Exhibit 1
_____________________________________________________________________
SERIES TRUST INDENTURE
between
TIERS ASSET-BACKED SECURITIES,
SERIES CHAMT TRUST 1997-7,
as Issuer,
and
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION,
as Indenture Trustee
FIXED RATE NOTES, Class A
_____________________________________________________________________
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT ........................................ 1
GRANTING CLAUSES ............................................. 1
Section 1. Definitions ................................... 3
Section 2. Terms of the Notes ............................ 8
a. Designation .............................. 8
b. Delivery ................................. 8
c. Aggregate Principal Amount; Classes ...... 8
d. Places of Payment of Principal ........... 8
e. Denominations of Notes ................... 9
f. Authentication of Notes .................. 9
Section 3. Payment Dates; Computations of Interest;
Prepayments; Payment of Principal............. 9
a. Payments of Interest ..................... 9
b. Mandatory Prepayment of Notes ............ 9
c. Optional Redemption of Notes ............. 10
d. Final Payment of Principal ............... 10
Section 4. Collections and Distributions ................. 10
a. Collection Account; Priority of Payments . 10
b. Collateral Account; Investments .......... 11
Section 5. Sale Procedures ............................... 12
Section 6. Final Scheduled Payment Date................... 12
Section 7. Events of Default ............................. 13
a. Events of Default ........................ 13
b. Sale of Assets Upon Event of Default ..... 13
c. Distributions after an Event of Default .. 14
d. Optional Preservation of the Collateral
Obligations............................. 14
Section 8. Appointment of Indenture Trustee as Paying
Agent and Note Registrar..................... 14
Section 9. Miscellaneous. ................................ 14
SCHEDULE A Prepayment Calculation Table
APPENDIX 1 Form of Fixed Rate Note, Class A
EXHIBIT A Standard Terms and Provisions of the Trust Indenture
TIERS ASSET-BACKED SECURITIES,
SERIES CHAMT TRUST 1997-7 INDENTURE
This TIERS Asset-Backed Securities, Series CHAMT Trust 1997-7
Indenture (the "Series Trust Indenture"), dated September 15, 1997, by and
between TIERS Asset-Backed Securities, Series CHAMT Trust 1997-7, a
Delaware business trust (the "Issuer"), and First Trust of New York,
National Association, as trustee and not in its individual capacity (the
"Indenture Trustee"), provides for the issuance of Fixed Rate Notes, Series
A (the "Notes") and incorporates by reference the Standard Terms and
Provisions of the Trust Indenture (the "Standard Terms") attached as
Exhibit A hereto (the Series Trust Indenture and the Standard Terms are
sometimes collectively referred to as the "Indenture"), and is governed by
the Standard Terms as fully as if set forth herein at length. All
capitalized terms not defined herein shall have the same meaning as set
forth in the Standard Terms.
PRELIMINARY STATEMENT
The Standard Terms permit the Indenture Trustee to authenticate and
deliver, to the order of the Issuer, Notes, in exchange for the Collateral
Obligations sold, assigned and transferred to the Indenture Trustee
pursuant to this Series Trust Indenture.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, each party hereto agrees for the benefit of each other
party hereto and for the equal and ratable benefit of the Holders of the
Notes as follows:
GRANTING CLAUSES
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as trustee for the benefit of the Noteholders (as their interests
appear herein) all of the Issuer's right, title and interest in and to (a)
the Collateral Obligations; (b) the Swap Agreement; (c) all Eligible
Investments acquired by the Issuer; (d) the Collection Account, the
Collateral Account and all funds from time to time on deposit therein; and
(e) all payment and future claims, demands, causes and chooses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and
receivables, instruments and other property which at any time constitute
all or part of or are included in the proceeds of any of the foregoing
(collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of,
the Notes, equally and ratably without prejudice, priority or distinction,
and to secure compliance with the provisions of this Indenture, all as
provided in this Indenture. The Indenture Trustee, as trustee on behalf of
the Noteholders and (only to the extent expressly provided herein) the
Certificateholders, acknowledges such Grant and accepts the trusts under
this Indenture in accordance with the provisions of this Indenture.
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as collateral agent for the Swap Counterparty (as its interests
appear herein) all of the Issuer's right, title and interest in and to (a)
the Collateral Obligations; (b) the Swap Agreement; (c) any Eligible
Investments acquired by the Issuer; (d) the Collection Account, the
Collateral Account and all funds from time to time on deposit therein; and
(e) all payment and future claims, demands, causes and chooses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and
receivables, instruments and other property which at any time constitute
all or part of or are included in the proceeds of any of the foregoing.
The foregoing Grant is made to secure the payment of all amounts
due by the Issuer under the Swap Agreement, but is subject to the priority
of payments set forth herein.
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Section 1. DEFINITIONS. Terms used and not defined herein
shall have the meanings specified in the Trust Agreement referred to below.
"ADMINISTRATION AGREEMENT" means the Administration Agreement
dated as of September 15, 1997 among the Issuer, First Trust in its
capacity as Indenture Trustee and as Administrator pursuant to such
Administration Agreement, and the Trustee.
"ADMINISTRATOR" means First Trust of New York, National
Association, as administrator under the Administration Agreement.
"ALLOCABLE CHARGE-OFF AMOUNT" means, as of any Payment Date (i)
with respect to the Notes, the Charge-Off Amount less the outstanding
principal balance of the Certificates on such date (before giving effect to
any distributions on such Payment Date) and (ii) with respect to the
Certificates, the Charge-Off Amount (but not to exceed the outstanding
principal balance of the Certificates.)
"AVAILABLE FUNDS" has the meaning set forth in Section 4(a).
"BUSINESS DAY" means any day on which commercial banks are open
for business (including dealings in foreign exchange and foreign currency
deposits) in ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
"CERTIFICATES" means the TIERS Asset-Backed Securities, Series
CHAMT Trust 1997-7, Floating Rate Certificates, Class B.
"CERTIFICATE NOTIONAL AMOUNT" means, as of any Payment Date, the
outstanding principal balance of the Certificates less the Allocable
Charge-Off Amount.
