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EXHIBIT 4.1
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EXHIBIT 4.1
EXECUTION COPY
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ADVANTA REVOLVING HOME EQUITY LOAN TRUST 1997-A
Class A Asset Backed Notes
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INDENTURE
Dated as of November 1, 1997
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BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
Indenture Trustee
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2. Incorporation by Reference of the Trust Indenture Act . . . . . . . . . . . . 24
SECTION 1.3. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 1.4. Action by or Consent of Noteholders . . . . . . . . . . . . . . . . . . . . . 25
SECTION 1.5. Conflict with TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE II. THE NOTES
SECTION 2.1. Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.2. Execution, Authentication and Delivery . . . . . . . . . . . . . . . . . . . 26
SECTION 2.3. Registration; Registration of Transfer and Exchange . . . . . . . . . . . . . 26
SECTION 2.4. Xxxxxxxxx, Destroyed, Lost or Stolen Notes . . . . . . . . . . . . . . . . . 27
SECTION 2.5. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.6. Payment of Principal and Interest; Defaulted Interest . . . . . . . . . . . . 29
SECTION 2.7. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.8. Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.9. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.10. Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.11. Definitive Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE III. COVENANTS
SECTION 3.1. Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.2. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.3. Money for Payments to be Held in Trust . . . . . . . . . . . . . . . . . . . 32
SECTION 3.4. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.5. Protection of Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.6. Opinions as to Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.7. Performance of Obligations; Servicing of Mortgage Loans . . . . . . . . . . . 35
SECTION 3.8. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.9. Annual Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.10. Issuer May Not Consolidate or Transfer Assets . . . . . . . . . . . . . . . . 37
SECTION 3.11. No Other Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.12. No Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.13. Guarantees, Loans, Advances and Other Liabilities . . . . . . . . . . . . . . 37
SECTION 3.14. Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.15. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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SECTION 3.16. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.17. Notice of Rapid Amortization Events and Events of Servicing Termination . . . 38
SECTION 3.18. Further Instruments and Acts . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.19. Amendments of Sale and Servicing Agreement and Trust Agreement . . . . . . . 38
SECTION 3.20. Income Tax Characterization . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IV. SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . 39
SECTION 4.2. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.3. Repayment of Monies Held by Note Paying Agent . . . . . . . . . . . . . . . . 40
ARTICLE V. REMEDIES
SECTION 5.1. Rights Upon a Rapid Amortization Event . . . . . . . . . . . . . . . . . . . 40
SECTION 5.2. Limitation of Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.3. Unconditional Rights of Noteholders To Receive Principal and Interest . . . . 41
SECTION 5.4. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.5. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.6. Delay or Omission Not a Waiver . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.7. Control by Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.8. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.9. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.10. Action on Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.11. Performance and Enforcement of Certain Obligations . . . . . . . . . . . . . 43
SECTION 5.12. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.13. Preference Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VI. THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.2. Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.3. Individual Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . 48
SECTION 6.4. Indenture Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.5. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.6. Reports by Indenture Trustee to Holders . . . . . . . . . . . . . . . . . . . 48
SECTION 6.7. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.8. Replacement of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.9. Successor Indenture Trustee by Xxxxxx . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee . . . . . . 51
SECTION 6.11. Eligibility: Disqualification . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.12. Preferential Collection of Claims Against Issuer . . . . . . . . . . . . . . 52
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SECTION 6.13. Appointment and Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.14. Performance of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.15. Limitation on Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.16. Reliance Upon Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.17. Representations and Warranties of the Indenture Trustee . . . . . . . . . . . 54
SECTION 6.18. Waiver of Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.19. Control by the Controlling Party . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.20. Trustee May Enforce Claims Without Possession of Notes . . . . . . . . . . . 54
SECTION 6.21. Suits for Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.22. Mortgagor Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE VII. NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish To Indenture Trustee Names and Addresses of Noteholders . . 56
SECTION 7.2. Preservation of Information; Communications to Noteholders . . . . . . . . . 56
SECTION 7.3. Reports by Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.4. Reports by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE VIII. PAYMENTS AND STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS;
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.2. Release of Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.3. Establishment of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.4. The Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.5. Pre-Funding Account and Capitalized Interest Account . . . . . . . . . . . . 59
SECTION 8.6. Flow of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.7. Investment of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.8. Eligible Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.9. Reports by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.10. Additional Reports by Indenture Trustee . . . . . . . . . . . . . . . . . . . 65
SECTION 8.11. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE IX. SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders . . . . . . . . . . . 66
SECTION 9.2. Supplemental Indentures with Consent of Noteholders . . . . . . . . . . . . . 67
SECTION 9.3. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 68
SECTION 9.4. Effect of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 9.5. Conformity With Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . 69
SECTION 9.6. Reference in Notes to Supplemental Indentures . . . . . . . . . . . . . . . . 69
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ARTICLE X. REDEMPTION OF NOTES
SECTION 10.1. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.2. Surrender of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 10.3. Form of Redemption Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 10.4. Notes Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE XI. MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions, etc. . . . . . . . . . . . . . . . . . 72
SECTION 11.2. Form of Documents Delivered to Indenture Trustee . . . . . . . . . . . . . . 73
SECTION 11.3. Acts of Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 11.4. Notices, etc. to Indenture Trustee, Issuer and Rating Agencies . . . . . . . 74
SECTION 11.5. Notices to Noteholders; Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 11.6. Alternate Payment and Notice Provisions . . . . . . . . . . . . . . . . . . . 76
SECTION 11.7. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 11.8. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . 76
SECTION 11.9. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 11.10. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 11.11. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 11.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 11.13. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.14. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.15. Recording of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.16. Trust Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.17. No Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.18. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 11.19. Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE XII. RAPID AMORTIZATION EVENTS
SECTION 12.1. Rapid Amortization Events . . . . . . . . . . . . . . . . . . . . . . . . . . 78
EXHIBITS
Exhibit A -- Form of Class A Note
Exhibit B -- Form of Monthly Report
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INDENTURE dated as of November 1, 1997, between ADVANTA
REVOLVING HOME EQUITY LOAN TRUST 1997-A, a Delaware business trust (the
"Issuer"), and BANKERS TRUST COMPANY OF CALIFORNIA, N.A., a national banking
association, as trustee (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuer's
Class A Asset Backed Notes (the "Class A Notes"):
As security for the payment and performance by the Issuer of
its obligations under this Indenture and the Class A Notes, the Issuer has
agreed to assign the Collateral (as defined below) to the Indenture Trustee on
behalf of the Noteholders.
Ambac Assurance Corporation (the "Insurer") has issued and
delivered a financial guaranty insurance policy, dated as of the Closing Date
(the "Policy"), pursuant to which the Insurer guarantees the Guaranteed
Distributions (as defined below).
As an inducement to the Insurer to issue and deliver the
Policy, the Issuer and the Insurer have executed and delivered the Insurance
Agreement, dated as of November 1, 1997 (as amended from time to time, the
"Insurance Agreement"), among the Insurer, the Issuer, Advanta Mortgage Conduit
Services, Inc. and the Indenture Trustee.
As an additional inducement to the Insurer to issue the
Policy, and as security for the performance by the Issuer of the Insurer Issuer
Secured Obligations and as security for the performance by the Issuer of the
Indenture Trustee Issuer Secured Obligations, the Issuer has agreed to grant
and assign the Collateral (as defined below) to the Indenture Trustee for the
benefit of the Issuer Secured Parties, as their respective interests may
appear.
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GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the
Closing Date, for the benefit of the Issuer Secured Parties all of the Issuer's
right, title and interest in and to (i) certain adjustable rate home equity
revolving credit line loans (the "Mortgage Loans") (including any Additional
Balances) made or to be made and conveyed to the Issuer under certain home
equity revolving credit line loan agreements ("Credit Line Agreements"); (ii)
collections in respect of the Mortgage Loans with due dates after the Initial
Cut-Off Date, (iii) property that secured a Mortgage Loan that has been
acquired by foreclosure or deed in lieu of foreclosure; (iv) rights of the
Sponsor under hazard insurance policies covering the Mortgaged Properties; (v)
the Policy; (vi) amounts on deposit in the Note Account; (vii) amounts on
deposit in the Pre-Funding Account; (viii) amounts on deposit in the
Capitalized Interest Account; (ix) amounts on deposit in the Principal and
Interest Account; (x) any and all Subsequent Mortgage Loans (including any
Additional Balances related thereto); (xi) all rights under the Purchase
Agreement assigned to the Issuer (including all representations and warranties
of the Originators contained therein) and all rights of the Issuer under the
Sale and Servicing Agreement; and (xii) any and all proceeds of the foregoing
(the foregoing, collectively, "Collateral").
The foregoing Grant is made in trust to the Indenture Trustee,
for the benefit first, of the Holders of the Notes, and second, for the benefit
of the Insurer. The Indenture Trustee hereby acknowledges such Grant, accepts
the trusts under this Indenture in accordance with the provisions of this
Indenture and agrees to perform the duties required of it by this Indenture to
the best of its ability to the end that the interests of such parties,
recognizing the priorities of their respective interests, may be adequately and
effectively protected.
ARTICLE I.
Definitions and Incorporation by Reference
SECTION 1.1. Definitions. Except as otherwise
specified herein, the following terms have the respective meanings set forth
below for all purposes of this Indenture. In addition, other capitalized terms
used herein and not defined herein shall have their respective meanings as set
forth in the Sale and Servicing Agreement.
"Accelerated Principal Payments": With respect to any
Payment Date, a payment received as a payment of principal by the Noteholders
of the Class A Notes, for the purpose of increasing the Overcollateralization
Amount to the Specified Overcollateralization Amount applicable to such Payment
Date, and to be paid from amounts remaining in the Note Account on such Payment
Date, after deduction of the amounts described in clauses (i) through (viii) of
Section 8.6(b) hereof on such Payment Date;
"Account": Any account established in accordance with
Section 8.3 hereof or Section 4.8 of the Sale and Servicing Agreement.
"Act" has the meaning specified in Section 11.3(a).
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"Affiliate" means, with respect to any specified Person,
any other Person controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" means the power to
direct the management and policies of a Person, directly or indirectly, whether
through ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AMHC": Advanta Mortgage Holding Company, a Delaware
corporation and the corporate parent of Advanta Mortgage Corp. USA, and the
indirect corporate parent of Advanta Mortgage Conduit Services, Inc.
"Authorized Newspapers": Any of the following, The Wall
Street Journal, the New York Times, the Washington Post, the Los Angeles Times
or such other newspaper determined by the Indenture Trustee in its sole
judgment.
"Authorized Officer": With respect to any Person, any
person who is authorized to act for such Person in matters relating to this
Agreement, and whose action is binding upon such Person and, with respect to
the Indenture Trustee, the Master Servicer and the Sponsor, initially including
those individuals whose names appear on the lists of Authorized Officers
delivered on the Closing Date.
"Available Funds": As defined in Section 8.4(a) hereof.
"Available Funds Shortfall": As defined in Section 8.4(b)
hereof.
"Billing Cycle": With respect to any Mortgage Loan and
Remittance Period, the billing period specified in the related Credit Line
Agreement and with respect to which amounts billed are received during such
Remittance Period.
"Book Entry Notes" means a beneficial interest in the
Notes, ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.9.
"Business Day": Any day that is not a Saturday, Sunday or
other day on which commercial banking institutions in the State of New York or
in the city in which the principal Corporate Trust Office of the Indenture
Trustee is located, are authorized or obligated by law or executive order to be
closed.
"Capitalized Interest Account": The Capitalized Interest
Account established in accordance with Section 8.3 hereof and maintained by the
Indenture Trustee.
"Capitalized Interest Account Deposit": $83,058.64.
"Capitalized Interest Amount": With respect to any
Determination Date, the amount on deposit in the Capitalized Interest Account.
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"Capitalized Interest Requirement": As to any Payment Date
occurring during the Pre-Funding Period, the difference, if any, between (x)
the interest due on the Class A Notes on such Payment Date plus the Premium
Amount, the Indenture Trustee's Fee and the Owner Trustee's Fee as of such
Payment Date and (y) the sum of (i) one month's interest on the aggregate
Principal Balances of all Mortgage Loans as of the close of business on the
last day of the immediately preceding Remittance Period, calculated at the
Class A Interest Rate, plus the Premium Amount, the Indenture Trustee's Fee and
the Owner Trustee's Fee as of such Payment Date and (ii) any Pre-Funding
Earnings to be transferred to the Note Account on such Payment Date pursuant to
Section 8.5(c) hereof.
"Certificate": As defined in the Trust Agreement.
"Certificate of Trust": means the certificate of trust of
the Issuer substantially in the form of Exhibit B to the Trust Agreement.
"Certificateholders": The holders of the Certificates
issued pursuant to the Trust Agreement.
"Civil Relief Act": The Soldiers' and Sailors' Civil
Relief Act of 1940, as amended.
"Class A Formula Rate": For any Interest Accrual Period,
(x) with respect to any Payment Date which occurs on or prior to the Optional
Redemption Date, LIBOR plus .20% per annum and (y) for any Payment Date
thereafter, LIBOR plus .40% per annum.
"Class A Interest Distribution Amount": With respect to
any Payment Date, the product of (x) one-twelfth of the Class A Interest Rate
applicable to such Payment Date and (y) the Class A Principal Balance
immediately prior to such Payment Date (based on a 360-day year and the actual
number of days in the prior calendar month).
"Class A Interest Rate": As to any Payment Date, the
lesser of (i) the Class A Formula Rate and (ii) the Net Funds Cap Rate.
"Class A Note": As defined in the Sale and Servicing
Agreement.
"Class A Note Balance": The Class A Principal Balance.
"Class A Principal Balance": As of any time of
determination, the Original Class A Principal Balance of the Class A Notes less
any amounts actually distributed theretofore as principal thereon to the Class
A Notes on all prior Payment Dates.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
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"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Date": November 20, 1997.
"Code": The Internal Revenue Code of 1986, as amended and
any successor statute.
"Collateral": As defined in the Recitals hereof.
"Combined Loan-to-Value Ratio" : With respect to any
Mortgage Loan as of any date, the percentage equivalent of a fraction, the
numerator of which is the sum of (i) the Credit Limit and (ii) the outstanding
principal balance as of the date of execution of the related Credit Line
Agreement (or as of any subsequent date, if any, as of which such outstanding
principal balance may be determined in connection with an increase in the
Credit Limit for such Mortgage Loan) of any mortgage loan or mortgage loans
that are senior in priority to the Mortgage Loan and which is secured by the
same Mortgaged Property and the denominator of which is the lesser of (i) the
Appraised Value of the related Mortgaged Property as set forth in the Mortgage
File on such date of execution or on such subsequent date, if any, or (ii) in
the case of a Mortgaged Property purchased within one year of such date of
execution, the purchase price thereof.
"Controlling Party" means the Insurer, so long as no
Insurer Default shall have occurred and be continuing, and the Indenture
Trustee, for so long as an Insurer Default shall have occurred and be
continuing.
"Corporate Trust Office": The Indenture Trustee's office
at 0 Xxxx Xxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000.
"Credit Limit": As to any Mortgage Loan, the maximum
principal balance permitted under the terms of the related Credit Line
Agreement.
"Credit Limit Utilization Rate": As to any Mortgage Loan,
the percentage equivalent of a fraction the numerator of which is the Principal
Balance for such Mortgage Loan and the denominator of which is the related
Credit Limit.
"Credit Line Agreement": With respect to any Mortgage
Loan, the related home equity line of credit agreement, security instrument and
promissory note executed by the related Mortgagor and any amendment or
modification thereof.
"Cut-Off Date": With respect to each Initial Mortgage
Loan, the Initial Cut-Off Date. With respect to any Subsequent Mortgage Loan,
the Subsequent Cut-Off Date related to such Subsequent Mortgage Loan. With
respect to each Qualified Replacement Mortgage, the Replacement Cut-off Date
related to such Qualified Replacement Mortgage.
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"Cut-Off Date Pool Balance": The aggregate Principal
Balances of all the Mortgage Loans as of the related Cut-Off Date; as of the
Initial Cut-Off Date, $86,835,573.71.
"Cut-Off Date Principal Balance": With respect to any
Mortgage Loan, the unpaid principal balance thereof as of the related Cut-Off
Date.
"Debt Service Reduction": With respect to any Mortgage
Loan, a reduction by a court of competent jurisdiction of the Minimum Monthly
Payment due on such Mortgage Loan.
"Default" means any occurrence that is, or with notice or
the lapse of time or both would become, a Rapid Amortization Event.
"Deficiency Amount": (a) For any Payment Date, any
shortfalls in amounts available in the Note Account to pay, in full on such
Payment Date, the Class A Interest Distribution Amount (excluding any Net Funds
Cap Carry-Forward Amounts, any Prepayment Interest Shortfalls and any Relief
Act Shortfalls), and (b) for any Payment Date, any shortfalls in amounts
available in the Note Account to pay the Overcollateralization Deficit and (c)
on the Final Scheduled Payment Date, any shortfall in amounts available in the
Note Account to pay the outstanding Class A Principal Balance.
"Deficient Valuation": With respect to any Mortgage Loan,
a valuation of the related Mortgaged Property by a court of competent
jurisdiction in an amount less than the then outstanding Principal Balance of
the Mortgage Loan, which valuation results from a proceeding initiated under
the United States Bankruptcy Code.
"Definitive Notes" has the meaning specified in Section
2.9.
"Delinquent": A Mortgage Loan is "delinquent" if any
payment due thereon is not made by the close of business on the day such
payment is scheduled to be due. A Mortgage Loan is "30 days delinquent" if
such payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which such
payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month) then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
"Depository": The Depository Trust Company, 0 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and any successor Depository hereafter named.
"Designated Depository Institution": With respect to the
Principal and Interest Account, an institution whose deposits are insured by
the Bank Insurance Fund or the Savings Association Insurance Fund of the FDIC,
the long-term deposits of which shall be rated (x) A or better by S&P and (y)
A2 or better by Moody's and in one of the two highest short-term rating
categories, unless otherwise approved in writing by the Insurer and each of
Moody's and S&P, and which is any of the following: (i) a federal savings and
loan association duly organized, validly existing and in good standing under
the federal banking laws, (ii) an institution duly
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organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or (v) approved in writing by the
Insurer, Moody's and S&P and, in each case acting or designated by the Master
Servicer as the depository institution for the Principal and Interest Account;
provided, however, that any such institution or association shall have combined
capital, surplus and undivided profits of at least $100,000,000.
Notwithstanding the foregoing, the Principal and Interest Account may be held
by an institution otherwise meeting the preceding requirements except that the
only applicable rating requirement shall be that the unsecured and
uncollateralized debt obligations thereof shall be rated Baa3 or better by
Moody's if such institution has trust powers and the Principal and Interest
Account is held by such institution in its trust capacity and not in its
commercial capacity.
"Determination Date": As to each Payment Date, the third
Business Day next preceding such Payment Date or such earlier day as shall be
agreed to by the Insurer and Indenture Trustee.
"Direct Participant" or "DTC Participant": Any
broker-dealer, bank or other financial institution for which the Depository
holds the Class A Notes from time to time as a securities depository.
"Draw": With respect to any Mortgage Loan, an additional
borrowing by the Mortgagor subsequent to the related Cut-Off Date in accordance
with the related Credit Line Agreement.
"Draw Period": With respect to any Mortgage Loan, the
period of time specified in the related Credit Line Agreement whereby a
Mortgagor may make a Draw under the related Credit Line Agreement, not to
exceed three years unless extended pursuant to such Credit Line Agreement.
"Eligible Investments": Those investments so designated
pursuant to Section 8.8 hereof.
"ERISA" means Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"FDIC": The Federal Deposit Insurance Corporation, or any
successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created pursuant to the
Emergency Home Finance Act of 1970, as amended, or any successor thereof.
"Final Scheduled Payment Date": The Payment Date in
February 2024 whereby the Class A Noteholders of the Class A Notes shall be
entitled to receive a payment of principal in an amount equal to the
outstanding Class A Principal Balance. The Final Scheduled Payment
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Date is the date which is one year after the date which is the latest possible
maturity date of a Mortgage Loan which amortizes according to its terms.
"First Mortgage Loan": A Mortgage Loan which constitutes a
first priority mortgage lien with respect to any Mortgaged Property.
"Fixed Allocation Percentage": 98%.
