Date (i)
with respect to the Notes, the Charge-Off Amount less the outstanding
principal balance of the Certificates on such date (before giving effect to
any distributions on such Payment Date) and (ii) with respect to the
Certificates, the Charge-Off Amount (but not to exceed the outstanding
principal balance of the Certificates.)
"AVAILABLE FUNDS" has the meaning set forth in Section 4(a).
"BUSINESS DAY" means any day on which commercial banks are open
for business (including dealings in foreign exchange and foreign currency
deposits) in New York, New York, Wilmington, Delaware and London, England.
"CERTIFICATES" means the TIERS Asset-Backed Securities, Series
CHAMT Trust 1997-7, Floating Rate Certificates, Class B.
"CERTIFICATE NOTIONAL AMOUNT" means, as of any Payment Date, the
outstanding principal balance of the Certificates less the Allocable
Charge-Off Amount.
"CHARGE-OFF AMOUNT" means, as of any Payment Date, the Class A
Investor Charge-Offs through such date less the amount of any Excess Spread
applied to reimburse the Class A Investor Interest through such date. As
used herein the terms "Class A Investor Charge-Offs;" "Class A Investor
Interest" and "Excess Spread" have the meanings specified in the Term
Assets Prospectus.
"CLOSING DATE" means September 15, 1997.
"COLLATERAL" means the collateral pledged to the Indenture
Trustee for the benefit of the Noteholders and the Swap Counterparty
pursuant to the Granting Clause hereof.
"COLLATERAL ACCOUNT" means the account by that name established
by the Indenture Trustee pursuant to Section 4(b).
"COLLATERAL OBLIGATIONS" means the Class A Floating Rate Asset
Backed Certificates, Series 1996-4 in an aggregate principal amount of
$363,900,000 issued by the Chase Credit Card Master Trust.
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"DEFERRED INTEREST AMOUNTS" means, as of any Payment Date, and
with respect to the Notes or the Certificates, any interest due thereon on
a prior Payment Date which remains unpaid.
"EARLY AMORTIZATION PAYMENTS" means, with respect to the
Collateral Obligations, any payments of principal received thereon prior to
the Final Scheduled Payment Date therefor.
"ELIGIBLE INVESTMENTS" means, any one or more of the following
obligations or securities, provided that the total return specified by the
terms of each such obligation or security is at least equal to the purchase
price thereof: (i) direct obligations of, and obligations fully guaranteed
by, the United States; (ii) demand and time deposits in, certificates
of deposit of, or banker's acceptances issued by any depository institution
or trust company (including the Indenture Trustee or any agent or affiliate
of the Indenture Trustee acting in their respective commercial capacities)
incorporated under the laws of the United States or any State and subject
to supervision and examination by Federal and/or State banking authorities
so long as the commercial paper and/or the short-term debt obligations
of such depository institution or trust company (or, in the case of a
depository institution which is the principal subsidiary of a holding
company, the commercial paper or other short-term debt obligations of
such holding company) at the time of such investment or contractual
commitment providing for such investment rated not less than A-1+ from
Standard & Poor and P1 from Moody's; (iii) commercial paper having at the
time of such investment, a rating of not less than A-1+ from Standard &
Poor and P1 from Moody's; (iv) investments in money market funds having a
rating from the Rating Agency in the highest investment category granted
thereby (including funds for which the Indenture Trustee or any of its
Affiliates is investment manager or advisor or otherwise may have an
interest) at the time such investment; and (v) investments in asset-backed
securities issued pursuant to a pooling and servicing agreement, master
pooling agreement, trust agreement or indenture, having at the time of
such investment, a rating of at least AAA from S&P and Aaa from Moody's.
All Eligible Investments shall mature no later than the Final Scheduled
Payment Date for the Notes.
"FINAL SCHEDULED PAYMENT DATE" means, with respect to the Notes,
the Certificates or the Collateral Obligations, the Payment Date in
November 2003.
"INITIAL PRINCIPAL AMOUNT" means, with respect to (i) the
Collateral Obligations, $363,900,000; and (ii) the Notes $352,980,000.
"INTEREST ACCRUAL PERIOD" means, with respect to any Payment
Date, the period from and including the preceding Payment Date (or, in the
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case of the initial Payment Date, from and including the Closing Date) to
but excluding such Payment Date.
"ISSUER" means the TIERS Asset-Backed Securities Series, CHAMT
Trust 1997-7.
"ISSUER ASSETS" means the Collateral Obligations, the Swap
Agreement and any Eligible Investments held by the Issuer.
"MOODY'S" means Moody's Investors Service, Inc.
"MONTHLY AMORTIZATION RATE" means, for any month, the rate set
forth in the Prepayment Calculation Table that corresponds to the PSA Index
Rate for such month.
"MONTHLY PREPAYMENT AMOUNT" means, for any Payment Date, (i) with
respect to the Notes, an amount equal to the Note Notional Amount on such
Payment Date (before giving effect to any distributions on such date)
multiplied by the Monthly Amortization Rate that corresponds to the PSA
Index Rate for the month in which such Payment Date occurs and (ii) with
respect to the Certificates, an amount equal to the Certificate Notional
Amount on such Payment Date (before giving effect to any distributions on
such date) multiplied by the Monthly Amortization Rate that corresponds to
the PSA Index Rate for the month in which such Payment Date occurs.
"NOTE CURRENT FACTOR" means a number (carried to eight decimal
places) that represents the portion of the aggregate original principal
amount of the Notes then outstanding.
"NOTE INTEREST RATE" means a fixed rate of 6.688% per annum
calculated on the basis of a 360-day year consisting of twelve 30-day
months.
"NOTE NOTIONAL AMOUNT" means, on any Payment Date, the Initial
Principal Amount of the Notes less any amounts paid to the Noteholders in
respect of the Monthly Prepayment Amounts less the Allocable Charge-Off
Amount as of such Payment Date, if any. The Note Notional Amount shall
never be less than zero.
"NOTE PRINCIPAL BALANCE" means, at any time of determination, the
Initial Note Principal Amount times the Note Current Factor.
"NOTES" means the TIERS Corporate Asset-Backed, Series CHAMT
Trust 1997-7 Fixed Rate Notes, Class A issued pursuant to this Indenture.
"PAR AMOUNT" means, with respect to any Eligible Investment, the
purchase price thereof excluding any accrued interest.
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"PAYMENT DATE" means the 15th day of each month (or, if any such
date is not a Business Day, then on the immediately following Business
Day), commencing October 15, 1997.
"PREPAYMENT CALCULATION TABLE" means the table set forth in
Schedule A attached hereto and made a part hereof.
"PREPAYMENT DETERMINATION DATE" means, for any Payment Date
occurring after the Payment Date in January 1999, the first Business Day of
the month in which such Payment Date occurs.
"PRO RATA SHARE" means the percentage obtained by dividing the
outstanding principal amount of such Note by the outstanding principal
amount of all of the Notes.
"PSA INDEX RATE" means, with respect to any Payment Date:
(i) the rate that appears as of 3:00 p.m. (New York City
time) on the related Prepayment Determination Date (as defined below) on
the Reference Bloomberg Page (as defined below) 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 Swap Counterparty will request FHMLC to provide a quotation of
the monthly prepayment speed (calculated according to the PSA Standard
Prepayment Model (as defined herein)) for the Reference Securities for the
applicable month. If FHMLC provides such quotation, the PSA Index Rate
will be the quotation provided by FHMLC;
(iii) if the Swap Counterparty determines that FHMLC has not
provided such quotation by 5:00 p.m. on the second Business Day following
such Prepayment Determination Date, the Swap Counterparty will request five
major securities dealers selected by the Swap Counterparty to provide a
quotation of the monthly prepayment speed (calculated according to the PSA
Standard Prepayment Model) for the Reference Securities for the applicable
month. If at least two such quotations are so provided, then the PSA Index
Rate will be the arithmetic mean (rounded to the nearest whole integer with
1/2 rounded up) determined by the Swap Counterparty 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 will be the quotation
so provided; and
(iv) if no such quotation is provided as requested in clause
(iii) above, then the PSA Index Rate will 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
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(calculated according to the PSA Standard Prepayment Model) for the
Reference Securities 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" means 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 AGENCIES" means Moody's and S&P.
"RECORD DATE" means, with respect to a Payment Date (including a
Redemption Date) the day immediately preceding such Payment Date, unless
Definitive Notes are issued, in which case on the last Business Day of
the month prior to the month in which such Payment Date occurs.
"REFERENCE BLOOMBERG PAGE" means the display designated as page
"A013" and titled "Reference Collateral 30-year Gold 8.00, Issued in 1995"
(or such other page selected by the Swap Counterparty as may replace page
"A013" for the purpose of displaying the monthly prepayment speed
(calculated based on the PSA Standard Prepayment Model) for the Reference
Securities) on the Bloomberg Financial Markets Service (or such other
service selected by the Swap Counterparty as may replace such service).
"REFERENCE SECURITIES" means the 30-year Federal Home Loan
Mortgage Corporation Gold 8.0% mortgage participation certificates issued
in calendar year 1995.
"SALE PROCEDURES" means, in connection with any sale of the
Collateral Obligations or of any Eligible Investments, the Indenture
Trustee shall sell such securities to the highest bidders among not less
than three solicited bidders in the relevant markets for such securities
(one of which will be the Swap Counterparty, if it so elects (or any of its
affiliates), and any of which other bidders may (but need not) be Salomon
Brothers Inc or any of its affiliates and which bidders need not be limited
to recognized broker dealers). In soliciting bids, the Indenture Trustee
may also solicit bids from any of the following: (1) Credit Suisse First
Boston Corporation, (2) Goldman, Sachs & Co., (3) Lehman Brothers Inc., (4)
Merrill Lynch, Pierce, Fenner & Smith Incorporated, and (5) UBS Securities
LLC. In the sole, good faith, judgment of the Indenture Trustee, bids may
be evaluated on the basis of bids for all or any portion of the securities
being sold or any other basis selected in good faith by the Indenture
Trustee. The Indenture Trustee shall not be responsible for a failure to
obtain a bid so long as it has made reasonable efforts to obtain bids. If
the Indenture Trustee is unable to obtain any bids prior to the Final
Scheduled Payment Date, the Sale Proceeds shall be deemed to be zero and
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the Term Assets and Eligible Investments (or the applicable portion thereof
subject to sale) shall be transferred to the Swap Counterparty or its
designee by the Indenture Trustee.
"SALE PROCEEDS" means any amounts received by the Indenture
Trustee upon a sale of the Collateral Obligations and/or any Eligible
Investments (i) in connection with a mandatory prepayment of the Notes
pursuant to Section 3b of this Agreement and a mandatory prepayment of the
Certificates pursuant to the Trust Agreement or (ii) in connection with an
optional redemption of the Notes pursuant to Section 3c hereof and an
optional redemption of the Certificates pursuant to the Trust Agreement or
(iii) in connection with a sale in connection with the Final Scheduled
Payment Date pursuant to Section 6 hereof.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"SCHEDULED INTEREST PAYMENTS" means, with respect to the Term
Assets, the interest scheduled to be paid on the Term Assets, assuming no
charge offs, defaults or other reductions thereon on each monthly payment
date therefor.
"SWAP AGREEMENT" means the ISDA Master Agreement, together with
the Schedule and Confirmations, entered into by the Issuer with the Swap
Counterparty on the Closing Date.
"SWAP COUNTERPARTY" means Westdeutsche Landesbank Girozentrale,
New York Branch.
"SWAP EARLY TERMINATION EVENT" means the occurrence of an Event
of Default or a Termination Event under and as defined in the Swap
Agreement.
"TERM ASSETS PROSPECTUS" means the prospectus dated November 6,
1996 and a supplement thereto also dated November 6, 1996, each relating to
the Collateral Obligations.
"TRUST AGREEMENT" means the Trust Agreement between Structured
Products Corp., as Depositor, and Delaware Trust Capital Management, Inc.,
as Trustee, as supplemented by the Series Trust Agreement between the
Depositor and the Delaware Trust Capital Management Inc., as Trustee, each
dated September 15, 1997, pursuant to which the Certificates are being
issued.
Section 2. TERMS OF THE NOTES.
a. DESIGNATION. The Notes created and authorized pursuant to
the Standard Terms and this Series Trust Indenture thereto shall be
designated as "TIERS Asset-Backed Securities, Series CHAMT Trust 1997-7,
Fixed Rate Notes, Class A". The Notes shall be limited obligations of the
Issuer payable solely from payments received by the Issuer attributable to
the Collateral Obligations and other assets granted hereunder. The Notes
shall be issued in substantially the form of Note set forth in Appendix 1
hereto.
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b. DELIVERY. The Issuer hereby authorizes the letter of
representations with respect to the Notes, in the form customarily provided
to DTC, from the Owner Trustee and the Indenture Trustee to DTC, dated the
date of delivery of the Notes (the "Letter of Representation").
c. AGGREGATE PRINCIPAL AMOUNT; CLASSES. The Notes created and
authorized pursuant to the Standard Terms and Provisions of the Trust
Indenture and Series Trust Indenture thereto shall be issued in a single
Class A in and aggregate principal amount equal to the Initial Note
Principal Amount; shall have the standard terms set forth in the Standard
Terms; and shall have the nonstandard terms set forth in this Series Trust
Indenture.
d. PLACES OF PAYMENT OF PRINCIPAL. The final payment of
principal in retirement of the Notes (including in connection with the
optional redemption of the Notes pursuant to Section 3(c)) shall be payable
upon presentation and surrender thereof only at the office of the Trustee
in the Borough of Manhattan, City and State of New York.
e. DENOMINATIONS OF NOTES. The Notes shall be issued in
minimum denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
f. AUTHENTICATION OF NOTES. The Notes may be authenticated by
the Trustee either at the Corporate Trust Office or at the Trustee's office
in the Borough of Manhattan, City and State of New York.
Section 3. PAYMENT DATES; COMPUTATIONS OF INTEREST;
PREPAYMENTS; PAYMENT OF PRINCIPAL.
a. PAYMENTS OF INTEREST. The Notes shall accrue interest at
the Note Interest Rate as set forth in the form of Note set forth in
Appendix 1 hereto. Payments on the Notes will be made monthly on each
Payment Date. In any case in which a Payment Date, as originally
scheduled, is not a Business Day and interest is to be paid on the next
succeeding Business Day, no additional interest for the number of
additional days to such succeeding Business Day will be paid on the Note.
Payment on the Notes in such circumstances shall be made with the same
force and effect as if the originally scheduled Payment Date was a Business
Day, and no additional interest shall accrue for the related Interest
Accrual Period. If and to the extent that the amount available to pay
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interest to the Noteholders on any Payment Date in accordance with the
priority of payments set forth in Section 4 hereof is insufficient to pay
all interest then due at the Note Interest Rate, such amounts shall
constitute Deferred Interest Amounts which shall be payable, as provided in
Section 4, in whole or in part, on any Payment Date on which the Available
Funds are sufficient to pay such amounts in accordance with such priority
of payments.
b. MANDATORY PREPAYMENT OF NOTES.
(i) Beginning on the Payment Date in February 1999, and on
each Payment Date thereafter until the principal amount of the Notes is
paid in full, the Issuer will prepay a portion of the principal amount of
Notes in an aggregate amount equal to the Monthly Prepayment Amount for
such Payment Date.
(ii) The Swap Counterparty has agreed in the Swap Agreement
that it shall, beginning in February 1999, on the first Business Day of
each month, determine (A) the PSA Index Rate for such month, (B) the
Monthly Amortization Rate that corresponds to such PSA Index Rate, (C) the
Note Notional Amount, (D) the Monthly Prepayment Amount, and (E) the Note
Current Factor, and to notify the Indenture Trustee of its determinations
thereof.
(iii) The Swap Counterparty's calculations of Monthly
Prepayment Amounts or its determination of the PSA Index Rate, the Monthly
Amortization Rate, the Note Notional Amount or the Note Current Factor,
each month will, absent manifest error, be final and binding.
c. OPTIONAL REDEMPTION OF NOTES.
(i) If on any Payment Date, before giving effect to any
distributions to be made on such date, the aggregate outstanding principal
amount of the Collateral Obligations would be less than 10% of the Initial
Principal Amount of the Collateral Obligations, the Swap Counterparty may,
at its option, by delivering a written notice to the Indenture Trustee
(with a copy to the Issuer), purchase all of the Term Assets and Eligible
Investments at an aggregate purchase price equal to the outstanding
principal amount of the Notes and Certificates and any accrued interest
thereon and direct the redemption of all of the Outstanding Notes at their
Redemption Price. If the Swap Counterparty so delivers such a written
notice to the Indenture Trustee, the Indenture Trustee shall deliver a
notice of redemption to each Noteholder (a "Redemption Notice"), with a
copy to the Issuer, in the manner provided in Section 10.2(b) of the
Standard Terms; provided that the Redemption Date for such redemption shall
be the first Payment Date which is at least 15 days after the date of the
Indenture Trustee's delivery of such Redemption Notice.
(ii) If a Redemption Notice is delivered by the Indenture Trustee
as provided herein, the Indenture Trustee shall, by no later than the 10th
day before the Redemption Date, notify the Swap Counterparty and sell, in
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accordance with the Sale Procedures, all of the Eligible Investments and
Collateral Obligations then held by the Issuer, for settlement on the
Redemption Date. Any Sale Proceeds realized from such sale shall be
deposited into the Collection Account for distribution as provided herein.
d. FINAL PAYMENT OF PRINCIPAL. Any principal of the Notes not
previously paid will become due on the Final Scheduled Payment Date for the
Notes.
Section 4. COLLECTIONS AND DISTRIBUTIONS.
a. COLLECTION ACCOUNT; PRIORITY OF PAYMENTS.
(i) Section 8.2 and Subsections (a) and (b) of Section 8.3 of
the Standard Terms shall have no effect with respect to the Notes or the
Certificates.
(ii) The Indenture Trustee shall deposit into the Collection
Account, upon receipt, (A) all payments on the Collateral Obligations
(other than Early Amortization Payments), (B) any amounts received from the
Swap Counterparty pursuant to the Swap Agreement, and (C) any Sale Proceeds
(all such amounts, "Available Funds").