"CHARGE-OFF AMOUNT" means, as of any Payment Date, the Class A
Investor Charge-Offs through such date less the amount of any Excess Spread
applied to reimburse the Class A Investor Interest through such date. As
used herein the terms "Class A Investor Charge-Offs;" "Class A Investor
Interest" and "Excess Spread" have the meanings specified in the Term
Assets Prospectus.
"CLOSING DATE" means September 15, 1997.
"COLLATERAL" means the collateral pledged to the Indenture
Trustee for the benefit of the Noteholders and the Swap Counterparty
pursuant to the Granting Clause hereof.
"COLLATERAL ACCOUNT" means the account by that name established
by the Indenture Trustee pursuant to Section 4(b).
"COLLATERAL OBLIGATIONS" means the Class A Floating Rate Asset
Backed Certificates, Series 1996-4 in an aggregate principal amount of
$363,900,000 issued by the Chase Credit Card Master Trust.
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"DEFERRED INTEREST AMOUNTS" means, as of any Payment Date, and
with respect to the Notes or the Certificates, any interest due thereon on
a prior Payment Date which remains unpaid.
"EARLY AMORTIZATION PAYMENTS" means, with respect to the
Collateral Obligations, any payments of principal received thereon prior to
the Final Scheduled Payment Date therefor.
"ELIGIBLE INVESTMENTS" means, any one or more of the following
obligations or securities, provided that the total return specified by the
terms of each such obligation or security is at least equal to the purchase
price thereof: (i) direct obligations of, and obligations fully guaranteed
by, the United States; (ii) demand and time deposits in, certificates
of deposit of, or banker's acceptances issued by any depository institution
or trust company (including the Indenture Trustee or any agent or affiliate
of the Indenture Trustee acting in their respective commercial capacities)
incorporated under the laws of the United States or any State and subject
to supervision and examination by Federal and/or State banking authorities
so long as the commercial paper and/or the short-term debt obligations
of such depository institution or trust company (or, in the case of a
depository institution which is the principal subsidiary of a holding
company, the commercial paper or other short-term debt obligations of
such holding company) at the time of such investment or contractual
commitment providing for such investment rated not less than A-1+ from
Standard & Poor and P1 from Moody's; (iii) commercial paper having at the
time of such investment, a rating of not less than A-1+ from Standard &
Poor and P1 from Moody's; (iv) investments in money market funds having a
rating from the Rating Agency in the highest investment category granted
thereby (including funds for which the Indenture Trustee or any of its
Affiliates is investment manager or advisor or otherwise may have an
interest) at the time such investment; and (v) investments in asset-backed
securities issued pursuant to a pooling and servicing agreement, master
pooling agreement, trust agreement or indenture, having at the time of
such investment, a rating of at least AAA from S&P and Aaa from Moody's.
All Eligible Investments shall mature no later than the Final Scheduled
Payment Date for the Notes.
"FINAL SCHEDULED PAYMENT DATE" means, with respect to the Notes,
the Certificates or the Collateral Obligations, the Payment Date in
November 2003.
"INITIAL PRINCIPAL AMOUNT" means, with respect to (i) the
Collateral Obligations, $363,900,000; and (ii) the Notes $352,980,000.
"INTEREST ACCRUAL PERIOD" means, with respect to any Payment
Date, the period from and including the preceding Payment Date (or, in the
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case of the initial Payment Date, from and including the Closing Date) to
but excluding such Payment Date.
"ISSUER" means the TIERS Asset-Backed Securities Series, CHAMT
Trust 1997-7.
"ISSUER ASSETS" means the Collateral Obligations, the Swap
Agreement and any Eligible Investments held by the Issuer.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MONTHLY AMORTIZATION RATE" means, for any month, the rate set
forth in the Prepayment Calculation Table that corresponds to the PSA Index
Rate for such month.
"MONTHLY PREPAYMENT AMOUNT" means, for any Payment Date, (i) with
respect to the Notes, an amount equal to the Note Notional Amount on such
Payment Date (before giving effect to any distributions on such date)
multiplied by the Monthly Amortization Rate that corresponds to the PSA
Index Rate for the month in which such Payment Date occurs and (ii) with
respect to the Certificates, an amount equal to the Certificate Notional
Amount on such Payment Date (before giving effect to any distributions on
such date) multiplied by the Monthly Amortization Rate that corresponds to
the PSA Index Rate for the month in which such Payment Date occurs.
"NOTE CURRENT FACTOR" means a number (carried to eight decimal
places) that represents the portion of the aggregate original principal
amount of the Notes then outstanding.
"NOTE INTEREST RATE" means a fixed rate of 6.688% per annum
calculated on the basis of a 360-day year consisting of twelve 30-day
months.
"NOTE NOTIONAL AMOUNT" means, on any Payment Date, the Initial
Principal Amount of the Notes less any amounts paid to the Noteholders in
respect of the Monthly Prepayment Amounts less the Allocable Charge-Off
Amount as of such Payment Date, if any. The Note Notional Amount shall
never be less than zero.
"NOTE PRINCIPAL BALANCE" means, at any time of determination, the
Initial Note Principal Amount times the Note Current Factor.
"NOTES" means the TIERS Corporate Asset-Backed, Series CHAMT
Trust 1997-7 Fixed Rate Notes, Class A issued pursuant to this Indenture.
"PAR AMOUNT" means, with respect to any Eligible Investment, the
purchase price thereof excluding any accrued interest.
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"PAYMENT DATE" means the 15th day of each month (or, if any such
date is not a Business Day, then on the immediately following Business
Day), commencing October 15, 1997.
"PREPAYMENT CALCULATION TABLE" means the table set forth in
Schedule A attached hereto and made a part hereof.
"PREPAYMENT DETERMINATION DATE" means, for any Payment Date
occurring after the Payment Date in January 1999, the first Business Day of
the month in which such Payment Date occurs.
"PRO RATA SHARE" means the percentage obtained by dividing the
outstanding principal amount of such Note by the outstanding principal
amount of all of the Notes.