"Floating Allocation Percentage": The percentage
equivalent of a fraction, (i) the numerator of which is the excess of (a) the
Trust Collateral Value as of such Payment Date over (b) the Non-Subordinated
Originators' Interest as of such Payment Date and (ii) the denominator of which
is the Trust Collateral Value as of such Payment Date.
"FNMA": The Federal National Mortgage Association, a
federally-chartered and privately-owned corporation existing under the Federal
National Mortgage Association Charter Act, as amended, or any successor
thereof.
"Grant" means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, xxxxx x xxxx upon
and a security interest in and right of set-off against, deposit, set over and
confirm pursuant to this Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
monies payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring proceedings in the name of the Granting party or otherwise
and generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a
Note is registered on the Note Register.
"Indebtedness" means, with respect to any Person at any
time, (a) indebtedness or liability of such Person for borrowed money whether
or not evidenced by bonds, debentures, notes or other instruments, or for the
deferred purchase price of property or services (including trade obligations);
(b) obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles,
recorded as capital leases; (c) current liabilities of such Person in respect
of unfunded vested benefits under plans covered by Title IV of ERISA; (d)
obligations issued for or liabilities incurred on the account of such Person;
(e) obligations or liabilities of such Person arising under acceptance
facilities; (f) obligations of such Person under any guarantees, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds to invest in any Person or otherwise to assure a creditor against
loss; (g) obligations of such Person secured by any lien on property or assets
of such Person, whether or not the obligations have been assumed by such
Person; or (h) obligations of such Person under any interest rate or currency
exchange agreement.
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"Indemnification Agreement": The Indemnification Agreement
dated as of November 20, 1997 among the Sponsor, the Insurer and the
Underwriter.
"Indenture" means this Indenture as amended and
supplemented from time to time.
"Indenture Trustee": Bankers Trust Company of California,
N.A., located on the date of execution of this Agreement at 0 Xxxx Xxxxx, 00xx
Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, not in its individual capacity but solely as
Indenture Trustee under this Agreement, and any successor hereunder.
"Indenture Trustee's Fee": With respect to any Payment
Date, the product of (x) one-twelfth of .015% and (y) the Pool Balance as of
the end of the immediately preceding Remittance Period.
"Indenture Trustee Issuer Secured Obligations" means all
amounts and obligations which the Issuer may at any time owe to the Indenture
Trustee for the benefit of the Noteholders under this Indenture or the Notes.
"Independent" means, when used with respect to any
specified Person, that the person (a) is in fact independent of the Issuer, any
other obligor upon the Notes, the Sponsor and any Affiliate of any of the
foregoing persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Sponsor or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Sponsor or any Affiliate
of any of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions.
"Independent Certificate" means a certificate or opinion to
be delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1, prepared
by an Independent appraiser or other expert appointed pursuant to an Issuer
Order and approved by the Indenture Trustee in the exercise of reasonable care,
and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
"Indirect Participant" shall mean any financial institution
for whom any Direct Participant holds an interest in the Class A Notes.
"Initial Cut-Off Date": With respect to the Initial
Mortgage Loans, the opening of business on November 1, 1997.
"Initial Mortgage Loans": Mortgage Loans delivered by the
Sponsor to the Trust on the Closing Date.
"Initial Premium": The initial premium payable by the
Sponsor on behalf of the Trust to the Insurer in consideration of the delivery
to the Indenture Trustee of the Insurance Policy.
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"Initial Specified Overcollateralization Amount": As
defined in the Insurance Agreement.
"Insurance Agreement": The Insurance Agreement dated as of
November 20, 1997 among the Sponsor, the Master Servicer, the Indenture Trustee
and the Insurer, as it may be amended from time to time.
"Insurance Policy": Any hazard, title or primary mortgage
insurance policy relating to a Mortgage Loan.
"Insurance Proceeds": Proceeds paid by any insurer (other
than the Insurer) pursuant to any Insurance Policy covering a Mortgage Loan, or
amounts required to be paid by the Master Servicer pursuant to the last
sentence of the first paragraph of Section 4.11(b) of the Sale and Servicing
Agreement, or the penultimate sentence of Section 4.11(c) of the Sale and
Servicing Agreement, net of any component thereof (i) covering any expenses
incurred by or on behalf of the Master Servicer in connection with obtaining
such proceeds, (ii) that is applied to the restoration or repair of the related
Mortgaged Property, (iii) released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures, or (iv) required to be paid to
any holder of a mortgage senior to such Mortgage Loan.
"Insured Payment": As of any Payment Date, (i) any
Deficiency Amount and (ii) any Preference Amount.
"Insurer": Ambac Assurance Corporation or any successor
thereto, as issuer of the Policy.
"Insurer Default" means the failure by the Insurer to make
a payment required under the Policy in accordance with the terms thereof.
"Insurer Issuer Secured Obligations" means all amounts and
obligations which the Issuer may at any time owe to or on behalf of the Insurer
under this Indenture, the Insurance Agreement or any other Operative Document.
"Interest Accrual Period": With respect to the Class A
Notes, the period commencing on the prior Payment Date (or on the Closing Date
with respect to the December 26, 1997 Payment Date) and ending on the day
immediately preceding such Payment Date.
"Interest Collections": For any Payment Date, amounts
collected during the related Remittance Period, including the portion of Net
Liquidation Proceeds allocated to interest pursuant to the terms of the Credit
Line Agreements, less the Servicing Fee for the related Remittance Period.
"Interest Determination Date": With respect to any
Interest Accrual Period for the Class A Notes (other than the initial Interest
Accrual Period), the second London Business Day preceding such first day of
such Interest Accrual Period.
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"Interest Remittance Amount": As of any Remittance Date,
the sum, without duplication, of (i) all interest collected by the Master
Servicer during the related Remittance Period with respect to the Mortgage
Loans (net of the Servicing Fee), except that with respect to Prepaid
Installments, interest shall be remitted in the related Remittance Period and
(ii) all Net Liquidation Proceeds actually collected by the Master Servicer
with respect to the Mortgage Loans during the related Remittance Period (to the
extent such Net Liquidation Proceeds relate to interest).
"Issuer" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order
or request signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Indenture Trustee.
"Issuer Secured Obligations" means the Insurer Issuer
Secured Obligations and the Indenture Trustee Issuer Secured Obligations.
"Issuer Secured Parties" means each of the Indenture
Trustee in respect of the Indenture Trustee Issuer Secured Obligations and the
Insurer in respect of the Insurer Issuer Secured Obligations.
"Late Payment Rate": For any Payment Date, the rate of
interest, as it is publicly announced by Citibank, N.A. at its principal
office in New York, New York as its prime rate (any change in such prime rate
of interest to be effective on the date such change is announced by Citibank,
N.A.) plus 2%. The Late Payment Rate shall be computed on the basis of a year
of 365 days calculating the actual number of days elapsed. In no event shall
the Late Payment Rate exceed the maximum rate permissible under any applicable
law limiting interest rates.
"LIBOR": With respect to any Interest Accrual Period for
the Class A Notes, the rate determined by the Indenture Trustee on the related
Interest Determination Date appearing on the Telerate Screen Page 3750, as of
11:00 AM, London Time, on the second LIBOR Business Day prior to the first day
of such Interest Accrual Period. If such rate does not appear on such page (or
such other page as may replace that page on that service, or if such service is
no longer offered, such other service for displaying LIBOR or comparable rates
as may be selected by the Sponsor after consultation with the Indenture
Trustee), the rate will be the Reference Bank Rate.
"LIBOR Business Day": Any day other than (i) a Saturday or
a Sunday or (ii) a day on which banking institutions in the State of New York
or in the city of London, England are required or authorized by law to be
closed.
"Lifetime Rate Cap": With respect to each Mortgage Loan
with respect to which the related Credit Line Agreement provides for a lifetime
rate cap, the maximum Loan Rate permitted over the life of such Mortgage Loan
under the terms of the related Credit Line Agreement.
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"Liquidated Mortgage Loan": As defined in the Sale and
Servicing Agreement.
"Liquidation Expenses": Expenses which are incurred by the
Master Servicer or any Sub-Servicer in connection with the liquidation of any
defaulted Mortgage Loan, such expenses, including, without limitation, legal
fees and expenses, and any unreimbursed Servicing Advances expended by the
Master Servicer or any Sub-Servicer pursuant to Section 4.9 of the Sale and
Servicing Agreement with respect to the related Mortgage Loan.
"Liquidation Proceeds": With respect to any Liquidated
Mortgage Loan, any amounts (including the proceeds of any Insurance Policy but
excluding any amounts drawn on the Insurance Policy) recovered by the Master
Servicer in connection with such Liquidated Mortgage Loan, whether through
Indenture Trustee's sale, foreclosure sale or otherwise.
"Loan Rate": With respect to any Mortgage Loan and as of
any day, the per annum rate of interest applicable under the related Credit
Line Agreement to the calculation of interest for such day on the Principal
Balance of such Mortgage Loan.
"Loan Rate Cap": With respect to each Mortgage Loan, the
lesser of (i) the Lifetime Rate Cap, if any, or (ii) the applicable state usury
ceiling, if any.
"London Business Day": A day on which banks are open for
dealing in foreign currency, and exchange in London and New York City.
"Managed Amortization Period": The Period commencing on
December 26, 1997 and ending on the earlier to occur of (x) the December, 2000
Payment Date and (y) the Payment Date which immediately precedes the occurrence
of a Rapid Amortization Event.
"Margin": With respect to each Mortgage Loan with an
adjustable rate, the fixed percentage amount set forth in the related Credit
Line Agreement which amount is added to Prime in accordance with the terms of
the related Credit Line Agreement to determine, on each Interest Determination
Date, the Loan Rate for such Mortgage Loan, subject to any maximum.
"Master Servicer": Advanta Mortgage Corp. USA, a Delaware
corporation, and its permitted successors and assigns.
"Master Servicer Affiliate": A Person (i) controlling,
controlled by or under common control with the Master Servicer and (ii) which
is qualified to service residential mortgage loans.
"Maximum Principal Payment": With respect to any Payment
Date, the Fixed Allocation Percentage of the Principal Collections relating to
such Payment Date.
"Maximum Step-Down Amount": As of any Payment Date, the
excess of (i) the aggregate, cumulative amount of Overcollateralization Release
Amounts for such current, and all prior, Payment Dates over (ii) the aggregate,
cumulative amount of all payments made with respect to Step-Down Amounts for
all prior Payment Dates; provided, that for any Payment Date
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on which the Specified Overcollateralization Amount exceeds the
Overcollateralization Amount, the Step-Down Amount will be reduced (but not
below zero) by the amount of any such excess.
"Minimum Monthly Payment": With respect to any Mortgage
Loan and any month, the minimum amount required to be paid by the related
Mortgagor in that month.
"Minimum Originators' Interest": With respect to any date,
an amount equal to 2% of the Trust Collateral Value.
"Monthly Remittance Amount": As of any Remittance Date,
the sum of (i) the Interest Remittance Amount for such Remittance Date and (ii)
the Principal Remittance Amount for such Remittance Date.
"Moody's": Xxxxx'x Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or junior lien on an estate in fee simple interest in real
property securing a Credit Line Agreement.
"Mortgage Files": As defined in the Sale and Servicing
Agreement.
"Mortgage Loans": As defined in the Sale and Servicing
Agreement.
"Mortgagor": The obligor on a Credit Line Agreement.
"Net Funds Cap Carry-Forward Amount": In the event that,
on any Payment Date, the Net Funds Cap Rate is less than the Class A Formula
Rate (i.e., the Class A Interest Rate equals the Net Funds Cap Rate), the
excess of the amount of interest due based on the Class A Formula Rate, over
the interest due based on the Net Funds Cap Rate, together with interest
thereon at the then-applicable Class A Formula Rate.
"Net Funds Cap Rate": For any Interest Accrual Period, (x)
the fraction, expressed as an annual percentage rate, (i) the numerator of
which is twelve times the interest due on the Mortgage Loans during the prior
Remittance Period, net of the amount of Prepayment Interest Shortfalls, Relief
Act Shortfalls, Servicing Fee, Indenture Trustee's Fee, Owner Trustee's Fee and
Premium Amount for the related Remittance Period and (ii) the denominator of
which is the Trust Collateral Value immediately prior to the related Payment
Date (y) less, commencing on the tenth Payment Date, 0.50%.
"Net Liquidation Proceeds": As to any Liquidated Mortgage
Loan, Liquidation Proceeds net of, without duplication, Liquidation Expenses
and unreimbursed Servicing Advances and accrued and unpaid Servicing Fees
through the date of liquidation relating to such Liquidated Mortgage Loan. In
no event shall Net Liquidation Proceeds with respect to any Liquidated Mortgage
Loan be less than zero.
"Net Principal Collections": With respect to any Payment
Date, the excess of (x) Principal Collections with respect to the related
Remittance Period over (y) the aggregate
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principal amount of all Additional Balances arising during such related
Remittance Period; provided that in no event will Net Principal Collections be
less than zero with respect to any Payment Date.
"Non-Subordinated Originators' Interest": As of any date
of determination, that portion of the Originators' Interest which is not
represented by the Specified Overcollateralization Amount as of such date.
"Note" means a Class A Note.
"Note Account": The Note Account established in accordance
with Section 8.3 hereof and maintained by the Indenture Trustee.
"Note Owner" means, with respect to a Book-Entry Note, the
person who is the owner of such Book-Entry Note or following the issuance of
Definitive Notes, the registered owner of the Notes.
"Note Paying Agent" means the Indenture Trustee or any
other Person that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 and is authorized by the Issuer to make payments to
and distributions from the Note Account, including payment of principal of or
interest on the Notes on behalf of the Issuer.
"Note Register" and "Note Registrar" have the respective
meanings specified in Section 2.3.
"Officer's Certificate" means a certificate signed by any
Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 and TIA
Section 314, and delivered to the Indenture Trustee.
"Operative Documents": Collectively, this Indenture, the
Trust Agreement, the Sale and Servicing Agreement, the Subsequent Transfer
Agreements, the Insurance Policy, the Class A Notes, the Indemnification
Agreement and the Insurance Agreement.
"Opinion of Counsel" means one or more opinions of counsel
who may, except as otherwise expressly provided in this Indenture, be employees
of or counsel to the Issuer and, if addressed to the Insurer, satisfactory to
the Insurer, and which shall comply with any applicable requirements of Section
11.1, and if addressed to the Insurer, satisfactory to the Insurer.
"Optional Redemption Date": The date on which the Sponsor
exercises its right of optional redemption of the Class A Notes pursuant to
Section 10.1(b) herein.
"Original Class A Principal Balance": $100,000,000.
"Original Cut-Off Date Pool Balance": The Pool Balance
calculated as of the Initial Cut-Off Date.
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"Original Pre-Funded Amount": The amount deposited in the
Pre-Funding Account on the Closing Date, from the proceeds of the sale of the
Class A Notes, which amount is $15,205,242.62.
"Original Principal Amount": With respect to any
particular Class A Note, an amount equal to the product of (i) the Percentage
Interest of such Class A Note and (ii) the Original Class A Principal Balance.
"Original Principal Balance": With respect to each Credit
Line Agreement, the principal amount of such Credit Line Agreement or the
mortgage note relating to a Senior Lien, as the case may be, on the date of
origination thereof.
"Originators": Advanta National Bank and Advanta Finance
Corp.
"Originators' Current Amount": On any Payment Date the sum
of (I) the product of (x) 100% minus the Floating Allocation Percentage for
such Payment Date and (y) Interest Collections for such Payment Date plus (II)
the product of (x) the difference between (i) during the Managed Amortization
Period, the Net Principal Collections on the Mortgage Loans received during the
related Remittance Period, and during the Rapid Amortization Period, the
Principal Collections on the Mortgage Loans received during the related
Remittance Period, and (ii) during the Managed Amortization Period, the lesser
of the Net Principal Collections and the Maximum Principal Payment for such
Payment Date, and during the Rapid Amortization Period, the Maximum Principal
Payment for such Payment Date and (y) a fraction, equal to the Non-Subordinated
Originators' Interest divided by the Originators' Interest.
"Originators' Interest": As of any Payment Date, is the
excess, if any, of (x) the Trust Collateral Value as of such Payment Date over
(y) the Class A Principal Balance as of such Payment Date (after taking into
account reductions therein on such Payment Date).
"Outstanding": With respect to all Notes, as of any date of
determination, all such Notes theretofore executed and delivered hereunder
except:
Notes theretofore cancelled by the
Indenture Trustee or delivered to the Indenture Trustee for
cancellation;
Notes or portions thereof for which full
and final payment money in the necessary amount has been
theretofore deposited with the Indenture Trustee in trust
for the Class A Noteholders of such Notes;
Notes in exchange for or in lieu of which
other Notes have been executed and delivered pursuant to
this Agreement, unless proof satisfactory to the Indenture
Trustee is presented that any such Notes are held by a bona
fide purchaser; and
Notes alleged to have been destroyed,
lost or stolen for which replacement Notes have been issued
as provided for in Section 2.4 hereof.
"Overcollateralization Amount": As of any Payment Date,
the lesser of (x) the Originators' Interest as of such date and (y) the
Specified Overcollateralization Amount for such Payment Date.
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"Overcollateralization Deficiency Amount": With respect to
any Payment Date, the difference, if any, between (i) the Specified
Overcollateralization Amount applicable to such Payment Date and (ii) the
Overcollateralization Amount applicable to such Payment Date.
"Overcollateralization Deficit": With respect to any
Payment Date, the amount, if any, by which (i) the aggregate Class A Principal
Balance, after taking into account the payment to the Class A Noteholders of
the Class A Notes of all principal from sources other than the Insurance Policy
on such Payment Date, exceeds (ii) the excess of (x) the Trust Collateral Value
as of such Payment Date over (y) the Non-Subordinated Originators' Interest as
of such Payment Date.
"Overcollateralization Release Amount": With respect to
any Payment Date on which the Originators' Interest is greater than the
Specified Overcollateralization Amount, if the Specified Overcollateralization
Amount is reduced, the corresponding increase in the Non-Subordinated
Originators' Interest which shall be equal to the reduction in the Specified
Overcollateralization Amount.
"Owner Trustee": Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee under the Trust Agreement, its
successors in interest or any successor Owner Trustee under the Trust
Agreement.
"Owner Trustee's Fee": A fee which is separately agreed to
between the Sponsor and the Owner Trustee.
"Payment Date": Any date on which the Indenture Trustee is
required to make distributions to the Class A Noteholders, which shall be the
25th day of each month, commencing in the month following the Closing Date or,
if such day is not a Business Day, then on the succeeding Business Day.
"Percentage Interest": As to any Class A Note that
percentage, expressed as a fraction, the numerator of which is the Class A
Principal Balance of such Class A Note as of the related Cut-Off Date and the
denominator of which is the Original Class A Principal Balance of all Class A
Notes; and as to any Certificate, that Percentage Interest set forth on such
Certificate.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Policy": The financial guaranty insurance policy dated
November 20, 1997, issued by the Insurer to the Indenture Trustee for the
benefit of the Noteholders.
"Policy Claim Amount": With respect to any Payment Date,
an amount equal to the related Available Funds Shortfall plus the related
Preference Amount.
"Pool Balance": With respect to any date, the Principal
Balances of the Mortgage Loans as of such date.
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"Pool Factor": A seven-digit decimal which the Indenture
Trustee shall compute monthly expressing the Class A Principal Balance as of
each Payment Date (after giving effect to any distribution of principal on such
Payment Date) as a proportion of the Original Class A Principal Balance. On
the Closing Date, the Pool Factor will be 1.0000000. Thereafter, the Pool
Factor shall decline to reflect reductions in the related Class A Principal
Balance resulting from distributions of principal to the Class A Notes.
"Predecessor Note" means, with respect to any particular
Note, every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any
Note authenticated and delivered under Section 2.4 in lieu of a mutilated,
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Preference Amount": As defined in the Policy.
"Pre-Funded Amount": With respect to any Determination
Date, the amount on deposit in the Pre-Funding Account.
"Pre-Funded Mortgage Loans": Subsequent Mortgage Loans
assigned to the Trust in consideration of amounts released to the Originators
from the Pre-Funding Account.
"Pre-Funding Account": The Pre-Funding Account established
in accordance with Section 8.3 hereof and maintained by the Indenture Trustee.
"Pre-Funding Earnings": With respect to any Payment Date,
the actual investment earnings then on deposit in the Pre-Funding Account.