(iii) Moneys held in this Collection Account shall be applied
on each Payment Date (including the Redemption Date and on the Final
Scheduled Payment Date) by the Indenture Trustee, to the extent of
Available Funds, as follows:
FIRST, to the Swap Counterparty, any amounts due pursuant to
the Swap Agreement;
SECOND, to the Noteholders, all accrued and unpaid interest
(including any Deferred Interest Amounts);
THIRD, to the Noteholders, any amounts constituting
principal due on the Notes;
FOURTH, to the Certificateholders, all accrued and unpaid
interest (including any Deferred Interest Amounts);
FIFTH, to the Certificateholders, any amounts constituting
principal due on the Certificates; and
SIXTH, any excess to the Swap Counterparty.
In the event that on any Payment Date the amounts in the Collection Account
are insufficient to pay all amounts then due the Noteholders, each
Noteholder will get its Pro Rata Share of the amount available for
distribution to all Noteholders as provided herein. In the event that on
any Payment Date the amounts in the Collection Account are insufficient to
pay all amounts then due the Certificateholders, each Certificateholder
will get its Pro Rata Share of the amount available for distribution to all
Certificateholders as provided herein.
b. COLLATERAL ACCOUNT; INVESTMENTS.
11
<PAGE>
(i) On or prior to the Closing Date the Indenture Trustee shall
establish, and thereafter shall maintain, in the name of the Indenture
Trustee, for the benefit of the Swap Counterparty, the Noteholders and the
Certificateholders, as their interests appear herein and in the Trust
Agreement, the Collateral Account and shall deposit and hold the Term
Assets therein. All Early Amortization Payments shall be deposited into
the Collateral Account and shall be invested at the written direction of
the Swap Counterparty given to the Indenture Trustee in Eligible
Investments made in the name of the Indenture Trustee. All interest on and
principal payments of Eligible Investments (except any such which
constitute Sale Proceeds, which shall be deposited into the Collection
Account) shall be deposited into the Collateral Account upon receipt. Upon
maturity of any Eligible Investments, an amount equal to the Par Amount
thereof shall be reinvested by the Indenture Trustee in Eligible
Investments in accordance with instructions from the Swap Counterparty. If
the Indenture Trustee has not received any instructions from the Swap
Counterparty by 4:30 p.m. New York City on any date on which there are
funds in the Collateral Account to be invested, the Indenture Trustee shall
invest such funds in any overnight investments meeting the requirements for
Eligible Investments. The Indenture Trustee shall give the Swap
Counterparty written notification by 3:00 p.m. New York City time each day
it receives an Early Amortization Payment or on any date on which there are
funds in the Collateral Account to be invested.
(ii) All income from any Eligible Investments shall be paid to
the Swap Counterparty upon receipt. Any losses from such investments shall
be charged to the Collateral Account. Neither the Trustee nor the Swap
Counterparty shall be liable for any losses from such investments.
Section 5. SALE PROCEDURES. If it is determined that a
Monthly Prepayment Amount will be due on the next Payment Date for the
Notes or the Certificates, the Indenture Trustee shall, by no later than
the 10th day before such Payment Date, notify the Swap Counterparty, and
shall arrange for the sale, for settlement on such Payment Date, in
accordance with the Sale Procedures, of an aggregate Par Amount of Eligible
Investments which, together with the principal amount of Collateral
Obligations to be sold, all as directed by the Swap Counterparty pursuant
to the Swap Agreement, will equal the sum of the Mandatory Prepayment
Amount due on the Notes and the Mandatory Prepayment due on the
Certificates on such next Payment Date.
Section 6. FINAL SCHEDULED PAYMENT DATE. The Indenture
Trustee shall, by no later than the 10th day before the Final Scheduled
Payment Date, notify the Swap Counterparty, and shall arrange for the sale,
for settlement on the Final Scheduled Payment Date, in accordance with the
Sale Procedures, of all Eligible Investments and Collateral Obligations
12
<PAGE>
then held by the Trustee and shall, irrespective of whether an Asset
Impairment Event (as defined in the Swap Agreement) has then occurred,
distribute the proceeds thereof in accordance with the priorities set forth
in Section 4a(iii) above.
Section 7. EVENTS OF DEFAULT.
a. EVENTS OF DEFAULT. In lieu of the defaults identified in
Section 5.1 of the Standard Terms, an "Event of Default" under this
Indenture will consist of: (i) a default for five Business Days or more in
the payment of any interest on any Note when the same becomes due and
payable; provided that a deferral of interest on the Notes as provided in
Section 3 hereof will not be considered "due and payable" within the
meaning of this clause (A) until the Payment Date on which there are
sufficient Available Funds to pay the interest so deferred; (B) a default
in the payment of the principal of or any installment of the principal of
any Note when the same becomes due and payable by reason of mandatory
prepayment or otherwise; (ii) a default in the observance or performance of
any covenant or agreement of the Issuer made in the Indenture and the
continuation of any such default for a period of 30 days after notice
thereof is given to the Issuer by the Indenture Trustee or the Swap
Counterparty or to the Issuer, the Swap Counterparty and the Indenture
Trustee by the holders of at least 25% of the outstanding principal of the
Notes; (iii) any representation or warranty made by the Issuer in the
Indenture or in any certificate delivered pursuant thereto or in connection
therewith having been incorrect in a material respect as of the time made,
and the circumstance in respect of which such representation or warranty
was incorrect not having been cured within 30 days after notice thereof is
given to the Issuer by the Indenture Trustee or the Swap Counterparty or to
the Issuer, the Swap Counterparty and the Indenture Trustee by the holders
of at least 25% of the outstanding principal of the Notes then outstanding;
(iv) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law or
hereafter in effect, 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 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 action by the Issuer
in furtherance of any of the foregoing; or (v) the occurrence of a Swap
Early Termination Event. In the event of the occurrence of a Swap Early
Termination Event, notwithstanding anything to the contrary in Section 5.2
of the Standard Terms, the Notes will be deemed to have been declared to be
immediately due and payable without need for any additional consents.
b. SALE OF ASSETS UPON EVENT OF DEFAULT AND ACCELERATION OF
NOTES. Upon the occurrence of an Event of Default hereunder, if the
Notes have been accelerated (or if such Event of Default is a Swap
Termination Event and the Notes are required to be accelerated as
set forth in Section 7a above), the Indenture Trustee shall sell the
Collateral Obligations and Eligible Investments pursuant to Section
5.4(a)(iv) of the Standard Terms and shall not take any other action
with respect thereto except to the extent, if any, that such property
cannot be sold.
13
<PAGE>
5.4(a)(iv) of the Standard Terms and shall not take any other action with
respect thereto except to the extent, if any, that such property cannot be
sold.
c. DISTRIBUTIONS AFTER AN EVENT OF DEFAULT. Section 5.4(b) of
the Standard Terms shall have no effect with respect to collections of
money or property pursuant to Article V of the Indenture following an Event
of Default, which collections shall be paid out in the following order:
FIRST, to the Indenture Trustee for amounts due under Section 6.7
of the Indenture;
SECOND, to the Swap Counterparty, any amounts due pursuant to the
Swap Agreement;
THIRD, to the Noteholders, any amounts constituting interest due
on the Notes to the date of payment, including deferred interest, if
any;
FOURTH, to the Noteholders, any amounts constituting principal
due on the Notes to the date of payment; and
FIFTH, to the Owner Trustee for distribution pursuant to the
Trust Agreement.
d. OPTIONAL PRESERVATION OF THE COLLATERAL OBLIGATIONS. With
reference to Section 5.5 of the Standard Terms, it is also the desire of
the parties to the 1997-7 Series Trust Indenture that the payments required
to be made to the Swap Counterparty pursuant to the Swap Agreement be made
when due thereunder, including upon a Swap Early Termination.
Section 8. APPOINTMENT OF INDENTURE TRUSTEE AS PAYING AGENT
AND NOTE REGISTRAR.
The Issuer hereby appoints the Indenture Trustee to act as Paying
Agent for the Notes and as Note Registrar and, so long as the Indenture
Trustee is also the Administrator, as Paying Agent for the Certificates and
as Certificate Registrar.
Section 9. MISCELLANEOUS.
a. The Issuer shall, on each anniversary of the Closing Date
furnish to the Indenture Trustee the Opinion of Counsel required by Section
3.6 of the Standard Terms and the "annual statement of compliance" required
by Section 3.9 of the Standard Terms.
b. The Indenture Trustee covenants and agrees to treat the Note
as indebtedness for all federal and state income tax, franchise tax, and
transfer and similar tax purposes.
c. The Indenture Trustee will mail to any Noteholder, within
three business days of any such Noteholder's written request, at its
address listed on the Note Register maintained with the Indenture Trustee,
a monthly report stating as of the immediately preceding Payment Date (i)
14
<PAGE>
the amount of principal and interest, respectively paid on each $1000 in
principal amount of Notes, (ii) the Note Principal Amount, (iii) the Note
Current Factor, (iv) the outstanding principal amount of the Term Assets
and the Par Value of any Eligible Investments then held by the Issuer and
(v) the Certificate principal balance.
d. With reference to Section 9.2 of the Standard Terms, where
the consent of the holders of not less than a majority of the outstanding
amount of the Notes is necessary to enter into an indenture or indentures
supplemental hereto for the purpose of adding any provision to, or changing
in any manner, or eliminating any of the provisions of the Indenture or of
modifying in any manner the rights of the Noteholders under the Indenture,
the consent of the Swap Counterparty shall also be necessary unless there
has been an Event of Default under (and as defined in) the Swap Agreement
and the party in default is the Swap Counterparty.
e. With reference to Section 9.1(b) of the Standard Terms, the
Opinion Of Counsel must also be satisfactory to the Swap Counterparty
unless there has been an Event of Default under and as defined in the Swap
Agreement and the party in default is the Swap Counterparty.
f. Notwithstanding anything contained herein to the contrary,
this instrument has been signed by the Owner Trustee, not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in
no event shall the Owner Trustee in its individual capacity or any
beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligation of the Issuer
hereunder as to all of which recourse shall be had solely to the assets of
the Issuer.
g. Each Series shall constitute a separate Series of the Trust
pursuant to Section 3806(b)(2) of the Delaware Business Trust act (the
"DBTA"). Separate and distinct records shall be maintained for each Series
and the assets associated with any such Series shall be held and accounted
for separately from the other assets of the Trust, or any other Series
thereof. Subject to the right of the Trust to allocate general
liabilities, expenses, costs, charges or reserves as herein provided, the
debts liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular Series shall be enforceable
against the assets of such Series only, and not against the assets of any
other Series. Notice of this limitation on inter-series liabilities shall
be set forth in the certificate of trust of the Trust (whether originally
or by amendment) as filed or to be filed in the Office of the Secretary of
State of the State of Delaware pursuant to the DBTA, and upon the giving of
such notice in the certificate of trust, the statutory provisions of
Section 3804 of the DBTA relating to limitations on inter-series
liabilities (and the statutory effect under Section 3804 of setting forth
such notice in the certificate of trust) shall become applicable to the
15
<PAGE>
Trust and each Series. Every note, bond, contract or other undertaking
issued by or on behalf of a particular Series shall include a recitation
limiting the obligation represented thereby to that Series and its assets.
h. The Swap Counterparty is hereby made an express third party
beneficiary of this Agreement.
16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Series
Trust Indenture to be executed by their respective duly authorized officers
as of the date first above written.
TIERS ASSET-BACKED SECURITIES, SERIES CHAMT TRUST
1997-7
By: DELAWARE TRUST CAPITAL MANAGEMENT,
INC.
not in its individual capacity
but solely as Owner Trustee under
the Trust Agreement
By:______________________________
Title:
FIRST TRUST NATIONAL ASSOCIATION,
solely in its capacity as Indenture Trustee
hereunder
By:______________________________
Title:
17
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
PREPAYMENT CALCULATION TABLE
<S> <C> <C> <C> <C> <C>
PSA INDEX PSA INDEX PSA INDEX
AMORTIZATION AMORTIZATION AMORTIZATION
RATE(%) MONTHLY RATE(%) MONTHLY RATE(%) MONTHLY
------------ ------- ------------- ------- ------------ ------------
0-100 0.000 142 1.176 184 2.352
101 0.028 143 1.204 185 2.380
102 0.058 144 1.232 186 2.408
103 0.084 145 1.280 187 2.436
104 0.112 146 1.288 188 2.484
105 0.140 147 1.316 189 2.492
106 0.168 148 1.344 190 2.520
107 0.196 149 1.372 191 2.548
108 0.224 150 1.400 192 2.576
109 0.252 151 1.428 193 2.604
110 0.280 152 1.456 194 2.632
111 0.308 153 1.484 195 2.660
112 0.338 154 1.512 196 2.888
113 0.364 155 1.540 197 2.716
114 0.392 156 1.568 198 2.744
115 0.420 157 1.596 199 2.772
116 0.448 158 1.624 200 2.800
117 0.476 159 1.652 201 2.828
118 0.504 160 1.680 202 2.858
119 0.532 161 1.708 203 2.884
120 0.560 162 1.736 204 2.912
121 0.588 163 1.764 205 2.940
122 0.616 164 1.792 206 2.988
123 0.644 165 1.820 207 2.996
124 0.672 166 1.848 208 3.024
125 0.700 167 1.876 209 3.052
126 0.728 168 1.904 210 3.080
127 0.756 169 1.932 211 3.108
128 0.784 170 1.960 212 3.136
129 0.812 171 1.988 213 3.164
130 0.840 172 2.018 214 3.192
131 0.888 173 2.044 215 3.220
132 0.896 174 2.072 216 3.248
133 0.924 175 2.100 217 3.278
134 0.952 176 2.128 218 3.304
135 0.980 177 2.158 219 3.332
136 1.006 178 2.185 220 3.360
137 1.038 179 2.212 221 3.388
138 1.084 180 2.240 222 3.416
139 1.092 181 2.288 223 3.444
140 1.120 182 2.296 224 3.472
141 1.148 183 2.324 225-325 3.500
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PSA INDEX PSA INDEX PSA INDEX
AMORTIZATION AMORTIZATION AMORTIZATION
RATE(%) MONTHLY RATE(%) MONTHLY RATE(%) MONTHLY
------------ ------- ------------- ------- ------------ -----------
326 3.570 374 6.930 422 10.525
327 3.640 375 7.000 423 10.600
328 3.710 376 7.075 424 10.675
329 3.780 377 7.150 425 10.750
330 3.850 378 7.225 426 10.825
331 3.920 379 7.300 427 10.900
332 3.990 380 7.375 428 10.975
333 4.060 381 7.450 429 11.050
334 4.130 382 7.525 430 11.125
335 4.200 383 7.600 431 11.200
336 4.270 384 7.765 432 11.275
337 4.340 385 7.750 433 11.350
338 4.410 386 7.825 434 11.425
339 4.480 387 7.900 435 11.500
340 4.550 388 7.975 436 11.575
341 4.620 389 8.050 437 11.650
342 4.690 390 8.125 438 11.725
343 4.760 391 8.200 439 11.800
344 4.830 392 8.275 440 11.875
345 4.900 393 8.350 441 11.950
346 4.970 394 8.425 442 12.025
347 5.040 395 8.500 443 12.100
348 5.110 396 8.575 444 12.175
349 5.180 397 8.650 445 12.250
350 5.250 398 8.725 446 12.325
351 5.320 399 8.800 447 12.400
352 5.390 400 8.875 448 12.475
353 5.460 401 8.950 449 12.550
354 5.530 402 9.025 450 12.625
355 5.600 403 9.100 451 12.700
356 5.670 404 9.175 452 12.775
357 5.740 405 9.250 453 12.850
358 5.810 406 9.325 454 12.925
359 5.880 407 9.400 455 13.000
360 5.950 408 9.475 456 13.075
361 6.020 409 9.550 457 13.150
362 6.090 410 9.625 458 13.225
363 6.160 411 9.700 459 13.300
364 6.230 412 9.775 460 13.375
365 6.300 413 9.860 461 13.450
366 6.370 414 9.925 462 13.525
367 6.440 415 10.000 463 13.800
368 6.510 416 10.075 464 13.675
369 6.580 417 10.150 465 13.750
370 6.650 418 10.225 466 13.825
371 6.720 419 10.300 467 13.900
372 6.790 420 10.375 468 13.975
373 6.860 421 10.450 469 14.050
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PSA INDEX PSA INDEX PSA INDEX
AMORTIZATION AMORTIZATION AMORTIZATION
RATE(%) MONTHLY RATE(%) MONTHLY RATE(%) MONTHLY
------------ ------- ------------- ------- ------------ ------------
470 14.125 518 17.940 558 21.140
471 14.200 519 18.020 559 21.220
472 14.275 520 18.100 560 21.300
473 14.350 521 18.180 561 21.380
474 14.425 522 18.260 562 21.460
475 14.500 523 18.340 563 21.540
476 14.580 524 18.420 564 21.620
477 14.660 525 18.500 565 21.700
478 14.745 526 18.580 566 21.780
479 14.820 527 18.660
480 14.905 528 18.740
481 14.980 529 18.820
482 15.060 530 18.900
483 15.140 531 18.980
484 15.220 532 19.060
485 15.300 533 19.140
486 15.380 534 19.220
487 15.460 535 19.300
488 15.540 536 19.380
489 15.620 537 19.460
490 15.700 538 19.540
491 15.780 539 19.620
492 15.860 540 19.700
493 15.940 541 19.780
494 16.020 542 19.860
495 16.100 543 19.940
496 16.180 544 20.020
497 16.260 545 20.100
498 16.340 546 20.180
499 16.420 547 20.260
500 16.500 548 20.340
501 16.580 549 20.420
502 16.660 550 20.500
503 16.740 551 20.580
504 16.820 552 20.660
505 16.900 553 20.740
506 16.980 554 20.820
507 17.060 555 20.900
508 17.140 556 20.980
509 17.220 557 20.060
510 17.300
511 17.380
512 17.460
513 17.540
514 17.620
515 17.700
516 17.780
517 17.880
</TABLE>
A-3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PSA INDEX PSA INDEX PSA INDEX
AMORTIZATION AMORTIZATION AMORTIZATION
RATE(%) MONTHLY RATE(%) MONTHLY RATE(%) MONTHLY
------------ ------- ------------- ------- ------------ ------------
567 21.860
568 21.940
569 21.020
570 22.100
571 22.180
572 22.260
573 22.340
574 22.420
575 22.500
</TABLE>
<PAGE>
FORM OF FIXED RATE NOTE, CLASS A
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY 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.