"PSA INDEX RATE" means, with respect to any Payment Date:
(i) the rate that appears as of 3:00 p.m. (New York City
time) on the related Prepayment Determination Date (as defined below) on
the Reference Bloomberg Page (as defined below) under the column heading "1
MO" opposite the row "PSA";
(ii) if such rate does not appear on the Reference Bloomberg
Page as of 3:00 p.m. (New York City time) on such Prepayment Determination
Date, the Swap Counterparty will request FHMLC to provide a quotation of
the monthly prepayment speed (calculated according to the PSA Standard
Prepayment Model (as defined herein)) for the Reference Securities for the
applicable month. If FHMLC provides such quotation, the PSA Index Rate
will be the quotation provided by FHMLC;
(iii) if the Swap Counterparty determines that FHMLC has not
provided such quotation by 5:00 p.m. on the second Business Day following
such Prepayment Determination Date, the Swap Counterparty will request five
major securities dealers selected by the Swap Counterparty to provide a
quotation of the monthly prepayment speed (calculated according to the PSA
Standard Prepayment Model) for the Reference Securities for the applicable
month. If at least two such quotations are so provided, then the PSA Index
Rate will be the arithmetic mean (rounded to the nearest whole integer with
1/2 rounded up) determined by the Swap Counterparty of the quotations so
obtained (and, if five such quotations are provided, eliminating the
highest quotation (or, in the event of equality, one of the highest) and
lowest quotation (or, in the event of equality, one of the lowest)). If
only one quotation is so provided, the PSA Index Rate will be the quotation
so provided; and
(iv) if no such quotation is provided as requested in clause
(iii) above, then the PSA Index Rate will be the PSA Index Rate determined
with respect to the Payment Date preceding the applicable Payment Date (or,
in the case of the first Payment Date, the monthly prepayment speed
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(calculated according to the PSA Standard Prepayment Model) for the
Reference Securities obtained from the sources specified in clauses (i)-
(iii) above, in that order, with respect to the most recent month for which
such information is available.
"PSA STANDARD PREPAYMENT MODEL" means the methodology set forth
under "Mortgage Prepayment Models -- The PSA Standard Prepayment Model" in
the "Uniform Practices for the Clearance and Settlement of Mortgage-Backed
Securities and Other Related Securities of the Public Securities
Association."
"RATING AGENCIES" means Moody's and S&P.
"RECORD DATE" means, with respect to a Payment Date (including a
Redemption Date) the day immediately preceding such Payment Date, unless
Definitive Notes are issued, in which case on the last Business Day of
the month prior to the month in which such Payment Date occurs.
"REFERENCE BLOOMBERG PAGE" means the display designated as page
"A013" and titled "Reference Collateral 30-year Gold 8.00, Issued in 1995"
(or such other page selected by the Swap Counterparty as may replace page
"A013" for the purpose of displaying the monthly prepayment speed
(calculated based on the PSA Standard Prepayment Model) for the Reference
Securities) on the Bloomberg Financial Markets Service (or such other
service selected by the Swap Counterparty as may replace such service).
"REFERENCE SECURITIES" means the 30-year Federal Home Loan
Mortgage Corporation Gold 8.0% mortgage participation certificates issued
in calendar year 1995.
"SALE PROCEDURES" means, in connection with any sale of the
Collateral Obligations or of any Eligible Investments, the Indenture
Trustee shall sell such securities to the highest bidders among not less
than three solicited bidders in the relevant markets for such securities
(one of which will be the Swap Counterparty, if it so elects (or any of its
affiliates), and any of which other bidders may (but need not) be Salomon
Brothers Inc or any of its affiliates and which bidders need not be limited
to recognized broker dealers). In soliciting bids, the Indenture Trustee
may also solicit bids from any of the following: (1) Credit Suisse First
Boston Corporation, (2) ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., (3) ▇▇▇▇▇▇ Brothers Inc., (4)
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, and (5) UBS Securities
LLC. In the sole, good faith, judgment of the Indenture Trustee, bids may
be evaluated on the basis of bids for all or any portion of the securities
being sold or any other basis selected in good faith by the Indenture
Trustee. The Indenture Trustee shall not be responsible for a failure to
obtain a bid so long as it has made reasonable efforts to obtain bids. If
the Indenture Trustee is unable to obtain any bids prior to the Final
Scheduled Payment Date, the Sale Proceeds shall be deemed to be zero and
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the Term Assets and Eligible Investments (or the applicable portion thereof
subject to sale) shall be transferred to the Swap Counterparty or its
designee by the Indenture Trustee.
"SALE PROCEEDS" means any amounts received by the Indenture
Trustee upon a sale of the Collateral Obligations and/or any Eligible
Investments (i) in connection with a mandatory prepayment of the Notes
pursuant to Section 3b of this Agreement and a mandatory prepayment of the
Certificates pursuant to the Trust Agreement or (ii) in connection with an
optional redemption of the Notes pursuant to Section 3c hereof and an
optional redemption of the Certificates pursuant to the Trust Agreement or
(iii) in connection with a sale in connection with the Final Scheduled
Payment Date pursuant to Section 6 hereof.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"SCHEDULED INTEREST PAYMENTS" means, with respect to the Term
Assets, the interest scheduled to be paid on the Term Assets, assuming no
charge offs, defaults or other reductions thereon on each monthly payment
date therefor.
"SWAP AGREEMENT" means the ISDA Master Agreement, together with
the Schedule and Confirmations, entered into by the Issuer with the Swap
Counterparty on the Closing Date.
"SWAP COUNTERPARTY" means Westdeutsche Landesbank Girozentrale,
New York Branch.
"SWAP EARLY TERMINATION EVENT" means the occurrence of an Event
of Default or a Termination Event under and as defined in the Swap
Agreement.
"TERM ASSETS PROSPECTUS" means the prospectus dated November 6,
1996 and a supplement thereto also dated November 6, 1996, each relating to
the Collateral Obligations.
"TRUST AGREEMENT" means the Trust Agreement between Structured
Products Corp., as Depositor, and Delaware Trust Capital Management, Inc.,
as Trustee, as supplemented by the Series Trust Agreement between the
Depositor and the Delaware Trust Capital Management Inc., as Trustee, each
dated September 15, 1997, pursuant to which the Certificates are being
issued.
Section 2. TERMS OF THE NOTES.
a. DESIGNATION. The Notes created and authorized pursuant to
the Standard Terms and this Series Trust Indenture thereto shall be
designated as "TIERS Asset-Backed Securities, Series CHAMT Trust 1997-7,
Fixed Rate Notes, Class A". The Notes shall be limited obligations of the
Issuer payable solely from payments received by the Issuer attributable to
the Collateral Obligations and other assets granted hereunder. The Notes
shall be issued in substantially the form of Note set forth in Appendix 1
hereto.