"Pre-Funding Period": The period commencing on the Closing
Date and ending on the earliest to occur of (i) the date on which the amount on
deposit in the Pre-Funding Account (exclusive of any investment earnings) is
less than $100,000, (ii) the date on which a Rapid Amortization Event occurs
and (iii) February 20, 1998.
"Pre-Funding Transfer Date": Any Subsequent Transfer Date
on which Pre-Funded Mortgage Loans are assigned to the Trust.
"Premium Amount": As to any Payment Date, the product of
(x) one-twelfth of the Premium Percentage and (y) the Class A Principal Balance
on such Payment Date (before taking into account any distributions of the
Scheduled Principal Distribution Amount to be made on such Payment Date).
"Premium Percentage": As defined in the Insurance
Agreement.
"Prepaid Installment": With respect to any Mortgage Loan,
any installment of principal thereof and interest thereon received prior to the
scheduled due date for such installment, intended by the Mortgagor as an early
payment thereof and not as a Prepayment with respect to such Mortgage Loan.
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"Prepayment": Any payment of principal of a Mortgage Loan
which is received by the Master Servicer in advance of the scheduled due date
for the payment of such principal (other than the principal portion of any
Prepaid Installment), and the proceeds of any Insurance Policy which are to be
applied as a payment of principal on the related Mortgage Loan shall be deemed
to be Prepayments for all purposes of this Agreement.
"Prepayment Interest Shortfall": With respect to any
Remittance Period, for each Mortgage Loan that was the subject during the
related Remittance Period of a Prepayment, an amount equal to the excess, if
any, of (i) 30 days' interest on the Principal Balance of such Mortgage Loan as
of the first day of such Remittance Period at a per annum rate equal to the
Loan Rate (or at such lower rate as may be in effect for such Mortgage Loan
pursuant to application of the Civil Relief Act, any Deficient Valuation and/or
any Debt Service Reduction) minus the Servicing Fee over (ii) the amount of
interest actually remitted by the Mortgagor in connection with such Prepayment
less the Servicing Fee for such Mortgage Loan in such month.
"Preservation Expenses": Expenditures made by the Master
Servicer or any Sub-Servicer in connection with a foreclosed Mortgage Loan
prior to the liquidation thereof, including, without limitation, expenditures
for real estate property taxes, hazard insurance premiums, property restoration
or preservation.
"Prime": The Prime rate of interest charged from time to
time as set forth in the related Credit Line Agreement.
"Principal and Interest Account": Collectively, each
principal and interest account created by the Master Servicer or any
Sub-Servicer pursuant to Section 4.8(a) of the Sale and Servicing Agreement.
"Principal Balance": As to any Mortgage Loan, other than a
Liquidated Mortgage Loan, and as of any date, the related Cut-Off Date
Principal Balance, plus (i) any Additional Balance in respect of such Mortgage
Loan, minus (ii) all collections credited as principal against the Principal
Balance of any such Mortgage Loan in accordance with the related Credit Line
Agreement prior to such day. For purposes of this definition, a Liquidated
Mortgage Loan shall be deemed to have a Principal Balance of zero as of the
first day of the Remittance Period following the Remittance Period in which
such Mortgage Loan becomes a Liquidated Mortgage Loan and at all times
thereafter.
"Principal Collections": As to any Payment Date, the sum
of all payments by or on behalf of Mortgagors and any other amounts
constituting principal (including, but not limited to, and Substitution Amounts
any portion of Insurance Proceeds or Net Liquidation Proceeds allocable to
principal of the applicable Mortgage Loan, but excluding Foreclosure Profits)
collected by the Master Servicer under the Mortgage Loans during the related
Remittance Period. The terms of the related Credit Line Agreement shall
determine the portion of each payment in respect of a Mortgage Loan that
constitutes principal or interest.
"Principal Remittance Amount": As of any Remittance Date,
the sum, without duplication, of (i) the principal actually collected by the
Master Servicer with respect to
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Mortgage Loans during the related Remittance Period, (ii) the Principal Balance
of each such Mortgage Loan that either was repurchased by the Originators or
purchased by the Master Servicer on such Remittance Date, to the extent such
Principal Balance was actually deposited in the Principal and Interest Account,
(iii) any Substitution Amounts delivered by the Originators in connection with
a substitution of a Mortgage Loan, to the extent such Substitution Amounts were
actually deposited in the Principal and Interest Account on such Remittance
Date, and (iv) all Net Liquidation Proceeds actually collected by the Master
Servicer with respect to the Mortgage Loans during the related Remittance
Period (to the extent such Liquidation Proceeds related to principal).
"Proceeding" means any suit in equity, action at law or
other judicial or administrative proceeding.
"Prospectus": That certain Prospectus dated October 30,
1997 naming Advanta Mortgage Conduit Services, Inc. and Advanta Mortgage Corp.
USA as registrants and describing certain mortgage loan asset-backed securities
to be issued from time to time as described in related Prospectus Supplements.
"Prospectus Supplement": That certain Prospectus
Supplement dated November 14, 1997, describing the Class A Notes issued by the
Trust.
"Purchase Agreement" means the Mortgage Loan Purchase
Agreement dated as of November 1, 1997 between the Originators and the Sponsor
with respect to the Mortgage Loans.
"Rapid Amortization Commencement Date": The earlier of (i)
the Payment Date in December, 2000, and (ii) the Payment Date next succeeding
the Remittance Period in which a Rapid Amortization Event is deemed to occur
pursuant to Section 12.1.
"Rapid Amortization Event": As defined in Section 12.1.
"Rapid Amortization Period": The period which follows the
earlier to occur of (x) the end of the Managed Amortization Period and (y) the
occurrence of a Rapid Amortization Event.
"Rating Agency" means Moody's and Standard & Poor's. If
such agency or a successor is no longer in existence, "Rating Agency" shall be
such statistical credit rating agency, or other comparable Person, designated
by the Sponsor and the Insurer, notice of which designation shall be given to
the Indenture Trustee. References herein to the highest short term unsecured
rating category of a Rating Agency shall means A1+ or better in the case of
Standard & Poor's and P1 or better in the case of Xxxxx'x, and in the case of
any other Rating Agency shall mean the ratings such other Rating Agency deems
equivalent to the foregoing ratings. References herein to the highest
long-term rating category of a Rating Agency shall mean "AAA" in the case of
Standard & Poor's and "Aaa" in the case of Xxxxx'x, and in the case of any
other Rating Agency, the rating such other Rating Agency deems equivalent to
the foregoing ratings.
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"Realized Loss": As to any Liquidated Mortgage Loan, the
amount, if any, by which the Principal Balance thereof as of the date of
liquidation is in excess of Net Liquidation Proceeds realized thereon.
"Record Date": With respect to each Payment Date, the last
Business Day of the calendar month immediately preceding the calendar month in
which such Payment Date occurs.
"Redemption Date" means, in the case of a redemption of the
Notes pursuant to Section 10.1(a), the Payment Date specified by the Master
Servicer or the Issuer pursuant to Section 10.2(a).
"Redemption Price" means, in the case of a redemption of
the Notes pursuant to Section 10.1(a), an amount equal to the unpaid principal
amount of the then outstanding principal amount of each class of Notes being
redeemed plus accrued and unpaid interest thereon to but excluding the
Redemption Date.
"Reference Bank Rate" shall be determined on the basis of
the rates at which deposits in U.S. Dollars are offered by the reference banks
(which shall be three major banks that are engaged in transactions in the
London interbank market, selected by the Sponsor after consultation with the
Indenture Trustee) as of 11:00 A.M., London time, on the day that is two LIBOR
Business Days prior to the immediately preceding Payment Date to prime banks in
the London interbank market for a period of one month in amounts approximately
equal to the principal amount of the Class A Notes then outstanding. The
Indenture Trustee will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the arithmetic mean of the
quotations. If on such date fewer than two quotations are provided as
requested, the rate will be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by the Sponsor after consultation
with the Indenture Trustee, as of 11:00 A.M., New York City time, on such date
for loans in U.S. Dollars to leading European banks for a period of one month
in amounts approximately equal to the principal amount of the Class A Notes
then outstanding. If no such quotations can be obtained, the rate will be
LIBOR for the prior Payment Date.
"Reference Banks": Bankers Trust Company, Xxxxxxx'x Bank
PLC, The Bank of Tokyo and National Westminster Bank PLC; provided that if any
of the foregoing banks are not suitable to serve as a Reference Bank, then any
leading banks selected by the Indenture Trustee which are engaged in
transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, (ii) not controlling,
under the control of or under common control with the Originators or any
affiliate thereof, (iii) whose quotations appear on the Telerate Screen Page
3750 on the relevant Interest Determination Date and (iv) which have been
designated as such by the Indenture Trustee.
"Registration Statement": The Registration Statement filed
by the Sponsor with the Securities and Exchange Commission, including all
amendments thereto and including the Prospectus and the Prospectus Supplement
relating to the Class A Notes constituting a part thereof.
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"Reimbursement Amount": As of any Payment Date, the sum of
(x)(i) all payments made pursuant to the Policy previously received by the
Indenture Trustee and all Preference Amounts previously paid to the Indenture
Trustee by the Insurer and in each case not previously repaid to the Insurer
pursuant to Section 8.6(b)(viii) hereof plus (ii) interest accrued on each such
payment made pursuant to the Policy not previously repaid calculated at the
Late Payment Rate from the date the Indenture Trustee received the related
payment made pursuant to the Policy and (y)(i) any amounts then due and owing
to the Insurer under the Insurance Agreement plus (ii) interest on such amounts
at the Late Payment Rate. The Insurer shall notify the Indenture Trustee and
the Sponsor of the amount of any Reimbursement Amount.
"Relief Act Shortfall": With respect to any Remittance
Period, for any Mortgage Loan as to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Remittance
Period as a result of the application of the Civil Relief Act, the amount, if
any, by which (i) interest collectible on such Mortgage Loan during the most
recently ended calendar month is less than (ii) the sum of (a) one month's
interest on the Principal Balance of such Mortgage Loan at the rate equal to
the sum of the Class A Interest Rate, the rate at which the Indenture Trustee's
Fee is calculated and the Premium Percentage, plus (b) the aggregate Servicing
Fee for such Mortgage Loan payable to the Master Servicer in such calendar
month.
"Remittance Date": Any date on which the Master Servicer
is required to remit monies on deposit in the Principal and Interest Account to
the Indenture Trustee, which shall be the 18th day or, if such day is not a
Business Day, the next preceding Business Day, of each month, commencing in the
month following the month in which the Closing Date occurs.
"Remittance Period": As to any Payment Date, the calendar
month preceding the month of such Payment Date.
"REO Property": A Mortgaged Property acquired by the
Master Servicer or any Sub-Servicer on behalf of the Trust through foreclosure
or deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
"Replacement Cut-Off Date": With respect to any Qualified
Replacement Mortgage, the first day of the calendar month in which such
Qualified Replacement Mortgage is conveyed to the Trust.
"Representation Letter" shall mean letters to, or
agreements with, the Depository to effectuate a book entry system with respect
to the Class A Notes registered in the Register under the nominee name of the
Depository.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of November 1, 1997, among the Issuer, the Sponsor, the
Master Servicer and the Indenture Trustee, as the same may be amended or
supplemented from time to time.
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"Schedule of Mortgage Loans": The Schedule of Mortgage
Loans, attached hereto as Schedule II, as it may be further supplemented in
connection with Subsequent Transfers.
"Scheduled Principal Distribution Amount": On any Payment
Date during the Managed Amortization Period, the excess (but in no event less
than zero) of (x) the lesser of (i) the Maximum Principal Payment and (ii) the
Net Principal Collections over (y) the Step-Down Amount, if any, with respect
to such Payment Date. Beginning with the first Payment Date in the Rapid
Amortization Period, the excess of (x) the Maximum Principal Payment over (y)
the Step-Down Amount, if any, with respect to such Payment Date.
"Second Mortgage Loan": A Mortgage Loan which constitutes
a second priority mortgage lien with respect to the related Mortgaged Property.
"Securities Act": The Securities Act of 1933, as amended.
"Servicing Advance": As defined in the Sale and Servicing
Agreement.
"Servicing Fee": With respect to any Payment Date, the
product of (i) one-twelfth of the Servicing Fee Rate and (ii) the aggregate
Principal Balance of the Mortgage Loans on the first day of the Remittance
Period preceding such Payment Date (or at the Cut-Off Date with respect to the
first Payment Date).
"Servicing Fee Rate": 0.50% per annum.
"Specified Overcollateralization Amount": As defined in
the Insurance Agreement.
"Sponsor": Advanta Mortgage Conduit Services, Inc., a
Delaware Corporation.
"Standard & Poor's": Standard & Poor's Rating Group, a
division of The McGraw Hill Companies.
"Step-Down Amount": As of any Payment Date, the lesser of
(x) the Maximum Step-Down Amount for such Payment Date and (y) the Maximum
Principal Payment or the Net Principal Collections as applicable to such
Payment Date; provided, that for any Payment Date on which the Specified
Overcollateralization Amount exceeds the Overcollateralization Amount, the
Step-Down Amount shall be reduced (but not below zero) by the amount of any
such excess.
"Subsequent Cut-Off Date": With respect to any Subsequent
Mortgage Loan, the opening of business on the first day of the calendar month
in which the related Subsequent Transfer Date occurs.
"Subsequent Mortgage Loans" As defined in the Sale and
Servicing Agreement.
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"Subsequent Transfer Agreement": Each Subsequent Transfer
Agreement dated as of a Subsequent Transfer Date executed by the Indenture
Trustee and the Sponsor substantially in the form of Exhibit L of the Sale and
Servicing Agreement, by which Subsequent Mortgage Loans are assigned to the
Trust.
"Subsequent Transfer Date": The date specified in each
Subsequent Transfer Agreement, which must, with respect to any Payment Date, be
a date occurring during the calendar month in which such Payment Date occurs,
at least [five Business Days] prior to the Remittance Date occurring in such
month.
"Substitution Amount": In connection with the delivery of
any Qualified Replacement Mortgage, if the outstanding principal amount of such
Qualified Replacement Mortgage as of the applicable Replacement Cut-Off Date is
less than the Principal Balance of the Mortgage Loan being replaced as of such
Replacement Cut-Off Date, an amount equal to such difference together with
accrued and unpaid interest on such amount calculated at the Loan Rate net of
the Servicing Fee, if any, of the Mortgage Loan being replaced.
"Telerate Screen Page 3750": The display designated as
page 3750 on the Telerate Service (or such other page as may replace page 3750
on that service for the purpose of displaying London interbank offered rates of
major banks).
"Termination Date" means the latest of (i) the termination
of the Policy and the return of the Policy to the Insurer for cancellation,
(ii) the date on which the Insurer shall have received payment and performance
of all Insurer Issuer Secured Obligations and (iii) the date on which the
Indenture Trustee shall have received payment and performance of all Indenture
Trustee Issuer Secured Obligations.
"Trust": Advanta Revolving Home Equity Loan Trust 1997-A.
"Trust Agreement": The Trust Agreement dated as of
November 1, 1997 between the Issuer and the Sponsor.
"Trust Collateral Value": As of any Payment Date, the sum
of (i) the Pool Balance at the end of the prior calendar month, (ii) the
aggregate Principal Balances as of the related Cut-Off Dates of all Subsequent
Mortgage Loans previously assigned to the Trust during the calendar month in
which such Payment Date occurs and (iii) the amounts, if any, on deposit in the
Pre-Funding Account at the close of business on such Payment Date.
"Trust Estate": Collectively, all money, instruments and
other property, to the extent such money, instruments and other property are
subject or intended to be held in trust, and in the subtrusts, for the benefit
of the Class A Noteholders and the Insurer, including all proceeds thereof
including, without limitation, (i) the Initial Mortgage Loans, Qualified
Replacement Mortgages and Subsequent Mortgage Loans, (ii) such amounts,
including Eligible Investments, as from time to time may be held in all
Accounts (except as otherwise provided herein), (iii) any Mortgaged Property,
the Class A Noteholdership of which has been effected on behalf of the Trust as
a result of foreclosure or acceptance by the Master Servicer or any
Sub-Servicer of a
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deed in lieu of foreclosure and that has not been withdrawn from the Trust,
(iv) any Insurance Policies relating to the Mortgage Loans and any rights of
the Trust and the Originators under any Insurance Policies, (v) Net Liquidation
Proceeds with respect to any Liquidated Mortgage Loan, (vi) the Insurance
Policy, (vii) such amounts held in the Capitalized Interest Account, and (viii)
such amounts held in the Pre-Funding Account, the Principal and Interest
Account and the Note Account.
"Trust Indenture Act" or "TIA" means the Trust Indenture
Act of 1939, as amended and as in force on the date hereof, unless otherwise
specifically provided.
"UCC" means, unless the context otherwise requires, the
Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended
from time to time.
"Underwriter": X.X. Xxxxxx Securities Inc.
"Unpaid Class A Note Interest Shortfall": As of any
Payment Date, the amount, if any, by which (x) the Class A Interest
Distribution Amount for the prior Payment Date, plus the Unpaid Class A Note
Interest Shortfall, if any, with respect to such prior Payment Date, exceeded
(y) the amount actually distributed to the Noteholders pursuant to Section
8.6(b)(iv) on such prior Payment Date.
Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to them in the Sale and Servicing
Agreement or the Trust Agreement.
SECTION 1.2. Incorporation by Reference of the Trust
Indenture Act. Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"Indenture Trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer.
All other TIA terms used in this Indenture that are defined
by the TIA, or defined by Commission rule have the meaning assigned to them by
such definitions.
SECTION 1.3. Rules of Construction. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
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(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation; and
(v) words in the singular include the plural and words
in the plural include the singular.
SECTION 1.4. Action by or Consent of Noteholders.
Whenever any provision of this Agreement refers to action to be taken, or
consented to, by Noteholders, such provision shall be deemed to refer to the
Noteholder of record as of the Record Date immediately preceding the date on
which such action is to be taken, or consent given, by Noteholders. Solely for
the purposes of any action to be taken, or consented to, by Noteholders, any
Note registered in the name of Headlands Mortgage Company or any Affiliate
thereof shall be deemed not to be outstanding; provided, however, that, solely
for the purpose of determining whether the Indenture Trustee or the Owner
Trustee is entitled to rely upon any such action or consent, only Notes which
the Owner Trustee or the Indenture Trustee, respectively, knows to be so owned
shall be so disregarded.
SECTION 1.5. Conflict with TIA. If any provision
hereof limits, qualifies or conflicts with a provision of the TIA that is
required under the TIA to be part of and govern this Indenture, the latter
provision shall control and all provisions required by the TIA are hereby
incorporated by reference. If any provision of this Indenture modifies or
excludes any provision of the TIA that may be so modified or excluded, the
latter provisions shall be deemed to apply to this Indenture as so modified or
to be excluded, as the case may be.
ARTICLE II.
The Notes
SECTION 2.1. Form. The Class A Notes, together
with the Indenture Trustee's certificate of authentication, shall be in
substantially the form set forth in Exhibit A, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
Each Note shall be dated the date of its authentication.
The terms of the Note set forth in Exhibit A are part of the terms of this
Indenture.
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SECTION 2.2. Execution, Authentication and Delivery.
The Notes shall be executed on behalf of the Issuer by any of its Authorized
Officers. The signature of any such Authorized Officer on the Notes may be
original or facsimile.
Notes bearing the original or facsimile signature of
individuals who were at any time Authorized Officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of such Notes.
The Indenture Trustee, upon receipt of a written Issuer
Order, shall authenticate and deliver Class A Notes for original issue in an
aggregate principal amount of $100,000,000. The Class A Notes outstanding at
any time may not exceed such amounts except as provided in Section 2.6.
Each Note shall be dated the date of its authentication.
The Notes shall be issuable as registered Notes in the minimum denomination of
$1000 and in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears
attached to such Note a certificate of authentication substantially in the form
provided for herein executed by the Indenture Trustee by the manual signature
of one of its authorized signatories, and such certificate attached to any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder. Subject to Section 2.11, the Notes
shall be Book-Entry Notes.