TIERS{sm} ASSET-BACKED SECURITIES, SERIES CHAMT TRUST 1997-7
FIXED RATE NOTE, CLASS A
(ISSUABLE IN MULTIPLES OF THE MINIMUM DENOMINATION)
No.: R-1 Principal Amount: $352,980,000
CUSIP No.: 871928AR8
TIERS{sm} Asset-Backed Securities, Series CHAMT Trust 1997-7, a
business trust organized and existing under the laws of the State of Delaware
(herein referred to as the "Issuer"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of [ ]
DOLLARS payable on each Payment Date in an amount equal to the result
obtained by multiplying (i) a fraction the numerator of which is $[INSERT
PRINCIPAL AMOUNT OF NOTE] and the denominator of which is $352,980,000 by (ii)
the aggregate amount, if any, payable from the Collection Account in respect of
principal on the Notes pursuant to Section 4 of the Indenture; PROVIDED
HOWEVER, that the entire unpaid principal amount of this Note shall be due and
payable on the Payment Date in November 2003 (the "Final Scheduled Payment
Date"). The Issuer will pay interest on this Note at the rate of 6.688% per
annum on each Payment Date, subject to deferral as provided in Section 3(a)
of the Indenture, until the principal of this Note is paid or made available
for payment, on the principal amount of this Note outstanding on the preceding
Payment Date (after giving effect to all payments of principal made on the
preceding Payment Date). Interest on this Note will accrue for each Payment
Date from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from
September 15, 1997. Interest will be computed on the basis of the actual
number of days elapsed in a 360-day year, consisting of 12 30-day months. The
sole obligors with respect to the principal and interest on this Note is the
issuer of the Term Assets and other assets granted pursuant to the 1997-7
Series Trust Indenture and any other entities obligated to make payments to
such issuers or obligors (or their trustees or other applicable fiduciaries).
This Note is one of a duly authorized issue of Notes of the
Issuer designated as its Class A Notes (herein called the "Notes"), pursuant to
the terms of a Series Trust Indenture, (the "Indenture") dated as of September
15, 1997 consisting of a Series Trust Indenture together with the Standard
Terms and Provisions of Trust Indenture appended thereto, together with all
other exhibits, schedules, appendices, supplements and amendments thereto
between the Issuer and First Trust of New York, National Association, as
Indenture Trustee, pursuant to which this and other Notes have been issued.
Reference is hereby made to the Indenture and all indentures supplemental
thereto for a statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the Noteholders. All terms used and not
otherwise defined in this Note that are defined in the Indentures, as
supplemented or amended, shall have the meanings assigned to them in or
pursuant to the Indenture.
The Notes issued pursuant to the Indenture and will be equally
and ratably secured by the Collateral pledged as security therefor as provided
in the Indenture.
Subject to mandatory prepayment in whole or in part or optional
redemption in whole, as set forth in Section 3 of the 1997-7 Series Trust
Indenture, the entire principal amount of this Note shall be due and payable on
the date on which Event of Default shall have occurred and be continuing and
the Indenture Trustee or Noteholders representing not less than 25% of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2 of the Indenture or upon the
occurrence of a Swap Early Termination Event as defined in the Series Trust
Indenture. All payments in respect of the principal amount hereof shall be
made in the ratio that the outstanding principal amount of this Note to the
Outstanding Amount of the Notes.
Payments in respect of interest on and principal of this Note
shall be due and payable on each Payment Date and payments in respect of
interim shall be due and payable on the Payment Dates, if not in full payment
of this Note, shall be made 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 the Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially such nominee to be Cede & Co.), payments will
<PAGE>
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. The Record Date, with respect to any Payment Date, means
the day immediately preceding such Payment Date or if Definitive Notes are
issued, the last business day of the month prior to the month in which such
Payment Date occurs. Any reduction in the principal amount of this Note (or
any one or more predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full of the
then remaining unpaid principal amount of this Note on a Payment Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, shall
notify the Person who is the Registered Holder hereof as of the Record
Date preceding such Payment Date, by notice sent in accordance with Section
2.7(d) of the Indenture, and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in New York City.
As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in New York City
or the city in which the Corporate Trust Office is located, or a member firm of
a national securities exchange, and such other documents as the Indenture
Trustee may require, and thereupon one or more new Notes of authorized
detonations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for
any registration of transfer or exchange of this Note, but the transferor may
be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
their individual capacities, (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 or the Owner Trustee in their individual
capacities, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assignee of the
Indenture Trustee or the Owner Trustee in their individual capacities, except
as any such person may have expressly agreed and except that any such party,
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 of call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture such Noteholder will not, prior
to the date which is one year and one day after the termination of this
Indenture with respect to the Issuer, acquiesce, petition or otherwise invoke
or cause the Depositor or the Issuer to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Depositor or the Issuer under any federal or state bankruptcy, insolvency
or similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Depositor or the
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Depositor or the Issuer.
Each Noteholder or Note Owner, acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees to
treat the Note as indebtedness for all federal and state income tax, franchise
tax, and transfer and similar tax purposes.
Prior to the due presentment of registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer of 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
shall be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the Indenture
at any time by the Issuer with the consent of the Holders of Notes representing
a majority of the Outstanding Amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.
<PAGE>
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of
law provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither the Depositor, the Indenture
Trustee nor the Owner Trustee in their respective individual capacities, any
owner of a beneficial interest in the Issuer, nor 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, or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in this Note or the Indenture, it being expressly understood that
said covenants, obligations and indemnifications have been made by the Issuer.
The Holder of this Note by the 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.
The principal of and interest of this Note are payable in such
coin or currency of the United States of America which, 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.
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 and the Indenture Trustee have
each caused this Agreement to be executed by or in facsimile, by its Authorized
Officer.
Date: TIERS{sm} ASSET-BACKED SECURITIES, SERIES CHAMT TRUST 1997-7
By: DELAWARE TRUST CAPITAL MANAGEMENT, INC., not in its
individual capacity but solely as Owner Trustee under the Trust
Agreement
By:________________________________
Name:
Title:
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION,
as Indenture Trustee
By:_________________________________
Name:
Title:
<PAGE>
Exhibit A
to the Series
Trust Indenture
____________________________________________________________
STANDARD TERMS AND PROVISIONS OF TRUST INDENTURE
between
THE TRUST SPECIFIED IN THE SERIES TRUST INDENTURE,
as Issuer
and
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION
as Indenture Trustee
____________________________________________________________
Relating to Notes
of the series specified in the Series Trust Indenture
<PAGE>
<TABLE>
<CAPTION>
__________________________________________
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS{1}
Trust Indenture
Act Section Indenture Section
- --------------- -----------------
<S> <C>
310(a)(1).................................................. 6.11
(a)(2).................................................. 6.10
(a)(3).................................................. 6.15
(a)(4).................................................. 6.11
(b)..................................................... 6.8(a)(1)
(c)..................................................... Not Applicable
311(a)..................................................... 6.12
(b)..................................................... 6.12
312(a)..................................................... 7.1
7.2(a)
(b)..................................................... 7.2(b)
(c)..................................................... 7.2(c)
313(a)..................................................... 7.4(a)
(b)..................................................... 7.4(a)
(c)..................................................... 7.4(a)
(d)..................................................... 7.4(a)
314(a)..................................................... 3.9, 7.3(a)
(b)..................................................... 3.6
(c)(1).................................................. 2.9, 8.5(b), 11.1(m)
(c)(2)................................................... 2.9, 8.5(B), 11.1(a)
(c)(3).................................................. 2.9, 8.5(B), 11.1(a)
(d)(1).................................................. 2.9, 8.5(B), 11.1(b)
(d)(2).................................................. Not Applicable
(d)(3).................................................. Not Applicable
(a) .................................................. 11.1(a)
315(a)..................................................... 6.1(b)
(b)..................................................... 6.5
(c)..................................................... 6.1(a)
(d)..................................................... 6.1(c)
(d)(1).................................................. 6.1(c)(i)
(d)(2).................................................. 6.1(c)(ii)
(d)(3).................................................. 6.1(c)(iii)
(e)..................................................... 5.13
316(a)(1)(a)............................................... 5.11
316(a)(1)(B)............................................... 5.12
316(a)(2).................................................. Not Applicable
316(b)..................................................... 5.7
317(a)(1).................................................. 5.3
317(a)(2).................................................. 5.3
317(b)..................................................... 3.3
318(a)..................................................... 11.7
____________
{1} This reconciliation and the tie shall not, for any purpose, be deemed
to be part of the within indenture.
<PAGE>
TABLE OF CONTENTS
-----------------
Page
ARTICLE I
DEFINITION AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions ................................. 2
SECTION 1.2 Other Definitional Provisions ............... 8
SECTION 1.3 Incorporation by Reference of Trust Indenture
Act........................................ 8
ARTICLE II
THE NOTES
SECTION 2.1 Form. ....................................... 9
SECTION 2.2 Execution; Authentication and Delivery ...... 9
SECTION 2.3 Original Notes .............................. 10
SECTION 2.4 Registration; Registration of Transfer and
Exchange of Notes............................ 11
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes .. 12
SECTION 2.6 Persons Deemed Noteholders .................. 13
SECTION 2.7 Payment of Principal and Interest ........... 13
SECTION 2.8 Cancellation of Notes ....................... 14
SECTION 2.9 Release of Collateral ....................... 15
SECTION 2.10 Book-Entry Notes ............................ 15
SECTION 2.11 Notices to Clearing Agency .................. 16
SECTION 2.12 Definitive Notes ............................ 16
SECTION 2.13 Depositor as Noteholder ..................... 16
SECTION 2.14 Tax Treatment ............................... 16
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest ........... 17
SECTION 3.2 Maintenance of Agency Office ................ 17
SECTION 3.3 Money for Payment to Be Held in Trust ....... 17
SECTION 3.4 Existence ................................... 19
SECTION 3.5 Protection of Trust Estate; Acknowledgment
of Pledge.................................. 19
SECTION 3.6 Opinions as to Trust Estate ................. 20
SECTION 3.7 Performance of Bond ......................... 20
SECTION 3.8 Negative Covenants .......................... 21
SECTION 3.9 Annual Statement as to Compliance ........... 22
SECTION 3.10 Consolidation, Merger, etc., of Issuer;
Disposition of Trust Assets................ 22
SECTION 3.11 Successor or Transferee ..................... 24
SECTION 3.12 No Other Business ........................... 24
SECTION 3.13 No Borrowing ................................ 24
SECTION 3.14 Guarantees, Loans, Advances and Other
Liabilities................................ 25
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<PAGE>
Page
SECTION 3.15 Capital Expenditures ........................ 25
SECTION 3.16 Restricted Payments ......................... 25
SECTION 3.17 Notice of Events of Default ................. 25
SECTION 3.18 Further Instruments and Acts ................ 25
SECTION 3.19 Representations and Warranties by the
Issuer to the Indenture Trustee............ 26
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture ..... 26
SECTION 4.2 Application of Trust Money .................. 27
SECTION 4.3 Repayment of Moneys Held by Paying Agent .... 27
SECTION 4.4 Duration of Position of Indenture Trustee ... 28
ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 Events of Default ........................... 28
SECTION 5.2 Acceleration to Maturity; Rescission and
Annulment.................................. 29
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee........... 30
SECTION 5.4 Remedies; Priorities ........................ 33
SECTION 5.5 Optional Preservation of the Collateral
Obligations................................ 34
SECTION 5.6 Limitation of Suits ......................... 34
SECTION 5.7 Unconditional Rights of Noteholders to
Receive Principal and Interest............. 35
SECTION 5.8 Restoration of Rights and Remedies .......... 35
SECTION 5.9 Rights and Remedies Cumulative .............. 36
SECTION 5.10 Delay or Omission Not a Waiver .............. 36
SECTION 5.11 Control by Noteholders ...................... 36
SECTION 5.12 Waiver of Past Defaults ..................... 37
SECTION 5.13 Undertaking for Costs ....................... 37
SECTION 5.14 Waiver of Stay or Extension Laws ............ 38
SECTION 5.15 Action on Notes ............................. 38
SECTION 5.16 Performance and Enforcement of Certain
Collateral Obligations..................... 38
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee ................. 39
SECTION 6.2 Rights of Indenture Trustee ................. 40
SECTION 6.3 Indenture Trustee May Own Notes ............. 40
SECTION 6.4 Indenture Trustee's Disclaimer .............. 41
SECTION 6.5 Notice of Defaults .......................... 41
SECTION 6.6 Reports by Indenture Trustee ................ 41
ii
<PAGE>
SECTION 6.7 Compensation; Indemnity ..................... 41
SECTION 6.8 Replacement of Indenture Trustee ............ 42
SECTION 6.9 Merger or Consolidation of Indenture Trustee. 43
SECTION 6.10 Appointment of Co-Indenture Trustee or
Separate Indenture Trustee................. 44
SECTION 6.11 Eligibility; Disqualification ............... 45
SECTION 6.12 Preferential Collection of Claims Against
Issuer..................................... 45
SECTION 6.13 Representations and Warranties of Indenture
Trustee.................................... 46
SECTION 6.14 Indenture Trustee May Enforce Claims
Without Possession of Notes................ 46
SECTION 6.15 Suit for Enforcement ........................ 47
SECTION 6.16 Rights of Noteholders to Direct Indenture
Trustee.................................... 47
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer to Furnish Indenture Trustee Names
and Addresses of Noteholders............... 47
SECTION 7.2 Preservation of Information, Communications
to Noteholders............................. 47
SECTION 7.3 Reports by Issuer ........................... 48
SECTION 7.4 Reports by Trustee .......................... 48
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money ......................... 49
SECTION 8.2 Designated Accounts ......................... 49
SECTION 8.3 Collection Account .......................... 49
SECTION 8.4 Note Payment Account ........................ 50
SECTION 8.5 Release of Trust Estate ..................... 50
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of
Noteholders................................ 50
SECTION 9.2 Supplemental Indenture With Consent of
Noteholders................................ 52
SECTION 9.3 Execution of Supplemental Indentures ........ 53
SECTION 9.4 Effect of Supplemental Indenture ............ 53
SECTION 9.5 Conformity with Trust Indenture ............. 54
SECTION 9.6 Reference in Notes to Supplemental
Indentures................................. 54
iii
<PAGE>
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption .................................. 54
SECTION 10.2 Notice of Redemption ........................ 55
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc. .. 55
SECTION 11.2 Form of Documents Delivered to Indenture
Trustee................................... 57
SECTION 11.3 Acts of Noteholders ......................... 58
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer
and Rating Agency.......................... 58
SECTION 11.5 Notice to Noteholders; Waiver ............... 59
SECTION 11.6 Alternate Payment and Notice Provisions ..... 60
SECTION 11.7 Conflict with Trust Indenture Act ........... 60
SECTION 11.8 Effect of Headings and Table of Contents .... 60
SECTION 11.9 Successors and Assigns ...................... 60
SECTION 11.10 Separability ................................ 60
SECTION 11.11 Benefits of Indenture ....................... 60
SECTION 11.12 Legal Holidays .............................. 61
SECTION 11.13 GOVERNING LAW ............................... 61
SECTION 11.14 Counterparts ................................ 61
SECTION 11.15 Recording of Indenture ...................... 61
SECTION 11.16 No Recourse ................................. 61
SECTION 11.17 No Petition ................................. 62
APPENDIX A-I Form of Note.................................A-I-1
iv
<PAGE>
STANDARD TERMS AND PROVISIONS OF TRUST INDENTURE
This document constitutes Standard Terms and Provisions of Trust
Indenture which are to be incorporated by reference in, and attached as
Exhibit A to, one or more Series Trust Indentures by and between the Trust
(as defined herein), as Issuer, and First Trust of New York, National
Association, as Indenture Trustee.
Each Series Trust Indenture will create a trust indenture under
the laws of the State of New York to secure the payment of principal of and
interest on, and any other amounts owing in respect of, the Notes (as
defined herein), and to secure compliance with the provisions of the Series
Trust Indenture.
These Standard Terms shall be of no force and effect unless and
until incorporated by reference into a Series Trust Indenture.
The following terms and provisions shall govern the Notes and
Certificates (as defined herein), subject to contrary terms and provisions
expressly set forth in a Series Trust Indenture, which contrary terms and
provisions of the Series Trust Indenture shall control; provided, that no
such term or provisions of the Series Trust Indenture may limit, qualify or
conflict with Section 11.7 hereof.
<PAGE>
ARTICLE I
DEFINITION AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS. Except as otherwise specified herein
or as the context may otherwise require, the following terms have the
respective meanings set forth below for all purposes of this Indenture.
"ACT" means 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.
"AFFILIATE" means, with respect to any specified Person, any
other Person 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 specified 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 meaning correlative to the
foregoing.
"AGENCY OFFICE" means the Office required to be maintained by the
Issuer, at which Notes may be surrendered for registration of exchange, and
where notices and demands to and upon the Issuer may be served.
"AUTHORIZED OFFICER" means, 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
on the Closing Date (as such list may be modified or supplemented from time
to time thereafter).
"BASIC DOCUMENTS" means the Trust Agreement and this Indenture
and such other documents as specified in the Series Trust Indenture.
"BOOK-ENTRY NOTES" means Notes, ownership and transfer of which
is made through book entries by a Clearing Agency and its participants as
described in Section 2.10.
"BUSINESS DAY" has the meaning set forth in the Series Trust
Indenture.
"CERTIFICATE" means a certificate of a class of certificates
identified in the Series Trust Indenture, which Certificate has been issued
by the Issuer pursuant to the Trust Agreement.
2
<PAGE>
"CERTIFICATE PRINCIPAL AMOUNT" equals initially that amount set
forth and designated as such in the Trust Agreement, and thereafter, such
amount, as reduced by all amounts allocable to principal previously
distributed to Certificateholders.
"CLEARING AGENCY" means an organization registered as "clearing
agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time, a
Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.
"CLOSING DATE" means the date set forth and designated as such in
the Series Trust Indenture.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Series Trust
Indenture.
"COLLATERAL OBLIGATIONS" means the credit card securities or
receivables listed in the Series Trust Indenture.
"COLLECTION ACCOUNT" means the Bond Collection Account
established pursuant to Section 8.2 of this Indenture.
"COMMISSION" means the Securities and Exchange Commission.