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b. DELIVERY. The Issuer hereby authorizes the letter of
representations with respect to the Notes, in the form customarily provided
to DTC, from the Owner Trustee and the Indenture Trustee to DTC, dated the
date of delivery of the Notes (the "Letter of Representation").
c. AGGREGATE PRINCIPAL AMOUNT; CLASSES. The Notes created and
authorized pursuant to the Standard Terms and Provisions of the Trust
Indenture and Series Trust Indenture thereto shall be issued in a single
Class A in and aggregate principal amount equal to the Initial Note
Principal Amount; shall have the standard terms set forth in the Standard
Terms; and shall have the nonstandard terms set forth in this Series Trust
Indenture.
d. PLACES OF PAYMENT OF PRINCIPAL. The final payment of
principal in retirement of the Notes (including in connection with the
optional redemption of the Notes pursuant to Section 3(c)) shall be payable
upon presentation and surrender thereof only at the office of the Trustee
in the Borough of Manhattan, City and State of New York.
e. DENOMINATIONS OF NOTES. The Notes shall be issued in
minimum denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
f. AUTHENTICATION OF NOTES. The Notes may be authenticated by
the Trustee either at the Corporate Trust Office or at the Trustee's office
in the Borough of Manhattan, City and State of New York.
Section 3. PAYMENT DATES; COMPUTATIONS OF INTEREST;
PREPAYMENTS; PAYMENT OF PRINCIPAL.
a. PAYMENTS OF INTEREST. The Notes shall accrue interest at
the Note Interest Rate as set forth in the form of Note set forth in
Appendix 1 hereto. Payments on the Notes will be made monthly on each
Payment Date. In any case in which a Payment Date, as originally
scheduled, is not a Business Day and interest is to be paid on the next
succeeding Business Day, no additional interest for the number of
additional days to such succeeding Business Day will be paid on the Note.
Payment on the Notes in such circumstances shall be made with the same
force and effect as if the originally scheduled Payment Date was a Business
Day, and no additional interest shall accrue for the related Interest
Accrual Period. If and to the extent that the amount available to pay
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interest to the Noteholders on any Payment Date in accordance with the
priority of payments set forth in Section 4 hereof is insufficient to pay
all interest then due at the Note Interest Rate, such amounts shall
constitute Deferred Interest Amounts which shall be payable, as provided in
Section 4, in whole or in part, on any Payment Date on which the Available
Funds are sufficient to pay such amounts in accordance with such priority
of payments.
b. MANDATORY PREPAYMENT OF NOTES.
(i) Beginning on the Payment Date in February 1999, and on
each Payment Date thereafter until the principal amount of the Notes is
paid in full, the Issuer will prepay a portion of the principal amount of
Notes in an aggregate amount equal to the Monthly Prepayment Amount for
such Payment Date.
(ii) The Swap Counterparty has agreed in the Swap Agreement
that it shall, beginning in February 1999, on the first Business Day of
each month, determine (A) the PSA Index Rate for such month, (B) the
Monthly Amortization Rate that corresponds to such PSA Index Rate, (C) the
Note Notional Amount, (D) the Monthly Prepayment Amount, and (E) the Note
Current Factor, and to notify the Indenture Trustee of its determinations
thereof.
(iii) The Swap Counterparty's calculations of Monthly
Prepayment Amounts or its determination of the PSA Index Rate, the Monthly
Amortization Rate, the Note Notional Amount or the Note Current Factor,
each month will, absent manifest error, be final and binding.
c. OPTIONAL REDEMPTION OF NOTES.
(i) If on any Payment Date, before giving effect to any
distributions to be made on such date, the aggregate outstanding principal
amount of the Collateral Obligations would be less than 10% of the Initial
Principal Amount of the Collateral Obligations, the Swap Counterparty may,
at its option, by delivering a written notice to the Indenture Trustee
(with a copy to the Issuer), purchase all of the Term Assets and Eligible
Investments at an aggregate purchase price equal to the outstanding
principal amount of the Notes and Certificates and any accrued interest
thereon and direct the redemption of all of the Outstanding Notes at their
Redemption Price. If the Swap Counterparty so delivers such a written
notice to the Indenture Trustee, the Indenture Trustee shall deliver a
notice of redemption to each Noteholder (a "Redemption Notice"), with a
copy to the Issuer, in the manner provided in Section 10.2(b) of the
Standard Terms; provided that the Redemption Date for such redemption shall
be the first Payment Date which is at least 15 days after the date of the
Indenture Trustee's delivery of such Redemption Notice.
(ii) If a Redemption Notice is delivered by the Indenture Trustee
as provided herein, the Indenture Trustee shall, by no later than the 10th
day before the Redemption Date, notify the Swap Counterparty and sell, in
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accordance with the Sale Procedures, all of the Eligible Investments and
Collateral Obligations then held by the Issuer, for settlement on the
Redemption Date. Any Sale Proceeds realized from such sale shall be
deposited into the Collection Account for distribution as provided herein.
d. FINAL PAYMENT OF PRINCIPAL. Any principal of the Notes not
previously paid will become due on the Final Scheduled Payment Date for the
Notes.
Section 4. COLLECTIONS AND DISTRIBUTIONS.
a. COLLECTION ACCOUNT; PRIORITY OF PAYMENTS.
(i) Section 8.2 and Subsections (a) and (b) of Section 8.3 of
the Standard Terms shall have no effect with respect to the Notes or the
Certificates.
(ii) The Indenture Trustee shall deposit into the Collection
Account, upon receipt, (A) all payments on the Collateral Obligations
(other than Early Amortization Payments), (B) any amounts received from the
Swap Counterparty pursuant to the Swap Agreement, and (C) any Sale Proceeds
(all such amounts, "Available Funds").