SECTION 2.3. Registration; Registration of Transfer
and Exchange. The Issuer shall cause to be kept a register (the "Note
Register") in which, subject to such reasonable regulations as it may
prescribe, the Issuer shall provide for the registration of Notes and the
registration of transfers of Notes. The Indenture Trustee shall be "Note
Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Note Registrar, the Issuer shall
promptly appoint a successor or, if it elects not to make such an appointment,
assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed
by the Issuer as Note Registrar, the Issuer will give the Indenture Trustee
prompt written notice of the appointment of such Note Registrar and of the
location, and any change in the location, of the Note Register, and the
Indenture Trustee shall have the right to inspect the Note Register at all
reasonable times and to obtain copies thereof. The Indenture Trustee shall
have the right to rely upon a certificate executed on behalf of the Note
Registrar by an Authorized Officer thereof as to the names and addresses of the
Holders of the Notes and the principal amounts and number of such Notes.
Upon surrender for registration or transfer of any Note at
the office or agency of the Issuer to be maintained as provided in Section 3.2,
and if the requirements of Section 8-401(1) of the UCC are met, the Issuer
shall execute or cause the Indenture Trustee to authenticate one or more new
Notes, in any authorized denominations, of the same class and a
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like aggregate principal amount. A Noteholder may also obtain from the
Indenture Trustee, in the name of the designated transferee or transferees one
or more new Notes, in any authorized denominations, of the same class and a
like aggregate principal amount. Such requirements shall not be deemed to
create a duty in the Indenture Trustee to monitor the compliance by the Issuer
with Section 8-401 of the UCC.
At the option of the Holder, Notes may be exchanged for
other Notes in any authorized denominations, of the same class and a like
aggregate principal amount, upon surrender of the Notes to be exchanged at such
office or agency. Whenever any Notes are so surrendered for exchange, and if
the requirements of Section 8-401(1) of the UCC are met, the Issuer shall
execute and upon its request the Indenture Trustee shall authenticate the Notes
which the Noteholder making the exchange is entitled to receive. Such
requirements shall not be deemed to create a duty in the Indenture Trustee to
monitor the compliance by the Issuer with Section 8-401 of the UCC.
All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of
transfer or exchange shall be (i) duly endorsed by, or be accompanied by a
written instrument of transfer in the form attached to Exhibit A, duly executed
by the Holder thereof or such Xxxxxx's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar all in accordance with the Exchange Act,
and (ii) accompanied by such other documents as the Note Registrar may require.
No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Note Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.4 or 9.6 not
involving any transfer.
Any Noteholder using the assets of (i) an employee benefit
plan (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) that is subject to the provisions of Title I of
ERISA, (ii) a plan described in Section 4975(e)(1) of the Internal Revenue Code
of 1986, as amended, or (iii) any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity to purchase the Notes, or
to whom the Notes are transferred, will be deemed to have represented that the
acquisition and continued holding of the Notes will be covered by a U.S.
Department of Labor Class Exemption.
SECTION 2.4. Mutilated, Destroyed, Lost or Stolen
Notes. If (i) any mutilated Note is surrendered to the Note Registrar, or the
Note Registrar receives evidence to its satisfaction of the destruction, loss
or theft of any Note, and (ii) there is delivered to the Indenture Trustee and
the Insurer such security or indemnity as may be required by it to hold the
Issuer, the Indenture Trustee and the Insurer harmless, then, in the absence of
notice to the
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Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, and provided that the requirements of
Section 8-405 of the UCC are met, the Issuer shall execute and upon its request
the Indenture Trustee shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note
(such requirement shall not be deemed to create a duty in the Indenture Trustee
to monitor the compliance by the Issuer with Section 8-405); provided, however,
that if any such destroyed, lost or stolen Note, but not a mutilated Note,
shall have become or within seven days shall be due and payable, or shall have
been called for redemption, the Issuer may, instead of issuing a replacement
Note, direct the Indenture Trustee, in writing, to pay such destroyed, lost or
stolen Note when so due or payable or upon the Redemption Date without
surrender thereof. If, after the delivery of such replacement Note or payment
of a destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the
Issuer, the Indenture Trustee and the Insurer shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred
by the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this
Section, the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.5. Persons Deemed Owners. Prior to due
presentment for registration of transfer of any Note, the Issuer, the Indenture
Trustee and the Insurer and any agent of the Issuer, the Indenture Trustee and
the Insurer may treat the Person in whose name any Note is registered (as of
the related Record Date) as the owner of such Note for the purpose of receiving
payments of principal of and interest, if any on such Note and for all other
purposes whatsoever, whether or not such Note be overdue, and none of the
Issuer, the Insurer, the Indenture Trustee nor any agent of the Issuer, the
Insurer or the Indenture Trustee shall be affected by notice to the contrary.
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SECTION 2.6. Payment of Principal and Interest;
Defaulted Interest. (a) The Notes shall accrue interest as provided herein,
and such amount shall be due and payable on each Payment Date as specified
herein. Any installment of interest or principal, if any, payable on any Note
which is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall be paid to the Person in whose name such Note (or one or
more Predecessor Notes) is registered on the Record Date, by check mailed
first-class, postage prepaid, to such Person's address as it appears on the
Note Register on such Record Date, except that, unless Definitive Notes have
been issued pursuant to Section 2.11, with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a Payment
Date or on the Final Scheduled Payment Date (and except for the Redemption
Price for any Note called for redemption pursuant to Section 10.1(a)) which
shall be payable as provided below. The funds represented by any such checks
returned undelivered shall be held in accordance with Section 3.3.
(b) Upon written notice from the Issuer, the Indenture
Trustee shall notify the Person in whose name a Note is registered at the close
of business on the Record Date preceding the Payment Date on which the Issuer
expects that the final installment of principal of and interest on such Note
will be paid. Such notice shall be mailed or transmitted by facsimile prior to
such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed
to Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on
the Notes, the Issuer shall pay defaulted interest (plus interest on such
defaulted interest to the extent lawful) at the applicable Interest Rate to the
extent lawful. The Issuer may pay such defaulted interest to the Persons who
are Noteholders on a subsequent special record date, which date shall be at
least five Business Days prior to the payment date. The Issuer shall fix or
cause to be fixed any such special record date and payment date, and, at least
15 days before any such special record date, the Issuer shall mail to each
Noteholder and the Indenture Trustee a notice that states the special record
date, the payment date and the amount of defaulted interest to be paid.
(d) Promptly following the date on which all principal of
and interest on the Notes has been paid in full and the Notes have been
surrendered to the Indenture Trustee, the Indenture Trustee shall, upon written
notice from the Master Servicer of the amounts, if any, that the Insurer has
paid in respect of the Notes under the Policy or otherwise which has not been
reimbursed to it, deliver such surrendered Notes to the Insurer to the extent
not previously cancelled or destroyed.
SECTION 2.7. Cancellation. Subject to Section 2.6(d), all
Notes surrendered for payment, registration of transfer, exchange or redemption
shall, if surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly canceled by the
Indenture Trustee. Subject to Section 2.6(d), the Issuer may at any time
deliver
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to the Indenture Trustee for cancellation any Notes previously authenticated
and delivered hereunder which the Issuer may have acquired in any manner
whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange
for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. Subject to Section 2.6(d), all canceled Notes may
be held or disposed of by the Indenture Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer shall
direct by an Issuer Order that they be destroyed or returned to it; provided
that such Issuer Order is timely and the Notes have not been previously
disposed of by the Indenture Trustee.
SECTION 2.8. Release of Collateral. The Indenture Trustee
shall, on or after the Termination Date, release any remaining portion of the
Trust Estate from the lien created by this Indenture and deposit in the Note
Account any funds then on deposit in any other Account. The Indenture Trustee
shall release property from the lien created by this Indenture pursuant to this
Section 2.8 only upon receipt of an Issuer Request by it accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA Section 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.1.
SECTION 2.9. Book-Entry Notes. The Notes, upon original
issuance, will be issued in the form of typewritten Notes representing the
Book-Entry Notes, to be delivered to The Depository Trust Company or its
custodian, the initial Clearing Agency, by, or on behalf of, the Issuer. Such
Notes shall initially be registered on the Note Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Note Owner will receive
a Definitive Note representing such Note Owner's interest in such Note, except
as provided in Section 2.11. Unless and until definitive, fully registered
Notes (the "Definitive Notes") have been issued to Note Owners pursuant to
Section 2.11:
(i) the provisions of this Section shall be in full force
and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the
sole Holder of the Notes, and shall have no obligation to the Note
Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions
of this Section shall control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Note Owners and the Clearing Agency
and/or the Clearing Agency Participants. Unless and until Definitive
Notes are issued pursuant to Section 2.11, the initial Clearing Agency
will make book-entry transfers among the Clearing Agency Participants
and receive and
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transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants;
(v) whenever this Indenture requires or permits actions
to be taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to
such effect from Note Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in the Notes and has delivered such instructions
to the Indenture Trustee; and
(vi) Note Owners may receive copies of any reports sent to
Noteholders pursuant to this Indenture, upon written request, together
with a certification that they are Note Owners and payment of
reproduction and postage expenses associated with the distribution of
such reports, from the Indenture Trustee at the Corporate Trust
Office.
SECTION 2.10. Notices to Clearing Agency. Whenever a notice
or other communication to the Noteholders is required under this Indenture,
unless and until Definitive Notes shall have been issued to Note Owners
pursuant to Section 2.11, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to the Note Owners.
SECTION 2.11. Definitive Notes. If (i) the Master Servicer
advises the Indenture Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Notes, and the Master Servicer is unable to locate a qualified successor, (ii)
the Master Servicer at its option advises the Indenture Trustee in writing that
it elects to terminate the book-entry system through the Clearing Agency or
(iii) after the occurrence of a Rapid Amortization Event, Note Owners
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Notes advise the Indenture Trustee through the
Clearing Agency in writing that the continuation of a book entry system through
the Clearing Agency is no longer in the best interests of the Note Owners, then
the Clearing Agency shall notify all Note Owners and the Indenture Trustee of
the occurrence of any such event and of the availability of Definitive Notes to
Note Owners requesting the same. Upon surrender to the Indenture Trustee of
the typewritten Note or Notes representing the Book-Entry Notes by the Clearing
Agency, accompanied by registration instructions, the Issuer shall execute and
the Indenture Trustee shall authenticate the Definitive Notes in accordance
with the instructions of the Clearing Agency. None of the Issuer, the Note
Registrar or the Indenture Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Notes, the
Indenture Trustee shall recognize the Holders of the Definitive Notes as
Noteholders.
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ARTICLE III.
Covenants
SECTION 3.1. Payment of Principal and Interest. The Issuer
will duly and punctually pay the principal of and interest on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting
the foregoing, the Issuer will cause to be distributed all amounts on deposit
in the Note Account on a Payment Date deposited therein pursuant to the Sale
and Servicing Agreement for the benefit of the Class A Notes, to Class A
Noteholders. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.2. Maintenance of Office or Agency. The Issuer
will maintain in Irvine, California, an office or agency where Notes may be
surrendered for registration, transfer or exchange of the Notes, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer will give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office, and
the Issuer hereby appoints the Indenture Trustee as its agent to receive all
such surrenders, notices and demands.
SECTION 3.3. Money for Payments to be Held in Trust. The
Issuer will cause each Note Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee and the Insurer an instrument in
which such Note Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Note Paying Agent, it hereby so agrees), subject to
the provisions of this Section, that such Note Paying Agent will:
(i) hold all sums held by it for the payment of amounts
due with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee written notice of any
default by the Issuer (or any other obligor upon the Notes) of which
it has actual knowledge in the making of any payment required to be
made with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Note
Paying Agent;
(iv) immediately resign as a Note Paying Agent and
forthwith pay to the Indenture Trustee all sums held by it in trust
for the payment of Notes if at any time it
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ceases to meet the standards required to be met by a Note Paying Agent
at the time of its appointment; and
(v) comply with all requirements of the Code with respect
to the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Note Paying Agent to pay to the Indenture Trustee all
sums held in trust by such Note Paying Agent, such sums to be held by the
Indenture Trustee upon the same trusts as those upon which the sums were held
by such Note Paying Agent; and upon such a payment by any Note Paying Agent to
the Indenture Trustee, such Note Paying Agent shall be released from all
further liability with respect to such money.
Subject to applicable laws with respect to the escheat of
funds, any money held by the Indenture Trustee or any Note Paying Agent in
trust for the payment of any amount due with respect to any Note and remaining
unclaimed for two years after such amount has become due and payable shall be
discharged from such trust and be paid to the Issuer on Issuer Request, and
shall be deposited by the Indenture Trustee in the Note Account; and the Holder
of such Note shall thereafter, as an unsecured general creditor, look only to
the Issuer for payment thereof (but only to the extent of the amounts so paid
to the Issuer), and all liability of the Indenture Trustee or such Note Paying
Agent with respect to such trust money shall thereupon cease.
SECTION 3.4. Existence. Except as otherwise permitted by
the provisions of Section 3.10, the Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Trust Estate, the Notes, and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5. Protection of Trust Estate. The Issuer
intends the security interest granted pursuant to this Indenture in favor of
the Issuer Secured Parties to be prior to all other liens in respect of the
Trust Estate, and the Issuer shall take all actions necessary to obtain and
maintain, in favor of the Indenture Trustee, for the benefit of the Issuer
Secured Parties, a first lien on and a first priority, perfected security
interest in the Trust Estate. The Issuer will from time to time prepare (or
shall cause to be prepared), execute and deliver all such supplements and
amendments hereto and all such financing statements, continuation statements,
instruments of further assurance and other instruments, and will take such
other action necessary or advisable to:
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(i) Grant more effectively all or any portion of the
Trust Estate;
(ii) maintain or preserve the lien and security interest
(and the priority thereof) in favor of the Indenture Trustee for the
benefit of the Issuer Secured Parties created by this Indenture or
carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee in such Trust Estate against the
claims of all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon
the Trust Estate when due.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Indenture Trustee pursuant to this Section;
provided that, such designation shall not be deemed to create a duty in the
Indenture Trustee or the Indenture Trustee to monitor the compliance of the
Issuer with respect to its duties under this Section 3.5 or the adequacy of any
financing statement, continuation statement or other instrument prepared by the
Issuer.
SECTION 3.6. Opinions as to Trust Estate. (a) On the
Closing Date, the Issuer shall furnish to the Indenture Trustee and the Insurer
an Opinion of Counsel stating that, in the opinion of such counsel, such
actions have been taken with respect to the recording and filing of this
Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the first priority lien and security interest in favor of the
Indenture Trustee, for the benefit of the Issuer Secured Parties, created by
this Indenture.
(b) Within 90 days after the beginning of each calendar
year, beginning with the first calendar year beginning more than six months
after the Closing Date, the Issuer shall furnish to the Indenture Trustee and
the Insurer, an Opinion of Counsel either stating that, in the opinion of such
counsel, such actions have been taken with respect to the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and with respect to the execution and filing
of any financing statements and continuation statements as are necessary to
maintain the lien and security interest created by this Indenture and reciting
the details of such action or stating that in the opinion of such counsel, no
such action is necessary to maintain such lien and security interest. Such
Opinion of Counsel shall also describe the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and the execution and filing of any financing statements
and continuation statements that will, in the opinion of such counsel, be
required to maintain the lien and security interest of this Indenture.
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SECTION 3.7. Performance of Obligations; Servicing of
Mortgage Loans. (a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Estate or that would result in
the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or agreement,
except as ordered by any bankruptcy or other court or as expressly provided in
this Indenture, the Operative Documents or such other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable
to the Insurer to assist it in performing its duties under this Indenture, and
any performance of such duties by a Person identified to the Indenture Trustee
and the Insurer in an Officer's Certificate of the Issuer shall be deemed to be
action taken by the Issuer. Initially, the Issuer has contracted with the
Master Servicer to assist the Issuer in performing its duties under this
Indenture.
(c) The Issuer will punctually perform and observe all of
its obligations and agreements contained in this Indenture, the Operative
Documents and in the instruments and agreements included in the Trust Estate,
including, but not limited, to preparing (or causing to be prepared) and filing
(or causing to be filed) all UCC financing statements and continuation
statements required to be filed by the terms of this Indenture and the Sale and
Servicing Agreement in accordance with and within the time periods provided for
herein and therein. Except as otherwise expressly provided therein, the Issuer
shall not waive, amend, modify, supplement or terminate any Operative Document
or any provision thereof without the consent of the Indenture Trustee, the
Insurer or the Holders of at least a majority of the Outstanding Amount of the
Notes.
(d) If an Authorized Officer of the Owner Trustee shall
have actual knowledge of the occurrence of an Event of Servicing Termination
under the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee, the Insurer and the Rating Agencies thereof in accordance
with Section 11.4, and shall specify in such notice the action, if any, the
Issuer is taking in respect of such default. If an Event of Servicing
Termination shall arise from the failure of the Master Servicer to perform any
of its duties or obligations under the Sale and Servicing Agreement with
respect to the Mortgage Loans, the Issuer shall take all reasonable steps
available to it to remedy such failure.
(e) The Issuer agrees that it will not waive timely
performance or observance by the Master Servicer or the Sponsor of their
respective duties under the Operative Documents (x) without the prior consent
of the Insurer or (y) if the effect thereof would adversely affect the Holders
of the Notes.
SECTION 3.8. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or
the Operative Documents, sell, transfer, exchange or otherwise dispose
of any of the properties or assets
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of the Issuer, including those included in the Trust Estate, without
the consent of the Insurer (which consent may not be unreasonably
withheld; provided, that if an Insurer Default has occurred and is
continuing, the Noteholders representing 66-2/3% of the Noteholders
may direct the Indenture Trustee to sell or dispose of the Trust
Estate if the Indenture Trustee receives the Liquidation Price, as
described in Section 12.1.
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien in favor of the Indenture
Trustee created by this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (B)
permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be
created on or extend to or otherwise arise upon or burden the Trust
Estate or any part thereof or any interest therein or the proceeds
thereof (other than tax liens, mechanics' liens and other liens that
arise by operation of law, in each case on a Mortgaged Property and
arising solely as a result of an action or omission of the related
Mortgagor), (C) permit the lien of this Indenture not to constitute a
valid first priority (other than with respect to any such tax,
mechanics' or other lien) security interest in the Trust Estate or (D)
amend, modify or fail to comply with the provisions of the Operative
Documents without the prior written consent of the Insurer, which
consent may not be unreasonably withheld.
SECTION 3.9. Annual Statement as to Compliance. The Issuer
will deliver to the Indenture Trustee and the Insurer, within 90 days after the
end of each fiscal year of the Issuer (commencing with the fiscal year ended
December 31, 1997), and otherwise in compliance with the requirements of TIA
Section 314(a)(4) an Officer's Certificate stating, as to the Authorized
Officer signing such Officer's Certificate, that
(i) a review of the activities of the Issuer during such
year and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
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SECTION 3.10. Issuer May Not Consolidate or Transfer
Assets. (a) The Issuer may not consolidate or merge with or into any other
Person.
(b) Except as otherwise provided in the Sale and
Servicing Agreement, the Issuer shall not convey or transfer all or
substantially all of its properties or assets, including those included in the
Trust Estate, to any Person.
SECTION 3.11. No Other Business. The Issuer shall not
engage in any business other than purchasing, owning, selling and managing the
Mortgage Loans and other assets in the manner contemplated by this Indenture
and the Operative Documents and activities incidental thereto.
SECTION 3.12. No Borrowing. The Issuer shall not issue,
incur, assume, guarantee or otherwise become liable, directly or indirectly,
for any Indebtedness except for (i) the Notes, (ii) obligations owing from time
to time to the Insurer under the Insurance Agreement and (iii) any other
Indebtedness permitted by or arising under the Operative Documents. The
proceeds of the Notes shall be used exclusively to fund the Issuer's purchase
of the Mortgage Loans and the other assets specified in the Sale and Servicing
Agreement, to fund the Pre-Funding Account and the Capitalized Interest Account
and to pay the Issuer's organizational, transactional and start-up expenses.
SECTION 3.13. Guarantees, Loans, Advances and Other
Liabilities. Except as contemplated by the Sale and Servicing Agreement or this
Indenture, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become continently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or make
any capital contribution to, any other Person.
SECTION 3.14. Capital Expenditures. The Issuer shall not
make any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty).
SECTION 3.15. Compliance with Laws. The Issuer shall comply
with the requirements of all applicable laws, the non-compliance with which
would, individually or in the aggregate, materially and adversely affect the
ability of the Issuer to perform its obligations under the Notes, this
Indenture or any Operative Document.