"CORPORATE TRUST OFFICE" means the principal office of the
Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of the execution
of this Indenture is located at 100 Wall Street, Suite 1600, New York, New
York 10005, Attention: Marlene Fahey; or such other office as the
Indenture Trustee may designate from time to time by notice to the
Noteholders, the Certificateholders, the Owner Trustee and the Rating
Agency, or the principal corporate trust office of any successor Indenture
Trustee (in which case the successor Indenture Trustee will notify the
Noteholders, the Certificateholders, the Owner Trustee and the Rating
Agency of the address of such Office).
"DEFAULT" means any occurrence that is, with notice or the lapse
of time or both would become, an Event of Default.
"DEFINITIVE NOTES" has the meaning specified in Section 2.12.
"DEPOSITOR" means Structured Products Corp., a Delaware
corporation, and any permitted successor or assignee.
3
<PAGE>
"DESIGNATED ACCOUNTS" means the Collection Account, the Note
Payment Account and the Distribution Account created pursuant to Section
8.2 of this Indenture.
"DISTRIBUTION ACCOUNT" means the Certificate Distribution Account
established pursuant to Section 8.2 of this Indenture.
"DISTRIBUTION DATE" means any one of the dates set forth and
designated as Distribution Dates in the Series Trust Indenture upon which
payments in respect of the Certificates shall be due and payable.
"DTC" means the Depository Trust Company.
"EVENT OF DEFAULT" has the meaning specified in Section 5.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXECUTIVE OFFICER" means the with respect to any corporation,
the Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, President, Executive Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"FINAL CALL DATE" means the date, if any, specified as such in
the Series Trust Indenture.
"FINAL SCHEDULED PAYMENT DATE" means the date set forth and
designated as such in the Series Trust Indenture, which shall be the
Payment Date upon which the entire unpaid principal amount of the Notes
shall be due and payable.
"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
Collateral 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.
"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note is
registered on the Note Register.
4
<PAGE>
"INDENTURE" means the Trust Indenture consisting of the Series
Trust Indenture into which is incorporated by reference the standard terms,
including all exhibits, schedules, appendices, supplements and amendments
to each.
"INDENTURE TRUSTEE" means the First Trust of New York, National
Association, a New York banking corporation and any successor qualifying
under Section 6.11 of this Indenture.
"INDEPENDENT CERTIFICATE" means a certificate of a non-affiliated
accountant, engineer, appraiser or other expert as required by the TIA.
"INTEREST PERIOD" means, with respect to any Payment Date, the
period from and including the Payment Date immediately preceding such
Payment Date (or, in the case of the first such Payment Date, the Closing
Date), to but excluding such Payment Date.
"ISSUER" means the TIERS Asset-Backed Securities, Series CHAMT
Trust 1997-7, the trust created pursuant to the Trust Agreement and
identified as the Issuer in the Series Trust Indenture.
"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.
"LETTER OF REPRESENTATIONS" means the Letter of Representations,
dated the Closing Date, from the Indenture Trustee and the Owner Trustee to
DTC, as Clearing Agency, with respect to the Notes.
"LIEN" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind.
"MOODY'S" means Moody's Investors Service, Inc., or a successor
thereto.
"NOTE" means a note of a class of Notes identified in the Series
Trust Indenture, which note has been issued by the Issuer pursuant to this
Indenture.
"NOTE DEPOSITORY" means the Clearing Agency, or any nominee
thereof, in whose name any Global Notes are registered.
"NOTE OWNER" means, with respect to a Book-Entry Note, the Person
who is the beneficial owner of such Book-Entry Note, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, each case in accordance with the
rules of such Clearing Agency).
5
<PAGE>
"NOTE PAYMENT ACCOUNT" means the Note Payment Account established
pursuant to Section 8.2 of this Indenture.
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings
specified in Section 2.4.
"OFFICER'S CERTIFICATE" means a certificate signed by any
Authorized Officer of the Owner Trustee 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 Owner Trustee.
"OPINION OF COUNSEL" means one or more written opinions of
counsel who may, except as otherwise expressly provided in this Indenture,
be employees of or counsel to the Owner Trustee and who shall be
satisfactory to the Indenture Trustee, and which opinion or opinions shall
be addressed to the Indenture Trustee as Indenture Trustee, shall comply
with any applicable requirements of Section 11.1 of this Indenture, and
shall be in form and substance satisfactory to the Indenture Trustee.
"ORIGINAL NOTES" means the original notes issued hereunder to be
held by DTC, as Clearing Agency.
"OUTSTANDING" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions of the payment for which money in the
necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(PROVIDED, HOWEVER, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or
provision therefor, satisfactory to the Indenture Trustee, has been
made); and
(iii) Notes in exchange for which or in lieu of which other
Notes have been authenticated and delivered pursuant to this
Indenture, unless proven satisfactory to the Indenture Trustee is
presented that any such Notes are held by a bona fide purchaser;
PROVIDED that in determining whether the Holders of the Notes have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Issuer, the Depositor, the Indenture Trustee
or any Affiliate of any foregoing Persons shall be disregarded, and for
purposes of determining the requisite Outstanding Amount of Notes shall be
6
<PAGE>
deemed not to be Outstanding, except that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes
that the Indenture Trustee actually knows to be so owned shall be so
disregarded.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all
Notes outstanding at the date of determination.
"OWNER TRUSTEE" means Delaware Trust Capital Management, Inc., a
Delaware banking corporation and any successor qualifying under Section
6.13 of the Trust Agreement.
"PAYING AGENT" means the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 and who is authorized by the Issuer to make the payments to
and distributions from the Note Payment Account, including payment of,
principal of or interest on the Notes, on behalf of the Issuer.
"PAYMENT DATE" means any one of the dates set forth in the Series
Trust Indenture upon which payments in respect of the Notes shall be due
and payable.
"PERSON" means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government, or any
agency or political subdivision thereof.
"PREDECESSOR NOTE" means, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition,
any Note authenticated and delivered under Section 2.5 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.
"PROCEEDING" means any suit in equity, action at law or other
judicial or administrative proceeding.
"RATING AGENCY" means the credit rating agency identified in the
Series Trust Indenture. If more than one credit rating agency is
identified in the Series Trust Indenture, any reference herein to "Rating
Agency" shall be deemed to include each such credit rating agency. If such
organization or successor is no longer in existence, "Rating Agency" shall
be a United States nationally recognized statistical rating organization or
other comparable Person designated by the Depositor, notice of designation
shall be given to the Indenture Trustee.
"RATING AGENCY CONDITION" means, with respect to any action, that
the Rating Agency shall have been given 10 days prior notice thereof, and
that the Rating Agency shall have notified the Issuer in writing that such
action will not result in a reduction or withdrawal of the then current
rating of the Notes.
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"RECORD DATE" means, with respect to a Payment Date or Redemption
Date, the day identified in the Series Trust Indenture.
"REDEMPTION DATE" means any date set for the redemption of the
Notes upon satisfaction of the conditions for early redemption.
"REDEMPTION PRICE" means an amount equal to the unpaid principal
amount of the Notes redeemed, plus accrued and unpaid interest thereon, but
excluding the Redemption Date, plus the redemption premium, if any.
"REGISTERED HOLDER" means the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"RESPONSIBLE OFFICER" means, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture
Trustee, including any Vice President, Assistant Vice President, Secretary,
Assistant Secretary, or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the
above designated officers, and also with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge and familiarity with the particular subject.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, and
any successor thereto.
"TRUST AGREEMENT" means the trust agreement identified in the
Series Trust Indenture.
"TRUST ESTATE" means all money, instruments, rights and other
property that are subject to or intended to be subject to the lien and
security interest of this Indenture for the benefit of the Noteholders
(including, without limitation, all property and interests Granted to the
Indenture Trustee pursuant to this Indenture), including all proceeds
thereof.
"TIA" means the Trust Indenture Act of 1939, as amended.
"UCC" means the Uniform Commercial Code, as in effect in the
State of Delaware, as amended from time to time.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS. Capitalized terms
used in this Indenture and not otherwise defined herein shall have the
respective meanings assigned them in the Trust Agreement. All references
in this Indenture to articles, sections, subsections and exhibits are the
same contained in or attached to this Indenture unless otherwise specified.
All terms defined in this Indenture shall have the defined meanings when
used in any certificate, notice, Note or other document made or delivered
pursuant hereto, unless otherwise defined therein.
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SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by a
Commission rule have the respective meanings assigned to them by such
definitions.
ARTICLE II
THE NOTES
SECTION 2.1 FORM.
(a) The Notes, together with the Indenture Trustee's Certificate
of Authentication, shall be in substantially the forms set forth in
Appendix A corresponding to the types of Notes designated in the Series
Trust Indenture, 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.
(b) The Definitive 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 officers
executing such Notes, as evidenced by their execution of such Notes.
SECTION 2.2 EXECUTION; AUTHENTICATION AND DELIVERY.
(a) Each Note shall be dated the date of its authentication, and
shall be issuable as a registered Note in any authorized denomination set
forth in the Series Trust Indenture.
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(b) The Notes shall be executed on behalf of the Issuer by any
Authorized Officer of the Owner Trustee. The signature of any such
Authorized Officer of the Notes may be manual or facsimile.
(c) Notes bearing the manual or facsimile signature of
individuals who were at any time Authorized Officers of the Owner Trustee
shall bind the issuer, notwithstanding that such individuals or any of them
have ceased to hold such office prior to the authentication and delivery of
such Notes, or did not hold such office at the date of such Notes.
(d) The Indenture Trustee, in exchange for the Collateral
Obligations, simultaneously with the sale, assignment and transfer to the
Indenture Trustee of the Collateral Obligations, shall cause to be
authenticated and delivered to or upon the order of the Issuer, the Notes
for original issue in an aggregate principal amount set forth in the Series
Trust Indenture. The aggregate principal amount of Notes outstanding at
any time may not exceed that amount except as provided in Section 2.5.
Such Notes shall be duly authenticated by the Indenture Trustee, in
authorized denominations.
(e) 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 set
forth in Appendix A, executed by the Indenture Trustee by manual signature
of one of its Authorized Officers, 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 2.3 ORIGINAL NOTES.
(a) The Issuer shall execute, and upon receipt of an Issuer
Order the Indenture Trustee shall authenticate and deliver, Original Notes
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, with such variations from the forms of such Notes set forth in
Appendix A as are consistent with the terms of this Indenture as the
officers executing such Notes may determine, as evidenced by their
execution of such Notes.
(b) Under the circumstances set forth in Section 2.12, the
Issuer shall cause Definitive Notes to be prepared. After the preparation
of Definitive Notes, the Original Notes shall be exchangeable for
Definitive Notes upon surrender of the Original Notes at the Agency Office
of the Issuer to be maintained as provided in Section 3.2, without charge
to the Noteholder. Upon surrender or cancellation of any one or more
Original Notes, the Issuer shall execute and the Indenture Trustee shall
authenticate and deliver in exchange, a like principal amount of Definitive
Notes of authorized denominations. Until so delivered in exchange, the
Original Notes shall in all respects be entitled to the same benefits under
this Indenture as Definitive Notes.
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SECTION 2.4 REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE OF NOTES.
(a) The Issuer shall cause to be kept a Note Register for the
Notes in which, subject to such reasonable regulations as it may prescribe,
the Issuer shall provide for the registration of the Notes and the
registration of transfers of the Notes. The Indenture Trustee shall
initially be the Note Registrar for the purpose of registering the Notes
and transfers of the Notes as herein provided. Upon any resignation of any
Note Registrar, the Issuer shall promptly appoint a successor or, if it
elects not to make such an appointment, assume the duties of the Note
Registrar.
(b) If a Person other than the Indenture Trustee is appointed by
the Issuer as Note Registrar, the Issuer will give the Indenture Trustee
prompt written notice of the appointment of such Note Registrar and of the
location, and any change in the location, of the Note Register. The
Indenture Trustee shall have the right to inspect the Note Register at all
reasonable times and to obtain copies thereof. The Indenture Trustee shall
have the right to rely upon a certificate executed on behalf of the Note
Registrar by an Executive Officer thereof as to the name and addresses of
the Noteholders and the principal amounts and number of such Notes.
(c) Upon surrender for registration of transfer of any Note at
the Corporate Trust Office of the Indenture Trustee or the Agency Office of
the Issuer (and following the delivery in the former case of such Notes to
the Issuer by the Indenture Trustee), the Issuer shall execute, the
Indenture Trustee shall authenticate and the Noteholder shall obtain from
the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same series and class in any
authorized denominations, of a like aggregate principal amount.
(d) At the option of the Noteholder, Notes may be exchanged for
other Notes of the same series and class in any authorized denominations of
a like aggregate principal amount, upon surrender of the Notes to be
exchanged at the Corporate Trust Office of the Indenture Trustee or the
Agency Office; provided, however, that in the latter case the Issuer agrees
that such surrendered Notes shall be promptly delivered to the Indenture
Trustee. Whenever any Notes are so surrendered for exchange, the Issuer
shall execute, and the Indenture Trustee shall authenticate and the
Noteholder shall obtain from the Indenture Trustee, the Notes which the
Noteholder making the exchange is entitled to receive.
(e) All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer, evidencing
the same debt, and entitled to the same benefits under the Indenture, as
the Notes surrendered upon such registration of transfer or exchange.
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(f) Every 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 a form satisfactory to the Indenture
Trustee and the Note Registrar, duly executed by the Holder thereof or such
Holder's attorney duly authorized in writing, with such other documents as
the Indenture Trustee may require.
(g) No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Issuer or Indenture
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration
of transfer or exchange of Notes, other than exchanges pursuant to Section
2.3 or 9.6 not involving any transfer.
(h) The preceding provisions of this Section 2.4
notwithstanding, the Issuer shall not be required to transfer or make
exchanges, and the Note Registrar need not register transfers or exchanges
of Notes that: (i) have been selected for redemption pursuant to Article X,
if applicable; or (ii) are due for repayment within 15 days of submission
to the Corporate Trust Office or the Agency Office.
SECTION 2.5 MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
(a) If (i) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee 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 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, the Issuer shall
execute and upon the Issuer's request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of a like aggregate
principal amount; provided, however, that if any such destroyed, lost or
stolen Note, but not a mutilated Note, shall have become or within seven
days shall be due and payable, or shall have been called for redemption,
instead of issuing a replacement Note, the Issuer may pay to the Holder of
such destroyed, lost or stolen Note the amount due and payable thereon when
so due or payable or upon the Redemption Date without surrender thereof.
(b) If, after the delivery of a replacement Note or payment in
respect of a destroyed, lost or stolen Note pursuant to subsection (a), a
bona fide purchaser of the original Note in lieu of which such replacement
Note was issued presents for payment such original Note, the Issuer and the
Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from (i) any Person to whom it was delivered; (ii) the Person
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taking such replacement Note from the Person to whom such replacement Note
was delivered; or (iii) any assignee of such Person, except a bona fide
purchaser, and the Issuer and the Indenture Trustee shall be entitled to
recovery upon the security or indemnity provided therefor to the extent of
any loss, damage, cost or expense incurred by the Issuer or the Indenture
Trustee in connection therewith.
(c) In connection with the issuance of any replacement Note
under this Section 2.5, the Issuer may require the payment by the Holder of
such Note of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto, and any other reasonable expenses
(including all fees and expenses of the Indenture Trustee) connected
therewith.
(d) Any duplicate Note issued pursuant to this Section 2.5 in
replacement for 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 found
at any time or be enforced by any Person, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
(e) The provisions of this Section 2.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Notes.
SECTION 2.6 PERSONS DEEMED NOTEHOLDERS. Prior to presentment
for registration of transfer of any Note, the Issuer, the Indenture Trustee
and any agent of the Issuer or the Indenture Trustee may treat the Person
in whose name any Note is registered (as of the day of determination) as
the Noteholder for the purpose of receiving payments of principal of and
interest on such Note and for all other purposes whatsoever, whether or not
such Notes be overdue, and neither the Issuer, the Indenture Trustee nor
any agent of the Issuer or the Indenture Trustee shall be affected by
notice to the contrary.
SECTION 2.7 PAYMENT OF PRINCIPAL AND INTEREST.
(a) Each Note of a series and class of Notes shall be entitled
to payments of interest as provided in the form of Note for such series and
class set forth in Appendix A, and such interest shall be payable on each
Payment Date as specified therein. Any installment of interest payable on
any Note which is punctually paid or duly provided for by a deposit by or
at the direction of the Issuer into the Note Payment Account on the
applicable Payment Date shall be paid to the Person in whose name such Note
(or one or more Predecessor Notes) is registered on the applicable Record
Date, by check mailed first-class, postage prepaid to such Person's address
as it appears on the Note Register on such Record Date; provided, however,
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that unless and until Definitive Notes have been issued pursuant to Section
2.12 with respect to Notes registered on the applicable Record Date in the
name of the Note Depository (initially, Cede & Co.), payment shall be made
by wire transfer in immediately available funds to the account designated
by the Note Depository.
(b) The entire unpaid principal amount of the Notes shall be due
and payable, if not previously paid, if:
(i) an Event of Default shall have occurred and be
continuing; and
(ii) the Indenture Trustee or the Noteholders representing
not less that 25% of the Outstanding Amount of the Notes have declared
the Notes to be immediately due and payable in the manner provided in
Section 5.2.
(c) Following an Event of Default and the acceleration of the
Notes as aforesaid, except to the extent otherwise specifically provided
herein, (i) Noteholders will be entitled to ratable repayment of principal
on the basis of their respective unpaid principal balances and (ii)
repayment in full of the accrued interest on and unpaid principal balances
of the Notes will be made prior to any further payment of interest or
principal on the Certificates in respect of the Certificate Principal
Amount.
(d) The Indenture Trustee shall notify each Noteholder of record
as of the Record Date for a Payment Date, of the fact that the final
installment of principal of and interest on such Note is to be paid on such
Payment Date. Such notice shall be sent (i) on such Record Date by
facsimile, if Book-Entry Notes are outstanding; or (ii) not later than
three Business Days after such Record Date in accordance with Section
11.5(a), if Definitive Notes are outstanding, and shall specify that such
final installment shall be payable only upon presentation and surrender of
such Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Notes shall be mailed to Noteholders as provided in Section
10.2.