(iii) Moneys held in this Collection Account shall be applied
on each Payment Date (including the Redemption Date and on the Final
Scheduled Payment Date) by the Indenture Trustee, to the extent of
Available Funds, as follows:
FIRST, to the Swap Counterparty, any amounts due pursuant to
the Swap Agreement;
SECOND, to the Noteholders, all accrued and unpaid interest
(including any Deferred Interest Amounts);
THIRD, to the Noteholders, any amounts constituting
principal due on the Notes;
FOURTH, to the Certificateholders, all accrued and unpaid
interest (including any Deferred Interest Amounts);
FIFTH, to the Certificateholders, any amounts constituting
principal due on the Certificates; and
SIXTH, any excess to the Swap Counterparty.
In the event that on any Payment Date the amounts in the Collection Account
are insufficient to pay all amounts then due the Noteholders, each
Noteholder will get its Pro Rata Share of the amount available for
distribution to all Noteholders as provided herein. In the event that on
any Payment Date the amounts in the Collection Account are insufficient to
pay all amounts then due the Certificateholders, each Certificateholder
will get its Pro Rata Share of the amount available for distribution to all
Certificateholders as provided herein.
b. COLLATERAL ACCOUNT; INVESTMENTS.
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(i) On or prior to the Closing Date the Indenture Trustee shall
establish, and thereafter shall maintain, in the name of the Indenture
Trustee, for the benefit of the Swap Counterparty, the Noteholders and the
Certificateholders, as their interests appear herein and in the Trust
Agreement, the Collateral Account and shall deposit and hold the Term
Assets therein. All Early Amortization Payments shall be deposited into
the Collateral Account and shall be invested at the written direction of
the Swap Counterparty given to the Indenture Trustee in Eligible
Investments made in the name of the Indenture Trustee. All interest on and
principal payments of Eligible Investments (except any such which
constitute Sale Proceeds, which shall be deposited into the Collection
Account) shall be deposited into the Collateral Account upon receipt. Upon
maturity of any Eligible Investments, an amount equal to the Par Amount
thereof shall be reinvested by the Indenture Trustee in Eligible
Investments in accordance with instructions from the Swap Counterparty. If
the Indenture Trustee has not received any instructions from the Swap
Counterparty by 4:30 p.m. New York City on any date on which there are
funds in the Collateral Account to be invested, the Indenture Trustee shall
invest such funds in any overnight investments meeting the requirements for
Eligible Investments. The Indenture Trustee shall give the Swap
Counterparty written notification by 3:00 p.m. New York City time each day
it receives an Early Amortization Payment or on any date on which there are
funds in the Collateral Account to be invested.
(ii) All income from any Eligible Investments shall be paid to
the Swap Counterparty upon receipt. Any losses from such investments shall
be charged to the Collateral Account. Neither the Trustee nor the Swap
Counterparty shall be liable for any losses from such investments.
Section 5. SALE PROCEDURES. If it is determined that a
Monthly Prepayment Amount will be due on the next Payment Date for the
Notes or the Certificates, the Indenture Trustee shall, by no later than
the 10th day before such Payment Date, notify the Swap Counterparty, and
shall arrange for the sale, for settlement on such Payment Date, in
accordance with the Sale Procedures, of an aggregate Par Amount of Eligible
Investments which, together with the principal amount of Collateral
Obligations to be sold, all as directed by the Swap Counterparty pursuant
to the Swap Agreement, will equal the sum of the Mandatory Prepayment
Amount due on the Notes and the Mandatory Prepayment due on the
Certificates on such next Payment Date.
Section 6. FINAL SCHEDULED PAYMENT DATE. The Indenture
Trustee shall, by no later than the 10th day before the Final Scheduled
Payment Date, notify the Swap Counterparty, and shall arrange for the sale,
for settlement on the Final Scheduled Payment Date, in accordance with the
Sale Procedures, of all Eligible Investments and Collateral Obligations
12
then held by the Trustee and shall, irrespective of whether an Asset
Impairment Event (as defined in the Swap Agreement) has then occurred,
distribute the proceeds thereof in accordance with the priorities set forth
in Section 4a(iii) above.
Section 7. EVENTS OF DEFAULT.
a. EVENTS OF DEFAULT. In lieu of the defaults identified in
Section 5.1 of the Standard Terms, an "Event of Default" under this
Indenture will consist of: (i) a default for five Business Days or more in
the payment of any interest on any Note when the same becomes due and
payable; provided that a deferral of interest on the Notes as provided in
Section 3 hereof will not be considered "due and payable" within the
meaning of this clause (A) until the Payment Date on which there are
sufficient Available Funds to pay the interest so deferred; (B) a default
in the payment of the principal of or any installment of the principal of
any Note when the same becomes due and payable by reason of mandatory
prepayment or otherwise; (ii) a default in the observance or performance of
any covenant or agreement of the Issuer made in the Indenture and the
continuation of any such default for a period of 30 days after notice
thereof is given to the Issuer by the Indenture Trustee or the Swap
Counterparty or to the Issuer, the Swap Counterparty and the Indenture
Trustee by the holders of at least 25% of the outstanding principal of the
Notes; (iii) any representation or warranty made by the Issuer in the
Indenture or in any certificate delivered pursuant thereto or in connection
therewith having been incorrect in a material respect as of the time made,
and the circumstance in respect of which such representation or warranty
was incorrect not having been cured within 30 days after notice thereof is
given to the Issuer by the Indenture Trustee or the Swap Counterparty or to
the Issuer, the Swap Counterparty and the Indenture Trustee by the holders
of at least 25% of the outstanding principal of the Notes then outstanding;
(iv) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law or
hereafter in effect, or the consent by the Issuer to the appointment or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part
of the Trust Estate, or the making by the Issuer of any general assignment
for the benefit of creditors, or the failure by the Issuer generally to pay
its debts as such debts become due, or the taking of action by the Issuer
in furtherance of any of the foregoing; or (v) the occurrence of a Swap
Early Termination Event. In the event of the occurrence of a Swap Early
Termination Event, notwithstanding anything to the contrary in Section 5.2
of the Standard Terms, the Notes will be deemed to have been declared to be
immediately due and payable without need for any additional consents.
b. SALE OF ASSETS UPON EVENT OF DEFAULT AND ACCELERATION OF
NOTES. Upon the occurrence of an Event of Default hereunder, if the
Notes have been accelerated (or if such Event of Default is a Swap
Termination Event and the Notes are required to be accelerated as
set forth in Section 7a above), the Indenture Trustee shall sell the
Collateral Obligations and Eligible Investments pursuant to Section
5.4(a)(iv) of the Standard Terms and shall not take any other action
with respect thereto except to the extent, if any, that such property
cannot be sold.