SECTION 3.16. Restricted Payments. The Issuer shall not,
directly or indirectly, (i) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Owner Trustee or any owner of a beneficial interest
in the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Master Servicer, (ii) redeem, purchase,
retire or otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Issuer may
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make, or cause to be made, distributions to the Master Servicer, the Owner
Trustee, the Indenture Trustee and the Certificateholders as permitted by, and
to the extent funds are available for such purpose under, the Sale and
Servicing Agreement, this Indenture, or Trust Agreement. The Issuer will not,
directly or indirectly, make payments to or distributions from the Note Account
except in accordance with this Indenture and the Operative Documents.
SECTION 3.17. Notice of Rapid Amortization Events and
Events of Servicing Termination. Upon a Responsible Officer of the Owner
Trustee having actual knowledge thereof, the Issuer agrees to give the
Indenture Trustee, the Insurer and the Rating Agencies prompt written notice of
each Rapid Amortization Event hereunder or Event of Servicing Termination under
the Sale and Servicing Agreement.
SECTION 3.18. Further Instruments and Acts. Upon request of
the Indenture Trustee or the Insurer, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 3.19. Amendments of Sale and Servicing Agreement
and Trust Agreement. The Issuer shall not agree to any amendment to Section
9.01 of the Sale and Servicing Agreement or Section 11.1 of the Trust Agreement
to eliminate the requirements thereunder that the Indenture Trustee, the
Insurer or the Holders of the Notes consent to amendments thereto as provided
therein.
SECTION 3.20. Income Tax Characterization. For purposes of
federal income, state and local income and franchise and any other income
taxes, the Issuer will treat the Notes as indebtedness of the Sponsor and
hereby instructs the Indenture Trustee to treat the Notes as indebtedness of
the Sponsor for federal and state tax reporting purposes.
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ARTICLE IV.
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture. Upon
payment in full of the Notes, this Indenture shall cease to be of further
effect with respect to the Notes except as to (i) rights of registration of
transfer and exchange, (ii) substitution of mutilated, destroyed, lost or
stolen Notes, (iii) rights of Noteholders to receive payments of principal
thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12,
3.13 and 3.20, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.7 and the obligations of the Indenture Trustee under Section 4.2) and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on written demand in the form of an Issuer Order and at the
expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen and
that have been replaced or paid as provided in Section 2.4 and (ii)
Notes for which payment money has theretofore been deposited in trust
or segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section 3.3)
have been delivered to the Indenture Trustee for cancellation and the
Policy has terminated and been returned to the Insurer for
cancellation and all amounts owing to the Insurer have been paid in
full; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their
respective Final Scheduled Payment Dates within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Indenture Trustee
for the giving of notice of redemption by the Indenture
Trustee in the name, and at the expense, of the Issuer,
and in the case of (i), (ii) or (iii) above
(A) the Issuer, has irrevocably deposited or caused to be
irrevocably deposited with the Indenture Trustee cash or direct obligations of
or obligations guaranteed by the United States of America (which will mature
prior to the date such amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such Notes
not theretofore delivered to the Indenture Trustee for cancellation when due on
the Final
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Scheduled Payment Date or Redemption Date (if Notes shall have been called for
redemption pursuant to Section 10.1(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all Insurer
Issuer Secured Obligations and all Indenture Trustee Issuer Secured
Obligations; and
(C) the Issuer has delivered to the Indenture Trustee
and the Insurer an Officer's Certificate, an Opinion of Counsel and if required
by the TIA, the Indenture Trustee or the Insurer an Independent Certificate
from a firm of certified public accountants, each meeting the applicable
requirements of Section 11.1(a) and each stating that all conditions precedent
herein provided relating to the satisfaction and discharge of this Indenture
have been complied with.
SECTION 4.2. Application of Trust Money. All monies
deposited with the Indenture Trustee pursuant to Section 4.1 hereof shall be
held in trust and applied by it, in accordance with the provisions of the Notes
and this Indenture, to the payment, either directly or through any Note Paying
Agent, as the Indenture Trustee may determine, to the Holders of the particular
Notes for the payment or redemption of which such monies have been deposited
with the Indenture Trustee, of all sums due and to become due thereon for
principal and interest.
SECTION 4.3. Repayment of Monies Held by Note Paying
Agent. In connection with the satisfaction and discharge of this Indenture with
respect to the Notes, all monies then held by any Note Paying Agent other than
the Indenture Trustee under the provisions of this Indenture with respect to
such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee
to be held and applied according to Section 3.3 and thereupon such Note Paying
Agent shall be released from all further liability with respect to such monies.
ARTICLE V.
Remedies
SECTION 5.1. Rights Upon a Rapid Amortization Event. If a
Rapid Amortization Event as described in Article XII shall have occurred and be
continuing, the Rapid Amortization Period shall immediately commence and the
Class A Noteholders shall be entitled on each Payment Date to an amount equal
to the Maximum Principal Payment. The rights contained in this Article V are
in addition to any rights which the Noteholders possess pursuant to Article
XII.
SECTION 5.2. Limitation of Suits. No Holder of any Note
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to
the Indenture Trustee of a continuing Rapid Amortization Event;
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(ii) the Holders of not less than 25% of the Outstanding
Amount of the Notes have made written request to the Indenture Trustee
to institute such proceeding in respect of such Rapid Amortization
Event in its own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee indemnity reasonably satisfactory to it against the costs,
expenses and liabilities to be incurred in complying with such
request;
(iv) the Indenture Trustee for 60 days after its receipt
of such notice, request and offer of indemnity has failed to institute
such proceedings;
(v) no direction inconsistent with such written request
has been given to the Indenture Trustee during such 60-day period by
the Holders of a majority of the Outstanding Amount of the Notes; and
(vi) an Insurer Default shall have occurred and be
continuing;
it being understood and intended that no Holders of Notes shall have any right
in any manner whatsoever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holders of
Notes or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the manner
herein provided.
In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Outstanding Amount of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.3. Unconditional Rights of Noteholders To
Receive Principal and Interest. Notwithstanding any other provisions in this
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note
or in this Indenture (or, in the case of redemption, on or after the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder.
SECTION 5.4. Restoration of Rights and Remedies. If the
Controlling Party or any Noteholder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, then and in every such case the
Issuer, the Indenture Trustee and the Noteholders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Noteholders shall continue as though no such
proceeding had been instituted.
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SECTION 5.5. Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Controlling Party or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.6. Delay or Omission Not a Waiver. No delay or
omission of the Indenture Trustee, Controlling Party or any Holder of any Note
to exercise any right or remedy accruing upon any Default or Rapid Amortization
Event shall impair any such right or remedy or constitute a waiver of any such
Default or Rapid Amortization Event or an acquiescence therein. Every right
and remedy given by this Article V or by law to the Indenture Trustee or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.7. Control by Noteholders. If the Indenture
Trustee is the Controlling Party, the Holders of a majority of the Outstanding
Amount of the Notes, with the consent of the Insurer, shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee pursuant to Section 12.1 with respect to the
Notes or exercising any trust or power conferred on the Indenture Trustee;
provided that
(i) such direction shall not be in conflict with any rule
of law or with this Indenture;
(ii) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not inconsistent with
such direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to
such action.
SECTION 5.8. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Note by such Xxxxxx's acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Indenture Trustee for any action taken,
suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to (a) any suit
instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Notes or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on
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any Note on or after the respective due dates expressed in such Note and in
this Indenture (or, in the case of redemption, on or after the Redemption
Date).
SECTION 5.9. Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance
of this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Indenture Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 5.10. Action on Notes. The Indenture Trustee's
right to seek and recover judgment on the Notes or under this Indenture shall
not be affected by the seeking, obtaining or application of any other relief
under or with respect to this Indenture. Neither the lien of this Indenture nor
any rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Trust Estate or upon any of the assets of the Issuer.
SECTION 5.11. Performance and Enforcement of Certain
Obligations. (a) Promptly following a request from the Indenture Trustee to do
so and at the Master Servicer's expense, the Issuer agrees to take all such
lawful action as the Indenture Trustee may request to compel or secure the
performance and observance by the Sponsor and the Master Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement in accordance with the terms thereof, and
to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Sponsor or
the Master Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Sponsor or the
Master Servicer of each of their obligations under the Sale and Servicing
Agreement.
(b) If the Indenture Trustee is a Controlling Party and
if a Rapid Amortization Event has occurred and is continuing, the Indenture
Trustee may, and, at the written direction of the Holders of 66-2/3% of the
Outstanding Amount of the Notes shall, exercise all rights, remedies, powers,
privileges and claims of the Issuer against the Sponsor or the Master Servicer
under or in connection with the Sale and Servicing Agreement, including the
right or power to take any action to compel or secure performance or observance
by the Sponsor or the Master Servicer of each of their obligations to the
Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Sale and Servicing Agreement, and any
right of the Issuer to take such action shall be suspended.
SECTION 5.12. Subrogation. The Indenture Trustee shall
receive as attorney-in-fact of each Noteholder any Policy Claim Amount from the
Insurer. Any and all Policy Claim
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Amounts disbursed by the Indenture Trustee from claims made under the Policy
shall not be considered payment by the Trust, and shall not discharge the
obligations of the Trust with respect thereto. The Insurer shall, to the
extent it makes any payment with respect to the Notes, become subrogated to the
rights of the recipient of such payments to the extent of such payments.
Subject to and conditioned upon any payment with respect to the Notes by or on
behalf of the Insurer, the Indenture Trustee shall assign to the Insurer all
rights to the payment of interest or principal with respect to the Notes which
are then due for payment to the extent of all payments made by the Insurer, and
the Insurer may exercise any option, vote right, power or the like with respect
to the Notes to the extent that it has made payment pursuant to the Policy.
SECTION 5.13. Preference Claims. (a) In the event that the
Indenture Trustee has received a certified copy of an order of the appropriate
court that any payment on a Note has been avoided in whole or in part as a
preference payment under applicable bankruptcy law, the Indenture Trustee shall
so notify the Insurer, shall comply with the provisions of the Policy to obtain
payment by the Insurer of such avoided payment, and shall, at the time it
provides notice to the Insurer, notify Holders of the Notes by mail that, in
the event that any Noteholder's payment is so recoverable, such Noteholder will
be entitled to payment pursuant to the terms of the Policy. The Indenture
Trustee shall furnish to the Insurer at its written request, the requested
records it holds in its possession evidencing the payments of principal of and
interest on Notes, if any, which have been made by the Indenture Trustee and
subsequently recovered from Noteholders, and the dates on which such payments
were made. Pursuant to the terms of the Policy, the Insurer will make such
payment on behalf of the Noteholder to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Final Order (as
defined in the Policy) and not to the Indenture Trustee or any Noteholder
directly.
(b) The Indenture Trustee shall promptly notify the
Insurer of any proceeding or the institution of any action (of which the
Indenture Trustee has actual knowledge) seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership, rehabilitation
or similar law (a "Preference Claim") of any distribution made with respect to
the Notes. Each Holder, by its purchase of Notes, and the Indenture Trustee
hereby agree that so long as an Insurer Default shall not have occurred and be
continuing, the Insurer may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim including, without limitation, (i) the direction of any appeal
of any order relating to any Preference Claim and (ii) the posting of any
surety, supersedes or performance bond pending any such appeal at the expense
of the Insurer, but subject to reimbursement as provided in the Insurance
Agreement. In addition, and without limitation of the foregoing, as set forth
in Section 5.12, the Insurer shall be subrogated to, and each Noteholder and
the Indenture Trustee hereby delegate and assign, to the fullest extent
permitted by law, the rights of the Indenture Trustee and each Noteholder in
the conduct of any proceeding with respect to a Preference Claim, including,
without limitation, all rights of any party to an adversary proceeding action
with respect to any court order issued in connection with any such Preference
Claim.
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ARTICLE VI.
The Indenture Trustee
SECTION 6.1. Duties of Indenture Trustee. (a) If a Rapid
Amortization Event has occurred and is continuing, the Indenture Trustee shall
exercise the rights and powers vested in it by this Indenture and the Operative
Documents and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs; provided, however, that if the Indenture Trustee is
acting as Master Servicer, it shall use the same degree of care and skill as is
required of the Master Servicer under the Sale and Servicing Agreement.
(b) Except during the continuance of a Rapid Amortization
Event:
(i) The Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into
this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; however, the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform on their face to the
requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer unless
it is proved that the Indenture Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 5.11;
and
(iv) the Indenture Trustee shall not be charged with
knowledge of any failure by the Master Servicer to comply with the
obligations of the Master Servicer referred to in clauses (i) and (ii)
of Section 5.1 of the Sale and Servicing Agreement unless a
Responsible Officer of the Indenture Trustee at the Corporate Trust
Office obtains actual knowledge of such failure or occurrence or the
Indenture Trustee receives written notice of such failure or
occurrence from the Master Servicer, the Insurer or the Holders of
Notes evidencing Voting Rights aggregating not less than 51%.
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(d) The Indenture Trustee shall not be liable for
interest on any money received by it except as the Indenture Trustee may agree
in writing with the Issuer.
(e) No provision of this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers, if it shall have reasonable grounds to believe
that repayment of such funds or indemnity reasonably satisfactory to it against
such risk or liability is not reasonably assured to it.
(f) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Indenture
Trustee shall be subject to the provisions of this Section and to the
provisions of the TIA.
(g) The Indenture Trustee shall, upon two Business Days'
prior written notice to the Indenture Trustee, permit any representative of the
Insurer, during the Indenture Trustee's normal business hours, to examine all
books of account, records, reports and other papers of the Indenture Trustee
relating to the Notes, to make copies and extracts therefrom and to discuss the
Indenture Trustee's affairs and actions, as such affairs and actions relate to
the Indenture Trustee's duties with respect to the Notes, with the Indenture
Trustee's officers and employees responsible for carrying out the Indenture
Trustee's duties with respect to the Notes.
(h) The Indenture Trustee shall, and hereby agrees that
it will, perform all of the obligations and duties required of it under the
Sale and Servicing Agreement.
(i) The Indenture Trustee shall, and hereby agrees that
it will, hold the Policy in trust, and will hold any proceeds of any claim on
the Policy in trust solely for the use and benefit of the Noteholders.
(j) In no event shall Bankers Trust Company of
California, N.A., in any of its capacities hereunder, be deemed to have assumed
any duties of the Owner Trustee under the Delaware Business Trust Statute,
common law, or the Trust Agreement.
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SECTION 6.2. Rights of Indenture Trustee. (a) The
Indenture Trustee may rely on any document reasonably believed by it to be
genuine and to have been signed or presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from
acting, it may require an Officer's Certificate or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee.
(d) The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers; provided, however, that the
Indenture Trustee's conduct does not constitute willful misconduct, negligence
or bad faith.
(e) The Indenture Trustee may consult with counsel, and
the advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Indenture Trustee shall be under no obligation to
institute, conduct or defend any litigation under this Indenture or in relation
to this Indenture, at the request, order or direction of any of the Holders of
Notes or the Controlling Party, pursuant to the provisions of this Indenture,
unless such Holders of Notes or the Controlling Party shall have offered to the
Indenture Trustee reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby; provided, however,
that the Indenture Trustee shall, upon the occurrence of a Rapid Amortization
Event or Event of Servicing Termination as defined in the Sale and Servicing
Agreement (that has not been cured or waived), exercise the rights and powers
vested in it by this Indenture or the Sale and Servicing Agreement with
reasonable care and skill.
(g) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by the Insurer or by the Holders of Notes evidencing not less than 25% of the
Outstanding Amount thereof; provided, however, that if the payment within a
reasonable time to the Indenture Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture or the
Sale and Servicing Agreement, the Indenture Trustee may require indemnity
reasonably satisfactory to it
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against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person making
such request, or, if paid by the Indenture Trustee shall be reimbursed by the
Person making such request upon demand.
(h) The Indenture Trustee shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer until such time as, and only to the extent
that, the Indenture Trustee may be required to act as Master Servicer.
SECTION 6.3. Individual Rights of Indenture Trustee. The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any Note
Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Indenture Trustee must comply with Sections
6.11 and 6.12.
SECTION 6.4. Indenture Trustee's Disclaimer. The Indenture
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, the Trust Estate or the Notes, it shall
not be accountable for the Issuer's use of the proceeds from the Notes, and it
shall not be responsible for any statement of the Issuer in the Indenture or in
any document issued in connection with the sale of the Notes or in the Notes
other than the Indenture Trustee's certificate of authentication.
SECTION 6.5. Notice of Defaults. If a Rapid Amortization
Event or an Event of Servicing Termination occurs and is continuing and if it
is either known by, or written notice of the existence thereof has been
delivered to, a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail to each Noteholder and to the Insurer of such event within
10 days after such knowledge or notice occurs. Except in the case of a Default
in payment of principal of or interest on any Note, the Indenture Trustee may
withhold the notice if and so long as a committee of its Responsible Officers
in good faith determines that withholding the notice is in the interests of
Noteholders.
SECTION 6.6. Reports by Indenture Trustee to Holders. Upon
written request, the Note Paying Agent or the Master Servicer shall on behalf
of the Issuer deliver to each Noteholder such information as may be reasonably
required to enable such Holder to prepare its Federal and state income tax
returns required by law.
SECTION 6.7. Compensation and Indemnity. (a) Pursuant to
Section 8.6 and subject to Section 6.18 herein, the Issuer shall, or shall
cause the Master Servicer to, pay to the Indenture Trustee from time to time
compensation for its services. The Indenture Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Issuer shall or shall cause the Master Servicer to reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Indenture Trustee's agents,
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counsel, accountants and experts. The Issuer shall or shall cause the Master
Servicer to indemnify the Indenture Trustee and its respective officers,
directors, employees and agents against any and all loss, liability or expense
(including attorneys' fees and expenses) incurred by each of them in connection
with the acceptance or the administration of this trust and the performance of
its duties hereunder. The Indenture Trustee shall notify the Issuer and the
Master Servicer promptly of any claim for which it may seek indemnity. Failure
by the Indenture Trustee to so notify the Issuer and the Master Servicer shall
not relieve the Issuer of its obligations hereunder or the Master Servicer of
its obligations under Article VIII of the Sale and Servicing Agreement. The
Issuer shall or shall cause the Master Servicer to defend the claim, the
Indenture Trustee may have separate counsel and the Issuer shall or shall cause
the Master Servicer to pay the fees and expenses of such counsel. Neither the
Issuer nor the Master Servicer need reimburse any expense or indemnify against
any loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith. The
indemnification provided in this Section 6.7(a) shall survive the discharge or
termination of this Indenture and the resignation or removal of the Indenture
Trustee.
(b) The Issuer's payment obligations to the Indenture
Trustee pursuant to this Section shall survive the discharge of this Indenture.
Notwithstanding anything else set forth in this Indenture or the Operative
Documents, the Indenture Trustee agrees that the obligations of the Issuer (but
not the Master Servicer) to the Indenture Trustee hereunder and under the
Operative Documents shall be recourse to the Trust Estate only and specifically
shall not be recourse to the assets of the Issuer or any Securityholder. In
addition, the Indenture Trustee agrees that its recourse to the Issuer, the
Trust Estate, the Sponsor and amounts held in the Spread Account, the Deferred
Interest Account, and the Funding Account shall be limited to the right to
receive the distributions referred to herein.
SECTION 6.8. Replacement of Indenture Trustee. The
Indenture Trustee may resign at any time by so notifying the Issuer and the
Insurer by written notice. Upon receiving such notice of resignation, the
Issuer shall promptly appoint a successor Indenture Trustee (approved in
writing by the Insurer, so long as such approval is not unreasonably withheld)
by written instrument, in duplicate, one copy of such instrument shall be
delivered to the resigning Indenture Trustee (who shall deliver a copy to the
Master Servicer) and one copy to the successor Trustee; provided, however, that
any such successor Xxxxxxxxx Trustee shall be subject to the prior written
approval of the Master Servicer, which approval shall not be unreasonably
withheld. The Issuer may and, at the request of the Insurer shall, remove the
Indenture Trustee, if:
(i) the Indenture Trustee fails to comply with Section
6.11;
(ii) a court having jurisdiction in the premises in
respect of the Indenture Trustee in an involuntary case or proceeding
under federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, shall have entered a decree or order
granting relief or appointing a receiver, liquidator, assignee,
custodian, trustee, conservator, sequestrator (or similar official)
for the Indenture Trustee or for any substantial part of the Indenture
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Trustee's property, or ordering the winding-up or liquidation of the
Indenture Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy
laws, as now or hereafter in effect, or another present or future
federal or state bankruptcy, insolvency or similar law is commenced
with respect to the Indenture Trustee and such case is not dismissed
within 60 days;
(iv) the Indenture Trustee commences a voluntary case
under any federal or state banking or bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or consents to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, conservator, sequestrator (or other
similar official) for the Indenture Trustee or for any substantial
part of the Indenture Trustee's property, or makes any assignment for
the benefit of creditors or fails generally to pay its debts as such
debts become due or takes any corporate action in furtherance of any
of the foregoing; or
(v) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee acceptable to the
Insurer. If the Issuer fails to appoint such a successor Indenture Trustee,
the Insurer may appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, to the Insurer
and to the Issuer. Thereupon the resignation or removal of the retiring
Indenture Trustee shall become effective, and the successor Indenture Trustee
shall have all the rights, powers and duties of the retiring Indenture Trustee
under this Indenture. The successor Indenture Trustee shall mail a notice of
its succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
If a successor Indenture Trustee does not take office within
30 days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the Issuer or the Holders of a majority in
Outstanding Amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee acceptable to
the Insurer.