SECTION 2.8 CANCELLATION OF NOTES. All Notes surrendered for
payment, redemption, exchange or registration of transfer 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 2.8, except as expressly permitted by
this Indenture. All cancelled Notes may be held or disposed of by the
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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, however, that
such Issuer Order is timely and the Notes have not been previously disposed
of by the Indenture Trustee.
SECTION 2.9 RELEASE OF COLLATERAL. Subject to Section 11.1,
the Indenture Trustee shall release property from the lien of this
Indenture, including a release of property pursuant to Section 10.4, only
upon receipt of an Issuer Request accompanied by an Officers' Certificate,
an Opinion of Counsel, and Independent Certificates in accordance with TIA
Sections 314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such
Independent Certificates, to the effect that the TIA does not require any
such Independent Certificates.
SECTION 2.10 BOOK-ENTRY NOTES. The Notes, upon original
issuance, shall be issued in the form of a typewritten Original Note or
Notes representing the Book-Entry Notes, to be delivered to DTC, the
initial Clearing Agency, by or on behalf of the Issuer. Such Original Note
or Notes shall be registered on the Note Register in the name of the Note
Depository, and no Note Owner shall receive a Definitive Note representing
such Note Owner's interest in such Note, except as provided in Section
2.12. Unless and until the Definitive Notes have been issued to Note
Owners pursuant to Section 2.12:
(a) the provisions of this Section 2.10 shall be in full force
and effect;
(b) the Note Registrar and then Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the Notes
and the giving of instructions or directions hereunder) as the sole holder
of the Notes and shall have no obligation to the Note Owners;
(c) to the extent that the provisions of this Section 2.10
conflict with any other provisions of this Indenture, the provisions of
this Section 2.10 shall control;
(d) the rights of the Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants. Unless and until Definitive Notes are
issued pursuant to Section 2.12, the initial Clearing Agency shall make
book-entry transfers between the Clearing Agency Participants and receive
and transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants, pursuant to the Letter of Representations;
and
(e) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes evidencing
a specified percentage of the Outstanding Amount of the Notes, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
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it has (i) received instructions to such effect from Note Owners and/or
Clearing Agency Participants owning or representing respectively, such
required percentage of the beneficial interest in the Notes; and (ii) has
delivered such instructions to the Indenture Trustee.
SECTION 2.11 NOTICES TO CLEARING AGENCY. Whenever a notice or
other communication to the Noteholders is required under this Indenture,
unless and until Definitive Notes shall have been issued to Note Owners
pursuant to Section 2.12, the Indenture Trustee shall give all such notices
and communications specified herein to be given to Noteholders to the
Clearing Agency, and shall have no obligation to the Note Owners.
SECTION 2.12 DEFINITIVE NOTES. If (i) the Depositor advises
the Indenture Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to
the Notes and the Issuer is unable to locate a qualified successor; or (ii)
the Depositor, at its option, advises the Indenture Trustee in writing that
it elects to terminate the book-entry system through the Clearing Agency;
or (iii) after the occurrence of an Event of Default, Note Owners
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Notes advise the Clearing Agency in writing that
the continuation of a book-entry system through the Clearing Agency is no
longer in the best interests of the Note Owners, then the Indenture Trustee
shall notify the Clearing Agency of the occurrence of any such event and of
its intent to make Definitive Notes available to Note Owners, and shall
request the surrender to the Indenture Trustee of the typewritten Original
Note or Notes representing the Book-Entry Notes by the Clearing Agency.
Upon such surrender, accompanied by registration instructions from the
Clearing Agency, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of
the Clearing Agency. Neither 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 2.13 DEPOSITOR AS NOTEHOLDER. Subject to the proviso
set forth in the definition of "Outstanding" in Section 1.1, the Depositor
in its individual or any other capacity may become the owner or pledger of
Notes and may otherwise deal with the Issuer or its affiliates with the
same rights it would have if it were not the Depositor.
SECTION 2.14 TAX TREATMENT. The Issuer and the Indenture
Trustee, by entering into this Indenture, and the Noteholders by acquiring
any Notes or Interests therein, (i) express their intention that the Notes
qualify under applicable tax law as indebtedness secured by the Collateral
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Obligations, and (ii) unless otherwise required by appropriate taxing
authorities, agree to treat the Notes as indebtedness secured by the
Collateral Obligations for the purpose of federal income taxes, state and
local income and franchise taxes and any other taxes imposed upon, measured
by or based upon gross or net income.
ARTICLE III
COVENANTS
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer
shall duly and punctually pay the principal and interest on the Notes in
accordance with the terms of the Notes and this Indenture. On each Payment
Date and on the Redemption Date, the Issuer shall cause all amounts on
deposit in the Note Payment Account to be distributed to the Noteholders in
accordance with Section 8.5, less amounts properly withheld under the Code
or applicable state law by any Person from a payment to any Noteholder of
interest and/or principal. Any amounts so withheld shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.2 MAINTENANCE OF AGENCY OFFICE. As long as any of
the Notes remains outstanding, the Issuer shall maintain in the Borough of
Manhattan, New York City, an office (the "Agency Office"), being an office
or agency where Notes may be surrendered to the Issuer 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. The Issuer shall give prompt written notice to the
Indenture Trustee of the location, and of any change in the location, of
any such office or agency. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Indenture
Trustee with the address thereof, such surrenders, notices and demands may
be made or served at the Corporate Trust Office of the Indenture Trustee,
and the Issuer hereby appoints the Indenture Trustee as its agent to
receive all such surrenders, notices, and demands.
SECTION 3.3 MONEY FOR PAYMENT TO BE HELD IN TRUST.
(a) As provided in Section 8.2, all payments of amounts due and
payable with respect to any Notes that are to be made from amounts
withdrawn from the Note Payment Account pursuant to Section 8.5 shall be
made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Note Payment Account for
payments of Notes shall be paid over to the Issuer except as provided in
this Section 3.3.
(b) On or before the Business Day next preceding each Payment
Date or the Redemption Date, the Issuer shall deposit or cause to be
deposited in the Note Payment Account an aggregate sum sufficient to pay
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the amounts then becoming due, such sum to be held in trust for the benefit
of the Persons entitled thereto and (unless the Paying Agent is the
Indenture Trustee) shall promptly notify the Indenture Trustee of its
action or failure so to act.
(c) The Issuer shall cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an
instrument in which such Paying Agent shall agree with the Indenture
Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so
agrees), subject to the provisions of this Section 3.3, that such Paying
Agent shall:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer of which it has actual knowledge (or any other obligor upon the
Notes) in the making of any payment required to be made with respect
to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to
the Indenture Trustee all sums so held in trust by such Paying Agent
for deposit by the Indenture Trustee in the applicable Designated
Account;
(iv) immediately resign as a Paying Agent and forthwith pay
to the Indenture Trustee all sums held by it in trust for the payment
of Notes if at any time it ceases to meet the standards required to be
met by a Paying Agent in effect at the time of determination; and
(v) comply with all requirements of the Code with respect
to the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer order direct any Paying Agent to pay to the Indenture Trustee all
sums held in trust by such Paying Agent, such sums to be held by the
Indenture Trustee upon the same trusts as those upon which the sums were
held by such Paying Agent; and upon such payment by any Paying Agent to the
Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
(e) Subject to all applicable laws with respect to escheat of
funds, any money held by the Indenture Trustee or any Paying Agent in trust
for the payment of any amount due with respect to any Note and remaining
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unclaimed for one year after such amount has become due and payable shall
be discharged from such trust and be paid to the Issuer on Issuer Request;
and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the
extent of the amounts so paid to the Issuer), and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Indenture Trustee or
such Paying Agent, before being required to make any such repayment, may at
the expense of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business
Day and of general circulation in New York City, notice that such money
remains unclaimed and that, after a date specified therein, which shall not
be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining shall be repaid to the Issuer. The
Indenture Trustee may also adopt and employ, at the expense of the Issuer,
any other reasonable means of notification of such repayment (including,
but not limited to, mailing notice of such repayment to Holders whose Notes
have been called but have not been surrendered for redemption or whose
right or interest in moneys due and payable but not claimed is determinable
from the records of the Indenture Trustee or of any Paying Agent, at the
last address of record for each such Holder).
SECTION 3.4 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, 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
Collateral and each other instrument or agreement included in the Trust
Estate.
SECTION 3.5 PROTECTION OF TRUST ESTATE; ACKNOWLEDGMENT OF
PLEDGE. 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 necessary or advisable to:
(i) maintain or preserve the lien and security interest
(and the priority thereof) of this Indenture or 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;
(iii) enforce any of the Collateral; or
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(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Trust
Estate against the claims of all persons and parties,
and the Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement
or other instrument required by the Indenture Trustee pursuant to this
Section 3.5.
SECTION 3.6 OPINIONS AS TO TRUST ESTATE.
(a) On the Closing Date, the Issuer shall furnish to the
Indenture Trustee an Opinion of Counsel to the effect that, in the opinion
of such counsel, such action has been taken with respect to the recording
and filing of this Indenture, any indentures supplemental hereto and any
other requisite documents, and with respect to the execution and filing of
any financing statements and continuation statement as are necessary to
perfect and make effective the lien and security interest of this Indenture
and reciting the details of such action, or stating that in the opinion of
such counsel, no such action is necessary to make such lien and security
interest effective.
(b) On or before the date set forth in the Series Trust
Indenture in each calendar year, beginning on the date set forth in the
Series Trust Indenture, the Issuer shall furnish to the Indenture Trustee
an Opinion of Counsel to the effect that, in the opinion of such counsel,
such action has been taken with respect to the recording, filing, re-
recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and with respect to the execution
and filing of any financing statements and continuation statements as is
necessary to maintain the lien and security interest created by this
Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain the lien
and security interest created by this Indenture. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be
required to maintain the lien and security interest of this Indenture until
such date in the following calendar year.
SECTION 3.7 PERFORMANCE OF BOND.
(a) The Issuer shall not take any action and shall use best
efforts not to permit any action to be taken by others that would release
any Person from any of such Person's material covenants or obligations
under any instrument or agreement included in the Trust Estate or that
would result in the amendment, hypothecation, subordination, termination or
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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 may contract with other Persons to assist in
performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee in an Officers'
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 Basic Documents
and in the instruments and agreements included in the Trust Estate,
including but not limited to filing or causing to be filed all UCC
financing statements and continuation statements required to be filed by
the terms of this Indenture in accordance with and within the time periods
provided for therein and therein.
(d) Subject to Article IX, without derogating from the absolute
nature of the assignment granted to the Indenture Trustee under this
Indenture or the rights of the Indenture Trustee hereunder, the Issuer
agrees that it shall not, without the prior written consent of the
Indenture Trustee or the Holders of at least a majority in Outstanding
Amount of the Notes, as applicable, in accordance with the terms thereof,
amend, modify, waive, supplement, terminate or surrender, or agree to any
amendment, modification, supplement, termination, waiver or surrender of,
the terms of the Collateral Obligations or the Basic Documents, or waive
timely performance or observance by the Depositor under the Trust
Agreement. If any such amendment, modification, supplement or waiver shall
be so consented to by the Indenture Trustee or such Holders as applicable,
the Issuer agrees, promptly following a request by the Indenture Trustee to
do so, to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as the Indenture
Trustee may deem necessary or appropriate in the circumstances.
SECTION 3.8 NEGATIVE COVENANTS. So long as any Notes are
Outstanding, the Issuer shall not:
(a) sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, except in accordance with Section
3.10(b) of this Indenture;
(b) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than amounts
properly withheld from such payments under the Code or applicable state
law) or assert any claim against any present or former Noteholder by reason
of the payment of the taxes levied or assessed upon any part of the Trust
Estate;
(c) voluntarily commence any insolvency, readjustment or debt,
marshalling of assets and liabilities or other proceeding, or apply for an
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order by a court or agency or supervisory authority for the winding-up or
liquidation of its affairs or any other event specified in Section 5.1(f);
or
(d) permit (i) the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharge, or 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; (ii) 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 (iii) the lien of this
Indenture not to constitute a valid first priority security interest in the
Trust Estate.
SECTION 3.9 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer
shall deliver to the Rating Agency and the Indenture Trustee, on or before
the date set forth in the Series Trust Indenture, beginning on the date set
forth in the Series Trust Indenture, an Officer's Certificate signed by an
Authorized Officer, dated as of the date set forth in the Series Trust
Indenture of such year, stating that:
(a) a review of the activities of the Issuer during such fiscal
year and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has fulfilled all of its obligations under this
Indenture throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to
such Authorized Officer and the nature and status thereof. A copy of such
certificate may be obtained by any Noteholder by a request in writing to
the Issuer addressed to the Corporate Trust Office of the Indenture
Trustee.
SECTION 3.10 CONSOLIDATION, MERGER, ETC., OF ISSUER;
DISPOSITION OF TRUST ASSETS.
(a) The Issuer shall not consolidate or merge with or into any
other Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America, or any State
and shall expressly assume by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in a form
satisfactory to the Indenture Trustee, the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this indenture on the
part of the Issuer to be performed or observed, all as provided
herein;
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(ii) immediately after giving effect to such merger or
consolidation, no Default or Event of Default shall have occurred and
be continuing;
(iii) owners of at least 66-2/3% of the Outstanding Amount of
the Notes shall have consented to such transaction and the Rating
Agency Condition shall have been satisfied with respect to such
transaction; and
(iv) The Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel addressed
to the Issuer, stating that such consolidation or merger and such
supplemental indenture comply with the foregoing requirements and
shall have no material adverse tax consequences to the Issuer or to
any Noteholders or Certificateholders.
(b) Except as expressly permitted by this Indenture or the other
Basic Documents, the Issuer shall not sell, convey, exchange, transfer or
otherwise dispose of any of its properties or assets, including those
included in the Trust Estate, to any Person, unless:
(i) the Person that acquires such properties or assets of
the Issuer (A) shall be a United States citizen or a Person organized
and existing under the laws of the United States of America or any
State and (B) by an Indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the
Indenture Trustee:
(1) expressly assumes the due and punctual payment of
the principal and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on
the part of the Issuer to be performed or observed, all as
provided herein;
(2) expressly agrees that all rights, title and
interest so sold, conveyed, exchanged, transferred or otherwise
disposed of shall be subject and subordinate to the rights of
Noteholders;
(3) unless otherwise provided in such supplemental
indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes;
and
(4) expressly agrees that such Person (or if a group
of Persons, then one specified Person) shall make all filings
with the Commission (and any other appropriate Person) required
by the Exchange Act in connection with the Notes;
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(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) owners of at least 66-2/3% of the Outstanding Amount of
the Notes shall have consented to such transaction and the Rating
Agency Condition shall have been satisfied with respect to such
transaction; and
(iv) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel addressed
to the Issuer, stating that such sale, conveyance, exchange, transfer
or disposition and such supplemental indenture comply with the
foregoing requirements, and shall have no material adverse tax
consequence to the Issuer or to any Noteholders or Certificateholders.
(c) The Issuer shall not liquidate or dissolve without the
consent of owners of at least 66-2/3% of the Outstanding Amount of the
Notes.
SECTION 3.11 SUCCESSOR OR TRANSFEREE.
(a) Upon any consolidation or merger of the Issuer in accordance
with Section 3.10(a), the Person formed by or surviving such consolidation
or merger (if other than the Issuer) shall succeed to, and be substituted
for, and may exercise every right and power of, the Issuer under this
Indenture with the same effect as if such Person had been named as the
Issuer herein.
(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.10(b), the Issuer 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 Indenture Trustee
from the Person acquiring such assets and properties stating the Issuer is
to be so released.
SECTION 3.12 NO OTHER BUSINESS. The Issuer shall not engage in
any business or activity other than acquiring and holding the Bonds and the
proceeds therefrom in the manner contemplated by the Basic Documents,
issuing the Notes and the Certificates, making payments on the Notes and
the Certificates and such other activities that are necessary, suitable, or
convenient to accomplish the foregoing or are incidental thereto, as set
forth in Section 2.3 of the Trust Agreement.
SECTION 3.13 NO BORROWING. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for
any indebtedness for money borrowed other than indebtedness for money
borrowed in respect of the Notes or in accordance with the Basic Documents.
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SECTION 3.14 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as contemplated by this Indenture or the other Basic Documents, the
Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable,
directly or indirectly, in connection with the obligations, stocks or
dividends, of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other
Person.
SECTION 3.15 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 3.16 RESTRICTED PAYMENTS. Except for payments of
principal or interest, or redemption of the Notes, so long as any Notes are
Outstanding, the Issuer shall not directly or indirectly:
(a) 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, in each case with respect to any
ownership or equity interest or similar security in or of the Issuer or to
the Depositor;
(b) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or similar security; or
(c) set aside or otherwise segregate any amounts for any such
purpose;
provided, however, that the Issuer may make, or cause to be made,
distributions to the Indenture Trustee, the Owner Trustee and the
Certificateholders as permitted by, and to the extent funds are available
for such purpose under, this Indenture or the Trust Agreement. The Issuer
shall not, directly or indirectly, make payments to or distributions from
the Designated Accounts except in accordance with the Basic Documents.
SECTION 3.17 NOTICE OF EVENTS OF DEFAULT. Within five Business
Days after the occurrence thereof, the Issuer agrees to give the Indenture
Trustee and the Rating Agency prompt written notice of each Event of
Default hereunder.
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.
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SECTION 3.19 REPRESENTATIONS AND WARRANTIES BY THE ISSUER TO
THE INDENTURE TRUSTEE. The Issuer hereby represents and warrants to the
Indenture Trustee as follows:
(a) GOOD TITLE. No Collateral Obligation has been sold,
transferred, assigned or pledged by the Issuer to any Person other than the
Indenture Trustee. Immediately prior to the conveyance of the Collateral
Obligations pursuant to this Indenture, the Issuer had good and marketable
title thereto, free of any Lien; and upon execution and delivery of this
Indenture by the Issuer, the Indenture Trustee shall have all of the right,
title and interest of the Issuer in, to and under the Collateral
Obligations, the unpaid indebtedness evidenced thereby and the collateral
security therefor, free of any Lien; and
(b) ALL FILINGS MADE. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give the
Indenture Trustee a first perfected ownership interest in the Collateral
Obligations shall have been made.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture shall cease to be of further effect with respect to the Notes
except as to: (i) rights of registration of transfer and exchange; (ii)
substitution of mutilated, destroyed, lost or stolen Notes; (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon;
(iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12, 3.13 and 3.19; (v) the
rights, obligations and immunities of the Indenture Trustee hereunder
(including the rights of the Indenture Trustee under Section 6.7 and the
obligations of the Indenture Trustee under Sections 4.2 and 4.4); and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of
them, and the Indenture Trustee, on demand of and at the expense of the
Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, if:
(a) either:
(1) all Notes theretofore authenticated and delivered
(other than (A) Notes that have been destroyed, lost or stolen and
that have been replaced or paid as provided in Section 2.5 and (B)
Notes for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section 3.3)
have been delivered to the Indenture Trustee for cancellation; or
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(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation:
(A) have become due and payable,
(B) shall become due and payable on the Final
Scheduled Payment Date, as appropriate, within one year, or
(C) are to be called for redemption within one year
under arrangements satisfactory to the Indenture Trustee for the
giving of notice or redemption by the Indenture Trustee, in the
name and at the expense of the Issuer,
and the Issuer, in the case of (A), (B), or (C) of subsection
4.1(a)(2) 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 will
mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire
amount principal of and accrued interest on such Notes not theretofore
delivered to the Indenture Trustee for cancellation when due to the
Final Scheduled Payment Date or Redemption Date (if Notes shall have
been called for redemption pursuant to Section 10.1(a)), as the case
may be;
(b) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(c) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and an Independent Certificate
from a firm of certified public accountant, each meeting the applicable
requirements of Section 11.1(a) and each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
SECTION 4.2 APPLICATION OF TRUST MONEY. All moneys deposited
with the Indenture Trustee pursuant to Article VIII shall be held in trust
and applied by it, in accordance with the provisions of the Notes, the
Trust Agreement and this Indenture, to the payment, either directly or
through any Paying Agent, as the Indenture Trustee may determine, to the
Holders of the particular Notes for the payment of 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 4.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture with
respect to the Notes, all moneys then held by any Paying Agent other than
the Indenture Trustee under the provisions of this Indenture with respect
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to such Notes shall, upon demand of the Issuer, be paid to the Indenture
Trustee to be held and applied according to Section 3.3 and thereupon such
Paying Agent shall be released from all further liability with respect to
such moneys.
SECTION 4.4 DURATION OF POSITION OF INDENTURE TRUSTEE.
Notwithstanding the earlier payment in full of all principal and interest
due to the Noteholders under the terms of the Notes and the cancellation of
the Notes pursuant to Section 3.1, the Indenture Trustee shall continue to
act in the capacity as Indenture Trustee hereunder and, for the benefit of
the Certificateholders, as appropriate, until such time as all payments in
respect of Certificate Principal Amount and interest due to the
Certificateholders have been paid in full.
ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 EVENTS OF DEFAULT. For the purposes of this
Indenture, "Event of Default" wherever used herein, means any one of the
following events;
(a) failure to pay interest on any Note as and when the same
becomes due and payable, which failure continues unremedied for a period of
five (5) days; or
(b) failure to pay any installment of the principal of any Note
as and when the same becomes due and payable, which failure continues
unremedied for a period of five (5) days; or
(c) the impairment of the validity or effectiveness of this
Indenture or any grant hereunder, or the subordination, termination or
discharge of the lien of this Indenture, or the release of any Person from
any covenants or obligations under this Indenture unless otherwise
expressly permitted, or the creation of any lien, charge, security
interest, mortgage or other encumbrance with respect to any part of the
property subject to the lien of this Indenture, or any interest in or
proceeds of such property, unless otherwise expressly permitted, or the
failure of the lien of this Indenture to constitute a valid first priority
security interest in the property subject to the lien of this Indenture and
the continuation of any of such defaults for a period of 30 days after
notice to the Issuer by the Trustee or to the Issuer and the Trustee by the
holders of at least 25% of the Outstanding Amount of the Notes; or
(d) default in the observance or performance in any material
respect of any covenant or agreement of the Issuer made in this Indenture
(other than a covenant or agreement, a default in the observance or
performance of which is elsewhere specifically dealt with in this Section
5.1) which failure materially and adversely affects the rights of the
Noteholders, and such default shall continue or not be cured, for a period
of 60 days after there shall have been given written notice of such failure
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to the Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the Holders of at least 25% of the Outstanding Amount of the
Notes; or
(e) 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 Trustee 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
(f) 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 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 action by the Issuer in furtherance of
any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five Business
Days after learning of the occurrence thereof, written notice in the form
of an Officer's Certificate of any event which with the giving of notice
and the lapse of time would become an Event of Default under Sections
5.1(c), its status and what action the Issuer is taking or proposes to take
with respect thereto.
SECTION 5.2 ACCELERATION TO MATURITY; RESCISSION AND
ANNULMENT.
(a) If an Event of Default, other than an Event of Default as
described in Section 5.1(d) or (e), should occur and be continuing, the
Indenture Trustee or the Holders of Notes representing not less than 25% of
the Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and or
the Indenture Trustee if given by the Noteholders) setting forth the Event
or Events of Default, and upon any such declaration the unpaid principal
amount of such Notes, together with accrued and unpaid interest thereon
through the date of acceleration, shall become immediately due and payable.
If an Event of Default, as described in Section 5.1(e) or (f), should occur
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and be continuing, the Indenture Trustee shall declare all the Notes to be
immediately due and payable, and upon any such declaration the unpaid
principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
(b) Except in the case of an Event of Default as described in
5.1(e), 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 as hereinafter provided in this
Article V, the Holders of Notes representing a majority of the Outstanding
Amount of the Notes, by written notice to the Issuer and the Indenture
Trustee, may waive all Defaults set forth in the notice delivered pursuant
to all Defaults set forth in the notice delivered pursuant to Section
5.2(a), and rescind and annul such declaration and its consequences;
provided, however, that no such rescission and annulment shall extend to or
affect any subsequent default or impair any right consequent thereto; and
provided, further that if the Indenture Trustee shall have proceeded to
enforce any right under this Indenture and such proceedings shall have
been discontinued or abandoned because of such rescission and annulment or
for any other reason, or shall have been determined adversely to the
Indenture Trustee, then and in every such case, the Indenture Trustee, the
Issuer and the Noteholders, as the case may be, shall be restored
respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Indenture Trustee, the Issuer and the
Noteholders, as the case may be, shall continue as though no such
proceedings had been taken.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY INDENTURE TRUSTEE.
(a) The Issuer covenants that if:
(i) default is made in the payment of any installment of
interest on any Note when the same becomes due and payable, and such
default continues unremedied for a period of five days after receipt
by the Issuer of notice thereof from the Indenture Trustee or receipt
by the Issuer and the Indenture Trustee of notice thereof from the
Holders of at least 25% of the Outstanding Amount of the Notes; or
(ii) default is made in the payment of the principal or any
installment of the principal of any Note when the same becomes due and
payable, and such default continues unremedied for a period of thirty
(30) days after receipt by the Issuer of notice thereof from the
Indenture Trustee of notice thereof from the holders of at least 25%
of the Outstanding Amount of the Notes;
the Issuer shall, upon demand of the Indenture Trustee, pay to the
Indenture Trustee, for the ratable benefit of the Noteholders in accordance
with their respective outstanding principal amounts, the whole amount then
due and payable on such Notes for principal and interest, with interest
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upon the overdue principal, at the rate borne by the Notes and in addition
thereto such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and
counsel.
(b) If the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so
due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer or other obligor upon
such Notes and collect in the manner provided by law out of the property of
the Issuer or other obligor upon such Notes, wherever situated, the moneys
adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the
Indenture Trustee may, as more particularly provided in Section 5.4, in its
discretion, proceed to protect and enforce its rights and the rights of the
Noteholders, 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.
(d) If there shall be pending, relative to the Issuer or any
other obligor upon the Notes 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 if 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 to
the creditors or property of the Issuer or such other obligor, 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 5.3, 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 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 Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and
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liabilities incurred, and all advances made, by the Indenture Trustee
and each predecessor Trustee, except as a result of negligence or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations to
vote on behalf of the Holders of Notes 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 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 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 to
make payments to the Indenture Trustee, and, if the Indenture Trustee shall
consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor trustee
and their respective agents, attorneys and counsel, and all other expenses
and liabilities incurred, and all advances made by the Indenture Trustee
and each predecessor trustee except as a result of negligence or bad faith.
(e) 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 any plan of reorganization, rearrangement,
adjustment or composition affecting the Note or the rights of any Holder
thereof or to authorize the Indenture Trustee to vote in respect of the
claim of any Noteholder in any such proceeding except, as aforesaid, to
vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, 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
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 trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Noteholders.
(g) In any Proceedings brought by the Indenture Trustee (and
also any Proceedings involving the interpretation of any provision of this
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Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Noteholders, and its shall not
be necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.4 REMEDIES; PRIORITIES.
(a) If an Event of Default shall have occurred and be
continuing, the Indenture Trustee may do one or more of the following
(subject to Section 5.5):
(i) 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 and any other obligor upon such Notes moneys adjudged
due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate;
(iii) 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 and the Noteholders
provided it is understood that Indenture Trustee shall not be required
to assume any obligations of any Trust Estate Obligor; and
(iv) sell the Trust Estate or any portion thereof or rights
or interest therein, at one or one or more public or private sales
called and conducted in any manner permitted by law; provided,
however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A)
the Holders of all of the Outstanding Amount of the Notes consent
thereto, (B) the proceeds of such sale or liquidations distributable
to the Noteholders are sufficient to discharge in full the principal
of and the accrued interest on the Notes at the date of such sales or
liquidation and the Holders of 66-2/3% of the Outstanding Amount of
the Notes consent thereto or (C) the Indenture Trustee in good faith
determines that the Trust Estate may not continue to provide
sufficient funds for the payment of principal of and interest on the
Notes as they would have become due if the Notes had not been declared
due and payable, and the Indenture Trustee obtains the consent of
Holders of 66-2/3% of the Outstanding Amount of the Notes. In
determining such sufficiency or insufficiency with respect to clauses
(B) and (C), the Indenture Trustee may, but need not, obtain and
conclusively rely upon an opinion of an independent investment banking
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or accounting firm of national reputation as to the sufficiency of the
Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V, it shall pay out the money or property in the
following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.7;
SECOND: to Noteholders for amounts due and unpaid on the Notes
for interest and principal, ratably among all classes of Noteholders,
according to the amounts due and payable on such Notes for interest
and/or principal; and
THIRD: to the Owner Trustee for amounts required to be
distributed to the Certificate-holders pursuant to the Trust
Agreement.
The Indenture Trustee may fix a record date and payment date for
any payment to Noteholders pursuant to this Section 5.4. At least 15 days
before such record date, the Issuer shall mail to each Noteholder and the
Indenture Trustee a notice that states the record date, the payment date
and the amount to be paid.
SECTION 5.5 OPTIONAL PRESERVATION OF THE COLLATERAL
OBLIGATIONS. If the Notes have been declared to be due and payable under
Section 5.2 following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee
may, but need not, elect to take and maintain possession of the Issuer's
interest in the Trust Estate. It is the desire of the parties hereto and
the Noteholders that there be at all times sufficient funds for the payment
of principal of and interest on the Notes, and the Indenture Trustee shall
take such desire into account when determining whether or not to take and
maintain possession of the Trust Estate. In determining whether or not to
take and maintain possession of the Trust Estate, the Indenture Trustee
may, but need not obtain and conclusively rely upon an opinion of an
independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
SECTION 5.6 LIMITATION OF SUITS. No Holder of any Note shall
have any right to institute any Proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding
Amounts 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;
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(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;
(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 Outstanding Amount of the Notes;
it being 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 or to obtain or to seek to obtain priority or
preference over any other Holders of Notes or to enforce any right under
this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Notes. For the protection and
enforcement of the provisions of this Section 5.6, each and every
Noteholder shall be entitled to such relief as can be given either at law
or in equity.
If the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Outstanding Amount of
the Notes, the Indenture Trustee in its sole good faith discretion may
determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.
SECTION 5.7 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 on
such Note on or after the respective due dates thereof expressed in such
Note or in this indenture (or, in the case of redemption, on or after the
Redemption Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder.
SECTION 5.8 RESTORATION OF RIGHTS AND REMEDIES. If the
Indenture Trustee or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has
been discontinued or abandoned for any reason or has been determined
adversely to the Indenture Trustee or to such Noteholder, then and in every
such case the Issuer, the Indenture Trustee and the Noteholders shall,
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subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights
and remedies of the Indenture Trustee and the Noteholders shall continue as
though no such Proceeding had been instituted.
SECTION 5.9 RIGHTS AND REMEDIES CUMULATIVE. No right or
remedy herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or
omission of the Indenture Trustee of any Holder of any Note to exercise any
right or remedy accruing upon any Default or Event of Default shall impair
any such right or remedy or constitute a waiver of any such Default or
Event of Default or an acquiescence therein. Every right and remedy given
by this Article V or by law to the Indenture Trustee or to the Noteholders
may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee or by the Noteholders, as the case may
be.
SECTION 5.11 CONTROL BY NOTEHOLDERS. The Holders of a majority
of the Outstanding Amount of the Notes shall, subject to provisions being
made for indemnification against costs, expenses and liabilities in a form
satisfactory to the Indenture Trustee, have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee with respect to the Notes or exercising any trust or
power conferred on the Indenture Trustee; provided, however, that:
(i) such direction shall not be in conflict with any rule
of law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any
direction to the Indenture Trustee to sell or liquidate the Trust
Estate shall be by the Holders of Notes representing not less than
100% of the Outstanding Amount of the Notes;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to Section 5.5, then any direction to the Indenture Trustee
by Holders of Notes representing less than 100% of the Outstanding
Amount of the Notes to sell or liquidate the Trust Estate shall be of
no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction;
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provided, however, that subject to Section 6.1, the Indenture Trustee need
not take any action that it determines might cause it to incur any
liability or might materially adversely affect the rights of any
Noteholders not consenting to such action.
SECTION 5.12 WAIVER OF PAST DEFAULTS.
(a) Prior to the declaration of the acceleration of the maturity
of the Notes as provided in Section 5.2, the Holders of not less than a
majority of the Outstanding Amount of the Notes may waive any past Default
or Event of Default and its consequences except a Default (i) in the
payment of principal of or interest on any of the Notes or (ii) in respect
of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note. In the case of any such
waiver, the Issuer, the Indenture Trustee and the Noteholders shall be
restored to their former positions and rights hereunder, respectively; but
no such waiver shall extend to any subsequent or other Default or impair
any right consequent thereto.
(b) Upon any such waiver, such Default shall cease to exist and
be deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured and not have
occurred, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default of Event of Default or impair any
right consequent thereto.
SECTION 5.13 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 proceeding for the enforcement of any right or
remedy under this Indenture, or in any Proceeding against the Indenture
Trustee for any action taken, suffered or omitted by it as Indenture
Trustee, the filing by any party litigant in such Proceeding of an
undertaking to pay the costs of such proceeding and that such court may in
its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such Proceeding, 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 5.13 shall not apply to:
(a) any Proceeding instituted by the Indenture Trustee;
(b) any Proceeding instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes; or
(c) any Proceeding instituted by any Noteholder for the
enforcement or the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture
(or, in the case of redemption, on or after the Redemption Date).
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SECTION 5.14 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 affect the covenants or the
performance of this Indenture. 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 5.15 ACTION ON NOTES. The Indenture Trustee's right to
seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the lien of this Indenture nor
any rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against
the Issuer or by the levy of any execution under such judgment upon any
portion of the Trust Estate or upon any of the assets of the Issuer.
SECTION 5.16 PERFORMANCE AND ENFORCEMENT OF CERTAIN COLLATERAL
OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee to
do so, the Issuer agrees to take all such lawful action as the Indenture
Trustee may request to compel or secure the performance and observance by
the Depositor and the obligors on the Collateral Obligations of its and
their obligations, respectively, to the Issuer under or in connection with
the Trust Agreement, in accordance with the terms thereof, and to exercise
any and all rights, remedies, powers and privileges lawfully available to
the Issuer under or in connection with the Trust Agreement to the extent
and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Depositor and the
obligors on the Collateral Obligations thereunder and the institution of
legal or administrative actions or proceedings to compel or secure
performance by the Depositor and the obligors on the Collateral Obligations
on its or their obligations, respectively, under the Trust Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66-2/3% of the Outstanding Amount of the Notes shall exercise
all rights, remedies, powers, privileges and claims of the Issuer against
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the Depositor under or in connection with the Trust Agreement, including
the right or power to take any action to compel or secure performance or
observance by the Depositor of its obligations to the Issuer thereunder and
to give any consent, request, notice, direction, approval, extension or
waiver under the Trust Agreement, and any right of the Issuer to take such
action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and 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
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; PROVIDED, HOWEVER, that the Indenture
Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own
wilful misconduct, except that:
(i) this Section 6.1(c) does not limit the effect of
Section 6.1(b);
(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 section 5.11.
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(d) The Indenture Trustee shall not be liable for interest on
any money received by it except as the Indenture Trustee may agree in
writing with the Issuer.
(e) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its rights or powers if it shall
have reasonable grounds to believe that repayments of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.
(f) Every provision of this Indenture relating to the Indenture
Trustee shall be subject to the provisions of this Section 6.1 and to the
provisions of the TIA.
SECTION 6.2 RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may rely on 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
documents.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on the Officer's Certificate or Opinion of
Counsel.
(c) The Indenture Trustee may execute any of the trusts of
powers thereunder 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.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; PROVIDED, HOWEVER, subject to any other
standard required under the TIA, that the Indenture Trustee's conduct does
not constitute wilful misconduct, gross negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or Opinion of Counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
SECTION 6.3 INDENTURE TRUSTEE MAY OWN NOTES. 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 any of its
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respective Affiliates with the same rights it would have if it were not
Indenture Trustee; PROVIDED, HOWEVER, that the Indenture Trustee shall
comply with Sections 6.10 and 6.11. Any Paying Agent, Note Registrar, co-
registrar or co-paying agent may do the same with like rights.
SECTION 6.4 INDENTURE TRUSTEE'S DISCLAIMER. The Indenture
Trustee shall not be responsible for and makes no representations 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 or authentication.
SECTION 6.5 NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to the Rating Agency and each
Noteholder notice of the Default within 90 days after it occurs. Except in
the case of a 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 to 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 6.6 REPORTS BY INDENTURE TRUSTEE.
(a) The Indenture Trustee shall deliver to each Noteholder the
information and documents set forth in Article VII, and, in addition, all
such information with respect to the Notes as may be required to enable
such Holder to prepare its federal and state income tax returns.
(b) On each Payment Date, the Indenture Trustee shall prepare a
report setting forth the following information with respect to the Interest
Period ending on such Payment Date: (i) the amount of moneys credited to
the Collection Account; (ii) the amount of moneys transferred to the Note
Payment Account; (iii) the amount of moneys transferred to the Distribution
Account; (iv) the amount of moneys paid to the Noteholders; and (v) the
amount of moneys distributed to the Certificateholders. Copies of this
report shall be delivered to the Owner trustee and to the Depositor.
SECTION 6.7 COMPENSATION; INDEMNITY.
(a) The Indenture Trustee shall receive as compensation for its
ordinary, pre-Default services hereunder such fees as have been separately
agreed upon before the date hereof between the Depositor and the Indenture
Trustee and the Indenture Trustee hereby acknowledges that such fees have
been paid. The Indenture Trustee's compensation shall not be limited by
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any law on compensation of a trustee of an express trust. The Issuer shall
reimburse or cause to be reimbursed the Indenture Trustee for all
extraordinary fees for post-Default services as well as 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 indemnify the Indenture Trustee against any and
all loss, liability or expense (including attorney's 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
promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer shall not relieve the Issuer of
its obligations hereunder. The Issuer shall defend the claim and the
Indenture Trustee may have separate counsel and the Issuer shall pay the
fees and expenses of such counsel. The Issuer need not reimburse any
expense or indemnity against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
(b) The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section 6.7 shall survive the discharge of this Indenture.
When the Indenture Trustee incurs fees and expenses after the occurrence of
a Default specified in Section 5.1(e) or (f) with respect to the Issuer,
the expenses are intended to constitute expenses of administration under
Title 11 of the United States code or any other applicable federal or state
bankruptcy, insolvency or similar law.
(c) The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section 6.7 shall be satisfied to the extent that funds
are available to make such payments after all amounts payable to Note
holders and Certificateholders pursuant to this Indenture and the trust
Agreement shall have been paid, and there shall be no recourse to the
issuer for all or any part of any amounts payable pursuant to this Section
6.7 if such funds are at any time insufficient to make all or part of any
such payments.
SECTION 6.8 REPLACEMENT OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may resign at any time by so notifying
the Issuer. The Holders of a majority in Outstanding Amount of the Notes
may remove the Indenture Trustee by so notifying the Indenture Trustee and
may appoint a successor Indenture Trustee. Such resignation or removal
shall become effective in accordance with Section 6.8(c). The Issuer shall
remove the Indenture Trustee if:
(1) the Indenture Trustee fails to comply with Section
6.11;
(2) the Indenture Trustee is adjudged a bankrupt or
insolvent;
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(3) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(4) the Indenture Trustee otherwise becomes incapable of
acting.
(b) If the Indenture Trustee resigns or is removed or if a
vacancy exists in the office of Indenture Trustee for any reason (the
Indenture Trustee in such event being referred to herein as the retiring
Indenture Trustee), the Issuer shall promptly appoint a successor Indenture
Trustee.
(c) A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall
have all the rights, powers and duties of the Indenture Trustee under this
Indenture. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
(d) 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 or the Holders of a majority of the
Outstanding Amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder may petition any court of competent jurisdiction for the
removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee.
(f) Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section 6.8, the Issuer's and the Depositor's obligations
under Section 6.7 shall continue for the benefit of the retiring Indenture
Trustee.
SECTION 6.9 MERGER OR CONSOLIDATION OF INDENTURE TRUSTEE.
(a) Any corporation into which the Indenture Trustee may be
merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Indenture Trustee shall be a
party, or any corporation succeeding to the corporate trust business or the
Indenture Trustee, shall be the successor of the Indenture Trustee under
this Indenture; provided, however, that such corporation shall be eligible
under the provisions of Section 6.11, without the execution or filing of
any instrument or any further act on the part of any of the parties to this
Indenture, anything in this Indenture to the contrary notwithstanding.
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(b) If at any time such successor or successors by merger or
consolidation to the Indenture Trustee shall succeed to the trusts created
by this Indenture any of the Notes which 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 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 ben 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. In all such
cases such certificate of authentication shall have the same full force as
is provided anywhere in the Notes or herein with respect to the certificate
of authentication of the Indenture Trustee.
SECTION 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE
INDENTURE TRUSTEE.
(a) Notwithstanding any other provision of this Indenture, at
any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Trust may at the time be located, the
Indenture Trustee shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee or co-
trustees, or separate trustee or separate trustees, of all or any part of
the Trust, and to vest in such Person or Persons in such capacity and for
the benefit of the Noteholders, such title to the Trust, or any part
hereof, and, subject to the other provisions of this Section 6.10, such
powers, duties, obligations, rights and trusts as the Indenture Trustee may
consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11 and no notice to Noteholders of the appointment
of any co-trustee or separate trustee shall be required under Section 6.8.
(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,
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powers, duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Indenture Trustee;
(ii) no separate trustee or co-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 Indenture and the conditions of this Article VI. Each separate
trustee and co-trustee, upon its acceptance of the trusts conferred, shall
be vested with the estates or property specified in its instrument of
appointment, either jointly with the Indenture Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the
conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee its agent or attorney-in-fact with full
power and authority, to the extent not prohibited by law, to do any lawful
act under or in respect of this Indenture on its behalf and in its name.
If any separate trustee or co-trustee shall die, 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 at all times satisfy the requirements of TIA Section 310(a).
The Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition and it (or its Ultimate Parent) shall have a long term unsecured
debt rating of Baa3 or better by Moody's Investors Service, Inc and BBB- by
Standard & Poor's or the equivalent rating thereof by the Rating Agency.
The Indenture Trustee shall comply with TIA Section 310(b); PROVIDED,
HOWEVER, that there shall be excluded from the operation of TIA Section
310(b)(1) any indenture or indentures under which other securities of the
Issuer are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
The Indenture Trustee shall comply with TIA Section 311(a), excluding any
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creditor relationship listed in TIA Section 311(b). A trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
SECTION 6.13 REPRESENTATIONS AND WARRANTIES OF INDENTURE
TRUSTEE. The Indenture Trustee represents and warrants as of the Closing
Date that:
(a) the Indenture Trustee is a banking corporation duly
organized, validly existing and in good standing under the laws of New
York;
(b) the Indenture Trustee has full power, authority and legal
right to execute, deliver and perform this Indenture, and has taken all
necessary corporate action to authorize the execution, delivery and
performance by it of this Indenture;
(c) the execution, delivery and performance by the Indenture
Trustee of this Indenture to the best of its actual knowledge (i) do not
violate any provision of any law or regulation governing the banking and
trust powers of the Indenture Trustee or any order, writ, judgment or
decree of any court, arbitrator, or governmental authority applicable to
the Indenture Trustee or any of its assets, (ii) do not violate any
provision of the corporate charter or by-laws of the Indenture Trustee, or
(iii) do not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of any lien on any properties included in the Trust pursuant to
the provisions of any mortgage, indenture, contract, agreement or other
undertaking to which it is a party, which violation, default or lien could
reasonably be expected to have a materially adverse effect on the Indenture
Trustee's performance or ability to perform its duties under this Indenture
or on the transactions contemplated in this Indenture;
(d) this Indenture has been duly executed and delivered by the
Indenture Trustee and constitutes the legal, valid and binding agreement of
the Indenture Trustee, enforceable in accordance with its terms.
SECTION 6.14 INDENTURE TRUSTEE MAY ENFORCE CLAIMS WITHOUT
POSSESSION OF NOTES. All rights of action and claims under this Indenture
or the Notes may be prosecuted and enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Indenture Trustee without the possession of any of the Notes or the
production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Indenture Trustee shall be brought in its own
name as Indenture Trustee. Any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel, be for the
ratable benefit of the Noteholders in respect of which such judgment has
been obtained.
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SECTION 6.15 SUIT FOR ENFORCEMENT. If an Event of Default
shall occur and be continuing, the Indenture Trustee in its good faith
discretion may, subject to the provisions of Section 6.1, proceed to
protect and enforce its rights and the rights of the Noteholders under this
Indenture by Proceeding whether for the specific performance of any
covenant or agreement contained in this Indenture or in aid of the
execution of any power granted in this Indenture or for the enforcement of
any other legal, equitable or other remedy as the indenture Trustee, being
advised by counsel, shall deem most effective to protect and enforce any of
the rights of the Indenture Trustee or the Noteholders.
SECTION 6.16 RIGHTS OF NOTEHOLDERS TO DIRECT INDENTURE TRUSTEE.
Holders of Notes evidencing not less than a majority of the Outstanding
Amount of the Notes shall have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the
Indenture Trustee or exercising any trust or power conferred on the
Indenture Trustee; PROVIDED, HOWEVER, that subject to Section 6.1, the
Indenture Trustee shall have the right to decline to follow any such
direction if the Indenture Trustee being advised by counsel determines that
the action so directed may not lawfully be taken, or if the Indenture
Trustee in good faith shall, by a Responsible Officer, determine that the
proceedings as directed would be illegal or subject it to personal
liability or be unduly prejudicial to the rights of Noteholders not parties
to such direction; and provided, further, that nothing in this Indenture
shall impair the right of the Indenture Trustee to take any actin deemed
proper by the Indenture Trustee and which is not inconsistent with such
direction by the Noteholders.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND
ADDRESSES OF NOTEHOLDERS. The Issuer shall furnish or cause to be
furnished to the Indenture Trustee a list, in such form as the Indenture
Trustee may reasonably require, of the names and addresses of the Holders
of Notes as of the close of business on the most recent Record Date, (a)
not more than five days before each Payment Date, and (b) within seven days
of receipt of written request from the Indenture Trustee; provided, that so
long as the Indenture Trustee is the Note Registrar, no such list shall be
required to be furnished.
SECTION 7.2 PRESERVATION OF INFORMATION, COMMUNICATIONS TO
NOTEHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of
Notes contained in the most recent list furnished to the Indenture Trustee
as provided in Section 7.1 and the names and addresses of Holders of Notes
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received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar
shall have the protection of TIA Section 312(c).
SECTION 7.3 REPORTS BY ISSUER.
(a) The issuer shall:
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission, copies of
the annual reports and of the information documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Issuer may be required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents, and reports
with respect to compliance by the Issuer, with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i) and
(ii) of this Section 7.3(a) as may be required by rules and
regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of each year.
SECTION 7.4 REPORTS BY TRUSTEE. If required by TIA Section
313(a), within 60 days after the occurrence of one or more of the following
events including:
(a) Any change to its eligibility and its qualifications under
TIA Section 310;
(b) The creation of or any material change to a relationship
specified in paragraph (1) through (10) of TIA Section 310(b);
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(c) The character and amount of any advances made by it, as
Indenture Trustee, which remain unpaid on the date of such report, and for
the reimbursement of which it claims or may claim a lien or charge, prior
to that of the Notes on the trust estate or on property or funds held or
collected by it as trustee, if such advances so remaining unpaid aggregate
more than one-half of one percent centum of the principal amount of the
Notes outstanding on such date;
(d) Any change to the amount, interest rate, and maturity date
of all other indebtedness owing to it in its individual capacity, on the
date of such report, by the obligor upon the Notes, with a brief
description of any property held as collateral security therefor, except an
indebtedness based upon a creditor relationship arising in any manner
described in paragraphs (2), (3), (4), or (6) of subsection (b) of TIA
Section 311.
(e) Any change to the property and funds physically in its
possession as Indenture Trustee on the date of such report;
(f) Any release, or release and substitution, of property
subject to the lien of the Indenture (and the consideration therefor, if
any) which it has not previously reported;
(g) Any additional issues of Notes which it has not previously
reported;
(h) Any action taken by it in the performance of its duties
under the Indenture which it has not previously reported and which in its
opinion materially affects the Notes or the Trust Estate, except action in
respect of a default, notice of which has been or is to be withheld by it
in accordance with an indenture provision authorized by subsection (b) of
TIA Section 315.
The Indenture Trustee shall mail to (i) each Noteholder as
required by TIA Section 313(c) and (ii) the Depositor, a brief report dated
as of such date that complies with TIA Section 313(a). The Indenture
Trustee also shall comply with TIA Section 313(b). A copy of any report
delivered pursuant to this Section 7.4 shall, at the time of its mailing to
Noteholders and the Depositor, be filed by the Indenture Trustee with the
Commission and each stock exchange, if any, on which the Notes are listed.
The Issuer shall notify the Indenture Trustee if and when the Notes are
listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 COLLECTION OF MONEY. Except as otherwise
expressly provided herein, the Indenture Trustee may demand payment or
delivery of, and shall receive and collect, directly and without
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intervention or assistance of any fiscal agent or other intermediary, all
money and other property payable to or receivable by 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 8.2 DESIGNATED ACCOUNTS. On or prior to the Closing
Date, the Issuer shall cause the Depositor to establish and maintain, in
the name of the Indenture Trustee, for the benefit of the Noteholders and
the Certificateholders, the following accounts:
(a) a Collection Account;
(b) a Note Payment Account; and
(c) a Distribution Account
SECTION 8.3 COLLECTION ACCOUNT. The Indenture Trustee shall
credit to the Collection Account all moneys received in respect of the
Collateral Obligations. On the next succeeding Payment Date, the Indenture
Trustee shall apply moneys held in the Collection Account in the following
order of priority:
(a) on or before each Payment Date and Redemption Date, an
amount equal to the amount due on the respective classes of Notes payable
on such Payment Date or Redemption Date in accordance with the terms of
such Notes shall be transferred from the Collection Account and credited to
the Note Payment Account; and
(b) on or before each Distribution Date and Redemption Date, an
amount equal to the amount due on the respective classes of Certificates on
such Distribution Date or Redemption Date in accordance with the terms of
such Certificates shall be transferred from the Collection Account and
credited to the Certificate Distribution Account.
SECTION 8.4 NOTE PAYMENT ACCOUNT. On each Payment Date and
Redemption Date, the Indenture Trustee shall distribute all amounts on
deposit in the Note Payment Account to Noteholders in respect of the class
of Notes payable on such date to the extent of amounts due and unpaid on
such Notes in accordance with the terms.
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SECTION 8.5 RELEASE OF TRUST ESTATE.
(a) Subject to the payment of its fees and expenses pursuant to
Section 6.7, the Indenture Trustee may and 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 consistent with the
provisions of this Indenture. No party relying upon an instrument executed
by the Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any moneys.
(b) The Indenture Trustee shall at such time as there are no
Notes Outstanding and all sums due to the Indenture Trustee pursuant to
Section 6.7 have been paid, release any remaining portion of the Trust
Estate that secured the Notes from the lien of this Indenture and release
to the Issuer or any other Person entitled thereto any funds then on
deposit in the Designated Accounts. The Indenture Trustee shall release
property from the lien of this Indenture pursuant to this Section 8.5(b)
only upon receipt of an Issuer Request accompanied by an Officer's
Certificate and (if required by the TIA) Independent Certificates in
accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable
requirements of Section 11.1.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes but with
prior notice to the Rating Agency, the Issuer and the Indenture Trustee,
when authorized by an Issuer Order, at any time and from time to time, may
enter into one or more indentures supplemental hereto (which shall conform
to the provision of the TIA as in force at the date of the execution
thereof), in form satisfactory to the Indenture Trustee, for any of the
following purposes:
(i) to correct or amplify the description of any property
at any time subject to the lien of this indenture, or better to assure
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
additional property to the lien of this Indenture;
(ii) to evidence the succession, in compliance with Section
3.10 and the applicable provisions hereof, of another person to the
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Issuer, and the assumption by any such successor of the covenants of
the Issuer contained herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Noteholders, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA, and the
Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may without the consent of any of the Noteholders, but with
prior notice to the Rating Agency, at any time and from time to time, enter
into any one or more 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 modifying in any manner the rights of
the Noteholders under this Indenture; provided, however, that such action
shall not, as conclusively evidenced by an Opinion of Counsel, adversely
affect in any material respect the interest of any Noteholder.
SECTION 9.2 SUPPLEMENTAL INDENTURE WITH CONSENT OF
NOTEHOLDERS.
(a) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may with prior notice to the Rating Agency and with the
consent of the Holders not less than a majority of the Outstanding Amount
of the Notes (by Act of such Holders delivered to the issuer and the
Indenture Trustee), enter into an indenture or indentures supplemental
hereto for the purpose of adding any provision to, or changing in any
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manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Noteholders under this Indenture;
provided, however that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of
principal or interest on any Note, or reduce the principal amount
thereof, the interest applicable thereto or the Redemption Price with
respect thereto, change the provision of this Indenture relating to
the application of collections on, or the proceeds of the sale of, the
Trust Estate, or 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 provision of this
Indenture requiring the application of funds available thereof, as
provided in Article V, to the payment of any such amount due on the
Notes on or after the respective due date thereof (or, in the case of
redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences
provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Indenture Trustee to direct the Issuer to
sell or liquidate the Trust Estate pursuant to Section 5.4 if the
proceeds of such sale would be insufficient to pay the principal
amount of and accrued but unpaid interest on the Outstanding notes;
(v) reduce the percentage of the Outstanding Amount of the
Notes required to amend the sections of this Indenture which specify
the aggregate principal amount of the Notes necessary to amend this
Indenture or the Basic Documents; or
(vi) 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.
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(b) The Indenture Trustee may in its good faith discretion
determine as conclusively evidenced by an Opinion of Counsel whether or not
any Notes would be affected (such that the consent of the Holder of each
would be required) by any supplemental indenture proposed pursuant to this
Section 9.2, and any such determination shall be conclusive upon the
Holders of all Notes, whether authenticated and delivered thereunder before
or after the date upon which such supplemental indenture becomes effective.
The Indenture Trustee shall not be liable for any such determination made
in good faith.
(c) It shall be sufficient if an Act of Noteholders approves the
substance, but not the form, of any proposed supplemental indenture.
(d) Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.2, the
Indenture Trustee shall mail to the Rating Agency and the Noteholders to
which such amendment or supplemental indenture relates a notice setting
forth in general terms the substance of such supplemental indenture. Any
failure of the Indenture Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES. In
executing or permitting the additional trusts created by any supplemental
indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Indenture Trustee shall be entitled
to receive, and subject to Sections 6.1 and 6.2, shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the
execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and be deemed to be modified and amended in
accordance therewith with respect to the Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities
and immunities under this Indenture of the Indenture Trustee, the Issuer
and the Noteholders shall thereafter be determined, exercised and enforced
hereunder, subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall
be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE. Every amendment
of this Indenture and every supplemental indenture executed pursuant to
this Article IX shall conform to the requirements of the TIA as then in
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effect so long as this Indenture shall be then qualified under the TIA.
SECTION 9.6 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX may, and if required by the Indenture
Trustee shall, bear a notation in form approved by the Indenture Trustee as
to any matter provided for in such supplemental indenture. If the Issuer
or the Indenture Trustee shall so determine, new Notes so modified as to
conform, in the opinion of the Indenture Trustee and the Issuer, to any
such supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 REDEMPTION.
(a) If any or all of the Collateral Obligations of any issue
underlying redeemable Notes are redeemed in whole or in part on the First
Call Date, and upon actual receipt by the Indenture Trustee of notice of
such redemption, the Indenture Trustee shall, in accordance with the
provisions of this Article X, redeem a principal amount of notes equal to
the principal amount of the Collateral Obligations of such issue then being
redeemed. In the absence of the actual notice, the Indenture Trustee shall
be under no obligation to effect the redemption required by this Section
10.1,
(b) In the event of such a redemption of Notes, the Indenture
Trustee shall deposit amounts received in respect of the bonds in the
Collection Account. Within fifteen days of the receipt of funds in the
Collection Account, the Indenture Trustee shall redeem an aggregate
principal amount of Notes equal to the product of (x) the Outstanding
Amount of Notes and (y) a fraction the numerator of which is the aggregate
principal amount of the Collateral Obligations being redeemed by the issuer
thereof and the denominator of which is the aggregate principal amount of
the Collateral Obligations included in the Trust Estate.
(c) If the assets of the Issuer are sold pursuant to Section 7.2
of the Trust Agreement, all amounts on deposit in the Note Payment Account
after payment of the amount, due under <section> 6.7, shall be paid to the
Noteholders. If amounts are to be paid to Noteholders pursuant to this
Section 10.1(c), the Depositor or the Issuer shall, to the extent
practicable, furnish notice of such event to the Indenture Trustee not
later than 25 days prior to the Redemption Date, whereupon all such amounts
shall be payable on the Redemption Date.
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SECTION 10.2 NOTICE OF REDEMPTION. (a) Notice of redemption
shall be given by the Indenture Trustee to each Noteholder of any Note to
be redeemed within thirty (30) days after notice of redemption of the
underlying Collateral Obligations has been received by the Indenture
Trustee, the issuer, trustee or paying agent of or for the Collateral
Obligations, as the case may be (but, to the extent practicable not less
than fifteen days prior to the redemption date); provided, however, that
the Indenture Trustee shall not be required to give any notice of
redemption less than three (3) business days after the date it receives
notice of such redemption. (b) All notices of redemption shall be mailed
to each Noteholder at such Noteholder's last address on the Note Register
and shall state the Redemption Date, the amount payable on such date, the
place at which Notes are to be surrendered for payment and that interest on
amounts redeemed will cease to accrue. (c) Notice of Redemption of the
Notes shall be given by the Indenture Trustee in the name and at the
expense of the Issuer. Failure to give notice of redemption, or any defect
therein, to any Holder of any Note shall not impair or affect the validity
of the redemption of any other Note.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the issuer to the
Indenture Trustee to take any action under the provisions of this
Indenture, the Issuer shall furnish to the Indenture Trustee: (i) an
Officer's Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with, and (ii) (if required by the TIA) an Independent Certificate
from a firm of certified public accountants meeting the applicable
requirements of this Section 11.1, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate need be furnished. Every certificate or opinion with respect
to compliance with a condition or covenant provided for in this Indenture
shall include:
(i) a statement that such signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the judgment of each such
signatory, such signatory has made such examination or investigations
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as is necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b)(i) Prior to the deposit with the Indenture Trustee of any
Collateral or other property or securities that is to be made the
basis for the release of any property or securities subject to the
lien of this Indenture, the Issuer shall, in addition to the
obligation imposed in Section 11.1(a) or elsewhere in this Indenture,
furnish to the Indenture Trustee an Officer's Certificate certifying
or stating the opinion of each person signing such certificate as to
the fair value (within 90 days of such deposit) to the Issuer of the
Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or described in
clause (b)(i) above, the Issuer shall also deliver to the Indenture
Trustee an Independent Certificate as to the same matters, if the fair
value to the Issuer of the securities to be so deposited and of all
other such securities made the basis of any such withdrawal or release
since the commencement of the then current fiscal year of the Issuer,
as set forth in the Certificates delivered pursuant clause (i) above
and this clause (b)(ii), as 10% or more of the Outstanding Amount of
the Notes, but such a certificate need not be furnished with respect
to any securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the Outstanding Amount of the
Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each Person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person
the proposed release will not impair the security under this Indenture
in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signatory thereof as to the matters described in clause
(b)(iii) above, the Issuer shall also furnish to the Indenture Trustee
an Independent Certificate as to the same matters if the fair value of
the property or securities and of all other property or securities
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released from the lien of this Indenture since the commencement of the
then current calendar year, as set forth in the certificates required
by clause (b)(iii) above and this clause (b)(iv), equals 10% or more
of the Outstanding Amount of the Notes, but such certificate need not
be furnished in the case of any release of property or securities if
the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the then
Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of
this Section 11.1, the Issuer may make cash payments out of the
Designated Accounts to the extent permitted or required by the Basic
Documents.
SECTION 11.2 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.
(a) 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 may certify or
give an opinion as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
(b) 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 the 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 Depositor or the
Issuer, stating that the information with respect to such factual matters
is in the possession of the Depositor or the Issuer, unless such counsel
knows, or in the exercise of reasonable care should know, that such
certificate or opinion or representations with respect to such matters are
erroneous.
(c) 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.
(d) 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
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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.
SECTION 11.3 ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or
taken by the Noteholders may be embodied in and by one or more instruments
of substantially similar tenor signed by such Noteholders in person or by
agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby
expressly required, to the Issuer. Such Instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section
11.3.
SECTION 11.4 NOTICES ETC., TO INDENTURE TRUSTEE, ISSUER, AND
RATING AGENCY. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture to be made upon, given or furnished to or filed
with:
(a) the Indenture Trustee by any Noteholder shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Indenture Trustee at its Corporate Trustee Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and either
sent by electronic facsimile transmission (with hard copy to follow via
first class mail) or mailed, by certified mail, return receipt requested to
the Issuer and the Owner Trustee, care of the Owner Trustee at its
Corporate Trustee Office, with copies to Richards, Layton & Finger, 1
Rodney Square, P.O. Box 551, Wilmington, Delaware 19899, Attention: Eric
Mazie, Esq. or at any other address previously furnished in writing to the
Indenture Trustee by the Issuer.
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee and the Indenture Trustee shall
likewise promptly transmit any notice received by it from the Noteholders
to the Indenture Trustee.
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(c) Notices required to be given to the Rating Agency by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, sent by electronic facsimile transmission (with hard
copy to follow via first class mail) or mailed by certified mail, return
receipt requested to the address set forth in the Series Trust Indenture or
any such other address as shall be designated by written notice to the
other parties.
SECTION 11.5 NOTICE TO NOTEHOLDERS; WAIVER.
(a) Where this Indenture provides for notice to Noteholders of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if it is in writing and mailed, first-class, postage
prepaid to each Noteholder affected by such event, at such Person's 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.
If 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 regardless of
whether such notice is in fact actually received.
(b) 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.
(c) In case, if 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 of 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.
(d) Where this Indenture provides for notice to the Rating
Agency, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstances
constitute an Event of Default.
SECTION 11.6 ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or
any Paying Agent to such Holder, that is different from the methods
provided for in this Indenture for such payments or notices. The Issuer
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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 11.7 CONFLICT WITH TRUST INDENTURE ACT.
(a) If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Indenture
by any of the provisions of the TIA, such required provision shall control.
(b) The provisions of TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are a part of
and govern this Indenture, whether or not physically contained herein.
SECTION 11.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.9 SUCCESSORS AND ASSIGNS.
(a) All covenants and agreements in this Indenture and the Notes
by the Issuer shall bind its successors and assigns, whether so expressed
or not.
(b) All covenants and agreements of the Indenture Trustee in
this Indenture shall bind its successors and assigns, whether so expressed
or not.
SECTION 11.10 SEPARABILITY. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired.
SECTION 11.11 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, 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 11.12 LEGAL HOLIDAYS. If the date on which any payment
is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date on which nominally due, and no
interest shall accrue for the period from and after any such nominal date.
SECTION 11.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
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ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 COUNTERPARTS. This Indenture may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one
and the same instrument.
SECTION 11.15 RECORDING OF INDENTURE. If this Indenture is
subject to recording in any appropriate public recording offices, such
recording is to be effected by the Issuer and at its expense accompanied by
an Opinion of Counsel (which may be counsel to the Issuer or any other
counsel reasonably acceptable to the Indenture Trustee) to the effect that
such recording is necessary either for the protection of the Noteholders or
any other Person secured hereunder or for the enforcement of any right or
remedy granted to the Indenture Trustee under this Indenture.
SECTION 11.16 NO RECOURSE. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee or 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 or the Owner
Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such person may have
expressly agreed (it being understood that the Indenture Trustee and
the Owner Trustee have no such obligations in their individual
capacity) and except that any such 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 Articles VI,
VII and VIII of the Trust Agreement.
SECTION 11.17 NO PETITION. The Indenture Trustee, by entering
into this Indenture, and each Noteholder, by accepting a Note issued
hereunder, hereby covenant and agree that they shall not, prior to the date
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which is one year and one day after the termination of this Indenture with
respect to the Notes pursuant to Section 4.1, acquiesce, petition or
otherwise invoke or cause the Depositor or the Issuer to invoke the process
of any court or government authority for the purpose of commencing or
sustaining a case against the Depositor or the Issuer under any federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Depositor or the Issuer or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
depositor or the Issuer.
SECTION 11.18
(a) The Issuer shall, on each anniversary of the Closing Date
furnish to the Indenture Trustee the Opinion of Counsel required by Section
3.6 of the Standard Terms and the "annual statement of compliance" required
by Section 3.9 of the Standard Terms.
(b) Notwithstanding anything contained herein to the contrary,
this instrument has been signed by the Owner trustee, not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in
no event shall the Owner Trustee in its individual capacity or any
beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligation of the Issuer
hereunder as to all of which recourse shall be had solely to the assets of
the Issuer.
(c) Each Series shall constitute a separate Series of the Trust
pursuant to Section 3806(b)(2) of the Delaware Business Trust act (the
"DBTA"). Separate and distinct records shall be maintained for each Series
and the assets associated with any such Series shall be held and accounted
for separately from the other assets of the Trust, or any other Series
thereof. Subject to the right of the Trust to allocate general
liabilities, expenses, costs, charges or reserves as herein provided, the
debts liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular Series shall be enforceable
against the assets of such Series only, and not against the assets of any
other series. Notice of this limitation on inter-series liabilities shall
be set forth in the certificate of trust of the Trust (whether originally
or by amendment) as filed or to be filed in the Office of the Secretary of
State of the State of Delaware pursuant to the DBTA, and upon the giving of
such notice in the certificate of trust, the statutory provisions of
Section 3804 of the DBTA relating to limitations on inter-series
liabilities (and the statutory effect under Section 3804 of setting forth
such notice in the certificate of trust) shall become applicable to the
Trust and each Series. Every note, bond, contract or other undertaking
issued by or on behalf of a particular Series shall include a recitation
limiting the obligation represented thereby to that Series and its assets.
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INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Indenture
Trustee
By:___________________________
Name:
Title:
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ASSIGNMENT
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__________________________________________________
________________, as attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Date:____________________ ______________________________
Signature Guaranteed:
______________________________
____________________
NOTE: 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 whatsoever.
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APPENDIX A-I
FORM OF NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY 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.
TIERS Asset-Backed Securities, Series Chamt Trust 1997-7
________ NOTE
(ISSUABLE IN MULTIPLES OF THE MINIMUM DENOMINATION)
Description of Collateral Obligations
No.:_____________________ Face Amount:_________________
Payment Date:__________________
Interest Payment Amount:______________________
Interest Payment Dates:_______________________
CUSIP No.:________________ Last Maturity Date:_______________
Initial Call Date:_____________________
TIERS Asset-Backed Securities, Series CHAMT Trust 1997-7 a
Delaware business trust organized and existing under the laws of the State
of Delaware (herein referred to as the "Issuer"), for value received,
hereby promises to pay to Cede & Co., or registered assigns, all principal
payments and interest payments due on the above-referenced Collateral
Obligations (the "Collateral Obligations") on each Payment Date with
respect to the Face Amount hereof and on each Interest Payment Date in
respect of the Interest Payment Amount hereof payable in accordance with
the Indenture, prior to the occurrence of an Event of Default and a
declaration that the Notes are due and payable. The amounts payable on
this Note shall be payable from the Note Payment Account pursuant to
Section 3.1 of the Indenture. The sole obligors with respect to the Face
Amount of the principal payment and the Interest Payment Amount of the
interest payment are the issuers or obligors of the Collateral Obligations
and any other entities obligated to make payments to such Persons (or their
trustees or other applicable fiduciaries) with respect to the Collateral
Obligations.
This Note is one of a duly authorized issue of Notes of the
Issuer designated as its ______ Notes (herein called the "Notes"), pursuant
to the terms of a Series Trust Indenture, (the "Indenture") dated as of
____, consisting of a Series Trust Indenture together with the Standard
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Terms and Provisions of Trust Indenture appended thereto together with all
other exhibits, schedules, appendices, supplements and amendments thereto
between the Issuer and First Trust of New York, National Association, as
Indenture Trustee, pursuant to which this and other Notes have been issued.
Reference is hereby made to the Indenture and all indentures supplemental
thereto for a statement of the respective rights and obligations thereunder
of the Issuer, the Indenture Trustee and the Noteholders. All terms used
and not otherwise defined in this Note that are defined in the Indentures,
as supplemented or amended, shall have the meanings assigned to them in or
pursuant to the Indenture.
The Notes issued pursuant to the Indenture will be equally and
ratably secured by the Collateral pledged as security therefor as provided
in the Indenture.
Upon the occurrence of an Event of Default and a declaration
under the Indenture that the Notes are immediately due and payable (i)
Noteholders will be entitled to ratable repayment of principal on the basis
of their respective unpaid principal balances and (ii) repayment in full of
the accrued interest on and unpaid principal balances of the Notes will be
made prior to any further payment of interest on the certificates in
respect of the Certificate Principal Amount.
Notwithstanding the foregoing, the entire Face Amount of this
Note shall be due and payable on the date on which Event of Default shall
have occurred and be continuing and the Indenture Trustee or the
Noteholders representing not less than 25% of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in the
manner provided in Section 5.2 of the Indenture. All payments in respect
of the Face Amount hereof shall be made pro rata to the Holders of the
Notes.
Payments of in respect of the Face Amount on this Note shall be
due and payable on each Payment Date and payments in respect of the
Interest Payment Amount shall be due and payable on the Interest Payment
Dates, if not in full payment of this Note, shall be made 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 the Notes
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by
such nominee. Such checks shall be mailed to the Person entitled thereto
at the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Note be submitted for
notation of payment. The Record Date, with respect to any Payment or
Interest Payment Date, means the close of business on the ________________
day of the calendar month in which such Payment Date or Interest Payment
Date occurs, or if Definitive Notes are issued, the (last day of the
preceding Interest Period). Any reduction in the principal amount of this
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Note (or any one or more predecessor Notes) effected by any payments made
on any Payment Date shall be binding upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds
are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal amount of this Note on a
Payment Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who is the Registered Holder hereof as
of the Record Date preceding such Payment Date by notice sent in accordance
with Section 2.7(d) of the Indenture, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of
the Indenture Trustee's agent appointed for such purposes located in New
York City.
As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, with such signature
guaranteed by a commercial bank or trust company located, or having a
correspondent located, in New York City or the city in which the Corporate
Trust Office is located, or a member firm of a national securities
exchange, and such other documents as the Indenture Trustee may require,
and thereupon one or more new Notes of authorized detonations and in the
same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to
pay a sum sufficient to cover any tax or other governmental charge that may
be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on
the Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in their individual capacities, (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 or the Owner
Trustee in their individual capacities, any holder of a beneficial interest
in the Issuer, the Owner Trustee or the Indenture Trustee or of any
successor or assignee of the Indenture Trustee or the Owner Trustee in
their individual capacities, except as any such person may have expressly
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agreed 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 of call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture such Noteholder will not,
prior to the date which is one year and one day after the termination of
this Indenture with respect to the Issuer, acquiesce, petition or otherwise
invoke or cause the Depositor or the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a
case against the Depositor or the Issuer under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Depositor or the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Depositor or
the Issuer.
Prior to the due presentment of registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer of 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 shall be overdue, and neither the Issuer, the Indenture
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the
Indenture at any time by the Issuer with the consent of the Holders of
Notes representing a majority of the Outstanding Amount of all the Notes.
The Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes,
on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by
the Holder of this Note (or any one of more Predecessor Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent
or waiver is made upon this Note. The Indenture also permits the Indenture
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the
Indenture Trustee and the Holders of Notes under the Indenture.
A-I-4
<PAGE>
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set
forth.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or
currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither the Depositor, the
Indenture Trustee nor the Owner Trustee in their respective individual
capacities, any owner of a beneficial interest in the Issuer, nor 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, or performance of, or omission to perform, any of the
covenants, obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants, obligations
and indemnifications have been made by the Issuer. The Holder of
this Note by the 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.
The principal of and interest of this Note are payable in such
coin or currency of the United States of America which, 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.
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.
A-I-5
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
TIERS ASSET-BACKED SECURITIES, SERIES CHAMT TRUST 1997-7
By: Delaware Trust Capital Management, Inc.
not in its individual capacity but solely as Owner
Trustee under the Trust Agreement
By:______________________________
Name:
Title:
<PAGE>
</TABLE>