13
5.4(a)(iv) of the Standard Terms and shall not take any other action with
respect thereto except to the extent, if any, that such property cannot be
sold.
c. DISTRIBUTIONS AFTER AN EVENT OF DEFAULT. Section 5.4(b) of
the Standard Terms shall have no effect with respect to collections of
money or property pursuant to Article V of the Indenture following an Event
of Default, which collections shall be paid out in the following order:
FIRST, to the Indenture Trustee for amounts due under Section 6.7
of the Indenture;
SECOND, to the Swap Counterparty, any amounts due pursuant to the
Swap Agreement;
THIRD, to the Noteholders, any amounts constituting interest due
on the Notes to the date of payment, including deferred interest, if
any;
FOURTH, to the Noteholders, any amounts constituting principal
due on the Notes to the date of payment; and
FIFTH, to the Owner Trustee for distribution pursuant to the
Trust Agreement.
d. OPTIONAL PRESERVATION OF THE COLLATERAL OBLIGATIONS. With
reference to Section 5.5 of the Standard Terms, it is also the desire of
the parties to the 1997-7 Series Trust Indenture that the payments required
to be made to the Swap Counterparty pursuant to the Swap Agreement be made
when due thereunder, including upon a Swap Early Termination.
Section 8. APPOINTMENT OF INDENTURE TRUSTEE AS PAYING AGENT
AND NOTE REGISTRAR.
The Issuer hereby appoints the Indenture Trustee to act as Paying
Agent for the Notes and as Note Registrar and, so long as the Indenture
Trustee is also the Administrator, as Paying Agent for the Certificates and
as Certificate Registrar.
Section 9. MISCELLANEOUS.
a. The Issuer shall, on each anniversary of the Closing Date
furnish to the Indenture Trustee the Opinion of Counsel required by Section
3.6 of the Standard Terms and the "annual statement of compliance" required
by Section 3.9 of the Standard Terms.
b. The Indenture Trustee covenants and agrees to treat the Note
as indebtedness for all federal and state income tax, franchise tax, and
transfer and similar tax purposes.
c. The Indenture Trustee will mail to any Noteholder, within
three business days of any such Noteholder's written request, at its
address listed on the Note Register maintained with the Indenture Trustee,
a monthly report stating as of the immediately preceding Payment Date (i)
14
the amount of principal and interest, respectively paid on each $1000 in
principal amount of Notes, (ii) the Note Principal Amount, (iii) the Note
Current Factor, (iv) the outstanding principal amount of the Term Assets
and the Par Value of any Eligible Investments then held by the Issuer and
(v) the Certificate principal balance.
d. With reference to Section 9.2 of the Standard Terms, where
the consent of the holders of not less than a majority of the outstanding
amount of the Notes is necessary to enter into an indenture or indentures
supplemental hereto for the purpose of adding any provision to, or changing
in any manner, or eliminating any of the provisions of the Indenture or of
modifying in any manner the rights of the Noteholders under the Indenture,
the consent of the Swap Counterparty shall also be necessary unless there
has been an Event of Default under (and as defined in) the Swap Agreement
and the party in default is the Swap Counterparty.
e. With reference to Section 9.1(b) of the Standard Terms, the
Opinion Of Counsel must also be satisfactory to the Swap Counterparty
unless there has been an Event of Default under and as defined in the Swap
Agreement and the party in default is the Swap Counterparty.
f. Notwithstanding anything contained herein to the contrary,
this instrument has been signed by the Owner Trustee, not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in
no event shall the Owner Trustee in its individual capacity or any
beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligation of the Issuer
hereunder as to all of which recourse shall be had solely to the assets of
the Issuer.
g. Each Series shall constitute a separate Series of the Trust
pursuant to Section 3806(b)(2) of the Delaware Business Trust act (the
"DBTA"). Separate and distinct records shall be maintained for each Series
and the assets associated with any such Series shall be held and accounted
for separately from the other assets of the Trust, or any other Series
thereof. Subject to the right of the Trust to allocate general
liabilities, expenses, costs, charges or reserves as herein provided, the
debts liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular Series shall be enforceable
against the assets of such Series only, and not against the assets of any
other Series. Notice of this limitation on inter-series liabilities shall
be set forth in the certificate of trust of the Trust (whether originally
or by amendment) as filed or to be filed in the Office of the Secretary of
State of the State of Delaware pursuant to the DBTA, and upon the giving of
such notice in the certificate of trust, the statutory provisions of
Section 3804 of the DBTA relating to limitations on inter-series
liabilities (and the statutory effect under Section 3804 of setting forth
such notice in the certificate of trust) shall become applicable to the
15
Trust and each Series. Every note, bond, contract or other undertaking
issued by or on behalf of a particular Series shall include a recitation
limiting the obligation represented thereby to that Series and its assets.
h. The Swap Counterparty is hereby made an express third party
beneficiary of this Agreement.
16
IN WITNESS WHEREOF, the parties hereto have caused this Series
Trust Indenture to be executed by their respective duly authorized officers
as of the date first above written.
TIERS ASSET-BACKED SECURITIES, SERIES CHAMT TRUST
1997-7
By: DELAWARE TRUST CAPITAL MANAGEMENT,
INC.