If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee
acceptable to the Insurer.
Any resignation or removal of the Indenture Trustee and
appointment of a successor Indenture Trustee pursuant to any of the provisions
of this Section shall not become effective until acceptance of appointment by
the successor Indenture Trustee pursuant to Section 6.8 and payment of all fees
and expenses owed to the outgoing Indenture Trustee.
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Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section, the Issuer's and the Master Servicer's indemnity
obligations under Section 6.7 shall continue for the benefit of the retiring
Indenture Trustee and the Master Servicer shall pay any amounts owing to the
Indenture Trustee.
SECTION 6.9. Successor Indenture Trustee by Xxxxxx. If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been authenticated
but not delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.
SECTION 6.10. Appointment of Co-Indenture Trustee or
Separate Indenture Trustee. (a) Notwithstanding any other provisions of this
Indenture, at any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Trust may at the time be located, the
Indenture Trustee with the consent of the Insurer shall have the power and may
execute and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Noteholders, such title to the Trust, or any part
hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.11 and no notice to Noteholders of the appointment of any co-trustee or
separate trustee shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Indenture Trustee shall be conferred or imposed
upon and exercised or performed by the Indenture Trustee and such
separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular
act or acts are to be performed the Indenture Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any
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portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder,
including acts or omissions of predecessor or successor trustees; and
(iii) the Indenture Trustee and the Master Servicer acting
jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee except that following the occurrence of
an Event of Servicing Termination, the Indenture Trustee acting alone
may accept the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article VI. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Every such instrument
shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, dissolve, become insolvent, become incapable
of acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Indenture Trustee, to
the extent permitted by law, without the appointment of a new or successor
trustee.
(e) The Master Servicer shall be responsible for the fees
of any co-trustee or separate trustee appointed hereunder.
SECTION 6.11. Eligibility: Disqualification. The Indenture
Trustee shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. The Indenture Trustee shall provide copies of such reports to the
Insurer upon request. The Indenture Trustee shall comply with TIA Section
310(b), including the optional provision permitted by the second sentence of
TIA Section 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities of the Issuer are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against
Issuer. The Indenture Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in
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TIA Section 311(b). An Indenture Trustee who has resigned or been removed shall
be subject to TIA Section 311(a) to the extent indicated.
SECTION 6.13. Appointment and Powers. Subject to the terms
and conditions hereof, each of the Issuer Secured Parties hereby appoints
Bankers Trust Company of California, N.A. as the Indenture Trustee with respect
to the Collateral, and Bankers Trust Company of California, N.A. xxxxxx accepts
such appointment and agrees to act as Indenture Trustee with respect to the
Trust Estate for the Issuer Secured Parties, to maintain custody and possession
of such Trust Estate (except as otherwise provided hereunder) and to perform
the other duties of the Indenture Trustee in accordance with the provisions of
this Indenture and the other Operative Documents. Each Issuer Secured Party
hereby authorizes the Indenture Trustee to take such action on its behalf, and
to exercise such rights, remedies, powers and privileges hereunder, as the
Controlling Party may direct and as are specifically authorized to be exercised
by the Indenture Trustee by the terms hereof, together with such actions,
rights, remedies, powers and privileges as are reasonably incidental thereto.
The Indenture Trustee shall act upon and in compliance with the written
instructions of the Controlling Party delivered pursuant to this Indenture
promptly following receipt of such written instructions; provided that the
Indenture Trustee shall not act in accordance with any instructions (i) which
are not authorized by, or in violation of the provisions of, this Indenture or
(ii) for which the Indenture Trustee has not received reasonable indemnity.
Receipt of such instructions shall not be a condition to the exercise by the
Indenture Trustee of its express duties hereunder, except where this Indenture
provides that the Indenture Trustee is permitted to act only following and in
accordance with such instructions.
SECTION 6.14. Performance of Duties. The Indenture Trustee
shall have no duties or responsibilities except those expressly set forth in
this Indenture and the other Operative Documents to which the Indenture Trustee
is a party or as directed by the Controlling Party in accordance with this
Indenture. The Indenture Trustee shall not be required to take any
discretionary actions hereunder except at the written direction and with the
indemnification of the Controlling Party. The Indenture Trustee shall, and
hereby agrees that it will, perform all of the duties and obligations required
of it under the Sale and Servicing Agreement.
SECTION 6.15. Limitation on Liability. Neither the
Indenture Trustee nor any of its directors, officers, employees and agents
shall be liable for any action taken or omitted to be taken by it or them
hereunder, or in connection herewith, except that the Indenture Trustee shall
be liable for its negligence, bad faith or willful misconduct; nor shall the
Indenture Trustee be responsible for the validity, effectiveness, value,
sufficiency or enforceability against the Issuer of this Indenture or any of
the Trust Estate (or any part thereof).
SECTION 6.16. Reliance Upon Documents. In the absence of
negligence, bad faith or willful misconduct on its part, the Indenture Trustee
shall be entitled to rely on any communication, instrument, paper or other
document reasonably believed by it to be genuine and correct and to have been
signed or sent by the proper Person or Persons and shall have no liability in
acting, or omitting to act, where such action or omission to act is in
reasonable reliance upon any statement or opinion contained in any such
document or instrument.
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SECTION 6.17. Representations and Warranties of the
Indenture Trustee. The Indenture Trustee represents and warrants to the Issuer
and to each Issuer Secured Party as follows:
(a) Due Organization. The Indenture Trustee is a
national banking association, duly organized, validly existing and in good
standing under the laws of the United States and is duly authorized and
licensed under applicable law to conduct its business as presently conducted.
(b) Corporate Power. The Indenture Trustee has all
requisite right, power and authority to execute and deliver this Indenture and
to perform all of its duties as the Indenture Trustee hereunder.
(c) Due Authorization. The execution and delivery by the
Indenture Trustee of this Indenture and the other Operative Documents to which
it is a party, and the performance by the Indenture Trustee of its duties
hereunder and thereunder, have been duly authorized by all necessary corporate
proceedings, are required for the valid execution and delivery by the Indenture
Trustee, or the performance by the Indenture Trustee, of this Indenture and
such other Operative Documents.
(d) Xxxxx and Binding Indenture. The Indenture Trustee
has duly executed and delivered this Indenture and each other Operative
Document to which it is a party, and each of this Indenture and each such other
Operative Document constitutes the legal, valid and binding obligation of the
Indenture Trustee, enforceable against the Indenture Trustee in accordance with
its terms, except as (i) such enforceability may be limited by bankruptcy,
insolvency, reorganization and similar laws relating to or affecting the
enforcement of creditors' rights generally and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability.
SECTION 6.18. Waiver of Setoffs. The Indenture Trustee
hereby expressly waives any and all rights of setoff that the Indenture Trustee
may otherwise at any time have under applicable law with respect to any Account
and agrees that amounts in the Accounts shall at all times be held and applied
solely in accordance with the provisions hereof.
SECTION 6.19. Control by the Controlling Party. The
Indenture Trustee shall comply with notices and instructions given by the
Issuer only if accompanied by the written consent of the Controlling Party.
SECTION 6.20. Trustee May Enforce Claims Without Possession
of Notes. All rights of action and claims under this Agreement or the Notes may
be prosecuted and enforced by the Indenture Trustee without the possession of
any of the Notes or the production thereof in any proceeding relating thereto,
and such proceeding instituted by the Indenture Trustee shall be brought in its
own name or in its capacity as Indenture Trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursement and advances of the Indenture Trustee, its agents and
counsel, be for the ratable benefit of the Noteholders in respect of which such
judgment has been recovered.
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SECTION 6.21. Suits for Enforcement. In case an Event of
Servicing Termination or other default by the Master Servicer or the Sponsor
hereunder shall occur and be continuing, the Indenture Trustee, if the
Controlling Party (and if not the Controlling Party, with the consent of the
Insurer), may proceed to protect and enforce its rights and the rights of the
Noteholders under this Agreement by a suit, action or proceeding in equity or
at law or otherwise, whether for the specific performance of any covenant or
agreement contained in this Agreement or in aid of the execution of any power
granted in this Agreement or for the enforcement of any other legal, equitable
or other remedy, as the Indenture Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Indenture
Trustee and the Noteholders.
SECTION 6.22. Mortgagor Claims. In connection with any
offset defenses, or affirmative claim for recovery, asserted in legal actions
brought by Mortgagors under one or more Mortgage Loans based upon provisions
therein or upon other rights or remedies arising from any requirements of law
applicable to the Mortgage Loans:
(a) The Indenture Trustee is the holder of the Mortgage
Loans only as trustee on behalf of the holders of the Notes, and not as a
principal or in any individual or personal capacity.
(b) The Indenture Trustee shall not be personally liable
for, or obligated to pay Mortgagors, any affirmative claims asserted thereby,
or responsible to holders of the Notes for any offset defense amounts applied
against Mortgage Loan payments, pursuant to such legal actions.
(c) The Indenture Trustee will pay, solely from available
Trust money, affirmative claims for recovery by Xxxxxxxxxx only pursuant to
final judicial orders or judgments, or judicially-approved settlement
agreements, resulting from such legal actions.
(d) The Indenture Trustee will comply with judicial
orders and judgments which require its actions or cooperation in connection
with Xxxxxxxxxx' legal actions to recover affirmative claims against holders of
the Notes.
(e) The Indenture Trustee will cooperate with and assist
the Master Servicer, the Sponsor, or holders of the Notes in their defense of
legal actions by Xxxxxxxxxx to recover affirmative claims if such cooperation
and assistance is not contrary to the interests of the Indenture Trustee as a
party to such legal actions and if the Indenture Trustee is satisfactorily
indemnified for all liability, costs and expenses arising therefrom.
(f) The Issuer hereby agrees to cause the Master Servicer
to indemnify, hold harmless and defend the Indenture Trustee from and against
any and all liability, loss, costs and expenses of the Indenture Trustee
resulting from any affirmative claims for recovery asserted or collected by
Xxxxxxxxxx under the Mortgage Loans.
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ARTICLE VII.
Noteholders' Lists and Reports
SECTION 7.1. Issuer To Furnish To Indenture Trustee Names
and Addresses of Noteholders. The Issuer will furnish or cause to be furnished
to the Indenture Trustee (a) not more than five days after the earlier of (i)
each Record Date and (ii) three months after the last Record Date, a list, in
such form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished. The Indenture Trustee or, if the Indenture
Trustee is not the Note Registrar, the Issuer shall furnish to the Insurer or
the Issuer in writing upon their written request and at such other times as the
Insurer or the Issuer may request a copy of the list.
SECTION 7.2. Preservation of Information; Communications
to Noteholders. (a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders contained
in the most recent list furnished to the Indenture Trustee as provided in
Section 7.1 and the names and addresses of Holders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy
any list furnished to it as provided in such Section 7.1 upon receipt of a new
list so furnished.
(b) Noteholders may communicate pursuant to TIA Section
312(b) with other Noteholders with respect to their rights under this Indenture
or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note
Registrar shall have the protection of TIA Section 312(c).
SECTION 7.3. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission, copies of
the annual reports and copies of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe)
which the Issuer may be required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the 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
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information, documents and reports required to be filed by the Issuer
pursuant to clauses (i) and (ii) of this Section 7.3(a) as may be
required by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal
year of the Issuer shall end on December 31 of each year.
SECTION 7.4. Reports by Indenture Trustee. If required by
TIA Section 313(a), within 60 days after each August 31, beginning with August
31, 1998, the Indenture Trustee shall mail to each Noteholder as required by
TIA Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Indenture Trustee also shall comply with TIA Section
313(b).
A copy of each report at the time of its mailing to
Noteholders shall be filed by the Indenture Trustee with the Commission and
each stock exchange, if any, on which the Notes are listed. The Issuer shall
notify the Indenture Trustee if and when the Notes are listed on any stock
exchange.
ARTICLE VIII.
Payments and Statements to Noteholders and Certificateholders;
Accounts, Disbursements and Releases
SECTION 8.1. Collection of Money. Except as otherwise
expressly provided herein, the Indenture Trustee may demand payment or delivery
of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture and the Sale and Servicing Agreement. The Indenture Trustee shall
apply all such money received by it as provided in this Indenture and the Sale
and Servicing Agreement. Except as otherwise expressly provided in this
Indenture or in the Sale and Servicing Agreement, if any default occurs in the
making of any payment or performance under any agreement or instrument that is
part of the Trust Estate, the Indenture Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
SECTION 8.2. Release of Trust Estate. (a) Subject to
Section 8.11 and the payment of its fees and expenses pursuant to Section 6.7,
the Indenture Trustee may, and when required by the Issuer and the provisions
of this Indenture shall, execute instruments to release property from the lien
of this Indenture, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture or the Sale and Servicing
Agreement. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article VIII shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there
are no Notes outstanding and all sums due the Indenture Trustee pursuant to
Section 6.7 and to the Insurer pursuant to the
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Insurance Agreement have been paid, release any remaining portion of the Trust
Estate that secured the Notes from the lien of this Indenture and release to
the Issuer or any other Person entitled thereto any funds then on deposit in
the Accounts. The Indenture Trustee shall release property from the lien of
this Indenture pursuant to this Section 8.2(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA Section
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1.
SECTION 8.3. Establishment of Accounts. The Sponsor shall
cause to be established, and the Indenture Trustee shall maintain, at the
corporate trust office of the Indenture Trustee, a Note Account, a Pre-Funding
Account and a Capitalized Interest Account, each to be held by the Indenture
Trustee in the name of the Trust for the benefit of the Class A Noteholders and
the Insurer, as their interests may appear.
SECTION 8.4. The Policy. On each Determination Date the
Indenture Trustee shall determine with respect to the immediately following
Payment Date, the amount (the "Available Funds") to be on deposit in the Note
Account on such Payment Date, as described in Section 8.6(a) hereof (excluding
the amounts of any payments made pursuant to the Policy, the Indenture
Trustee's Fee, the Owner Trustee's Fee, the Servicing Fee and the Premium
Amount, but including amounts transferred from the Capitalized Interest Account
and the Pre-Funding Account).
(a) If (i) the Available Funds for such Payment Date are
not sufficient to pay the Class A Interest Distribution Amount and/or (ii)
following the application of all Available Funds, an Overcollateralization
Deficit would exist (either such event being an "Available Funds Shortfall"),
the Indenture Trustee shall complete a Notice in the form of Exhibit A to the
Policy and submit such notice to the Insurer no later than 12:00 noon New York
City time on the second Business Day preceding such Payment Date as a claim for
a payment in an amount equal to the aggregate Available Funds Shortfall.
(b) Upon receipt of payments made pursuant to the Policy
from the Insurer on behalf of Class A Noteholders, the Indenture Trustee shall
deposit such payments in the Note Account and shall distribute such payments,
or the proceeds thereof, in accordance with Section 8.6 hereof to the Class A
Noteholders.
(c) The Indenture Trustee shall (i) receive payments made
pursuant to the Policy as attorney-in-fact of each Class A Noteholder receiving
any Insured Payment from the Insurer and (ii) disburse such Insured Payment to
the Class A Noteholders as set forth in Section 8.6 hereof. The Insurer shall
be entitled to receive the related Reimbursement Amount pursuant to Section
8.6(b)(viii) hereof with respect to each Insured Payment made by the Insurer.
The Indenture Trustee hereby agrees on behalf of each Class A Noteholder and
the Trust for the benefit of the Insurer that it recognizes that to the extent
the Insurer makes payments made pursuant to the Policy, either directly or
indirectly (as by paying through the Indenture Trustee), to the Class A
Noteholders, the Insurer will be entitled to receive such related Reimbursement
Amount.
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SECTION 8.5. Pre-Funding Account and Capitalized Interest
Account. (a) On the Closing Date, the Indenture Trustee will deposit from the
proceeds of the sale of the Class A Notes, on behalf of the Class A Noteholders
and the Insurer, in the Pre-Funding Account, the Original Pre-Funded Amount and
in the Capitalized Interest Account, the Capitalized Interest Account Deposit.
(b) On each Pre-Funding Transfer Date, the Sponsor shall
instruct the Indenture Trustee to withdraw from the Pre-Funding Account and
release to the related Originator an amount equal to 100% of the Principal
Balance of the Pre-Funded Mortgage Loans transferred to the Trust on such
Pre-Funding Transfer Date upon satisfaction of the conditions set forth in
Section 2.4 of the Sale and Servicing Agreement with respect to such transfer.
(c) On the Payment Dates occurring in December, 1997,
January, 1998 and February, 1998, the Indenture Trustee shall transfer from the
Pre-Funding Account to the Note Account the Pre-Funding Earnings, if any,
applicable to each such Payment Date.
(d) On each Payment Date occurring during the Pre-Funding
Period, the Indenture Trustee shall transfer from the Capitalized Interest
Account to the Note Account the Capitalized Interest Requirement, if any, for
such Payment Dates.
On the Payment Date which immediately follows the end of the
Pre-Funding Period, and following any withdrawals from the Capitalized Interest
Account on such Payment Date, the Capitalized Interest Account shall be closed
and any remaining amount on deposit therein shall be paid to the related
Originator in proportion to their Originator's Interest (as set forth in the
report delivered to the Indenture Trustee pursuant to Section 4.8(d)(ii) of the
Sale and Servicing Agreement).
SECTION 8.6. Flow of Funds. (a) The Indenture Trustee
shall deposit to the Note Account, without duplication, upon receipt, (i) any
payments made pursuant to the Policy, (ii) the proceeds of any liquidation of
the assets of the Trust, the Monthly Remittance Amount remitted by the Master
Servicer or any Sub-Servicer, together with any Substitution Amounts, and any
Loan Purchase Price amounts received by the Indenture Trustee, (iii) on the
Payment Dates occurring in December, 1997, January, 1998 and February 1998, the
Pre-Funding Earnings transferred by the Indenture Trustee pursuant to Section
8.5(c) hereof, (iv) the Capitalized Interest Requirement to be transferred on
such Payment Dates from the Capitalized Interest Account, pursuant to Section
8.5(d) hereof and (v) the portion of the amount, if any, to be transferred on
such Payment Date from the Pre-Funding Account, pursuant to Section 8.6(b)(vi)
hereof.
(b) With respect to the Note Account, on each Payment
Date, the Indenture Trustee shall make the following allocations, disbursements
and transfers in the following order of priority, and each such allocation,
transfer and disbursement shall be treated as having occurred only after all
preceding allocations, transfers and disbursements have occurred:
(i) first, to the Indenture Trustee, the Indenture
Trustee's Fee then due and to the Owner Trustee, the Owner Trustee's
Fee then due;
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(ii) second, to each Originator, each Originator's
proportionate interest in the Originator's Current Amount, if any, for
such Payment Date;
(iii) third, from amounts then on deposit in the Account,
the Premium Amount to the Insurer for such Payment Date.
(iv) fourth, to the Class A Noteholders, the Class A
Interest Distribution Amount and the Unpaid Class A Note Interest
Shortfall, if any, for such Payment Date;
(v) fifth, to the Class A Noteholders, as a distribution
of principal, the Overcollateralization Deficit for such Payment Date;
(vi) sixth, if such Payment Date is the first Payment Date
following the end of the Pre-Funding Period, to the Class A
Noteholders as a distribution of principal any amount remaining in the
Pre-Funding Account (after taking into account all transfers of
Subsequent Mortgage Loans on or prior to such Payment Date);
(vii) seventh, to the Class A Noteholders as a distribution
of principal, the Scheduled Principal Distribution Amount for such
Payment Date;
(viii) eighth, to the Insurer, the Reimbursement Amount, if
any, then due to it;
(ix) ninth, to the Class A Noteholders as a distribution
of principal up to an amount equal to the Overcollateralization
Deficiency Amount (the "Accelerated Principal Payment");
(x) tenth, to the Master Servicer, reimbursement for
Servicing Advances to the extent not previously reimbursed and
reimbursement for Servicing Advances which have been deemed
Nonrecoverable Advances;
(xi) eleventh, to the Class A Noteholders, the amount of
any Net Funds Cap Carry-Forward Amount then due; and
(xii) twelfth, to the Certificateholders, which shall
initially be the Originators, any amount remaining on deposit in the
Note Account.
SECTION 8.7. Investment of Accounts. (a) So long as no
event described in Section 5.1(a) of the Sale and Servicing Agreement shall
have occurred and be continuing, and consistent with any requirements of the
Code, all or a portion of the Accounts held by the Indenture Trustee shall be
invested and reinvested by the Indenture Trustee in the name of the Indenture
Trustee for the benefit of the Class A Noteholders and the Insurer, as directed
in writing by the Master Servicer, in one or more Eligible Investments bearing
interest or sold at a discount. During the continuance of an event described
in Section 5.1(a) of the Sale and Servicing Agreement and following any removal
of the Master Servicer, the Insurer shall direct such investments. No
investment in any Account shall mature later than the Business Day immediately
preceding the next Payment Date.
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(b) If any amounts are needed for disbursement from any
Account held by the Indenture Trustee and sufficient uninvested funds are not
available to make such disbursement, the Indenture Trustee shall cause to be
sold or otherwise converted to cash a sufficient amount of the investments in
such Account. No investments will be liquidated prior to maturity unless the
proceeds thereof are needed for disbursement.
(c) The Indenture Trustee shall not in any way be held
liable by reason of any insufficiency in any Account held by the Indenture
Trustee resulting from any loss on any Eligible Investment included therein.
(d) The Indenture Trustee shall hold funds in the
Accounts held by the Indenture Trustee uninvested upon the occurrence of either
of the following events:
(i) the Master Servicer or the Insurer, as the case may
be, shall have failed to give investment directions to the Indenture
Trustee; or
(e) the Master Servicer or the Insurer, as the case may
be, shall have failed to give investment directions to the Indenture Trustee by
11:15 a.m. New York time (or such other time as may be agreed by the Master
Servicer or the Insurer, as the case may be, and the Indenture Trustee) on any
Business Day (any such investment by the Indenture Trustee pursuant to this
clause (ii) to mature on the next Business Day after the date of such
investment).
SECTION 8.8. Eligible Investments. The following are
Eligible Investments:
(a) Direct general obligations of the United States or
the obligations of any agency or instrumentality of the United States fully and
unconditionally guaranteed, the timely payment or the guarantee of which
constitutes a full faith and credit obligation of the United States.
(b) Federal Housing Administration debentures.
(c) FHLMC participation certificates and senior debt
obligations.
(d) Federal Home Loan Banks' consolidated senior debt
obligations.
(e) FNMA mortgage-backed securities (other than stripped
mortgage securities which are valued greater than par on the portion of unpaid
principal) and senior debt obligations.
(f) Federal funds, certificates of deposit, time and
demand deposits, and bankers' acceptances (having original maturities of not
more than 365 days) of any domestic bank, the short-term debt obligations of
which have been rated A-1 or better by S&P and P-1 by Xxxxx'x.
(g) Investment agreements approved by the Insurer
provided:
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1. The agreement is with a bank or insurance company
which has an unsecured, uninsured and unguaranteed obligation (or
claims-paying ability) rated Aa2 or better by Xxxxx'x and AA or better
by S&P, or is the lead bank of a parent bank holding company with an
uninsured, unsecured and unguaranteed obligation meeting such rating
requirements, and
2. Monies invested thereunder may be withdrawn
without any penalty, premium or charge upon not more than one day's
notice (provided such notice may be amended or canceled at any time
prior to the withdrawal date), and
3. The agreement is not subordinated to any other
obligations of such insurance company or bank, and
4. The same guaranteed interest rate will be paid on
any future deposits made pursuant to such agreement, and
5. The Indenture Trustee and the Insurer receive an
opinion of counsel that such agreement is an enforceable obligation of
such insurance company or bank.
(h) Commercial paper (having original maturities of not
more than 365 days) rated A-1 or better by S&P and P-1 or better by Xxxxx'x.
(i) Investments in money market funds rated AAAm or
AAAm-G by S&P and AAA or P-1 by Xxxxx'x.
(j) Investments approved in writing by the Insurer and
acceptable to Xxxxx'x and S&P.
Provided that no instrument described above is permitted to evidence either the
right to receive (a) only interest with respect to obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that no instrument described above may be purchased at a price greater than par
if such instrument may be prepaid or called at a price less than its purchase
price prior to stated maturity.
SECTION 8.9. Reports by Indenture Trustee. (a) On each
Payment Date, to the extent that the related report described in Section
4.8(d)(ii) of the Sale and Servicing Agreement has been received by the
Indenture Trustee, the Indenture Trustee shall provide to each Class A
Noteholder, to the Master Servicer, to the Insurer, to each Underwriter, to the
Sponsor, to S&P and to Xxxxx'x a written report in substantially the form set
forth as Exhibit B hereto, as such form may be revised by the Indenture
Trustee, the Master Servicer, Xxxxx'x and S&P from time to time, but in every
case setting forth the information requested on Exhibit B hereto and the
following information:
(i) the Class A Note Distribution Amount;
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(ii) the amount of such distributions allocable to
principal;
(iii) the amount of such distributions allocable to
interest and the related Class A Note;
(iv) the amount of any Unpaid Class A Note Interest
Shortfall in such distribution;
(v) the amount of any Insured Payment included in the
amounts distributed to the Notes on such Payment Date;
(vi) information furnished by the Sponsor pursuant to
Section 6049(d)(7)(C) of the Code and the regulations promulgated
thereunder to assist the Class A Noteholders in computing their market
discount;
(vii) the total of any Substitution Amounts and any Loan
Purchase Price amounts included in such distribution;
(viii) for Payment Dates during the Pre-Funding Period, the
remaining Pre-Funded Amount;
(ix) for the final Subsequent Transfer Date, the amount of
any remaining Pre-Funded Amount that has not been used to fund the
purchase of Subsequent Mortgage Loans and that will be distributed to
the Class A Noteholders as principal, if any, on the immediately
following Payment Date;
(x) the amounts, if any, of any Realized Losses for the
related Remittance Period; and
(xi) the amount, if any, of principal in such
distribution, separately stating the components thereof;
(xii) the Servicing Fee for such Payment Date;
(xiii) the Class A Principal Balance and the Pool Factor,
each after giving effect to such distribution;
(xiv) the Pool Balance as of the end of the preceding
Remittance Period and the Pool Balance at the close of business on the
last day of the related Remittance Period;
(xv) the number and aggregate Principal Balances of
Mortgage Loans as to which the Minimum Monthly Payment is Delinquent
for 30-59 days, 60-89 days and 90 or more days, respectively, as of
the end of the preceding Remittance Period;
(xvi) the book value (within the meaning of 12 C.F.R.
Section 571.13 or comparable provision) of any REO Property;
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(xvii) the Class A Interest Rate applicable to the
distribution on the following Payment Date;
(xviii) the number and principal balances of any Mortgage
Loans retransferred to the Sponsor pursuant to (a) Section 2.2 and (b)
Section 2.5 of the Sale and Servicing Agreement;
(xix) the Overcollateralization Deficit;
(xx) the aggregate Principal Balance of the Subsequent
Mortgage Loans delivered during the related Remittance Period;
(xxi) the amount of the Accelerated Principal Payment, if
any, for the related Payment Date;
(xxii) the amount of any Net Funds Cap Carry-Forward Amount;
(xxiii) the amount of any Step-Down Amount;
(xxiv) the amount of the Originator's Interest; and
(xxv) the amount of the Non-Subordinated Originator's
Interest.
Items (i) through (iii) above shall, with respect to each
Note, be presented on the basis of a Note having a $1,000 denomination. In
addition, by January 31 of each calendar year following any year during which
the Notes are outstanding, the Indenture Trustee shall furnish a report to each
holder of record at any time during each calendar year as to the aggregate of
amounts reported pursuant to (i), (ii) and (iii) with respect to the Notes for
such calendar year.
(b) In addition, on each Payment Date the Indenture
Trustee will distribute to each Holder, to the Insurer, to the Underwriter, to
the Master Servicer, to the Sponsors, to S&P and to Xxxxx'x, together with the
information described in Subsection (a) preceding, the following information as
of the close of business on the last Business Day of the prior calendar month,
which is hereby required to be prepared by the Master Servicer and furnished to
the Indenture Trustee for such purpose on or prior to the related Remittance
Date:
(i) the total number of Mortgage Loans and the Principal
Balances thereof, together with the number, aggregate Principal
Balances of such Mortgage Loans and the percentage (based on the
aggregate Principal Balance of the Mortgage Loans) of the aggregate
Principal Balance of such Mortgage Loans to the aggregate Principal
Balance of all Mortgage Loans (a) 30-59 days Delinquent, (b) 60-89
days Delinquent and (c) 90 or more days Delinquent;
(ii) the number, aggregate Principal Balances of all
Mortgage Loans and percentage (based on the aggregate Principal
Balance of the Mortgage Loans) of the aggregate Principal Balance
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of such Mortgage Loans to the aggregate Principal Balance of all
Mortgage Loans in foreclosure proceedings (and whether any such
Mortgage Loans are also included in any of the statistics described in
the foregoing clause (i));
(iii) the number, aggregate Principal Balances of all
Mortgage Loans and percentage (based on the aggregate Principal
Balance of the Mortgage Loans) of the aggregate Principal Balance of
such Mortgage Loans to the aggregate Principal Balance of all Mortgage
Loans relating to Mortgagors in bankruptcy proceedings (and whether
any such Mortgage Loans are also included in any of the statistics
described in the foregoing clause (i));
(iv) the number, aggregate Principal Balances of all
Mortgage Loans and percentage (based on the aggregate Principal
Balance of the Mortgage Loans) of the aggregate Principal Balance of
such Mortgage Loans to the aggregate Principal Balance of all Mortgage
Loans relating to REO Properties (and whether any such Mortgage Loans
are also included in any of the statistics described in the foregoing
clause (i)); and
(v) the book value of any REO Property.
(c) The foregoing reports shall be sent be to an Class A
Noteholder only insofar as such holder owns a Note.
SECTION 8.10. Additional Reports by Indenture Trustee. (a)
The Indenture Trustee shall report to the Sponsor, the Master Servicer and the
Insurer with respect to the amount then held in each Account (including
investment earnings accrued or scheduled to accrue) held by the Indenture
Trustee and the identity of the investments included therein, as the Sponsor,
the Master Servicer or the Insurer may from time to time request. Without
limiting the generality of the foregoing, the Indenture Trustee shall, at the
request of the Sponsor, the Master Servicer or the Insurer, transmit promptly
to the Sponsor, the Master Servicer and the Insurer copies of all accounting of
aggregate receipts in respect of the Mortgage Loans furnished to it by the
Master Servicer pursuant to Section 4.8(d)(ii) of the Sale and Servicing
Agreement and shall notify the Sponsor, the Master Servicer and the Insurer if
any such receipts have not been received by the Indenture Trustee.
(b) From time to time, at the request of the Insurer, the
Indenture Trustee shall report to the Insurer with respect to its actual
knowledge, without independent investigation, of any breach of any of the
representations or warranties relating to individual Mortgage Loans set forth
in Section 3.3(a) of the Sale and Servicing Agreement. On the date that is
eighteen months after the Closing Date, the Indenture Trustee shall provide the
Insurer with a written report of all of such inaccuracies to such date of which
it has actual knowledge, without independent investigation, and of the action
taken by the Sponsors under Section 3.4(b) of the Sale and Servicing Agreement
with respect thereto.
SECTION 8.11. Opinion of Counsel. The Indenture Trustee
shall receive at least seven days' notice when requested by the Issuer to take
any action pursuant to Section 8.2(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require as a condition to such
action, an Opinion of Counsel, stating the legal effect of any such
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action, outlining the steps required to complete the same, and concluding that
all conditions precedent to the taking of such action have been complied with
and such action will not materially and adversely impair the security for the
Notes or the rights of the Noteholders or the Insurer in contravention of the
provisions of this Indenture; provided, however, that such Opinion of Counsel
shall not be required to express an opinion as to the fair value of the Trust
Estate. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX.
Supplemental Indentures
SECTION 9.1. Supplemental Indentures Without Consent of
Noteholders. (a) Without the consent of the Holders of any Notes but with the
consent of the Insurer, as evidenced to the Indenture Trustee, the Issuer and
the Indenture Trustee, when authorized by an Issuer Order, at any time and from
time to time, may enter into one or more indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as in force at the
date of the execution thereof), in form satisfactory to the Indenture Trustee,
for any of the following purposes:
(i) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better to
assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subjected to the lien of this Indenture, or
to subject to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any right or
power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided that such action shall not adversely affect the
interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the
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provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee,
pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any further
appropriate agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized
by an Issuer Order, may, also without the consent of any of the Holders of the
Notes but with the prior written consent of the Insurer and with prior notice
to the Rating Agencies by the Issuer, as evidenced to the Indenture Trustee,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder.
SECTION 9.2. Supplemental Indentures with Consent of
Noteholders. The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to the Rating Agencies, with the consent of
the Insurer and with the consent of the Holders of not less than a majority of
the Outstanding Notes, by Act of such Holders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that, subject to the express rights of the Insurer under the Operative
Documents, no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal amount
thereof, the interest rate thereon or the Redemption Price with
respect thereto, change the provision of this Indenture relating to
the application of collections on, or the proceeds of the sale of, the
Trust Estate to payment of principal of or interest on the Notes, or
change any place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable;
(ii) impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(iii) reduce the percentage of the Outstanding Notes, the
consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of
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which is required for any waiver of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences
provided for in this Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Outstanding Notes
required to direct the Indenture Trustee to direct the Issuer to sell
or liquidate the Trust Estate pursuant to Section 12.1;
(vi) modify any provision of this Section except to
increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the Operative Documents
cannot be modified or waived without the consent of the Holder of each
Outstanding Note affected thereby;
(vii) modify any of the provisions of this Indenture in
such manner as to affect the calculation of the amount of any payment
of interest or principal due on any Note on any Payment Date
(including the calculation of any of the individual components of such
calculation); or
(viii) permit the creation of any lien ranking prior to or
on a parity with the lien of this Indenture with respect to any part
of the Trust Estate or, except as otherwise permitted or contemplated
herein or in any of the Operative Documents, terminate the lien of
this Indenture on any property at any time subject hereto or deprive
the Holder of any Note of the security provided by the lien of this
Indenture.
The Indenture Trustee may determine whether or not any Notes
would be adversely affected by any supplemental indenture upon receipt of an
Opinion of Counsel to that effect and any such determination shall be
conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be
liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section, the Indenture
Trustee shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in 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
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be entitled to receive, and subject to Sections 6.1 and 6.2, shall be fully
protected in relying upon, an Opinion of Counsel (and, if requested, an
Officer's Certificate) stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Indenture Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Indenture Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and immunities
under this Indenture of the Indenture Trustee, the Issuer and the Holders of
the Notes shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.5. Conformity With Trust Indenture Act. Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to the requirements of the Trust Indenture Act
as then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.6. Reference in Notes to Supplemental
Indentures. Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer or the Indenture Trustee shall so determine, new Notes so modified as to
conform, in the opinion of the Indenture Trustee and the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.
ARTICLE X.
Redemption of Notes
SECTION 10.1. Redemption. (a) The Notes are subject to
redemption following the later of (A) the Payment Date following payment in
full of all amounts owing to the Insurer and (B) the earliest of (i) the
transfer, under the conditions specified in Section 10.1(b), to the Master
Servicer of the Noteholders' interest in each Mortgage Loan and all property
acquired in respect of any Mortgage Loan remaining in the Trust for an amount
equal to the sum of (w) the Class A Principal Balance, (x) the sum of accrued
and unpaid Class A Interest Distribution Amount through the day preceding the
final Payment Date, (ii) the day following the Payment Date on which the
distribution made to Class A Noteholders has reduced the Class A Principal
Balance to zero and no other amounts are owed to the Class A Noteholders, (iii)
the final payment or other liquidation of the last Mortgage Loan remaining in
the Trust (including,
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without limitation, the disposition of the Mortgage Loan pursuant to Section
12.1 hereof) or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan and (iv) the
Payment Date in February 2024; provided, however, that in no event shall the
trust created hereby continue beyond the expiration of 21 years from the date
of death of the last surviving descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof. Upon termination in accordance with clause (B)(i) of this Section
10.1(a), the Indenture Trustee shall execute such documents and instruments of
transfer presented by the Sponsor, in each case without recourse,
representation or warranty, and take such other actions as the Sponsor may
reasonably request to effect the transfer of the Mortgage Loan to the Sponsor.
(b) The Class A Notes shall be subject to optional
transfer to the Sponsor on any Payment Date after the Class A Principal Balance
has been reduced to an amount less than or equal to $10,000,000 (10% of the
Original Class A Principal Balance) and all amounts due and owing to the
Insurer as a Reimbursement Amount have been paid. Such transfer shall only be
permitted if the Sponsor delivers to the Indenture Trustee an amount equal to
the sum of the outstanding Class A Principal Balance and accrued and unpaid
interest thereon at the Class A Interest Rate through the day preceding the
final Payment Date plus all Reimbursement Amounts (such amount, the "Redemption
Price"). In connection with such purchase, the Master Servicer shall remit to
the Indenture Trustee all amounts then on deposit in the Principal and Interest
Account for deposit to the Note Account, which deposit shall be deemed to have
occurred immediately preceding such purchase.
(c) Promptly following any such purchase, the Indenture
Trustee will release the Mortgage Files to the Master Servicer, or otherwise
upon their order, in a manner similar to that described in Section 4.14 of the
Sale and Servicing Agreement.
(d) Advanta National Bank may not participate in any
purchase described in this Section 10.1(b), or fund any portion of the purchase
price, unless the then-outstanding Principal Balances of the Mortgage Loans in
the Trust Estate is less than or equal to five percent of the sum of the
aggregate Loan Balances of all Mortgage Loans in the Trust Estate as of the
Initial Cut-Off Date and the Original Pre-Funded Amount.
(e) If the Notes are to be redeemed pursuant to this
Section 10.1(a), the Master Servicer or the Issuer shall furnish notice of such
election to the Indenture Trustee not later than 45 days prior to the
Redemption Date and the Issuer shall deposit with the Indenture Trustee in the
Note Account the Redemption Price of the Notes not less than five Business Days
prior to the Redemption Date whereupon all such Notes shall be due and payable
on the Redemption Date upon the furnishing of a notice complying with Section
10.2.
SECTION 10.2. Surrender of Notes. (a) Notice of any
termination, specifying the Payment Date (which shall be a date that would
otherwise be a Payment Date) upon which the Noteholders may surrender their
Notes to the Indenture Trustee for payment of the final distribution and
cancellation, shall be given promptly by the Indenture Trustee (upon receipt of
written directions from the Sponsor, if the Sponsor is exercising its right to
transfer of the
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Mortgage Loans, given not later than the first day of the month preceding the
month of such final distribution) to the Insurer and to the Master Servicer and
by letter to Noteholders mailed not earlier than the 15th day and not later
than the 25th day of the month next preceding the month of such final
distribution specifying (i) the Payment Date upon which final distribution of
the Notes will be made upon presentation and surrender of Notes at the office
or agency of the Indenture Trustee therein designated, (ii) the amount of any
such final distribution and (iii) that the Record Date otherwise applicable to
such Payment Date is not applicable, distributions being made only upon
presentation and surrender of the Notes at the office or agency of the
Indenture Trustee therein specified.