not in its individual capacity
but solely as Owner Trustee under
the Trust Agreement
By:______________________________
Title:
FIRST TRUST NATIONAL ASSOCIATION,
solely in its capacity as Indenture Trustee
hereunder
By:______________________________
Title:
17
SCHEDULE A
PREPAYMENT CALCULATION TABLE
PSA INDEX PSA INDEX PSA INDEX
AMORTIZATION AMORTIZATION AMORTIZATION
RATE(%) MONTHLY RATE(%) MONTHLY RATE(%) MONTHLY
------------ ------- ------------- ------- ------------ ------------
0-100 0.000 142 1.176 184 2.352
101 0.028 143 1.204 185 2.380
102 0.058 144 1.232 186 2.408
103 0.084 145 1.280 187 2.436
104 0.112 146 1.288 188 2.484
105 0.140 147 1.316 189 2.492
106 0.168 148 1.344 190 2.520
107 0.196 149 1.372 191 2.548
108 0.224 150 1.400 192 2.576
109 0.252 151 1.428 193 2.604
110 0.280 152 1.456 194 2.632
111 0.308 153 1.484 195 2.660
112 0.338 154 1.512 196 2.888
113 0.364 155 1.540 197 2.716
114 0.392 156 1.568 198 2.744
115 0.420 157 1.596 199 2.772
116 0.448 158 1.624 200 2.800
117 0.476 159 1.652 201 2.828
118 0.504 160 1.680 202 2.858
119 0.532 161 1.708 203 2.884
120 0.560 162 1.736 204 2.912
121 0.588 163 1.764 205 2.940
122 0.616 164 1.792 206 2.988
123 0.644 165 1.820 207 2.996
124 0.672 166 1.848 208 3.024
125 0.700 167 1.876 209 3.052
126 0.728 168 1.904 210 3.080
127 0.756 169 1.932 211 3.108
128 0.784 170 1.960 212 3.136
129 0.812 171 1.988 213 3.164
130 0.840 172 2.018 214 3.192
131 0.888 173 2.044 215 3.220
132 0.896 174 2.072 216 3.248
133 0.924 175 2.100 217 3.278
134 0.952 176 2.128 218 3.304
135 0.980 177 2.158 219 3.332
136 1.006 178 2.185 220 3.360
137 1.038 179 2.212 221 3.388
138 1.084 180 2.240 222 3.416
139 1.092 181 2.288 223 3.444
140 1.120 182 2.296 224 3.472
141 1.148 183 2.324 225-325 3.500
A-1
PSA INDEX PSA INDEX PSA INDEX
AMORTIZATION AMORTIZATION AMORTIZATION
RATE(%) MONTHLY RATE(%) MONTHLY RATE(%) MONTHLY
------------ ------- ------------- ------- ------------ -----------
326 3.570 374 6.930 422 10.525
327 3.640 375 7.000 423 10.600
328 3.710 376 7.075 424 10.675
329 3.780 377 7.150 425 10.750
330 3.850 378 7.225 426 10.825
331 3.920 379 7.300 427 10.900
332 3.990 380 7.375 428 10.975
333 4.060 381 7.450 429 11.050
334 4.130 382 7.525 430 11.125
335 4.200 383 7.600 431 11.200
336 4.270 384 7.765 432 11.275
337 4.340 385 7.750 433 11.350
338 4.410 386 7.825 434 11.425
339 4.480 387 7.900 435 11.500
340 4.550 388 7.975 436 11.575
341 4.620 389 8.050 437 11.650
342 4.690 390 8.125 438 11.725
343 4.760 391 8.200 439 11.800
344 4.830 392 8.275 440 11.875
345 4.900 393 8.350 441 11.950
346 4.970 394 8.425 442 12.025
347 5.040 395 8.500 443 12.100
348 5.110 396 8.575 444 12.175
349 5.180 397 8.650 445 12.250
350 5.250 398 8.725 446 12.325
351 5.320 399 8.800 447 12.400
352 5.390 400 8.875 448 12.475
353 5.460 401 8.950 449 12.550
354 5.530 402 9.025 450 12.625
355 5.600 403 9.100 451 12.700
356 5.670 404 9.175 452 12.775
357 5.740 405 9.250 453 12.850
358 5.810 406 9.325 454 12.925
359 5.880 407 9.400 455 13.000
360 5.950 408 9.475 456 13.075
361 6.020 409 9.550 457 13.150
362 6.090 410 9.625 458 13.225
363 6.160 411 9.700 459 13.300
364 6.230 412 9.775 460 13.375
365 6.300 413 9.860 461 13.450
366 6.370 414 9.925 462 13.525
367 6.440 415 10.000 463 13.800
368 6.510 416 10.075 464 13.675
369 6.580 417 10.150 465 13.750
370 6.650 418 10.225 466 13.825
371 6.720 419 10.300 467 13.900
372 6.790 420 10.375 468 13.975
373 6.860 421 10.450 469 14.050
A-2
PSA INDEX PSA INDEX PSA INDEX
AMORTIZATION AMORTIZATION AMORTIZATION
RATE(%) MONTHLY RATE(%) MONTHLY RATE(%) MONTHLY
------------ ------- ------------- ------- ------------ ------------
470 14.125 518 17.940 558 21.140
471 14.200 519 18.020 559 21.220
472 14.275 520 18.100 560 21.300
473 14.350 521 18.180 561 21.380
474 14.425 522 18.260 562 21.460
475 14.500 523 18.340 563 21.540
476 14.580 524 18.420 564 21.620
477 14.660 525 18.500 565 21.700
478 14.745 526 18.580 566 21.780
479 14.820 527 18.660
480 14.905 528 18.740
481 14.980 529 18.820
482 15.060 530 18.900
483 15.140 531 18.980
484 15.220 532 19.060
485 15.300 533 19.140
486 15.380 534 19.220
487 15.460 535 19.300
488 15.540 536 19.380
489 15.620 537 19.460
490 15.700 538 19.540
491 15.780 539 19.620
492 15.860 540 19.700
493 15.940 541 19.780
494 16.020 542 19.860
495 16.100 543 19.940
496 16.180 544 20.020
497 16.260 545 20.100
498 16.340 546 20.180
499 16.420 547 20.260
500 16.500 548 20.340
501 16.580 549 20.420
502 16.660 550 20.500
503 16.740 551 20.580
504 16.820 552 20.660
505 16.900 553 20.740
506 16.980 554 20.820
507 17.060 555 20.900
508 17.140 556 20.980
509 17.220 557 20.060
510 17.300
511 17.380
512 17.460
513 17.540
514 17.620
515 17.700
516 17.780
517 17.880
A-3
PSA INDEX PSA INDEX PSA INDEX
AMORTIZATION AMORTIZATION AMORTIZATION
RATE(%) MONTHLY RATE(%) MONTHLY RATE(%) MONTHLY
------------ ------- ------------- ------- ------------ ------------
567 21.860
568 21.940
569 21.020
570 22.100
571 22.180
572 22.260
573 22.340
574 22.420
575 22.500
FORM OF FIXED RATE NOTE, CLASS A
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
TIERS{sm} ASSET-BACKED SECURITIES, SERIES CHAMT TRUST 1997-7
FIXED RATE NOTE, CLASS A
(ISSUABLE IN MULTIPLES OF THE MINIMUM DENOMINATION)
No.: ▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: $352,980,000
CUSIP No.: ▇▇▇▇▇▇▇▇▇
TIERS{sm} Asset-Backed Securities, Series CHAMT Trust 1997-7, a
business trust organized and existing under the laws of the State of Delaware
(herein referred to as the "Issuer"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of [ ]
DOLLARS payable on each Payment Date in an amount equal to the result
obtained by multiplying (i) a fraction the numerator of which is $[INSERT
PRINCIPAL AMOUNT OF NOTE] and the denominator of which is $352,980,000 by (ii)
the aggregate amount, if any, payable from the Collection Account in respect of
principal on the Notes pursuant to Section 4 of the Indenture; PROVIDED
HOWEVER, that the entire unpaid principal amount of this Note shall be due and
payable on the Payment Date in November 2003 (the "Final Scheduled Payment
Date"). The Issuer will pay interest on this Note at the rate of 6.688% per
annum on each Payment Date, subject to deferral as provided in Section 3(a)
of the Indenture, until the principal of this Note is paid or made available
for payment, on the principal amount of this Note outstanding on the preceding
Payment Date (after giving effect to all payments of principal made on the
preceding Payment Date). Interest on this Note will accrue for each Payment
Date from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from
September 15, 1997. Interest will be computed on the basis of the actual
number of days elapsed in a 360-day year, consisting of 12 30-day months. The
sole obligors with respect to the principal and interest on this Note is the
issuer of the Term Assets and other assets granted pursuant to the 1997-7
Series Trust Indenture and any other entities obligated to make payments to
such issuers or obligors (or their trustees or other applicable fiduciaries).