(b) Any money held by the Indenture Trustee in trust for
the payment of any amount due with respect to any Class A Note and remaining
unclaimed by the related Class A Noteholder for the period then specified in
the escheat laws of the State of New York after such amount has become due and
payable shall be discharged from such trust and be paid first, to the Insurer
on account of any Reimbursement Amounts, and second, to the Certificateholders
of the Originators' Interest; and such Class A Noteholder shall thereafter, as
an unsecured general creditor, look only to the Insurer or the
Certificateholders of the Originators' Interest for payment thereof (but only
to the extent of the amounts so paid to the Insurer or the Certificateholders
of the Originators' Interest), and all liability of the Indenture Trustee with
respect to such trust money shall thereupon cease; provided, however, that the
Indenture Trustee, before being required to make any such payment, shall at the
expense of the Trust cause to be published once, in the eastern edition of The
Wall Street Journal, notice that such money remains unclaimed and that, after a
date specified therein, which shall be not fewer than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
paid to the Insurer or the Certificateholders of the Originators' Interest.
The Indenture Trustee shall, at the direction of the Sponsor, also adopt and
employ, at the expense of the Trust, any other reasonable means of notification
of such payment (including, but not limited to, mailing notice of such payment
to Class A Noteholders whose right to or interest in monies due and payable but
not claimed is determinable from the Note Register at the last address of
record for each such Class A Noteholder).
SECTION 10.3. Form of Redemption Notice. Notice of
redemption supplied to the Indenture Trustee by the Master Servicer under
Section 10.1(a) shall be given by the Indenture Trustee by facsimile or by
first-class mail, postage prepaid, transmitted or mailed prior to the
applicable Redemption Date to each Holder of Notes of record, as of the close
of business on the date which is not less than 5 days prior to the applicable
Redemption Date, at such Holder's address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
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(iii) that the Record Date otherwise applicable to such
Redemption Date is not applicable and that payments shall be made only
upon presentation and surrender of such Notes at the place where such
Notes are to be surrendered for payment of the Redemption Price (which
shall be the office or agency of the Issuer to be maintained as
provided in Section 3.2); and
(iv) that interest on the Notes shall cease to accrue on
the Redemption Date.
Notice of redemption of the Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer. Failure to
give notice of redemption, or any defect therein, to any Holder of any Note
shall not impair or affect the validity of the redemption of any other Note.
SECTION 10.4. Notes Payable on Redemption Date. The Notes
to be redeemed shall, following notice of redemption as required by Section
10.2, on the Redemption Date become due and payable at the Redemption Price and
(unless the Issuer shall default in the payment of the Redemption Price) no
interest shall accrue on the Redemption Price for any period after the date to
which accrued interest is calculated for purposes of calculating the Redemption
Price.
ARTICLE XI.
Miscellaneous
SECTION 11.1. Compliance Certificates and Opinions, etc.
Upon any application or request by the Issuer to the Indenture Trustee to take
any action under any provision of this Indenture, the Issuer shall furnish to
the Indenture Trustee and to the Insurer if the application or request is made
to the Indenture Trustee (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with and (iii) (if required by the TIA) an Independent
Certificate from a firm of certified public accountants meeting the applicable
requirements of this Section, except that, in the case of any such application
or request as to which the furnishing of such documents is specifically
required by any provision of this Indenture, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate
or opinion has read or has caused to be read such covenant or
condition and the definitions herein relating thereto;
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(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation
as is necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(iv) a statement as to whether, in the opinion of each
such signatory such condition or covenant has been complied with.
SECTION 11.2. Form of Documents Delivered to Indenture
Trustee. In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate
or opinion is based are erroneous. Any such certificate of an Authorized
Officer or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Master Servicer, the Sponsor or the Issuer, stating that the
information with respect to such factual matters is in the possession of the
Master Servicer, the Sponsor or the Issuer, unless such counsel knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Whenever in this Indenture, in connection with any application
or certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case
be conditions precedent to the right of the Issuer to have such application
granted or to the sufficiency of such certificate or report. The foregoing
shall not, however, be construed to affect the Indenture Trustee's right to
conclusively
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rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
SECTION 11.3. Acts of Noteholders. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Noteholders may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such Noteholders in person or by agents duly appointed in writing;
and except as herein otherwise expressly provided such action shall become
effective when such instrument or instruments are delivered to the Indenture
Trustee, and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Section 6.1) conclusive in favor
of the Indenture Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of
any such instrument or writing may be proved in any customary manner of the
Indenture Trustee.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any Notes shall bind
the Holder of every Note issued upon the registration thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered
to be done by the Indenture Trustee or the Issuer in reliance thereon, whether
or not notation of such action is made upon such Note.
SECTION 11.4. Notices, etc. to Indenture Trustee, Issuer
and Rating Agencies. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or permitted
by this Indenture to be made upon, given or furnished to or filed with:
(a) The Indenture Trustee by any Noteholder or by the
Issuer shall be sufficient for every purpose hereunder if personally delivered,
delivered by overnight courier or mailed first-class and shall be deemed to
have been duly given upon receipt to the Indenture Trustee at its Corporate
Trust Office and any notice delivered by facsimile shall be addressed to the
Corporate Trust Office, telecopy number (000) 000-0000, or
(b) The Issuer by the Indenture Trustee or by any
Noteholder shall be in writing and shall be sufficient for every purpose
hereunder if personally delivered, delivered by facsimile or overnight courier
or mailed first class, and shall deemed to have been duly given upon receipt to
the Issuer addressed to: Advanta Home Equity Loan Trust 1997-A, in care of
Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000-0000 Attention: Corporate Trust Administration, or at any
other address previously furnished in writing to the Indenture Trustee by
Issuer. The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee.
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(c) The Insurer by the Issuer or the Indenture Trustee
shall be sufficient for any purpose hereunder if in writing and mailed by
first-class mail, personally delivered, or telecopied to the recipient as
follows:
To the Insurer: Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Structured Finance Department
Telecopy: (000) 000-0000
Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, delivered by overnight courier or first class or via
facsimile to (i) in the case of Moody's, at the following address: Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax No:
(000) 000-0000 and (ii) in the case of S&P, at the following address: Standard
& Poor's Ratings Group, 00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000,
Attention: Asset Backed Surveillance Department, Fax No: (000) 000-0000; or as
to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION 11.5. Notices to Noteholders; Waiver. Where this
Indenture provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder.
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SECTION 11.6. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Note Paying Agent to such Holder, that is different from the methods provided
for in this Indenture for such payments or notices, provided that such methods
are reasonable and consented to by the Indenture Trustee (which consent shall
not be unreasonably withheld). The Issuer will furnish to the Indenture Trustee
a copy of each such agreement and the Indenture Trustee will cause payments to
be made and notices to be given in accordance with such agreements.
SECTION 11.7. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
The provisions of TIA Section 310 through 317 that impose
duties on any person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.
SECTION 11.8. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.9. Successors and Assigns. All covenants and
agreements in this Indenture and the Notes by the Issuer shall bind its
successors and assigns, whether so expressed or not. All agreements of the
Indenture Trustee in this Indenture shall bind its successors.
SECTION 11.10. Separability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. The Insurer and its
successors and assigns shall be a third-party beneficiary to the provisions of
this Indenture, and shall be entitled to rely upon and directly to enforce such
provisions of this Indenture. Nothing in this Indenture or in the Notes,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, the Insurer and the Noteholders, and any other
party secured hereunder, and any other person with an ownership interest in any
part of the Trust Estate, any benefit or any legal or equitable right, remedy
or claim under this Indenture. The Insurer may disclaim any of its rights and
powers under this Indenture (in which case the Indenture Trustee may exercise
such right or power hereunder), but not its duties and obligations under the
Policy, upon delivery of a written notice to the Indenture Trustee.
SECTION 11.12. Legal Holidays. In any case where the date on
which any payment is due shall not be a Business Day, then (notwithstanding any
other provision of the Notes or this Indenture) payment need not be made on
such date, but may be made on the next
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succeeding Business Day with the same force and effect as if made on the date
on which nominally due, and no interest shall accrue for the period from and
after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and
the same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is
subject to recording in any appropriate public recording offices, such
recording is to be effected by the Issuer and at its expense accompanied by an
Opinion of Counsel (which may be counsel to the Trust or any other counsel
reasonably acceptable to the Indenture Trustee and the Insurer) to the effect
that such recording is necessary either for the protection of the Noteholders
or any other person secured hereunder or for the enforcement of any right or
remedy granted to the Indenture Trustee under this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the
Sponsor, any Originator, the Master Servicer, the Owner Trustee or the
Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Sponsor, any Originator, the Master Servicer, the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent,
officer, director, employee or agent of the Sponsor, any Originator, the Master
Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Sponsor, any
Originator, the Master Servicer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Sponsor, any Originator, the Master Servicer,
the Indenture Trustee or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture,
in the performance of any duties or obligations of the Issuer hereunder, the
Owner Trustee shall be subject to, and entitled to the benefits of, the terms
and provisions of Articles VI, VII and VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by
entering into this Indenture, and each Noteholder, by accepting a Note, hereby
covenant and agree that they will not at any time institute against the
Sponsor, or the Issuer, or join in any institution against the Sponsor, or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation
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proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the Operative Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on
reasonable prior notice, it will permit any representative of the Indenture
Trustee or of the Insurer, during the Issuer's normal business hours, to
examine all the books of account, records, reports, and other papers of the
Issuer, to make copies and extracts therefrom, to cause such books to be
audited by independent certified public accountants, and to discuss the
Issuer's affairs, finances and accounts with the Issuer's officers, employees,
and independent certified public accountants, all at such reasonable times and
as often as may be reasonably requested. The Indenture Trustee shall and shall
cause its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its Obligations hereunder.
SECTION 11.19. Limitation of Liability. It is expressly
understood and agreed by the parties hereto that (a) this Agreement is executed
and delivered by Wilmington Trust Company, not individually or personally but
solely as Owner Trustee of the Issuer under the Trust Agreement, in the
exercise of the powers and authority conferred and vested in it, (b) each of
the representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Issuer, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties to this Agreement and
by any person claiming by, through or under them and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaking by
the Issuer under this Agreement or any related documents.
ARTICLE XII.
Rapid Amortization Events
SECTION 12.1. Rapid Amortization Events. The following
shall constitute Rapid Amortization Events:
(a) failure on the part of Sponsor (i) to make a payment
or deposit required under the Sale and Servicing Agreement within four Business
Days after the date such payment or deposit is required to be made or (ii) to
observe or perform in any material respect any other covenants or agreements of
the Sponsor set forth in the Sale and Servicing Agreement, which failure
continues unremedied for a period of 60 days after written notice;
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(b) any representation or warranty made by the Sponsor in
the Sale and Servicing Agreement proves to have been incorrect in any material
respect when made and continues to be incorrect in any material respect for a
period of 60 days after written notice and as a result of which the interests
of the Holders or the Insurer are materially and adversely affected: provided,
however, that a Rapid Amortization Event shall not be deemed to occur if the
Sponsor has purchased or made a substitution for the related Mortgage Loan or
Mortgage Loans if applicable during such period (or within an additional 60
days with the consent of the Indenture Trustee and the Insurer) in accordance
with the provisions of the Sale and Servicing Agreement;
(c) the occurrence of certain events of bankruptcy,
insolvency or receivership relating to the Originators;
(d) the Trust becomes subject to regulation by the
Securities and Exchange Commission as an investment company within the meaning
of the Investment Company Act of 1940, as amended;
(e) the occurrence of an event permitting the removal of
the Master Servicer. See "Certain Matters Regarding the Master Servicer"
herein;
(f) default in the payment of any interest, principal or
any installment of principal on any Note when the same becomes due and payable,
and such default continues for a period of five days; and
(g) the aggregate of all draws under the Policy exceeds
1% of the Cut-Off Date Pool Balance.
In the case of any event described in clause (a), (b), (e) or
(g), a Rapid Amortization Event will be deemed to have occurred only if, after
the applicable grace period, if any, described herein or in the Indenture or
Sale and Servicing Agreement either (i) the Indenture Trustee or Holders
holding Class A Notes evidencing more than 51% of the aggregate principal
amount of the Class A Notes with the consent of the Insurer (so long as there
is no continuing default by the Insurer in the performance of its obligations
under the Policy) or the Insurer (so long as there is no continuing default by
the Insurer in the performance of its obligations under the Policy), by written
notice to the Insurer, the Sponsor, the Originators, the Rating Agencies, and
the Master Servicer (and to the Indenture Trustee, if given by the Holders or
the Insurer) declare that a Rapid Amortization Event has occurred as of the
date of such notice. In the case of any event described in clause (c), (d) or
(f), a Rapid Amortization Event will be deemed to have occurred without any
notice or other action on the part of the Indenture Trustee, the Holders or the
Insurer immediately upon the occurrence of such event.
In addition to the consequences of a Rapid Amortization Event
discussed above, if any Originator voluntarily files a bankruptcy petition or
goes into liquidation or any person is appointed a receiver or bankruptcy
trustee of the related Originator, on the day of any such filing or appointment
no further Additional Balances will be transferred to the Trust, and the
related Originator will promptly give notice to the Indenture Trustee and the
Insurer of any such filing or
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appointment. Within 15 days, the Indenture Trustee will publish a notice of
the liquidation or the filing or appointment relating to such Originator.
Unless otherwise instructed within 60 days by the Holders representing
undivided interests aggregating more than 51% of the aggregate principal amount
of the Class A Notes, the Indenture Trustee will sell, dispose of or otherwise
liquidate the Trust Estate in a commercially reasonable manner and on
commercially reasonable terms. Any such sale, disposal or liquidation and such
sale, disposal or liquidation will be "servicing retained" by the Master
Servicer. The net proceeds of such sale will first (if an Insurer Default
shall not have occurred and be continuing) be paid to the Insurer to the extent
of unreimbursed draws under the Policy and other amounts owing to the Insurer.
The lesser of (i) the amount required to reduce the Class A Principal Balance,
together with all accrued and unpaid interest due thereon, to zero and (ii) the
Floating Allocation Percentage times such remaining amounts will be distributed
to the Holders of the Class A Notes; the Policy will cover any amount by which
such remaining net proceeds are insufficient to pay the Class A Principal
Balance in full.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers,
hereunto duly authorized, all as of the day and year first above written.
ADVANTA REVOLVING HOME EQUITY LOAN
TRUST 1997-A,
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but
solely as Owner Trustee,
By:
-------------------------------------
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A., not in its individual
capacity but solely as
Indenture Trustee,
By:
-------------------------------------
Name:
Title:
88
EXHIBIT A
[Form of Note]
REGISTERED $100,000,000
No. A
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. _________
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any Note
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ADVANTA REVOLVING HOME EQUITY LOAN TRUST 1997-A
CLASS A ASSET BACKED NOTES
Advanta Home Equity Loan Trust 1997-A, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of ($100,000,000), such amount payable
on each Payment Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is $100,000,000 and the denominator of
which is $100,000,000 by (ii) the aggregate amount, if any, payable from the
Certificate Account in respect of principal on the Class A Notes pursuant to
Section 8.6 of the Indenture; provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the February, 2024,
Payment Date (the "Final Scheduled Payment Date"). The Issuer will pay
interest on this Note at the rate per annum provided in the Indenture on each
Payment Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Payment Date (after giving effect to all payments of principal made on the
preceding Payment Date). Interest on this Note will accrue for each Payment
Date from the most recent Payment Date on which interest has been
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89
paid to but excluding such Payment Date or, if no interest has yet been paid,
from November 20, 1997. Interest will be computed on the basis of the actual
number of days elapsed in a 360-day year. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Policy") issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments on each Payment Date, all as more fully set
forth in the Indenture.
For purposes of federal income, state and local income and
franchise and any other income taxes, the Issuer will treat the Notes as
indebtedness of the Issuer and hereby instructs the Indenture Trustee to treat
the Notes as indebtedness of the Issuer for federal state tax reporting
purposes.
Each Noteholder or Note Owner, by acceptance of this Note or,
in the case of a Note Owner, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on
the Notes or under the Indenture or any certificate or other writing delivered
in connection therewith, against (i) the Sponsor, any Originator, the Master
Servicer, the Indenture Trustee, or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
owner, beneficiary, agent, officer, director or employee of the Sponsor, any
Originator, the Master Servicer, the Indenture Trustee, or the Owner Trustee in
its individual capacity, any holder of a beneficial interest in the Issuer, the
Sponsor, any Originator, the Master Servicer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Sponsor, any Originator,
the Master Servicer, the Indenture Trustee, or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
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90
Any Noteholder using the assets of (i) an employee benefit
plan (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) that is subject to the provisions of Title I of
ERISA, (ii) a plan described in Section 4975(e)(1) of the Internal Revenue Code
of 1986, as amended, or (iii) any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity to purchase the Notes,
or to whom the Notes are transferred, will be deemed to have represented that
the acquisition and continued holding of the Notes will be covered by a U.S.
Department of Labor Class Exemption.
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IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer.
Date: November __, 1997 ADVANTA REVOLVING HOME EQUITY LOAN
TRUST 1997-A
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as
Owner Trustee under the Trust
Agreement
By:
-------------------------------------
Name:
Title:
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92
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
Date: November __, 1997 BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
not in its individual capacity but solely
as Indenture Trustee,
By:
-------------------------------------
Authorized Signatory
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REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A Asset Backed Notes (herein called the "Class
A Notes"), all issued under an Indenture dated as of November 1, 1997 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Bankers Trust Company of California, N.A., as trustee
(the "Indenture Trustee", which term includes any successor Indenture Trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms
used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.
The Class A Notes are and will be secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Class A Notes will be payable on each Payment
Date in an amount described on the face hereof. "Payment Date" means the
twenty-fifth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing December 26, 1997. The term "Payment
Date," shall be deemed to include the Final Scheduled Payment Date.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Final Scheduled Payment
Date and the Redemption Date, if any, pursuant to Section 10.1(a) of the
Indenture. Notwithstanding the foregoing, the entire unpaid principal amount
of the Notes shall be due and payable if any Originator voluntarily files a
bankruptcy petition or goes into liquidation or any person is appointed a
receiver or bankruptcy trustee of the related Originator and the Indenture
Trustee or the Holders of the Notes representing at least 51% of the
Outstanding Amount of the Notes shall have the right to direct the Indenture
Trustee to sell or liquidate the Trust Estate as provided in Section 12.1 of
the Indenture. All principal payments on the Class A Notes shall be made pro
rata to the Class A Noteholders entitled thereto.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Payment Date shall be binding upon all future Holders of this Note and
of any Note issued upon the registration of
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transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this Note
on a Payment Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Holder hereof as of the Record
Date preceding such Payment Date by notice mailed prior to such Payment Date
and the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's principal Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of
interest at the Class A Note Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed
pursuant to Section 10.1(b) of the Indenture, in whole, but not in part, at the
option of the Sponsor, on any Payment Date on or after the date on which the
Class A Note Principal Balance is less than or equal to 10% of the Original
Class A Note Principal Balance.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, (i)
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
his attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note Registrar
which requirements include membership or participation in Securities Transfer
Agents Medallion Program ("Stamp") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, Stamp, all in accordance with the Exchange Act, and (ii) accompanied by
such other documents as the Indenture Trustee may require, and thereupon one or
more new Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Sponsor, any Originator, the Master
Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
owner, beneficiary, agent, officer, director or employee of the Sponsor, any
Originator, the Master Servicer, the Indenture Trustee or the Owner Trustee in
its individual capacity, any holder of a beneficial interest in the Issuer, the
Sponsor, any Originator, the Master Servicer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Sponsor, any Originator,
the Master Servicer, the Indenture
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Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such owner or beneficiary shall be fully liable,
to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note covenants and agrees
that by accepting the benefits of the Indenture that such Noteholder will not
at any time institute against the Sponsor, or the Issuer or join in any
institution against the Sponsor, or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings, under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Operative Documents.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and the Insurer and any agent of
the Issuer, the Indenture Trustee or the Insurer may treat the Person in whose
name this Note (as of the day of determination or as of such other date as may
be specified in the Indenture) is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Issuer, the
Indenture Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Insurer and of the
Holders of Notes representing a majority of the Outstanding Amount of all Notes
at the time Outstanding. Any such consent or waiver by the Holder of this Note
(or any one of more Predecessor Notes) shall be conclusive and binding upon
such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder but with the consent of the Insurer.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of
law provisions, and the obligations, rights 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,
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to pay the principal of and interest on this Note at the times, place, and
rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Operative Documents, neither
Wilmington Trust Company in its individual capacity, any owner of a beneficial
interest in the Issuer, nor any of their respective beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Issuer for the sole purposes of binding
the interests of the Issuer in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Indenture or the Operative Documents, in the case of an Rapid Amortization
Event under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
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ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
--------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: (1)
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Signature Guaranteed:
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--------------------------
(1) 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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