This Note is one of a duly authorized issue of Notes of the
Issuer designated as its Class A Notes (herein called the "Notes"), pursuant to
the terms of a Series Trust Indenture, (the "Indenture") dated as of September
15, 1997 consisting of a Series Trust Indenture together with the Standard
Terms and Provisions of Trust Indenture appended thereto, together with all
other exhibits, schedules, appendices, supplements and amendments thereto
between the Issuer and First Trust of New York, National Association, as
Indenture Trustee, pursuant to which this and other Notes have been issued.
Reference is hereby made to the Indenture and all indentures supplemental
thereto for a statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the Noteholders. All terms used and not
otherwise defined in this Note that are defined in the Indentures, as
supplemented or amended, shall have the meanings assigned to them in or
pursuant to the Indenture.
The Notes issued pursuant to the Indenture and will be equally
and ratably secured by the Collateral pledged as security therefor as provided
in the Indenture.
Subject to mandatory prepayment in whole or in part or optional
redemption in whole, as set forth in Section 3 of the 1997-7 Series Trust
Indenture, the entire principal amount of this Note shall be due and payable on
the date on which Event of Default shall have occurred and be continuing and
the Indenture Trustee or Noteholders representing not less than 25% of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2 of the Indenture or upon the
occurrence of a Swap Early Termination Event as defined in the Series Trust
Indenture. All payments in respect of the principal amount hereof shall be
made in the ratio that the outstanding principal amount of this Note to the
Outstanding Amount of the Notes.
Payments in respect of interest on and principal of this Note
shall be due and payable on each Payment Date and payments in respect of
interim shall be due and payable on the Payment Dates, if not in full payment
of this Note, shall be made by check mailed to the Person whose name appears as
the Registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on each Record Date, except that with
respect to the Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. The Record Date, with respect to any Payment Date, means
the day immediately preceding such Payment Date or if Definitive Notes are
issued, the last business day of the month prior to the month in which such
Payment Date occurs. Any reduction in the principal amount of this Note (or
any one or more predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full of the
then remaining unpaid principal amount of this Note on a Payment Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, shall
notify the Person who is the Registered Holder hereof as of the Record
Date preceding such Payment Date, by notice sent in accordance with Section
2.7(d) of the Indenture, and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in New York City.
As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in New York City
or the city in which the Corporate Trust Office is located, or a member firm of
a national securities exchange, and such other documents as the Indenture
Trustee may require, and thereupon one or more new Notes of authorized
detonations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for
any registration of transfer or exchange of this Note, but the transferor may
be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
their individual capacities, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in their individual
capacities, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assignee of the
Indenture Trustee or the Owner Trustee in their individual capacities, except
as any such person may have expressly agreed and except that any such party,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment of call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture such Noteholder will not, prior
to the date which is one year and one day after the termination of this
Indenture with respect to the Issuer, acquiesce, petition or otherwise invoke
or cause the Depositor or the Issuer to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Depositor or the Issuer under any federal or state bankruptcy, insolvency
or similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Depositor or the
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Depositor or the Issuer.
Each Noteholder or Note Owner, acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees to
treat the Note as indebtedness for all federal and state income tax, franchise
tax, and transfer and similar tax purposes.
Prior to the due presentment of registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer of the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the Indenture)
is registered as the owner hereof for all purposes, whether or not this Note
shall be overdue, and neither the Issuer, the Indenture Trustee nor any such
agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the Indenture
at any time by the Issuer with the consent of the Holders of Notes representing
a majority of the Outstanding Amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of
law provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither the Depositor, the Indenture
Trustee nor the Owner Trustee in their respective individual capacities, any
owner of a beneficial interest in the Issuer, nor any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors
or assigns, shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on, or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in this Note or the Indenture, it being expressly understood that
said covenants, obligations and indemnifications have been made by the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
The principal of and interest of this Note are payable in such
coin or currency of the United States of America which, at the time of payment,
is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
each caused this Agreement to be executed by or in facsimile, by its Authorized
Officer.
Date: TIERS{sm} ASSET-BACKED SECURITIES, SERIES CHAMT TRUST 1997-7
By: DELAWARE TRUST CAPITAL MANAGEMENT, INC., not in its
individual capacity but solely as Owner Trustee under the Trust
Agreement
By:________________________________
Name:
Title:
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION,
as Indenture Trustee
By:_________________________________
Name:
Title: