EXHIBIT 4.3
[_] TRUST 200_-____
Issuer
AND
[_]
Indenture Trustee
----------
INDENTURE
Dated as of _______________
----------
[_] TERM NOTES
[[_] VARIABLE FUNDING NOTES]
----------
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...............................................................................2
Section 1.01 Definitions...........................................................................2
Section 1.02 Incorporation by Reference of Trust Indenture Act.....................................3
Section 1.03 Rules of Construction.................................................................3
ARTICLE II ORIGINAL ISSUANCE OF NOTES................................................................4
Section 2.01 Form..................................................................................4
Section 2.02 Execution, Authentication and Delivery................................................4
ARTICLE III COVENANTS.................................................................................6
Section 3.01 Collection of Payments with respect to the Trust Estate...............................6
Section 3.02 Maintenance of Office or Agency.......................................................6
Section 3.03 Money for Payments To Be Held in Trust; Paying Agent..................................6
Section 3.04 Existence.............................................................................7
Section 3.05 Payment of Principal and Interest; Defaulted Interest.................................7
Section 3.06 Protection of Trust Estate............................................................9
Section 3.07 Opinions as to Trust Estate..........................................................10
Section 3.08 Performance of Obligations; Servicing Agreement......................................10
Section 3.09 Negative Covenants...................................................................11
Section 3.10 Annual Statement as to Compliance....................................................11
Section 3.11 Recording of Assignments.............................................................12
Section 3.12 Representations and Warranties Concerning the Mortgage Loans.........................12
Section 3.13 Amendments to Servicing Agreement....................................................12
Section 3.14 [Master] Servicer as Agent and Bailee of the Trust Estate Holder.....................12
Section 3.15 Investment Company Act...............................................................12
Section 3.16 Issuer May Consolidate, etc .........................................................13
Section 3.17 Successor or Transferee..............................................................14
Section 3.18 No Other Business....................................................................14
Section 3.19 No Borrowing.........................................................................14
Section 3.20 Guarantees, Loans, Advances and Other Liabilities....................................14
Section 3.21 Capital Expenditures.................................................................15
Section 3.23 Restricted Payments..................................................................15
Section 3.24 Notice of Events of Default..........................................................15
Section 3.25 Further Instruments and Acts.........................................................15
Section 3.26 Statements to Noteholders............................................................15
-i-
TABLE OF CONTENTS
(continued)
Page
Section 3.27 Determination of Note Rate and Certificate Rate......................................15
Section 3.28 Payments under the Credit Enhancement Instrument.....................................15
Section 3.29 Replacement Credit Enhancement Instrument............................................16
Section 4.01 The Notes; Increase of Maximum Variable Funding Balance;
Additional Variable Funding Notes....................................................17
Section 4.02 Registration of and Limitations on Transfer and Exchange of
Notes; Appointment of Certificate Registrar..........................................19
Section 4.03 Mutilated, ▇▇▇▇▇▇▇▇▇, Lost or Stolen Notes...........................................20
Section 4.04 Persons Deemed Owners................................................................21
Section 4.05 Cancellation.........................................................................21
Section 4.06 Book-Entry Notes.....................................................................21
Section 4.07 Notices to Depository................................................................22
Section 4.08 Definitive Notes.....................................................................22
Section 4.09 Tax Treatment........................................................................22
Section 4.10 Satisfaction and Discharge of Indenture..............................................23
Section 4.11 Application of Trust Money...........................................................23
Section 4.12 Subrogation and Cooperation..........................................................24
Section 4.13 Repayment of Monies Held by Paying Agent.............................................24
Section 4.14 Temporary Notes......................................................................25
ARTICLE V DEFAULT AND REMEDIES.....................................................................26
Section 5.01 Events of Default....................................................................26
Section 5.02 Acceleration of Maturity; Rescission and Annulment...................................26
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee..............................................................................27
Section 5.04 Remedies; Priorities.................................................................29
Section 5.05 Optional Preservation of the Trust Estate............................................30
Section 5.06 Limitation of Suits..................................................................30
Section 5.07 Unconditional Rights of Noteholders To Receive Principal and Interest................31
Section 5.08 Section 5.0.Restoration of Rights and Remedies.......................................31
Section 5.09 Rights and Remedies Cumulative.......................................................31
Section 5.10 Delay or Omission Not a Waiver.......................................................31
Section 5.11 Control by Noteholders...............................................................32
Section 5.12 Waiver of Past Defaults..............................................................32
-ii-
TABLE OF CONTENTS
(continued)
Page
Section 5.13 Undertaking for Costs................................................................32
Section 5.14 Waiver of Stay or Extension Laws.....................................................33
Section 5.15 Sale of Trust Estate.................................................................33
Section 5.16 Action on Notes......................................................................34
Section 5.17 Performance and Enforcement of Certain Obligations...................................35
ARTICLE VI THE INDENTURE TRUSTEE....................................................................36
Section 6.01 Duties of Indenture Trustee..........................................................36
Section 6.02 Rights of Indenture Trustee..........................................................37
Section 6.03 Individual Rights of Indenture Trustee...............................................37
Section 6.04 Indenture Trustee's Disclaimer.......................................................37
Section 6.05 Notice of Event of Default...........................................................37
Section 6.06 Reports by Indenture Trustee to Holders..............................................38
Section 6.07 Compensation and Indemnity...........................................................38
Section 6.08 Replacement of Indenture Trustee.....................................................38
Section 6.09 Successor Indenture Trustee by Merger................................................39
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee....................39
Section 6.11 Eligibility; Disqualification........................................................40
Section 6.12 Preferential Collection of Claims Against Issuer.....................................41
Section 6.13 Representation and Warranty..........................................................41
Section 6.14 Directions to Indenture Trustee......................................................41
Section 6.15 No Consent to Certain Acts of Depositor..............................................41
Section 6.16 Indenture Trustee May Own Securities.................................................42
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS...........................................................42
Section 7.01 Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders...............42
Section 7.02 Preservation of Information; Communications to Noteholders...........................42
Section 7.03 Reports by Issuer....................................................................42
Section 7.04 Reports by Indenture Trustee.........................................................44
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES.....................................................45
Section 8.01 Collection of Money..................................................................45
Section 8.02 Trust Accounts.......................................................................45
Section 8.03 Officer's Certificate................................................................46
Section 8.04 Termination Upon Distribution to Noteholders.........................................46
-iii-
TABLE OF CONTENTS
(continued)
Page
Section 8.05 Release of Trust Estate..............................................................46
Section 8.06 Surrender of Notes Upon Final Payment................................................47
ARTICLE IX SUPPLEMENTAL INDENTURES..................................................................48
Section 9.01 Supplemental Indentures Without Consent of Noteholders...............................48
Section 9.02 Supplemental Indentures With Consent of Noteholders..................................49
Section 9.03 Execution of Supplemental Indentures.................................................50
Section 9.04 Effect of Supplemental Indenture.....................................................50
Section 9.05 Conformity with Trust Indenture Act..................................................51
Section 9.06 Reference in Notes to Supplemental Indentures........................................51
ARTICLE X MISCELLANEOUS............................................................................52
Section 10.01 Compliance Certificates and Opinions, etc. ..........................................52
Section 10.02 Form of Documents Delivered to Indenture Trustee.....................................53
Section 10.03 Acts of Noteholders..................................................................54
Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Credit Enhancer and
Rating Agencies......................................................................54
Section 10.05 Notices to Noteholders; Waiver.......................................................55
Section 10.06 Alternate Payment and Notice Provisions..............................................56
Section 10.07 Conflict with Trust Indenture Act....................................................56
Section 10.08 Effect of Headings...................................................................56
Section 10.09 Successors and Assigns...............................................................56
Section 10.10 Separability.........................................................................56
Section 10.11 Benefits of Indenture................................................................56
Section 10.12 Legal Holidays.......................................................................56
Section 10.13 GOVERNING LAW........................................................................57
Section 10.14 Counterparts.........................................................................57
Section 10.15 Recording of Indenture...............................................................57
Section 10.16 Issuer Obligation....................................................................57
Section 10.17 No Petition..........................................................................57
Section 10.18 Inspection...........................................................................57
Section 10.19 Authority of the Administrator.......................................................58
EXHIBITS
Exhibit A-1 -Form of Term Notes
Exhibit A-2 -Form of Variable Funding Notes
-iv-
TABLE OF CONTENTS
(continued)
Page
Exhibit B -Form of Opinion to be delivered pursuant
to Section 4.01(b)(ii)
Exhibit C -Form of Opinion to be delivered pursuant
to Section 4.01(b)(iii)
Appendix A Definitions
-v-
This Indenture, dated as of _______________, between [_] TRUST
200_-____, a Delaware business trust, as Issuer (the "Issuer"), and
__________________________________, a ____________________________, as Indenture
Trustee (the "Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Issuer's Series
______ [_] Term Notes and [_]Variable Funding Notes, (together the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Holders of the Notes, all of the Issuer's
right, title and interest in and to whether now existing or hereafter created
[(a) all funds on deposit in the Funding Account, including all income from the
investment and reinvestment of funds therein, ] (b) all funds on deposit from
time to time in the Collection Account allocable to the Mortgage Loans excluding
any investment income from such funds; (c) all funds on deposit from time to
time in the Payment Account and in all proceeds thereof; ][(d) the Policy] and
(e) all present 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 and all payments on or under, and all proceeds of every kind and
nature whatsoever in the conversion thereof, voluntary or involuntary, into cash
or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing (collectively, the "Trust Estate" or the
"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 Holders of the
Notes, acknowledges such ▇▇▇▇▇, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
ARTICLE I
Definitions
Section 1.01 Definitions. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
2
Section 1.02 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the Trust Indenture Act (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 and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
Section 1.03 Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in
effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural
include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
3
ARTICLE II
Original Issuance Of Notes
Section 2.01 Form. The Term Notes and the Variable Funding Notes, in each
case together with the Indenture Trustee's certificate of authentication, shall
be in substantially the forms set forth in Exhibits A-1 and A-2, respectively,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may, consistently herewith, be determined by the officers executing
such Notes, as evidenced by their execution of the Notes. Any portion of the
text of any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibits A-1 and A-2 are part of the
terms of this Indenture.
Section 2.02 Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and deliver
Term Notes for original issue in an aggregate initial principal amount of
$___________ and Variable Funding Notes for original issue in an aggregate
initial principal amount of zero. The Security Balance of the Variable Funding
Notes in the aggregate may not exceed the Maximum Variable Funding Balance. The
aggregate principal amount of Notes outstanding at any time may not exceed the
sum of $___________ and the Security Balance of Additional Variable Funding
Notes issued pursuant to the terms of Section 4.01 hereof.
Each Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes and the Term Notes shall be issuable in the minimum
initial Security Balances of $100,000 and in integral multiples of $1,000 in
excess thereof.
Each Variable Funding Note shall be initially issued with a Security
Balance of $0 or, if applicable, with a Security Balance in the amount equal to
the Additional Balance Differential for the Collection Period related to the
Payment Date following the date of issuance of such Variable Funding Note
pursuant to Section 4.01(c).
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by
the Indenture Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
4
ARTICLE III
Covenants
Section 3.01 Reserved.
Section 3.02 Maintenance of Office or Agency. The Issuer will maintain in
the Borough of Manhattan, The City of New York, an office or agency where,
subject to satisfaction of conditions set forth herein, Notes may be surrendered
for registration of transfer or exchange, and where notices and demands to or
upon the Issuer in respect of the Notes and this Indenture may be served. The
Issuer hereby initially appoints the Indenture Trustee to serve as its agent for
the foregoing purposes. If at any time the Issuer shall fail to maintain any
such office or agency or shall fail to furnish the Indenture Trustee with the
address thereof, such surrenders, notices and demands may be made or served at
the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee
as its agent to receive all such surrenders, notices and demands.
Section 3.03 Money for Payments To Be Held in Trust; Paying Agent. (a) As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture
Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment
Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03.
The Issuer will cause each Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee an instrument in which such Paying
Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts
as Paying Agent it hereby so agrees), subject to the provisions of this Section
3.03, that such 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 notice of any default by the Issuer of
which it has actual knowledge in the making of any payment required to be
made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent 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
5
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 Request
direct any Paying Agent to pay to the Indenture Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Indenture Trustee upon the
same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held
by the Indenture Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for one year after
such amount has become due and payable shall be discharged from such trust and
be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper published in the English language, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. The Indenture
Trustee may also adopt and employ, at the expense and direction of the Issuer,
any other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in monies due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).
Section 3.04 Existence. 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 Notes and each other instrument or
agreement included in the Trust Estate.
Section 3.05 Payment of Principal and Interest; Defaulted Interest. (a) On
each Payment Date from amounts on deposit in the Payment Account after making
(x) any deposit to the Funding Account pursuant to Section 8.02(b) and (y) any
deposits to the Payment Account pursuant to Section 8.02(c)(ii) and Section
8.02(c)(i)(2), the Indenture Trustee shall pay to the Noteholders, the
Certificate Paying Agent, on behalf of the Certificateholders, and to other
Persons the amounts to which they are entitled as set forth below:
(i) The sum of (x) to the Noteholders the sum of (a) one month's
interest at the Note Rate on the Security Balances of Notes immediately
prior to such Payment Date and (b) any previously accrued and unpaid
interest for prior Payment Dates and (y) to the Certificate Paying Agent,
the Certificate Distribution Amount for such Payment Date;
6
(ii) if such Payment Date is after the Funding Period, to the
Noteholders and the Certificate Paying Agent as the case may be, as
principal on the Term Notes, Variable Funding Notes, and the Certificates,
the applicable Security Percentage of the Principal Collection Distribution
Amount and if such Payment Date is the first Payment Date following the end
of the Funding Period (if ending due to an Amortization Event) or the
Payment Date on which the Funding Period ends, to the Noteholders and
Certificate Paying Agent as principal on the Term Notes, Variable Funding
Notes, and Certificates the applicable Security Percentage of the amount
deposited from the Funding Account in respect of Security Principal
Collections;
(iii) to the Noteholders and the Certificate Paying Agent, as the case
may be, as principal on the Term Notes, Variable Funding Notes and the
Certificates, pro rata, based on the Security Balances from the amount
remaining on deposit in the Payment Account, up to the applicable Security
Percentage of Liquidation Loss Amounts for the related Collection Period;
(iv) to the Noteholders and the Certificate Paying Agent, as the case
may be, as principal on the Term Notes, Variable Funding Notes and the
Certificates, pro rata, based on the Security Balances from the amount
remaining on deposit in the Payment Account, up to the applicable Security
Percentage of Carryover Loss Amounts;
(v) [to the Credit Enhancer, in the amount of the premium for the
Credit Enhancement Instrument and for any Additional Credit Enhancement
Instrument;]
(vi) [to the Credit Enhancer, to reimburse it for prior draws made on
the Credit Enhancement Instrument and on any Additional Credit Enhancement
Instrument (with interest thereon as provided in the Insurance Agreement);]
(vii) to the Noteholders and the Certificate Paying Agent, as the case
may be, as principal on the Term Notes, Variable Funding Notes and the
Certificates, pro rata, based on the Security Balances from Security
Interest Collections, up to the Special Capital Distribution Amount for
such Payment Date;
(viii) [to the Credit Enhancer, any other amounts owed to the Credit
Enhancer pursuant to the Insurance Agreement;]
(ix) [Reserved];
(x) to reimburse the Administrator for expenditures made on behalf of
the Issuer with respect to the performance of its duties under the
Indenture; and
(xi) any remaining amount, to the Certificate Paying Agent, on behalf
of the Designated Certificates.
[provided, however, in the event that on a Payment Date a Credit Enhancer
Default shall have occurred and be continuing then the priorities of
distributions described above will be adjusted such that payments of the
Certificate Distribution Amount and all other amounts to be paid to the
Certificate Paying Agent will not be paid until the full amount of interest and
principal in accordance with clauses (i), (x) and (ii) through (iv) above that
are due on the Notes on such Payment Date have been paid] and provided, further,
that on the Final Scheduled Payment Date
7
or other final Payment Date, the amount to be paid pursuant to clause (ii) above
shall be equal to the Security Balances of the Securities immediately prior to
such Payment Date.
On each Payment Date, the Certificate Paying Agent shall deposit in the
Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of distributing such funds to the
Certificateholders.
The amounts paid to Noteholders shall be paid to each Class in accordance
with the Class Percentage as set forth in paragraph (b) below. Interest will
accrue on the Notes during an Interest Period on the basis of the actual number
of days in such Interest Period and a year assumed to consist of 360 days.
[Any installment of interest or principal, if any, payable on any Note or
Certificate that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall, if such Holder holds Notes or Certificates of an
aggregate initial Principal Balance of at least $1,000,000, be paid to each
Holder of record on the preceding Record Date, by wire transfer to an account
specified in writing by such Holder reasonably satisfactory to the Indenture
Trustee as of the preceding Record Date or in all other cases or if no such
instructions have been delivered to the Indenture Trustee, by check to such
Noteholder mailed to such Holder's address as it appears in the Note Register
the amount required to be distributed to such Holder on such Payment Date
pursuant to such Holder's Securities; provided, however, that the Indenture
Trustee shall not pay to such Holders any amount required to be withheld from a
payment to such Holder by the Code.]
(b) The principal of each Note shall be due and payable in full on the
Final Scheduled Payment Date for such Note as provided in the related form of
Note set forth in Exhibits A-1 and A-2. All principal payments on each Class of
Notes shall be made to the Noteholders of such Class entitled thereto in
accordance with the Percentage Interests represented by such Notes. Upon notice
to the Indenture Trustee by 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 Final Scheduled Payment Date or other final Payment Date.
Such notice shall be mailed no later than five Business Days prior to such Final
Scheduled Payment Date or other final Payment Date and shall specify that
payment of the principal amount and any interest due with respect to such Note
at the Final Scheduled Payment Date or other final Payment Date 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 such final payment.
Section 3.06 Protection of Trust Estate. (a) The Issuer will from time to
time execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable
to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) cause the 200_-____ Trust LLC to enforce any of the Mortgage
Loans; or
8
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture Trustee
shall not remove any portion of the Trust Estate that consists of money or is
evidenced by an instrument, certificate or other writing from the jurisdiction
in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant to Section 3.07 (or from the jurisdiction in which it was held as
described in the Opinion of Counsel delivered at the Closing Date pursuant to
Section 3.07(a), if no Opinion of Counsel has yet been delivered pursuant to
Section 3.07(b) unless the Trustee shall have first received an Opinion of
Counsel to the effect that the lien and security interest created by this
Indenture with respect to such property will continue to be maintained after
giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.06.
Section 3.07 Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and security
interest created hereunder and reciting the details of such action, or stating
that, in the opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) On or before ___________ in each calendar year, beginning in ____, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and security interest in the security interest created hereunder 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 in the security interest created
hereunder until December 31 in the following calendar year.
Section 3.08 Performance of Obligations; Servicing Agreement. (a) The
Issuer will punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Basic Documents and in the instruments and
agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee 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 Administrator to assist the Issuer in performing its duties
under this Indenture.
9
(c) The Issuer will not take any action or permit any action to be taken by
others which would release any Person from any of such Person's covenants or
obligations under any of the documents relating to the security interest created
hereunder or under any instrument included in the Trust Estate, or which would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any of the documents relating to
the Mortgage Loans or any such instrument, except such actions as the [Master]
Servicer is expressly permitted to take in the Servicing Agreement.
(d) The Issuer shall at all times retain an Administrator [(approved by the
Credit Enhancer under the Administration Agreement)] and may enter into
contracts with other Persons for the performance of the Issuer's obligations
hereunder, and performance of such obligations by such Persons shall be deemed
to be performance of such obligations by the Issuer.
Section 3.09 Negative Covenants. So long as any Notes are Outstanding, the
Issuer shall not:
(i) except as expressly permitted by this Indenture, sell, transfer,
exchange or otherwise dispose of the Trust Estate, unless directed to do so
by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (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;
(iii) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, () permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part thereof or any
interest therein or the proceeds thereof or () permit the lien of this
Indenture not to constitute a valid first priority security interest in the
Trust Estate; or
(iv) waive or impair, or fail to assert rights under, or impair or
cause to be impaired any interest in the Mortgage Loans, the Mortgage Loan
Purchase Agreement or in any Basic Document, if any such action would
materially and adversely affect the interests of the Noteholders.
Section 3.10 Annual Statement as to Compliance. The Issuer will deliver to
the Indenture Trustee, within 120 days after the end of each fiscal year of the
Issuer (commencing with the fiscal year ____), 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
its performance under this Indenture has been made under such Authorized
Officer's supervision; and
10
(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 its
compliance with any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status thereof.
Section 3.11 Recording of Assignments. The Issuer shall cause the 200_-____
Trust LLC to exercise its right under the Mortgage Loan Purchase Agreement with
respect to the obligation of the Seller to submit or cause to be submitted for
recording all Assignments of Mortgages on or prior to ______________ with
respect to the Initial Loans and within 60 days following the related Deposit
Date with respect to any Additional Loans.
Section 3.12 Representations and Warranties Concerning the Mortgage Loans.
The Indenture Trustee, as pledgee of Trust Estate, has the benefit of the
representations and warranties made by the Seller in Section 3.1(a) and Section
3.1(b) of the Mortgage Loan Purchase Agreement concerning the Mortgage Loans and
the right to enforce the remedies against the Seller provided in such Section
3.1(a) or Section 3.1(b) to the same extent as though such representations and
warranties were made directly to the Indenture Trustee.
Section 3.13 Amendments to Servicing Agreement. The Issuer covenants with
the Indenture Trustee that it will not enter into any amendment or supplement to
the Servicing Agreement in accordance with Section 8.01 of the Servicing
Agreement without the prior written consent of the Indenture Trustee. The
Indenture Trustee, as pledgee of the Trust Estate, may, in its discretion,
decline to enter into or consent to any such supplement or amendment if its own
rights, duties or immunities shall be adversely affected.
Section 3.14 [Master] Servicer as Agent and Bailee of the Trust Estate.
Solely for purposes of perfection under Section 9-305 of the Uniform Commercial
Code or other similar applicable law, rule or regulation of the state in which
such property is held by the [Master] Servicer, the Indenture Trustee hereby
acknowledges that the [Master] Servicer is acting as agent and bailee of the
Trust Estate in holding amounts on deposit in the Collection Account pursuant to
Section 3.02 of the Servicing Agreement, as well as its agent and bailee in
holding any Related Documents released to the [Master] Servicer pursuant to
Section 3.06(c) of the Servicing Agreement, and any other items constituting a
part of the Trust Estate which from time to time come into the possession of the
[Master] Servicer. It is intended that, by the [Master] Servicer's acceptance of
such agency pursuant to Section 3.02 of the Servicing Agreement, the Trustee, as
a secured party of the Trust Estate, will be deemed to have possession of such
Related Documents, such monies and such other items for purposes of Section
9-305 of the Uniform Commercial Code of the state in which such property is held
by the [Master] Servicer.
Section 3.15 Investment Company Act. The Issuer shall not become an
"investment company" or under the "control" of an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
provided, however, that the Issuer shall be in compliance with this Section 3.15
if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions imposed
in such order.
11
Section 3.16 Issuer May Consolidate, etc. (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any state or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form reasonably
satisfactory to the Indenture Trustee, the due and punctual payment of the
principal of and interest on all Notes and to the Certificate Paying Agent,
on behalf of the Certificateholders and the performance or observance of
every agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Event of
Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that such
transaction shall not cause the rating of the Notes [or the Certificates]
to be reduced, suspended or withdrawn or to be considered by either Rating
Agency to be below investment grade without taking into account the Credit
Enhancement Instrument;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby
restricted shall () be a United States citizen or a Person organized and
existing under the laws of the United States of America or any state, ()
expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee, the due and punctual payment of the principal of and interest on
all Notes and the performance or observance of every agreement and covenant
of this Indenture on the part of the Issuer to be performed or observed,
all as provided herein, () expressly agrees by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of Holders of the Notes, ()
unless otherwise provided in such supplemental indenture, expressly agrees
to indemnify, defend and hold harmless the Issuer against and from any
loss, liability or
12
expense arising under or related to this Indenture and the Notes and ()
expressly agrees by means of such supplemental indenture that such Person
(or if a group of Persons, then one specified Person) shall make all
filings with the Commission (and any other appropriate Person) required by
the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that such
transaction shall not cause the rating of the Notes or the Certificates to
be reduced, suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
Section 3.17 Successor or Transferee. (a) Upon any consolidation or merger
of the Issuer in accordance with Section 3.16(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.16(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.
Section 3.18 No Other Business. The Issuer shall not engage in any business
other than financing, purchasing, owning and selling and managing the Trust
Estate and the issuance of the Notes and Certificates in the manner contemplated
by this Indenture and the Basic Documents and all activities incidental thereto.
Section 3.19 No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.20 Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by this Indenture or the Basic Documents, the Issuer shall not make
any loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection
13
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 3.21 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 3.22 [Reserved]
Section 3.23 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, (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 make, or cause to be made, (x) distributions to the Owner Trustee
and the Certificateholders as contemplated by, and to the extent funds are
available for such purpose under the Trust Agreement, (y) payments to the
[Master] Servicer pursuant to the terms of the Servicing Agreement and (z)
payments to the Indenture Trustee pursuant to Section 1(a)(ii) of the
Administration Agreement. The Issuer will not, directly or indirectly, make
payments to or distributions from the Collection Account except in accordance
with this Indenture and the Basic Documents.
Section 3.24 Notice of Events of Default. The Issuer shall give the
Indenture Trustee [the Credit Enhancer] and the Rating Agencies prompt written
notice of each Event of Default hereunder and under the Trust Agreement.
Section 3.25 Further Instruments and Acts. Upon request of the Indenture
Trustee, 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 3.26 Statements to Noteholders. The Indenture Trustee and the
Certificate Registrar shall forward by mail to each Noteholder and
Certificateholder, respectively, the Statement delivered to it pursuant to
Section 4.01 of the Servicing Agreement.
Section 3.27 Determination of Note Rate and Certificate Rate. On the second
LIBOR Business Day immediately preceding (i) the Closing Date in the case of the
first Interest Period and (ii) the first day of each succeeding Interest Period,
the Indenture Trustee shall determine LIBOR and the Note Rate for such Interest
Period and shall inform the Issuer, the [Master] Servicer and the Depositor at
their respective facsimile numbers given to the Indenture Trustee in writing
thereof.
Section 3.28 [Payments under the Credit Enhancement Instrument. (a) On any
Payment Date, other than a Dissolution Payment Date, the Indenture Trustee on
behalf of the Noteholders, and in its capacity as Certificate Paying Agent on
behalf of the Certificateholders shall make a draw on the Credit Enhancement
Instrument in an amount if any equal to the sum of (x) the amount by which the
interest accrued at the Note Rate on the Security Balance of the Notes exceeds
the amount on deposit in the Payment Account available to be distributed
therefor on such Payment Date and (y) the Guaranteed Principal Payment Amount
(the "Credit Enhancement Draw Amount").
14
(b) The Indenture Trustee shall submit, if a Credit Enhancement Draw Amount
is specified in any Statement to Holders prepared by the [Master] Servicer
pursuant to Section 4.01 of the Servicing Agreement, the Notice for Payment (as
defined in the Credit Enhancement Instrument) in the amount of the Credit
Enhancement Draw Amount to the Credit Enhancer no later than 2:00 P.M., New York
City time, on the second Business Day prior to the applicable Payment Date. Upon
receipt of such Credit Enhancement Draw Amount in accordance with the terms of
the Credit Enhancement Instrument, the Indenture Trustee shall deposit such
Credit Enhancement Draw Amount in the Payment Account for distribution to
Holders (and the Certificate Paying Agent on behalf of the Certificates)
pursuant to Section 3.05.
In addition, a draw may be made under the Credit Enhancement Instrument in
respect of any Avoided Payment (as defined in and pursuant to the terms and
conditions of the Credit Enhancement Instrument) and the Indenture Trustee shall
submit a Notice for Payment with respect thereto together with the other
documents required to be delivered to the Credit Enhancer pursuant to the Credit
Enhancement Instrument in connection with a draw in respect of any Avoided
Payment.
(c) In the event that any Additional Credit Enhancement Instruments are
issued pursuant to Section 4.01 and Section 2.02(B) of the Insurance Agreement,
the Indenture Trustee shall be authorized to make draws thereon subject to the
terms and conditions therein.]
Section 3.29 [Replacement Credit Enhancement Instrument. In the event of a
Credit Enhancer Default or if the claims paying ability rating of the Credit
Enhancer is downgraded and such downgrade results in a downgrading of the then
current rating of the Securities (in each case, a "Replacement Event"), the
Issuer, at its expense, in accordance with and upon satisfaction of the
conditions set forth in the Credit Enhancement Instrument, including, without
limitation, payment in full of all amounts owed to the Credit Enhancer, may, but
shall not be required to, substitute a new surety bond or surety bonds for the
existing Credit Enhancement Instrument or may arrange for any other form of
credit enhancement; provided, however, that in each case the Notes shall be
rated no lower than the rating assigned by each Rating Agency to the Notes
immediately prior to such Replacement Event and the timing and mechanism for
drawing on such new credit enhancement shall be reasonably acceptable to the
Indenture Trustee and provided further that the premiums under the proposed
credit enhancement shall not exceed such premiums under the existing Credit
Enhancement Instrument. It shall be a condition to substitution of any new
credit enhancement that there be delivered to the Indenture Trustee (i) an
Opinion of Counsel, acceptable in form to the Indenture Trustee, from counsel to
the provider of such new credit enhancement with respect to the enforceability
thereof and such other matters as the Indenture Trustee may require and (ii) an
Opinion of Counsel to the effect that such substitution would not (a) adversely
affect in any material respect the tax status of the Notes or (b) cause the
Issuer to be subject to a tax at the entity level. Upon receipt of the items
referred to above and payment of all amounts owing to the Credit Enhancer and
the taking of physical possession of the new credit enhancement, the Indenture
Trustee shall, within five Business Days following receipt of such items and
such taking of physical possession, deliver the replaced Credit Enhancement
Instrument to the Credit Enhancer. In the event of any such replacement the
Issuer shall give written notice thereof to the Rating Agencies.]
15
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01 The Notes; Increase of Maximum Variable Funding Balance;
Additional Variable Funding Notes. (a) The Term Notes shall be registered in the
name of a nominee designated by the Depository. Beneficial Owners will hold
interests in the Term Notes through the book-entry facilities of the Depository
in minimum initial Principal Balances of $1,000 and integral multiples of $1,000
in excess thereof. The Capped Funding Notes will be issued as physical notes in
fully registered form in minimum initial Principal Balances of $10,000 and
integral multiples of $1,000 in excess thereof, together with any additional
amount necessary to cover the aggregate initial Principal Balance of the Capped
Funding Notes surrendered at the time of the initial denominational exchange
thereof (with such initial Principal Balance in each case being deemed to be the
Principal Balance of the Capped Funding Notes at the time of such initial
denominational exchange thereof).
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Term Notes for the
purposes of exercising the rights of Holders of Term Notes hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Term Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive certificates for the Term
Notes as to which they are the Beneficial Owners. Requests and directions from,
and votes of, the Depository as Holder of the Term Notes shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Noteholders and give notice to the
Depository of such record date. Without the consent of the Issuer and the
Indenture Trustee, no Term Note may be transferred by the Depository except to a
successor Depository that agrees to hold such Note for the account of the
Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Notes it
beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer by
the Owner Trustee, not in its individual capacity but solely as Owner Trustee,
authenticated by the Note Registrar and delivered by the Indenture Trustee to or
upon the order of the Issuer.
(b) So long as no Amortization Event has occurred the Maximum Variable
Funding Balance on the Closing Date may be increased from time to time by an
aggregate amount not to exceed $__________ and Additional Variable Funding Notes
may be issued upon satisfaction of the following conditions:
16
(i) the Indenture Trustee shall have received an Additional Credit
Enhancement Instrument pursuant to the terms and conditions of the
Insurance Agreement, including without limitation Section 2.02(B) thereof;
(ii) [the Indenture Trustee shall have received an Opinion of Counsel
to the Credit Enhancer in the form attached hereto as Exhibit B;]
(iii) the Indenture Trustee shall have received an Opinion of Counsel
in the form attached hereto as Exhibit C;
(iv) the Indenture Trustee shall have received the documents specified
in Section 10.01(a) (other than clause (iii) thereof).
The Security Balance of such Additional Variable Funding Notes in the aggregate
will reflect the sum of (i) the related Excess Additional Balance Differential
and (ii) the Additional Balance Differential for each Collection Period from the
Collection Period during which the Additional Variable Funding Notes are issued
until the new Maximum Variable Funding Balance is reached. Notwithstanding the
foregoing, the Security Balance of each specific Additional Variable Funding
Note will be limited to the Maximum Individual Variable Funding Balance as
provided in subsection (c) below.
The Additional Variable Funding Notes issued in connection with the first
increase in the Maximum Variable Funding Balance pursuant to this subsection
will bear the designation "A" (in addition to the numerical designation pursuant
to subsection (c) below) and any subsequent Additional Variable Funding Notes
issued in connection with any subsequent increases in the Maximum Variable
Funding Balance will bear alphabetical designations in the order of their
issuance.
Any Additional Variable Funding Notes shall be in the form of Exhibit A-2
hereof and for all purposes shall be Notes issued pursuant to this Indenture and
all references to Variable Funding Notes herein shall include Additional
Variable Funding Notes issued pursuant to this Section 4.01(b).
Upon the issuance of any Additional Variable Funding Notes the Issuer will
deliver written notice thereof to the Rating Agencies.
(c) Subject to the Maximum Variable Funding Balance at such time as the
Security Balance of any Variable Funding Note reaches the Maximum Individual
Variable Funding Balance no subsequent amounts in respect of the Additional
Balance Differential shall be added to the Security Balance of such Variable
Funding Note and instead a new Variable Funding Note shall be issued and
executed on behalf of the Issuer by the Owner Trustee, not in its individual
capacity but solely as Owner Trustee, authenticated by the Note Registrar and
delivered by the Indenture Trustee to or upon the order of the Issuer. All
subsequent amounts in respect of the Additional Balance Differential shall be
added to the Security Balance of such new Variable Funding Note (subject to the
Maximum Variable Funding Balance) until the Security Balance thereof reaches the
Maximum Individual Variable Funding Balance.
The Variable Funding Note issued on the Closing Date shall bear the
Designation "1" and each new Variable Funding Note will bear sequential
numerical designations in the order of their issuance. On each Payment Date on
or after the end of the Revolving Period a new Variable
17
Funding Note will be issued on each Payment Date in a principal amount equal
to the lesser of (a) the Maximum Individual Variable Funding Balance and
(b) the Additional Balance Differential for such Payment Date, but in no event
will the Principal Balance of the Variable Funding Notes exceed the Maximum
Variable Funding Balance without satisfying the conditions of Section 4.01
hereof.
Section 4.02 Registration of and Limitations on Transfer and Exchange of
Notes; Appointment of Certificate Registrar. The Issuer shall cause to be kept
at its Corporate Trust Office a Note Register in which, subject to such
reasonable regulations as it may prescribe, the Note Registrar shall provide for
the registration of Notes and of transfers and exchanges of Notes as herein
provided.
Subject to the restrictions and limitations set forth below, upon surrender
for registration of transfer of any Note at the Corporate Trust Office, the
Indenture Trustee shall execute and the Note Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes in authorized initial Security Balances evidencing the same aggregate
Percentage Interests.
No Variable Funding Note, other than any Capped Funding Notes, may be
transferred. Subject to the provisions set forth below Capped Funding Notes may
be transferred, provided that with respect to the initial transfer thereof by
the Seller prior written notification of such transfer shall have been given to
the Rating Agencies [and to the Credit Enhance] by the Seller along with an
Opinion of Counsel to the effect that such transfer will not constitute a
fraudulent conveyance under the laws of the relevant jurisdiction.
No transfer of a Capped Funding Note shall be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws. In the event of any such transfer, (i) unless such transfer
is made in reliance upon Rule 144A under the 1933 Act, the Indenture Trustee or
the Issuer may, require a written Opinion of Counsel (which may be in-house
counsel) acceptable to and in form and substance reasonably satisfactory to the
Indenture Trustee and the Issuer that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from said
Act and laws or is being made pursuant to said Act and laws, which Opinion of
Counsel shall not be an expense of the Indenture Trustee or the Issuer and (ii)
the Indenture Trustee shall require the transferee to execute an investment
letter (in substantially the form attached hereto as Exhibit D) acceptable to
and in form and substance reasonably satisfactory to the Issuer and the
Indenture Trustee certifying to the Issuer and the Indenture Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Indenture Trustee or the Issuer. The Holder of a Variable Funding Note
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Indenture Trustee, [the Credit Enhancer] and the Issuer against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws. Notwithstanding the foregoing, the restriction
of transfer specified in this paragraph is not applicable to any Capped Funding
Notes that have been registered under the Securities Act of 1933 pursuant to
Section 2.4 of the Mortgage Loan Purchase Agreement.
Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged for other Notes of like tenor or, in each case in authorized initial
Principal Balances evidencing the same aggregate Percentage Interests upon
surrender of the Notes to be exchanged at the Corporate Trust Office of the Note
Registrar. With respect to any surrender of Capped Funding
18
Notes for exchange the new Notes delivered in exchange therefor will
bear the designation "Capped" in addition to any other applicable
designations. Whenever any Notes are so surrendered for exchange,
the Indenture Trustee shall execute and the Note Registrar shall
authenticate and deliver the Notes which the Noteholder making the
exchange is entitled to receive. Each Note presented or surrendered for
registration of transfer or exchange shall (if so required by the Note
Registrar) be duly endorsed by, or be accompanied by a written instrument
of transfer in form reasonably satisfactory to the Note Registrar duly executed
by, the Holder thereof or his attorney duly authorized in writing with such
signature guaranteed by a commercial bank or trust company located or having a
correspondent located in the city of New York. Notes delivered upon any such
transfer or exchange will evidence the same obligations, and will be entitled to
the same rights and privileges, as the Notes surrendered.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall be
cancelled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
The Issuer hereby appoints __________________________________ as
Certificate Registrar to keep at its Corporate Trust Office a Certificate
Register pursuant to Section 3.09 of the Trust Agreement in which, subject to
such reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of Certificates and of transfers and exchanges
thereof pursuant to Section 3.05 of the Trust Agreement.
__________________________________ hereby accepts such appointment.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
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 of the same Class; 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, instead
of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable 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 and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
19
Upon the issuance of any replacement Note under this Section 4.03, 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 4.03 in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04 Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the 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 neither the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 4.05 Cancellation. All Notes surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section 4.05, except as expressly permitted by
this Indenture. All cancelled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Request that they
be destroyed or returned to it; provided however, that such Issuer Request is
timely and the Notes have not been previously disposed of by the Indenture
Trustee.
Section 4.06 Book-Entry Notes. The Term 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, the initial Depository, by, or on
behalf of, the Issuer. Such Term Notes shall initially be registered on the Note
Register in the name of Cede & Co., the nominee of the initial Depository, and
no Beneficial Owner will receive a Definitive Note representing such Beneficial
Owner's interest in such Note, except as provided in Section 4.08. Unless and
until definitive, fully registered Notes (the "Definitive Notes") have been
issued to Beneficial Owners pursuant to Section 4.08:
(i) the provisions of this Section 4.06 shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled to
deal with the Depository for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole holder of the Term Notes,
and shall have no obligation to the Owners of Term Notes;
20
(iii) to the extent that the provisions of this Section 4.06 conflict
with any other provisions of this Indenture, the provisions of this Section
4.06 shall control;
(iv) the rights of Beneficial Owners shall be exercised only through
the Depository and shall be limited to those established by law and
agreements between such Owners of Term Notes and the Depository and/or
the Depository Participants. Unless and until Definitive Term Notes
are issued pursuant to Section 4.08, the initial Depository will make
book-entry transfers among the Depository Participants and receive and
transmit payments of principal of and interest on the Notes to such
Depository Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Term Notes evidencing a
specified percentage of the Security Balances of the Term Notes, the
Depository shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Beneficial Owners
and/or Depository Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Term Notes and has
delivered such instructions to the Indenture Trustee.
Section 4.07 Notices to Depository. Whenever a notice or other
communication to the Term Note Holders is required under this Indenture, unless
and until Definitive Term Notes shall have been issued to Beneficial Owners
pursuant to Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Term Notes to the
Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08 Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities with respect to the Term Notes and the
Administrator is unable to locate a qualified successor, (ii) the Administrator
at its option advises the Indenture Trustee in writing that it elects to
terminate the book-entry system through the Depository or (iii) after the
occurrence of an Event of Default, Owners of Term Notes representing beneficial
interests aggregating at least a majority of the Security Balances of the Term
Notes advise the Depository in writing that the continuation of a book-entry
system through the Depository is no longer in the best interests of the
Beneficial Owners, then the Depository shall notify all Beneficial Owners and
the Indenture Trustee of the occurrence of any such event and of the
availability of Definitive Term Notes to Beneficial Owners requesting the same.
Upon surrender to the Indenture Trustee of the typewritten Term Notes
representing the Book-Entry Notes by the Depository, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Term Notes in accordance with the instructions of
the Depository. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
Section 4.09 Tax Treatment. The Issuer has entered into this Indenture, and
the Notes will be issued, with the intention that, for federal, state and local
income, single business and franchise tax purposes, the Notes will qualify as
indebtedness of the Issuer. The Issuer, by
21
entering into this Indenture, and each Noteholder, by its acceptance of its
Note (and each Beneficial Owner by its acceptance of an interest in the
applicable Book-Entry Note), agree to treat the Notes for federal, state
and local income, single business and franchise tax purposes as indebtedness
of the Issuer.
Section 4.10 Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect with respect to the Notes except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive
payments of principal thereof and interest thereon, (iv) Sections 3.03,
3.04, 3.06, 3.09, 3.16, 3.18 and 3.19, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.07 and the obligations of the Indenture
Trustee under Section 4.11) and (vi) the rights of Noteholders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them, and the Indenture Trustee, on demand of and at
the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes, 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 4.03 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.03) have been delivered to the Indenture Trustee for
cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation
a. have become due and payable,
b. will become due and payable at the Final Scheduled Payment
Date within one year, or
c. have been called for early redemption pursuant to Section
5.02.
and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
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 and Certificates then outstanding not theretofore delivered to the
Indenture Trustee for cancellation when due on the Final Scheduled Payment Date;
(B) the Issuer has paid or caused to be paid all other sums payable
hereunder and under the Insurance Agreement by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee [and the Credit
Enhancer] an Officer's Certificate, an Opinion of Counsel and each meeting the
applicable requirements of Section 10.01 each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with and, if the Opinion of Counsel relates to a
deposit made in connection with Section 4.10(A)(2)b. above, such opinion
22
shall further be to the effect that such deposit will not have any material
adverse tax consequences to the Issuer, any Noteholders or any
Certificateholders.
Section 4.11 Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the Holders
of Securities, of all sums due and to become due thereon for principal and
interest; but such monies need not be segregated from other funds except to
the extent required herein or required by law.
Section 4.12 [Subrogation and Cooperation. (a) The Issuer and the Indenture
Trustee acknowledge that (i) to the extent the Credit Enhancer makes payments
under the Credit Enhancement Instrument on account of principal of or interest
on the Notes, the Credit Enhancer will be fully subrogated to the rights of such
Holders to receive such principal and interest from the Issuer, and (ii) the
Credit Enhancer shall be paid such principal and interest but only from the
sources and in the manner provided herein and in the Insurance Agreement for the
payment of such principal and interest.
The Indenture Trustee shall cooperate in all respects with any reasonable
request by the Credit Enhancer for action to preserve or enforce the Credit
Enhancer's rights or interest under this Indenture or the Insurance Agreement
without limiting the rights of the Noteholders as otherwise set forth in the
Indenture, including, without limitation, upon the occurrence and continuance of
a default under the Insurance Agreement, a request to take any one or more of
the following actions:
(i) institute Proceedings for the collection of all amounts then
payable on the Notes, or under this Indenture in respect to the Notes and
all amounts payable under the Insurance Agreement enforce any judgment
obtained and collect from the Issuer monies adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private Sales called and
conducted in any manner permitted by law;
(iii) file or record all Assignments that have not previously been
recorded;
(iv) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and
enforce the rights and remedies of the Credit Enhancer hereunder.]
Section 4.13 Repayment of Monies Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
monies then held by any Administrator 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 3.05 and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
23
Section 4.14 Temporary Notes. Pending the preparation of any Definitive
Notes, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Notes that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to be
prepared without unreasonable delay. After the preparation of the Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Indenture
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Issuer shall execute and the Indenture Trustee
shall authenticate and make available for delivery, in exchange therefor,
Definitive Notes of authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
24
ARTICLE V
Default and Remedies
Section 5.01 Events of Default. "Event of Default," wherever used herein,
shall have the meaning provided in Article I[; provided, however, that no Event
of Default will occur under clause (i) or clause (ii) of the definition of
"Event of Default" if the Issuer fails to make payments of principal of and
interest on the Notes so long as the Credit Enhancer makes payments sufficient
therefore under the Credit Enhancement Instrument].
The Issuer shall deliver to the Indenture Trustee [and the Credit
Enhancer], within five days after learning of the occurrence of an Event of
Default, written notice in the form of an Officer's Certificate of any event
which with the giving of notice and the lapse of time would become an Event of
Default under clause (iii) of the definition of "Event of Default", its status
and what action the Issuer is taking or proposes to take with respect thereto.
Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing or if the [Master] Servicer
shall purchase all of the Mortgage Loans pursuant to Section 8.08 of the
Servicing Agreement, then and in every such case the Indenture Trustee or the
Holders of Notes representing not less than a majority of the Security Balances
of all Notes may declare the Notes to be immediately due and payable, by a
notice in writing to the Issuer (and to the Indenture Trustee if given by
Noteholders), and upon any such declaration the unpaid principal amount of such
Class of Notes, together with accrued and unpaid interest thereon through the
date of acceleration, shall become immediately due and payable. [Unless the
prior written consent of the Credit Enhancer shall have been obtained by the
Indenture Trustee, the Payment Date upon which such accelerated payment is due
and payable shall not be a Payment Date under the Credit Enhancement Instrument
and the Indenture Trustee shall not be authorized under Section 3.29 to make a
draw therefor.]
At any time after such declaration of acceleration of maturity with respect
to an Event of Default has been made and before a judgment or decree for payment
of the money due has been obtained by the Indenture Trustee as hereinafter in
this Article V provided, the Holders of Notes representing a majority of the
Security Balances of all Notes, by written notice to the Issuer and the
Indenture Trustee, may waive the related Event of Default and rescind and annul
such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(A) all payments of principal of and interest on the Notes and all
other amounts that would then be due hereunder or upon the Notes if the
Event of Default giving rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel; and
25
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.03 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable, the Issue shall, upon demand of the Indenture
Trustee, pay to it, for the benefit of the Holders of Notes [and of the Credit
Enhancer], the whole amount then due and payable on the Notes for principal and
interest, with interest upon the overdue principal, and in addition thereto such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.17 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor the Notes, wherever
situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee
subject to the provisions of Section 10.17 hereof may, as more particularly
provided in Section 5.04, in its discretion, proceed to protect and enforce its
rights and the rights of the Noteholders [and the Credit Enhancer], by such
appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or
26
documents as may be necessary or advisable in order to have the claims of
the Indenture Trustee (including any claim for reasonable compensation to
the Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of
negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture
Trustee or the Holders of Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Term Notes or the Variable Funding Notes,
as applicable.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
27
Section 5.04 Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing, the Indenture Trustee subject to the provisions of
Section 10.17 hereof may do one or more of the following (subject to Section
5.05):
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or under
this Indenture with respect thereto, whether by declaration or otherwise,
and all amounts payable under the Insurance Agreement, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such Notes
monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee, the Holders of the Notes [and the Credit
Enhancer]; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (i) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Principal Balances of the Notes [and the Credit Enhancer] which consent will not
be unreasonably withheld, (ii) the proceeds of such sale or liquidation
distributable to Holders are sufficient to discharge in full all amounts then
due and unpaid upon the Notes for principal and interest and to reimburse [the
Credit Enhancer for any amounts drawn under the Credit Enhancement Instrument
and any other amounts due the Credit Enhancer under the Insurance Agreement] or
(iii) the Indenture Trustee determines that the Trust Estate will not continue
to provide sufficient funds for the payment of principal of and interest on the
Notes as they would have become due if the Notes had not been declared due and
payable, [and the Indenture Trustee obtains the consent of the Credit Enhancer,
which consent will not be unreasonably withheld,] and of the Holders of a
majority of the aggregate Principal Balances of the Notes. In determining such
sufficiency or insufficiency with respect to clause (B) and (C), the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose. Notwithstanding the foregoing, so long as an Event of
Servicer Termination has not occurred, any Sale of the Trust Estate shall be
made subject to the continued Servicing of the Mortgage Loans by the [Master]
Servicer as provided in the Servicing Agreement.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to each Class of Noteholders for amounts due and unpaid on the
related Class Notes for interest and to each Noteholder of such Class
in each case, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Class of Notes for
interest from amounts available in the Trust Estate for such
Noteholders;
28
THIRD: to Holders of each Class of Notes for amounts due and unpaid on
the related Class of Notes for principal, from amounts available in
the Trust Estate for such Noteholders, and to each Noteholder of such
Class in each case ratably, without preference or priority of any
kind, according to the amounts due and payable on such Class of Notes
for principal, until the Security Balances of each Class of Notes is
reduced to zero;
FOURTH: to the Issuer for amounts required to be distributed to the
Certificateholders in respect of interest and principal pursuant to
the Trust Agreement;
FIFTH: [To the payment of all amounts due and owing to the Credit
Enhancer under the Insurance Agreement;]
SIXTH: to the Issuer for amounts due under Article VIII of the Trust
Agreement; and
SEVENTH: to the payment of the remainder, if any to the Issuer or any
other person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05 Optional Preservation of the Trust Estate. If the Notes have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to take and maintain
possession of the Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes and other obligations of the Issuer
[including payment to the Credit Enhancer,] and the Indenture Trustee shall take
such desire into account when determining whether or not to take and maintain
possession of the Trust Estate. In determining whether to take and maintain
possession of the Trust Estate, the Indenture Trustee may, but need not, obtain
and rely upon an opinion of an Independent investment banking or accounting firm
of national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose.
Section 5.06 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 and subject to the provisions of Section 10.17 hereof:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Security Balances of the
Notes have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
29
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the Holders of a
majority of the Security Balances of the Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes 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 Security Balances 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 5.07 Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
Section 5.08 Section 5.0.Restoration of Rights and Remedies. If the
Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
Section 5.09 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10 Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the
30
Indenture Trustee or to the Noteholders may be exercised from time to time, and
as often as may be deemed expedient, by the Indenture Trustee or by the
Noteholders, as the case may be.
Section 5.11 Control by Noteholders. The Holders of a majority of the
Security Balances of Notes shall have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Indenture
Trustee with respect to the Notes or exercising any trust or power conferred on
the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Trust Estate shall be by
Holders of Notes representing not less than 100% of the Security Balances
of Notes;
(iii) if the conditions set forth in Section 5.05 have been satisfied
and the Indenture Trustee elects to retain the Trust Estate pursuant to
such Section, then any direction to the Indenture Trustee by Holders of
Notes representing less than 100% of the Security Balances of Notes to sell
or liquidate the Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, 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 5.12 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Security Balances of the
Notes may waive any past Event of Default and its consequences except an Event
of Default (i) with respect to payment of principal of or interest on any of the
Notes or () in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Note or [(ii) the
waiver of which would materially and adversely affect the interests of the
Credit Enhancer or modify its obligation under the Credit Enhancement
Instrument]. In the case of any such waiver, the Issuer, the Indenture Trustee
and the Holders of the Notes shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be deemed to
have been cured and not to have occurred, for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other Event of Default or
impair any right consequent thereto.
Section 5.13 Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such ▇▇▇▇▇▇'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,
31
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 5.13 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 Security Balances of the Notes or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note and in this
Indenture.
Section 5.14 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 shall 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 5.15 Sale of Trust Estate. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 is expressly subject to the provisions of Section 5.05 and this
Section 5.15. The power to effect any such Sale shall not be exhausted by any
one or more Sales as to any portion of the Trust Estate remaining unsold, but
shall continue unimpaired until the entire Trust Estate shall have been sold or
all amounts payable on the Notes and under this Indenture and under the
Insurance Agreement shall have been paid. The Indenture Trustee may from time to
time postpone any public Sale by public announcement made at the time and place
of such Sale. The Indenture Trustee hereby expressly waives its right to any
amount fixed by law as compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless
(1) the Holders of all Notes [and the Credit Enhancer] consent to or
direct the Indenture Trustee to make, such Sale, or
(2) the proceeds of such Sale would be not less than the entire amount
which would be payable to the Noteholders under the Notes [and the Credit
Enhancer in respect of amounts drawn under the Credit Enhancement Instrument and
any other amounts due the Credit Enhancer under the Insurance Agreement], in
full payment thereof in accordance with Section 5.02, on the Payment Date next
succeeding the date of such Sale, or
(3) The Indenture Trustee determines, in its sole discretion, that the
conditions for retention of the Trust Estate set forth in Section 5.05 cannot be
satisfied (in making any such determination, the Indenture Trustee may rely upon
an opinion of an Independent investment banking firm obtained and delivered as
provided in Section 5.05), [and the Credit Enhancer] consents to such Sale,
which consent will not be unreasonably withheld and the Holders representing at
least 66-2/3% of the Security Balances of the Notes consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
32
(c) Unless the Holders [and the Credit Enhance]r have otherwise consented
or directed the Indenture Trustee, at any public Sale of all or any portion of
the Trust Estate at which a minimum bid equal to or greater than the amount
described in paragraph (2) of subsection (b) of this Section 5.15 has not been
established by the Indenture Trustee and no Person bids an amount equal to or
greater than such amount, the Indenture Trustee shall bid an amount at least
$1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust Estate
any Holder or Holders of Notes may bid for [and with the consent of
the Credit Enhancer] purchase the property offered for sale, and upon compliance
with the terms of sale may hold, retain and possess and dispose of such
property, without further accountability, and may, in paying the purchase money
therefor, deliver any Notes or claims for interest thereon in lieu of cash up to
the amount which shall, upon distribution of the net proceeds of such sale, be
payable thereon, and such Notes, in case the amounts so payable thereon shall be
less than the amount due thereon, shall be returned to the Holders thereof after
being appropriately stamped to show such partial payment;
(1) the Indenture Trustee may bid for and acquire the property offered
for Sale in connection with any Sale thereof, and, subject to any requirements
of, and to the extent permitted by, applicable law in connection therewith, may
purchase all or any portion of the Trust Estate in a private sale, and, in lieu
of paying cash therefor, may make settlement for the purchase price by crediting
the gross Sale price against the sum of (A) the amount which would be
distributable to the Holders of the Notes and Holders of Certificates [and
amounts owing to the Credit Enhancer] as a result of such Sale in accordance
with Section 5.04(b) on the Payment Date next succeeding the date of such Sale
and (B) the expenses of the Sale and of any Proceedings in connection therewith
which are reimbursable to it, without being required to produce the Notes in
order to complete any such Sale or in order for the net Sale price to be
credited against such Notes, and any property so acquired by the Indenture
Trustee shall be held and dealt with by it in accordance with the provisions of
this Indenture;
(2) the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the Trust
Estate in connection with a Sale thereof;
(3) the Indenture Trustee is hereby irrevocably appointed the agent
and attorney- in-fact of the Issuer to transfer and convey its interest in any
portion of the Trust Estate in connection with a Sale thereof, and to take all
action necessary to effect such Sale; and
(4) no purchaser or transferee at such a Sale 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.
Section 5.16 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
33
the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b).
Section 5.17 Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer in its capacity as holder of the Trust
Estate, shall take all such lawful action as the Indenture Trustee may request
to cause the 200_-____ Trust LLC to compel or secure the performance and
observance by the Seller and the [Master] Servicer, as applicable, of each of
their obligations to the Issuer under or in connection with the Mortgage Loan
Purchase Agreement and the Servicing Agreement, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Mortgage Loan Purchase Agreement and the Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee, as
pledgee of the Trust Estate, including the transmission of notices of default on
the part of the Seller or the [Master] Servicer thereunder and the institution
of legal or administrative actions or proceedings to compel or secure
performance by the Seller or the [Master] Servicer of each of their obligations
under the Mortgage Loan Purchase Agreement and the Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee, as pledgee of the Trust Estate], subject to the rights of the Credit
Enhancer under the Servicing Agreement may,] and at the direction (which
direction shall be in writing or by telephone (confirmed in writing promptly
thereafter)) of the Holders of 66-2/3% of the Security Balances of the Notes
shall, exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Seller or the [Master] Servicer under or in connection with
the Mortgage Loan Purchase Agreement and the Servicing Agreement, including the
right or power to take any action to compel or secure performance or observance
by the Seller or the [Master] Servicer, as the case may be, of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Mortgage Loan Purchase
Agreement and the Servicing Agreement, as the case may be, and any right of the
Issuer to take such action shall not be suspended.
34
ARTICLE VI
The Indenture Trustee
Section 6.01 Duties of Indenture Trustee. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it (A) pursuant to Section 5.11 or [(B) from the
Credit Enhancer, which it is entitled to give under any of the Basic
Documents].
(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) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
35
(g) 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.
Section 6.02 Rights of Indenture Trustee. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the 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 an 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, and the Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, 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.
Section 6.03 Individual Rights of Indenture Trustee. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Administrator, 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 6.04 Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
Section 6.05 Notice of Event of Default. [If an Event of Default occurs and
is continuing and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall give notice thereof to the Credit
Enhancer.] The Trustee shall mail to each Noteholder notice of the Event of
Default within 90 days after it occurs. Except in the case of an Event of
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.
36
Section 6.06 Reports by Indenture Trustee to Holders. The Indenture Trustee
shall deliver to each Noteholder such information as may be required to enable
such holder to prepare its federal and state income tax returns. In addition,
upon the Issuer's written request, the Indenture Trustee shall promptly furnish
information reasonably requested by the Issuer that is reasonably available to
the Indenture Trustee to enable the Issuer to perform its federal and state
income tax reporting obligations.
Section 6.07 Compensation and Indemnity. The Issuer shall or shall cause
the Administrator to pay to the Indenture Trustee on each Payment Date
reasonable 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 Administrator to reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall or shall cause the Administrator to
indemnify the Indenture Trustee against any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the administration
of this trust and the performance of its duties hereunder. The Indenture Trustee
shall notify the Issuer and the Administrator promptly of any claim for which it
may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and
the Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder. The Issuer shall or shall cause the Administrator to
defend any such claim, and the Indenture Trustee may have separate counsel and
the Issuer shall or shall cause the Administrator to pay the fees and expenses
of such counsel. Neither the Issuer nor the Administrator need reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section 6.07 shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of an Event of Default specified in
Section 5.01(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
Section 6.08 Replacement of Indenture Trustee. No resignation or removal of
the Indenture Trustee and no appointment of a successor Indenture Trustee shall
become effective until the acceptance of appointment by the successor Indenture
Trustee pursuant to this Section 6.08. The Indenture Trustee may resign at any
time by so notifying the Issuer [and the Credit Enhancer]. The Holders of a
majority of Security Balances of the Notes may remove the Indenture Trustee by
so notifying the Indenture Trustee [and the Credit Enhancer] and may appoint a
successor Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
37
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.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority of Security Balances of the
Notes may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Administrator's obligations under Section 6.07
shall continue for the benefit of the retiring Indenture Trustee.
Section 6.09 Successor Indenture Trustee by ▇▇▇▇▇▇. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may 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 Estate, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
38
as the Indenture Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11 Eligibility; Disqualification. The Indenture Trustee shall at
all times satisfy the requirements of TIA 'SS' 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least [$50,000,000] as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of [Baa3] or better by [▇▇▇▇▇'▇]. The
Indenture Trustee shall comply with TIA 'SS' 310(b), including the optional
provision permitted by the second sentence of TIA 'SS' 310(b)(9); provided,
however, that there shall be
39
excluded from the operation of TIA 'SS' 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 'SS' 310(b)(1) are met.
Section 6.12 Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA 'SS' 311(a), excluding any creditor
relationship listed in TIA 'SS' 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA 'SS' 311(a) to the extent indicated.
Section 6.13 Representation and Warranty. The Indenture Trustee hereby
represents that:
(i) The Indenture Trustee is duly organized and validly existing as a
corporation in good standing under the laws of the State of ___________,
with power and authority to own its properties and to conduct its business
as such properties are currently owned and such business is presently
conducted.
(ii) The Indenture Trustee has the power and authority to execute and
deliver this Indenture and to carry out its terms; and the execution,
delivery and performance of this Indenture have been duly authorized by the
Indenture Trustee by all necessary corporate action.
(iii) The consummation of the transactions contemplated by this
Indenture and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Indenture Trustee or any agreement or other
instrument to which the Indenture Trustee is a party or by which it is
bound
(iv) To the Indenture Trustee's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Indenture Trustee or its
properties: (A) asserting the invalidity of this Indenture (B) seeking to
prevent the consummation of any of the transactions contemplated by this
Indenture or (C) seeking any determination or ruling that might materially
and adversely affect the performance by the Indenture Trustee of its
obligations under, or the validity or enforceability of, this Indenture.
Section 6.14 Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Trust Estate and hold the assets of the
Trust in trust for the Noteholders;
(b) to issue, execute and deliver the Notes substantially in the form
prescribed by Exhibit A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the terms
of this Indenture.
Section 6.15 No Consent to Certain Acts of Depositor. The Indenture Trustee
shall not consent to any action proposed to be taken by the Depositor pursuant
to Article EIGHTH or Article ELEVENTH of the Depositor's Restated Certificate of
Incorporation.
Section 6.16 Indenture Trustee May Own Securities. The Indenture Trustee,
in its individual or any other capacity may become the owner or pledgee of
Securities with the same rights it would have if it were not Indenture Trustee.
40
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01 Issuer To Furnish 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 each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Notes as of such Record Date, (b) at such other times as the
Indenture Trustee [and the Credit Enhancer] 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.
Section 7.02 Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.01
and the names and addresses of Holders of Notes received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA 'SS' 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 7.03 Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) that 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 'SS' 313(c)) such
summaries of any information, documents and reports required to be filed by
the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and 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.
41
Section 7.04 Reports by Indenture Trustee. If required by TIA 'SS'
313(a), within 60 days after each January 1 beginning with January 1, 200_, the
Indenture Trustee shall mail to each Noteholder as required by TIA 'SS'
313(c) [and to the Credit Enhancer] a brief report dated as of such date that
complies with ▇▇▇ 'SS' 313(a). The Indenture Trustee also shall comply with
TIA 'SS' 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 Term Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Term Notes are listed on any stock exchange.
42
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01 Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02 Trust Accounts. (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Noteholders and the Certificate
Paying Agent, on behalf of the Certificateholders [and the Credit Enhancer], the
Payment Account as provided in Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Payment Account pursuant
to the Servicing Agreement and all deposits therein pursuant to this Indenture
are for the benefit of the Noteholders and the Certificate Paying Agent, on
behalf of the Certificateholders and all investments made with such monies
including all income or other gain from such investments are for the benefit of
the [Master] Servicer as provided by the Servicing Agreement.
On each Payment Date during the Funding Period the Indenture Trustee shall
withdraw Net Principal Collections from the Payment Account and deposit Net
Principal Collections to the Funding Account.
On each Payment Date, the Indenture Trustee shall distribute all amounts on
deposit in the Payment Account (after giving effect to the withdrawal referred
to in the preceding paragraph) to Noteholders in respect of the Notes and in its
capacity as Certificate Paying Agent to Certificateholders in the order of
priority set forth in Section 3.05 (except as otherwise provided in Section
5.04(b).
The [Master] Servicer may direct the Indenture Trustee to invest any funds
in the Payment Account in Eligible Investments maturing no later than the
Business Day preceding each Payment Date and shall not be sold or disposed of
prior to the maturity. Unless otherwise instructed by the [Master] Servicer, the
Indenture Trustee shall invest all funds in the Payment Account in Eligible
Investments.
(c) On or before the Closing Date the Issuer shall open, at the Corporate
Trust Office, an account which shall be the "Funding Account". The [Master]
Servicer may direct the Indenture Trustee to invest any funds in the Funding
Account in Eligible Investments maturing no later than the Business Day
preceding each Payment Date and shall not be sold or disposed of prior to the
maturity. Unless otherwise instructed by the [Master] Servicer, the Indenture
Trustee
43
shall invest all funds in the Payment Account in its Corporate Trust Short Term
Investment Fund so long as it is an Eligible Investment. During the Funding
Period, any amounts received by the Indenture Trustee in respect of Net
Principal Collections for deposit in the Funding Account, together with any
Eligible Investments in which such monies are or will be invested or reinvested
during the term of the Notes, shall be held by the Indenture Trustee in the
Funding Account as part of the Trust Estate, subject to disbursement and
withdrawal as herein provided: Amounts on deposit in the Funding Account in
respect of Net Principal Collections may be withdrawn on each Deposit Date and
(i) paid to the Issuer in payment for Additional Loans by the deposit of such
amount to the Collection Account and (ii) at the end of the Funding Period any
amounts remaining in the Funding Account after the withdrawal called for by
clause (1) shall be deposited in the Payment Account to be included in the
payment of principal on the Payment Date that is the last day of the Funding
Period.
(d) (i) Any investment in the institution with which the Funding Account is
maintained may mature on such Payment Date and (ii) any other investment may
mature on such Payment Date if the Indenture Trustee shall advance funds on such
Payment Date to the Funding Account in the amount payable on such investment on
such Payment Date, pending receipt thereof to the extent necessary to make
distributions on the Notes and the Certificates) and shall not be sold or
disposed of prior to maturity.
Section 8.03 Officer's Certificate. The Indenture Trustee shall receive at
least [seven] days notice when requested by the Issuer to take any action
pursuant to Section 8.05(a), accompanied by copies of any instruments to be
executed, and the Indenture Trustee shall also require, as a condition to such
action, an Officer's Certificate, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with.
Section 8.04 Termination Upon Distribution to Noteholders. This Indenture
and the respective obligations and responsibilities of the Issuer and the
Indenture Trustee created hereby shall terminate upon the distribution to
Noteholders, Certificate Paying Agent, on behalf of the Certificateholders and
the Indenture Trustee of all amounts required to be distributed pursuant to
Article III; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to
the Court of St. ▇▇▇▇▇, living on the date hereof.
Section 8.05 Release of Trust Estate. (a) Subject to the payment of its
fees and expenses, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture. No party relying upon an instrument executed by
the Indenture Trustee as provided in Article VIII hereunder shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent, or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding, (ii) all sums due the Indenture Trustee pursuant to this Indenture
have been paid, [and (iii) all sums due the Credit Enhancer have been paid],
release any remaining portion of the Trust Estate that secured the Notes from
the lien of this Indenture.
44
[(c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of an request from the
Issuer accompanied by an [Officers' Certificate], [an Opinion of Counsel,] and a
letter from the Credit Enhancer, stating that the Credit Enhancer has no
objection to such request from the Issuer.]
Section 8.06 Surrender of Notes Upon Final Payment. By acceptance of any
Note, the Holder thereof agrees to surrender such Note to the Indenture Trustee
promptly, prior to such Noteholder's receipt of the final payment thereon.
45
ARTICLE IX
Supplemental Indentures
Section 9.01 Supplemental Indentures Without Consent of Noteholders. ()
Without the consent of the Holders of any Notes [but with the consent of the
Credit Enhancer] and prior notice to the Rating Agencies [and the Credit
Enhancer], the Issuer and the Indenture Trustee, when authorized by an Issuer
Request, 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 that may be inconsistent with any
other provision herein or in any supplemental indenture
(vi) 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 materially and adversely affect the interests of
the Holders of the Notes;
(vii) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(viii) 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;
provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
entering into such indenture supplement will not have any material adverse tax
consequences to the Noteholders.
46
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
Request, may, also without the consent of any of the Holders of the Notes ]but
with the consent of the Credit Enhancer] and prior notice to the Rating Agencies
[and the Credit Enhancer], 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, (i)
adversely affect in any material respect the interests of any Noteholder or (ii)
cause the Issuer to be subject to an entity level tax.
Section 9.02 Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and, ]with the written consent of
the Credit Enhancer] and with the consent of the Holders of not less than a
majority of the Security Balances of each Class of Notes affected thereby, 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 no such
supplemental indenture shall, without the consent of the Holder of each 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 or the
interest rate thereon, change the provisions of this Indenture relating to
the application of collections on, or the proceeds of the sale of, the
Trust Estate to payment of principal of or interest on the Notes, or change
any place of payment where, or the coin or currency in which, any Note or
the interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to the
payment of any such amount due on the Notes on or after the respective due
dates thereof;
(ii) reduce the percentage of the Security Balances of the Notes, the
consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition
of the term "Outstanding" or modify or alter the exception in the
definition of the term "Holder";
(iv) reduce the percentage of the Security Balances of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section 9.02 except to increase any
percentage specified herein or to provide that certain additional
provisions of this
47
Indenture or the Basic Documents cannot be modified or waived without the
consent of the Holder of each Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation of
any of the individual components of such calculation); or
(vii) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Trust
Estate or, except as otherwise permitted or contemplated herein, terminate
the lien of this Indenture on any property at any time subject hereto or
deprive the Holder of any Note of the security provided by the lien of this
Indenture; and provided, further, that such action shall not, as evidenced
by an Opinion of Counsel, cause the Issuer to be subject to an entity level
tax.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture 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
9.02 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 9.02, 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 9.03 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
Section 9.04 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer 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.
48
Section 9.05 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 9.06 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.
49
ARTICLE X
Miscellaneous
Section 10.01 Compliance Certificates and Opinions, etc. (a) 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 Credit Enhancer] (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and (ii) an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, 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:
(1) 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;
(2) 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;
(3) 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;
(4) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with; and
(5) if the Signer of such Certificate or Opinion is required to be
Independent, the Statement required by the definition of the term "Independent".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (i) above, the Issuer
shall also deliver to the Indenture Trustee an Independent Certificate as
to the same matters, if the fair value to the Issuer of the securities to
be so deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then-current fiscal
year of the Issuer, as set forth in the certificates delivered pursuant to
clause (i) above and this clause (ii), is 10% or more of the Security
Balances of the Notes, but such a certificate need not
50
be furnished with respect to any securities so deposited, if the fair value
thereof to the Issuer as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the Security Balances of the
Notes.
(iii) Whenever any property or securities are to be released from the
lien of this Indenture, the Issuer shall also furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of
such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will not
impair the security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (iii) above, the
Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than property as contemplated
by clause (v) below or securities released from the lien of this Indenture
since the commencement of the then-current calendar year, as set forth in
the certificates required by clause (iii) above and this clause (iv),
equals 10% or more of the Security Balances of the Notes, but such
certificate need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the then
Security Balances of the Notes.
(v) Notwithstanding any provision of this Indenture, the Issuer may,
without compliance with the requirements of the other provisions of this
Section 10.01, (A) collect, sell or otherwise dispose of the Class A
Ownership Interest as and to the extent permitted or required by the Basic
Documents or (B) make cash payments out of the Payment Account as and to
the extent permitted or required by the Basic Documents [, so long as the
Issuer shall deliver to the Indenture Trustee every six months, commencing
_____________, an Officer's Certificate of the Issuer stating that all the
dispositions of Collateral described in clauses (A) or (B) above that
occurred during the preceding six calendar months were in the ordinary
course of the Issuer's business and that the proceeds thereof were applied
in accordance with the Basic Documents].
Section 10.02 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 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 Seller, the
Issuer or the Administrator, stating that the information with respect to such
factual matters is in the possession of the Seller, the Issuer
51
or the Administrator, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 10.03 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 6.01)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any manner that the Indenture Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
Section 10.04 Notices, etc., to Indenture Trustee, Issuer], Credit
Enhancer] and Rating Agencies. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Note holders or other documents provided or
permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or act of Noteholders is to be
made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or
52
with the Indenture Trustee at the Corporate Trust Office. The Indenture
Trustee shall promptly transmit any notice received by it from the
Noteholders to the Issuer, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to [_] Trust
200_-____, in care of [Name of Owner Trustee] _________________,
__________, ______________, Attention of
_________________________________________ with a copy to the Administrator
at [_], Attention: ____________________________________, or at any other
address previously furnished in writing to the Indenture Trustee by the
Issuer or the Administrator. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee, or
(iii) [the Credit Enhancer by the Issuer, the Indenture Trustee or by
any Noteholders shall be sufficient for every purpose hereunder to in
writing and mailed, first-class postage pre-paid, or personally delivered
or telecopied to: [Name of Credit Enhancer], ________________, ________,
_______________, Attention: _________________, ___________________________,
Telephone ______________. Telecopier ______________. The Credit Enhancer
shall promptly transmit any notice received by it from the Issuer, the
Indenture Trustee or the Noteholders to the Issuer or Indenture Trustee, as
the case may be.]
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
or mailed by certified mail, return receipt requested, to (i) in the case of
[Moody's], at the following address: [▇▇▇▇▇'▇ Investors Service, Inc., ABS
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇] and (ii) in
the case of [Standard & Poor's], at the following address: [Standard & Poor's
Corporation, ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of
Asset Backed Surveillance Department]; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
Section 10.05 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 such
Person's 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 regardless of whether such
notice is in fact actually received.
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
53
when such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be satisfactory to the
Indenture Trustee shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of Default.
Section 10.06 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 Administrator to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer shall furnish to the Indenture Trustee a copy of
each such agreement and the Indenture Trustee shall cause payments to be made
and notices to be given in accordance with such agreements.
Section 10.07 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 'SS''SS' 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 10.08 Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
Section 10.09 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, co-trustees and agents.
Section 10.10 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 10.11 [Benefits of Indenture. The Credit Enhancer and its
successors and assigns shall be a third-party beneficiary to the 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, and the Noteholders, and any other party secured hereunder, and any
other Person with an ownership interest in any part of the Trust Estate, any
benefit or any legal or equitable right, remedy or claim under this Indenture.]
Section 10.12 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
54
Section 10.13 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 10.14 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 10.15 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 Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
Section 10.16 Issuer Obligation. 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 this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
Section 10.17 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 Depositor or the Issuer, or
join in any institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
Section 10.18 Inspection. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, 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
55
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 10.19 Authority of the Administrator. Each of the parties to this
Indenture acknowledges that the Issuer and the Owner Trustee have each appointed
the Administrator to act as its agent to perform the duties and obligations of
the Issuer hereunder. Unless otherwise instructed by the Issuer or the Owner
Trustee, copies of all notices, requests, demands and other documents to be
delivered to the Issuer or the Owner Trustee pursuant to the terms hereof shall
be delivered to the Administrator. Unless otherwise instructed by the Issuer or
the Owner Trustee, all notices, requests, demands and other documents to be
executed or delivered, and any action to be taken, by the Issuer or the Owner
Trustee pursuant to the terms hereof may be executed, delivered and/or taken by
the Administrator pursuant to the Administration Agreement.
56
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
[_] Trust 200_-____,
as Issuer
By:
---------------------------------
not in its individual capacity
but solely as Owner Trustee
By:
---------------------------------
Name:
Title:
------------------------------------
as Indenture Trustee, as Certificate
Paying Agent and as Note Registrar
By:
---------------------------------
Name:
Title:
--------------------------------------------
hereby accepts the appointment as Certificate
Paying Agent pursuant to Section 3.03 hereof
and as Certificate Registrar pursuant to
Section 4.02 hereof.
--------------------------------------
By:
-----------------------------------
Title:
--------------------------------
57
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared
______________, to me known, who being by me duly sworn, did depose and say,
that he resides at _________________, __________________ _____, that he is the
__________ of the Owner Trustee, one of the corporations described in and which
executed the above instrument; that he knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.
-----------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared , to me
known, who being by me duly sworn, did depose and say, that he resides at , that
he is the ______________ of ________________, as Indenture Trustee, one of the
corporations described in and which executed the above instrument; that he knows
the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation; and that he signed his name thereto by like order.
-----------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared , to me
known, who being by me duly sworn, did depose and say, that he resides at , that
he is an ________________ of _______________, as Indenture Trustee, one of the
corporations described in and which executed the above instrument; that he knows
the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation; and that he signed his name thereto by like order.
-----------------------------
Notary Public
[NOTARIAL SEAL]
Exhibit B
[FORM OF OPINION]
[Date]
To: The Persons Listed On the Attached Schedule
Re: [_] Trust 200_-____
-------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to ________________ ("______") in connection with
the issuance by _________ its Surety Bond Number [SB___] (the "Surety Bond")
issued pursuant to the [Insurance and Reimbursement Agreement, dated as of
_______________ among ________________, HomePride Mortgage and Finance Corp., as
Depositor (the "Depositor"), [_], as Seller and [Master] Servicer and [_] Trust
200_ - (the "Issuer") (the "Insurance Agreement") with respect to the Additional
Variable Funding Notes issued pursuant to the Indenture, dated as of
_______________ between the Issuer and __________________________________, as
Indenture Trustee.]
For the purposes of this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction of
[(i) the Certificate of Incorporation and the By-Laws of ______; (ii)
resolutions adopted by the Board of Directors of ______ relevant to the issuance
of the Surety Bond; (iii) the Surety Bond; (iv) the Insurance Agreement; (v) the
certificate of the Secretary of ______ dated as of the date hereof (the
"Certificate");] and (vi) such other documents that we have deemed necessary or
appropriate as a basis for the opinion set forth below.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the [Definitions incorporated in and attached as an
Appendix to the Indenture.]
In our examination we have assumed the genuineness of all signatures and
the legal capacity of natural persons (other than with respect to officers of
______), the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such copies. We
have relied upon the certificates, statements and representations of officers
and other representatives of ______ with regard to all facts (but not
conclusions of law) material to the opinions set forth below and have not
conducted an independent inquiry as to such matters. Based upon and subject to
the foregoing, we are of the opinion that:
1. ______ is a corporation validly existing, in good standing and licensed
to transact the business of surety and financial guaranty insurance under
the laws of the State of New York.
B-1
2. ______ has the corporate power to execute and deliver, and to take all
action required of it under the Surety Bond.
3. Except as have already been obtained, no authorization, consent,
approval, license, formal exemption, or declaration from, nor any
registration or filing with, any court or governmental agency or body of
the United States of America or the State of New York, which if not
obtained would affect or impair the validity or enforceability of the
Surety Bond is required in connection with the execution and delivery by
______ of the Surety Bond or in connection with ________ performance of its
obligations thereunder.
4. The Surety Bond has been duly authorized, executed and delivered by
______ and constitutes the legally valid and binding obligation of ______,
enforceable in accordance with its terms subject, as to enforcement, to (a)
bankruptcy, reorganization, insolvency, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights generally,
including, without limitation, laws relating to fraudulent transfers or
conveyances, preferential transfers and equitable subordination, presently
or from time to time in effect, and general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law), as such laws may be applied in any such proceeding with
respect to ______ and (b) the qualification that the remedy of specific
performance may be subject to equitable defenses and to the discretion of
the court before which any proceedings with respect thereto may be brought.
5. The Surety Bond is not required to be registered under the Securities
Act of 1933, as amended.
We express no opinion as to the laws of any jurisdiction other than the
federal laws of the United States of America and the laws of the State of New
York. This opinion is limited to the laws of New York and the United States of
America as in effect on the date hereof and, in rendering this opinion, we
assume no obligation to revise or supplement this opinion should the present
laws, or the interpretation thereof, be changed.
This opinion has been furnished solely for the benefit of the persons
listed on the attached Schedule A in connection with the transactions described
herein and on the condition that the opinions expressed herein may not be
published or otherwise communicated to any other party, or relied upon by any
other party, without prior written approval in each instance.
Very truly yours,
B-2
Schedule A
Opinion of [Date]
Re: [_] Trust 200_-____
-------------------------------------------
HomePride Mortgage and Finance Corp
[▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]
[Standard & Poor's, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]
__________________________________,
as Indenture Trustee
_________________________________
_______________
_______________________
______________________,
as Owner Trustee
__________________
__________________________
B-3
Exhibit C
__________, 200_
HomePride Mortgage and Finance Corp
[Name of Underwriter]
____________________________
_________________________
[Name of Credit Enhancer]
________________
_________________________
[Name of Indenture Trustee]
___________________________
_________________
_________________
Re: [_] Trust 200_-____
Ladies and Gentlemen:
We have acted as counsel to HomePride Mortgage and Finance Corp., a
Delaware corporation (the "Depositor"), in connection with (i) the purchase of
certain adjustable rate home loans (the "Mortgage Loans") pursuant to a mortgage
loan purchase agreement, dated as of ________________ (the "Mortgage Loan
Purchase Agreement") between [_], as seller (the "Seller"), and the Depositor,
and (ii) the sale by the Depositor of the Trust Estate to [_] Trust 200_-
______, a Delaware business trust (the "Issuer"), created by a Trust Agreement
dated as of ________________ (the "Trust Agreement") between the Depositor and
______________________, as owner trustee (the "Owner Trustee"). In exchange for
the Trust Estate, the Issuer has issued [_] Term Notes, Series ______ (the "Term
Notes"), [_] Variable Funding Notes, Series ______ (the "Variable Funding
Notes", and together with the Term Notes, the "Notes") and [_] Certificates,
Series ______ (the "Certificates", and together with the Notes, the
"Securities"). The Issuer wishes to increase the Maximum Variable Funding
Balance of the Variable funding Notes in excess of $__________ as provided for
in Section 4.01 of the Indenture. Capitalized terms not otherwise defined herein
shall (unless otherwise specifically set forth herein) have the meanings
ascribed to such terms in the Trust Agreement.
C-1
This opinion is rendered pursuant to Section 4.01(b)(iii) of the Indenture.
In arriving at the opinions expressed below, we have examined such
documents and records as we have deemed appropriate, including the following:
1. A signed copy of the Indenture.
2. A signed copy of the Trust Agreement.
3. Specimens of the Notes.
As to any facts material to the following opinions which we did not
independently establish or verify, we have relied upon statements and
representations of the responsible officers and other representations of the
Depositor and of public officials and agencies.
Based upon the foregoing and consideration of such other matters as we have
deemed appropriate, we are of the opinion that:
1. For federal income tax purposes, as a result of the increase in the
Maximum Variable Funding Balance of the Variable Funding Notes in excess of
$__________, the Issuer will not be classified as an association or a publicly
traded partnership taxable as a corporation.
2. The Variable Funding Notes will be treated as debt for federal income
tax purposes and will not affect the Classification as debt of any other class
of Notes.
We do not express any opinion as to any laws other than the federal tax law
of the United States of America.
The opinions set forth herein are expressly subject to there being no
additional facts that would materially affect the validity of the assumptions
and conclusions set forth herein or upon which this opinion is based.
No one other than you shall be entitled to rely on the opinions expressed
herein. This opinion letter is not intended to be employed in any transaction
other than the one described above and is being delivered to you on the
understanding that neither it nor its contents may be published, communicated or
otherwise made available, in whole or in part, to any other party or entity
without, in each instance, our specific prior written consent.
Very truly yours,
C-2
APPENDIX A
DEFINITIONS
Additional Principal Distribution Amount: With respect to any Payment
Date, the lesser of (x) the amount remaining in the Payment Account after the
application of funds on deposit therein in accordance with clauses (i) through
(vi) of Section 3.05 of the Indenture and (y) the amount required to bring the
Outstanding Revenue Amount up to the Reserve Amount Target.
Administration Agreement: The Administration Agreement dated as of
_______________ among the Issuer and the Indenture Trustee, as Administrator, as
it may be amended from time to time.
Administrator: [_], as administrator under the Administration
Agreement or any successor Administrator appointed pursuant to the terms of the
Administration Agreement.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For 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 "controlling" and "controlled" shall have meanings
correlative to the foregoing.
Aggregate Security Balance: With respect to any Payment Date, the
aggregate of the Principal Balances of all Securities as of such date.
Amortization Event: [Any one of the following events:
(a) the failure on the part of the Seller (i) to make any payment or
deposit required to be made under the Mortgage Loan Purchase 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 Seller set forth in the Mortgage
Loan Purchase Agreement, which failure continues unremedied for a period of
60 days after written notice and such failure materially and adversely
affects the interests of the Securityholders [or the Credit Enhancer];
(b) if any representation or warranty made by the Seller in the
Mortgage Loan Purchase Agreement proves to have been incorrect in any
material respect when made and which continues to be incorrect in any
material respect for a period of 45 days with respect to any representation
or warranty of the Seller made in Section 3.1(a) of the Mortgage Loan
Purchase Agreement or 90 days with respect to any representation or
warranty made in Section 3.1(b) or 3.2 of the Mortgage Loan Purchase
Agreement after written notice and as a result of which the interests of
the Securityholders [or the Credit Enhancer] are materially and adversely
affected; provided, however, that an Amortization Event shall not be deemed
to occur if the Seller has repurchased or substituted for the related
Mortgage Loans or all Mortgage Loans, if applicable, during such period (or
within an additional 60 days with the consent of the Indenture Trustee [and
the Credit Enhancer]) in accordance with the provisions of the Indenture;
A-1
(c) The entry against the Seller of a decree or order by a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days;
(d) The Seller shall voluntarily go into liquidation, consent to the
appointment of a conservator, receiver, liquidator or similar person in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Seller or of or relating to all
or substantially all of its property, or a decree or order of a court,
agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, liquidator or similar person in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Seller and such decree or order shall
have remained in force undischarged, unbonded or unstayed for a period of
60 days; or the Seller shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations;
(e) the Issuer becomes subject to regulation by the Commission as an
investment company within the meaning of the Investment Company Act of
1940, as amended;
(f) an Event of Servicing Termination relating to the [Master]
Servicer occurs under the Servicing Agreement and the [Master] Servicer is
the Seller;
In the case of any event described in (a), (b) or (f), an Amortization
Event will be deemed to have occurred only if, after any applicable grace period
described in such clauses, either the Indenture Trustee], the Credit Enhancer]
or, [with the consent of the Credit Enhancer,] Securityholders evidencing not
less than 51% of the Security Balance of each of the Bonds and the Certificates
by written notice to the Seller, the [Master] Servicer, the Depositor and the
Owner Trustee (and to the Indenture Trustee, if given by [the Credit Enhancer
or] the Securityholders) may declare that an Amortization Event has occurred as
of the date of such notice. In the case of any event described in clauses (c),
(d), (e), an Amortization Event will be deemed to have occurred without any
notice or other action on the part of the Indenture Trustee, the Securityholders
[or the Credit Enhancer] immediately upon the occurrence of such event;
provided, that any Amortization Event may be waived and deemed of no effect with
the written consent of the Credit Enhancer and each Rating Agency, subject to
the satisfaction of any conditions to such waiver.]
Appraised Value: [The appraised value of a Mortgaged Property or
Manufactured Home, as applicable, based upon the lesser of (i) the appraisal
made at the time of the origination of the related Mortgage Loan, or (ii) the
sales price of such Mortgaged Property at such time of origination. With respect
to a Mortgage Loan the proceeds of which were used to refinance an existing
mortgage loan, the appraised value of the Mortgaged Property based upon the
appraisal (as reviewed and approved by the Seller) obtained at the time of
refinancing.]
Assignment of Mortgage: An assignment of Mortgage, notice of transfer
or equivalent instrument, in recordable form, which is sufficient under the laws
of the jurisdiction
A-2
wherein the related Mortgaged Property is located to reflect of record the sale
of the Mortgage, which assignment, notice of transfer or equivalent instrument
may be in the form of one or more blanket assignments covering Mortgages secured
by Mortgaged Properties located in the same county, if permitted by law.
Authorized Newspaper: A newspaper of general circulation in the
Borough of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
Authorized Officer: With respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers delivered
by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter) and, so long as
the Administration Agreement is in effect, any Responsible Officer of the
Administrator who is authorized to act for the Administrator in matters relating
to the Issuer and to be acted upon by the Administrator pursuant to the
Administration Agreement and who is identified on the list of Authorized
Officers delivered by the Administrator to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter).
Basic Documents: The Trust Agreement, the Certificate of Trust, the
Indenture, the Mortgage Loan Purchase Agreement[, the Insurance Agreement,] the
Administration Agreement, the Servicing Agreement, the Custodial Agreement and
the other documents and certificates delivered in connection with any of the
above.
Beneficial Owner: With respect to any Bond, the Person who is the
beneficial owner of such ▇▇▇▇ as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).
Billing Date: With respect to any Due Date and Mortgage Loan or
Contract, [the first day of the month preceding such Due Date on which date the
bill is generated for the amount due and payable on the related Mortgage Loan or
Contract on such Due Date].
Bond Owner: The Beneficial Owner of a Bond.
Bond Percentage: With respect to any Payment Date, the ratio expressed
as a percentage of the aggregate of the Principal Balances of all Bonds
immediately prior to such Payment Date to the sum of the Pool Balance on the
first day of the related Collection Period and the amount on deposit in the
Funding Account from Net Principal Collections immediately prior to such Payment
Date.
Bond Rate: With respect to any Interest Period, a per annum rate
determined by the [Master] Servicer equal to LIBOR as of the second LIBOR
Business Day prior to the first day of such Interest Period and 0.__%; provided
however, that in no event shall the Bond Rate with respect to any Interest
Period exceed the Maximum Rate for such Interest Period.
Bond Register: The register maintained by the Bond Registrar in which
the Bond Registrar shall provide for the registration of Bonds and of transfers
and exchanges of Bonds.
A-3
Bond Registrar: The Indenture Trustee, in its capacity as Bond
Registrar.
Bondholder: The Person in whose name a Bond is registered in the Bond
Register, except that, any Bond registered in the name of the Depositor, the
Issuer or the Indenture Trustee or any Affiliate of any of them shall be deemed
not to be outstanding and the registered holder will not be considered a
Bondholder or holder for purposes of giving any request, demand, authorization,
direction, notice, consent or waiver under the Indenture or the Trust Agreement
provided that, in determining whether the Indenture Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Bonds that the Indenture Trustee or the Owner Trustee
knows to be so owned shall be so disregarded. Owners of Bonds that have been
pledged in good faith may be regarded as Holders if the pledgee establishes to
the satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's
right so to act with respect to such Bonds and that the pledgee is not the
Issuer, any other obligor upon the Bonds or any Affiliate of any of the
foregoing Persons.
Bonds: The Bonds designated as the "Bonds" in the Indenture.
Book-Entry Bonds: Beneficial interests in the Bonds, ownership and
transfers of which shall be made through book entries by the Depository as
described in 'SS''SS' 4.06 of the Indenture.
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, [Illinois] or
Minnesota are required or authorized by law to be closed.
Business Trust Statute: Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code 'SS''SS' 3801 et seq., as the same may be amended from time to
time.
Carryover Loss Amount: With respect to any Payment Date, the aggregate
of Loss Amounts (other than Loss Amounts arising during the related Collection
Period) with respect to which either (i) payments of principal have not been
previously made on the Bonds and the Certificates or (ii) were not reflected in
a reduction (not below zero) of the Outstanding Reserve Amount.
Certificate Distribution Account: The account or accounts created and
maintained pursuant to Section _____ of the Servicing Agreement. The Certificate
Distribution Account shall be an Eligible Account.
Certificate Distribution Amount: With respect to any Payment Date, the
sum of (x) the amount accrued during the related Interest Period on the
Principal Balance of the Certificates at the Certificate Rate for such Interest
Period and (y) any Unpaid Certificate Distribution Amount Shortfall. The amount
available for distribution on any Payment Date shall be allocated first to the
amount in clause (x) above, and second to the amount in clause (y) above.
Certificate Paying Agent: The meaning specified in Section 3.10 of the
Trust Agreement.
Certificate Percentage: With respect to any Payment Date, the ratio,
expressed as a percentage, of the aggregate of the Principal Balance of the
Certificates immediately prior to
A-4
such Payment Date to the sum of the aggregate of the Principal Balance of the
Securities immediately prior to such date.
Certificate Rate: With respect to any Interest Period, the per annum
rate determined by the [Master] Servicer equal to the sum of (i) LIBOR and (ii)
0.__% provided, however, that in no event shall the Certificate Rate with
respect to any Interest Period exceed the Maximum Rate.
Certificate Register: The register maintained by the Certificate
Registrar in which the Certificate Registrar shall provide for the registration
of Certificates and of transfers and exchanges of Certificates.
Certificate Registrar: Initially, __________________________________,
in its capacity as Certificate Registrar, or any successor to the Indenture
Trustee in such capacity.
Certificate of Trust: The Certificate of Trust filed for the Trust
pursuant to Section 3810(a) of the Business Trust Statute.
Certificates: The Collateralized Mortgage Certificates, Series ______,
each evidencing undivided beneficial interests in the Issuer and executed by the
Owner Trustee in substantially the form set forth in Exhibit A to the Trust
Agreement.
Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register except that, any Certificate registered
in the name of the Issuer, the Owner Trustee or the Indenture Trustee or any
Affiliate of any of them shall be deemed not to be outstanding and the
registered holder will not be considered a Certificateholder or a holder for
purposes of giving any request, demand, authorization, direction, notice,
consent or waiver under the Indenture or the Trust Agreement provided that, in
determining whether the Indenture Trustee or the Owner Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that the Indenture Trustee or the
Owner Trustee knows to be so owned shall be so disregarded. Owners of
Certificates that have been pledged in good faith may be regarded as Holders if
the pledgee establishes to the satisfaction of the Indenture Trustee or the
Owner Trustee, as the case may be, the pledgee's right so to act with respect to
such Certificates and that the pledgee is not the Issuer, any other obligor upon
the Certificates or any Affiliate of any of the foregoing Persons.
Class Percentage: With respect to each Class of Bonds and Payment
Date, the ratio, expressed as a percentage, of the aggregate Principal Balance
of such Class of Bonds to the aggregate Principal Balance of the Bonds, in each
case immediately prior to such Payment Date.
Closing Date: ________________.
Code: The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
Collateral: The meaning specified in the Granting Clause of the
Indenture.
Collection Account: The account or accounts created and maintained
pursuant to Section 3.02(b) of the Servicing Agreement. The Collection Account
shall be an Eligible Account.
A-5
Collection Period: With respect to any Mortgage Loan and Payment Date
other than the first Payment Date, the calendar month preceding any such Payment
Date and with respect to the first Payment Date, the period from
________________ through ________________.
Combined Loan-to-Value Ratio: With respect to any Mortgage Loan and
any date, the percentage equivalent of a fraction, the numerator of which is the
Cut-Off Date Principal Balance of such Mortgage Loan and the denominator of
which is the outstanding principal balance as of the date of the origination of
such Mortgage Loan of any mortgage loan or mortgage loans that are secured by
liens on the Mortgaged Property that are senior or subordinate to the Mortgage
and the denominator of which is the Appraised Value of the related Mortgaged
Property.
[Contract: Any one of the manufactured housing installment sale
contracts or installment loan agreements, including any Land Home Contracts,
described in the Mortgage and Contract Schedule and constituting part of the
corpus of the Trust Fund, which Contracts are sold and assigned by the Depositor
to the Trustee and which are the subject of this Agreement. The Contracts
include all related security interests and any and all rights to receive
payments which are due pursuant thereto from and after the Cut-off Date, but
exclude any rights to receive payments which were due pursuant thereto prior to
the Cut-off Date.]
[Contract File: As to each Contract other than a Land Home Contract,
(a) the original copy of the Contract, (b) the original title document issued to
the Seller as secured lender or agent therefor for the related Manufactured
Home, unless the laws of the jurisdiction in which the related Manufactured Home
is located do not provide for the issuance of any title documents for
manufactured housing to secured lenders, (c) evidence of one or more of the
following types of perfection of the security interest in favor of the Seller as
secured lender or agent therefor in the related Manufactured Home granted by
such Contract, as appropriate: (1) notation of such security interest on the
title document, (2) a financing statement meeting the requirements of the UCC,
with evidence of filing in the appropriate offices indicated thereon, or (3)
such other evidence of perfection of a security interest in a manufactured
housing unit as is customary in such jurisdiction, (d) the assignment of the
Contract from the manufactured housing dealer to the Contract Seller, if any,
including any intervening assignments, and (e) any extension, modification or
waiver agreement(s).]
Corporate Trust Office: With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Bond Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at
________________________, __________, _______, ___________________,
___________________________, except that for purposes of Section 4.02 of the
Indenture and Section 3.09 of the Trust Agreement, such term shall include the
Indenture Trustee's office or agency at ______________, _________, ________,
______________. With respect to the Owner Trustee, the principal corporate trust
office of the Owner Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of the execution of
this Trust Agreement is located at __________________, __________,
______________, Attention: ______________________________.
Credit Enhancement Draw Amount: As defined in Section 3.32 of the
Indenture.
A-6
[Credit Enhancement Instrument: The surety bond number ______, dated
as of the Closing Date, issued by the Credit Enhancer to the Indenture Trustee
for the benefit of the Bondholders.]
[Credit Enhancer: _____________________________________, a
______________________-domiciled ______________________________________________
insurance company, any successor thereto or any replacement credit enhancer
substituted pursuant to Section 3.33 of the Indenture.]
[Credit Enhancer Default: If the Credit Enhancer fails to make a
payment required under the Credit Enhancement Instrument in accordance with its
terms].
Custodial Agreement: Any Custodial Agreement between the Custodian,
the Indenture Trustee, the Issuer and the [Master] Servicer relating to the
custody of the Mortgage Loans and the Related Documents.
Custodian: With respect to the ______ Loans,
___________________________________, a ____________________, and its successors
and assigns, and with respect to the ____________________________ Loans,
________________________________________, a ______________, and its successors
and assigns, provided, that in no event shall the Custodian be an Affiliate of
the Seller.
Cut-Off Date: With respect to the Initial Loans, ________________.
Cut-Off Date Principal Balance: With respect to any Initial Loan, the
unpaid principal balance thereof as of the opening of business on the last day
of the related Due Period immediately prior to the Cut-Off Date.
Default: Any occurrence which is or with notice or the lapse of time
or both would become an Event of Default.
Definitive Bonds: The meaning specified in Section 4.06 of the
Indenture.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with
an Eligible Substitute Mortgage Loan.
Deposit Date: The applicable date as of which any Additional Loan is
sold to the Purchaser pursuant to the Mortgage Loan Purchase Agreement.
Deposit Date Principal Balance: With respect to any Additional Loan,
the Principal Balance thereof as of the Deposit Date.
Depositor: HomePride Mortgage and Finance Corp., a Delaware
corporation, or its successor in interest.
Depository or Depository Agency: The Depository Trust Company or a
successor appointed by the Indenture Trustee with the approval of the Depositor.
Any successor to the Depository shall be an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act and the
regulations of the Securities and Exchange Commission thereunder.
A-7
Depository Participant: A Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.
Determination Date: With respect to any Payment Date, the 15th day (or
if such 15th day is not a Business Day, the Business Day immediately preceding
such 15th day) of the month of the related Payment Date.
Dissolution Payment Date: Following an Event of Default under the
Indenture and an acceleration of the Maturity Date of the Bonds, a date on which
the proceeds of the sale of the Trust Estate are paid to Securityholders.
Draw: With respect to any Mortgage Loan, a borrowing by the Mortgagor
under the related Loan Agreement.
Due Date: With respect to any _________ Loans, the [25th] day of the
month. With respect to any ________ Loans, the [10th] day of the month. With
respect to any ______ Loans, the [20th] day of the month.
Due Period: With respect to any Mortgage Loan and Due Date, the
calendar month preceding such Due Date.
Eligible Account: An account that is any of the following: (i)
maintained with a depository institution the debt obligations of which have been
rated by each Rating Agency in its highest rating available, or (ii) an account
or accounts in a depository institution in which such accounts are fully insured
to the limits established by the FDIC, provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency, as evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel delivered to the
Indenture Trustee and each Rating Agency) the Indenture Trustee have a claim
with respect to the funds in such account or a perfected first security interest
against any collateral (which shall be limited to Eligible Investments) securing
such funds that is superior to claims of any other depositors or creditors of
the depository institution with which such account is maintained, or (iii) in
the case of the Collection Account, either (A) a trust account or accounts
maintained at the Corporate Trust Department of the Indenture Trustee or (B) an
account or accounts maintained at the Corporate Trust Department of the
Indenture Trustee, as long as its short term debt obligations are rated P-1 by
▇▇▇▇▇'▇ and A-1 by Standard & Poor's or the equivalent) or better by each Rating
Agency and its long term debt obligations are rated A2 by ▇▇▇▇▇'▇ and A by
Standard & Poor's or the equivalent) or better, by each Rating Agency, or (iv)
in the case of the Collection Account and the Payment Account, a trust account
or accounts maintained in the corporate trust division of the Indenture Trustee,
or (v) an account or accounts of a depository institution acceptable to each
Rating Agency as evidenced in writing by each Rating Agency that use of any such
account as the Collection Account or the Payment Account will not reduce the
rating assigned to any of the Securities by such Rating Agency below investment
grade without taking into account the Credit Enhancement Instrument.
Eligible Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and
interest by the United States or any agency or instrumentality thereof
when such obligations are backed by the full faith and credit of the
United States;
A-8
(ii) repurchase agreements on obligations specified in
clause (i) maturing not more than one month from the date of
acquisition thereof, provided that the unsecured obligations of the
party agreeing to repurchase such obligations are at the time rated by
each Rating Agency in the highest short-term rating available;
(iii) federal funds, certificates of deposit, demand
deposits, time deposits and bankers' acceptances (which shall each
have an original maturity of not more than 90 days and, in the case of
bankers' acceptances, shall in no event have an original maturity of
more than 365 days or a remaining maturity of more than 30 days)
denominated in United States dollars of any U.S. depository
institution or trust company incorporated under the laws of the United
States or any state thereof or of any domestic branch of a foreign
depository institution or trust company; provided that the debt
obligations of such depository institution or trust company (or, if
the only Rating Agency is Standard & Poor's, in the case of the
principal depository institution in a depository institution holding
company, debt obligations of the depository institution holding
company) at the date of acquisition thereof have been rated by each
Rating Agency in its highest short-term rating available; and provided
further that, if the only Rating Agency is Standard & Poor's and if
the depository or trust company is a principal subsidiary of a bank
holding company and the debt obligations of such subsidiary are not
separately rated, the applicable rating shall be that of the bank
holding company; and, provided further that, if the original maturity
of such short-term obligations of a domestic branch of a foreign
depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+ in the case of
Standard & Poor's if Standard & Poor's is the Rating Agency;
(iv) commercial paper (having original maturities of not
more than 270 days) of any corporation incorporated under the laws of
the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in their highest
short-term rating available; provided that such commercial paper shall
have a remaining maturity of not more than 30 days;
(v) interests in any money market fund or qualified
investment fund which at the date of acquisition of the interests in
such fund and throughout the time the interest is held in such fund
has a rating of P-1 or Aaa by ▇▇▇▇▇'▇ and either AAAm or AAAm-G by
Standard & Poor's or such lower rating as will not result in the
qualification, downgrading or withdrawal of the then-current rating
assigned to the Certificates by each Rating Agency;
(vi) other obligations or securities that are acceptable to
each Rating Agency as an Eligible Investment hereunder and will not
reduce the rating assigned to any Class of Certificates by such Rating
Agency below the lower of the rating then assigned thereto or the
rating assigned at the Closing Date], and which are acceptable to the
Credit Enhancer,] as evidenced in writing, provided that if the
[Master] Servicer or any other Person controlled by the [Master]
Servicer is the issuer or the obligor of any obligation or security
described in this clause (vi) such obligation or security must have an
interest rate or yield that is fixed or is variable based on an
objective index that is not affected by the rate or amount of losses
on the Mortgage Loans;
A-9
provided, however, that each such instrument shall be acquired in an arm's
length transaction and no such instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations.
Eligible Substitute Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan which must, on the date of such substitution,
as confirmed in an Officers' Certificate delivered to the Indenture Trustee, (i)
have an outstanding principal balance, after deduction of the principal portion
of the monthly payment due in the month of substitution (or in the case of a
substitution of more than one Mortgage Loan for a Deleted Mortgage Loan, an
aggregate outstanding principal balance, after such deduction), not in excess of
the outstanding principal balance of the Deleted Mortgage Loan (the amount of
any shortfall to be deposited by the Seller in the Collection Account in the
month of substitution); (ii) comply with each representation and warranty set
forth in clauses (ii) through (xxxiv) of Section 3.1(b) of the Mortgage Loan
Purchase Agreement other than clauses (viii), (xiii), (xiv), (xxiv)(B),
(xxv)(B), (xxvi) and (xxvii); (iii) have a Loan Rate, Net Loan Rate and Gross
Margin no lower than and not more than [1]% per annum higher than the Loan Rate,
Net Loan Rate and Gross Margin, respectively, of the Deleted Mortgage Loan as of
the date of substitution; (iv) have a Combined Loan-to-Value Ratio at the time
of substitution no higher than that of the Deleted Mortgage Loan at the time of
substitution; (v) have a remaining term to stated maturity not greater than (and
not more than one year less than) that of the Deleted Mortgage Loan and (vi) not
be 30 days or more delinquent.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default: With respect to the Indenture, any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) a default in the payment of any interest on any Bond when the
same becomes due and payable, and such default shall continue for a period
of five days; or
(ii) a default in the payment of the principal of or any
installment of the principal of any Bond when the same becomes due and
payable; or
(iii) [a Credit Enhancer Default shall have occurred and be
continuing and] there occurs a default in the observance or performance of
any covenant or agreement of the Issuer made in the Indenture, or any
representation or warranty of the Issuer made in the Indenture or in any
certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the
time when the same shall have been made [which has a material adverse
effect on Securityholders], and such default shall continue or not be
cured, or the circumstance or condition in respect of which such
representation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 30 days after there shall have been given,
by registered or certified mail, to the Issuer by the Indenture Trustee or
to the Issuer and the Indenture Trustee by the Holders of at least 25% of
the Outstanding
A-10
Amount of the Bonds, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that
such notice is a notice of default hereunder; or
(iv) [a Credit Enhancer Default shall have occurred and be
continuing and] there occurs the filing of a decree or order for relief by
a court having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Trust Estate in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(v) [a Credit Enhancer Default shall have occurred and be
continuing and] there occurs the commencement by the Issuer of a voluntary
case under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any such law, or
the consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the assets of the
Trust Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of any action by the Issuer
in furtherance of any of the foregoing.
Event of Servicer Termination: With respect to the Servicing
Agreement, an Event of Default as defined in Section 7.01 of the Servicing
Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
Excluded Amount: For any Payment Date on or after the occurrence of an
Amortization Event, with respect to all collections whether interest or
principal (other than any amounts received in respect of a Repurchase Price and
pursuant to Section 3.05(c) of the Servicing Agreement) ("Total Collections") on
all Initial Loans and Additional Loans (collectively, "Total Balances of
Obligors"), an amount equal to the product of (A) Total Collections during the
related Collection Period and (B) a fraction equal to one (1) minus a fraction
the numerator of which is (x) the aggregate Principal Balances as of the end of
the last Collection Period and the denominator of which is (y) the Total
Balances of Obligors.
Expenses: The meaning specified in Section 7.02 of the Trust
Agreement.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Final Scheduled Payment Date: To the extent not previously paid, the
principal balance of each Class of Bonds will be due on the Payment Date in
____________.
A-11
FNMA: The Federal National Mortgage Association, or any successor
thereto.
Foreclosure Profit: With respect to a Liquidated Mortgage Loan, the
amount, if any, by which (i) the aggregate of its Net Liquidation Proceeds
exceeds (ii) the related Principal Balance (plus accrued and unpaid interest
thereon at the applicable Loan Rate from the date interest was last paid through
the date of receipt of the final Liquidation Proceeds) of such Liquidated
Mortgage Loan immediately prior to the final recovery of its Liquidation
Proceeds.
Funding Account: The trust account created and maintained with the
Indenture Trustee pursuant to Section 8.02 of the Indenture and referred to
therein as the Funding Account. Funds deposited in the Funding Account shall be
held in trust for the uses and purposes set forth in Article VIII of the
Indenture.
Funding Period: The period commencing on the Cut-Off Date and ending
on the earlier of (x) the Payment Date in ______________ and (y) the occurrence
of an Amortization Event.
▇▇▇▇▇: Pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a security interest
in and right of set-off against, deposit, set over and confirm pursuant to the
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 such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
Gross Margin: With respect to any Mortgage Loan, the percentage set
forth as the "Gross Margin" for such Mortgage Loan on the Mortgage Loan
Schedule, as adjusted from time to time with respect to any ______ Loan in
accordance with the terms of the Servicing Agreement.
Guaranteed Principal Payment Amount: [With respect to any Payment
Date, other than the Dissolution Payment Date, the amount, if any, by which the
Security Balance of the Bonds (after giving effect to all amounts allocable and
distributable to principal on the Bonds on such Payment Date) exceeds the sum of
(A) the Pool Balance plus (B) all amounts on deposit in the Funding Account on
such date (after giving effect to all withdrawals therefrom and deposits thereto
pursuant to Sections 8.02(b) and 8.02(c) of the Indenture on such Payment Date).
With respect to the Payment Date in ____________, if such Payment Date is not a
Dissolution Payment Date, the amount, if any, by which the aggregate of the
Security Balances of the Bonds (after giving effect to all amounts allocable and
distributable to principal on the Bonds) exceeds the amount on deposit in the
Payment Account available to be paid as principal on the Bonds (after giving
effect to all amounts allocable and distributable as principal on the Bonds on
such date).
Holder: Any of the Bondholders or Certificateholders.
A-12
Indemnified Party: The meaning specified in Section 7.02 of the Trust
Agreement.
Indenture: The indenture dated as of _______________ between the
Issuer, as debtor, and the Indenture Trustee, as Indenture Trustee.
Indenture Trustee: __________________________________, and its
successors and assigns or any successor indenture trustee appointed pursuant to
the terms of the Indenture.
Independent: When used with respect to any specified Person, the
Person (i) is in fact independent of the Issuer, any other obligor on the Bonds,
the Seller, the Issuer, the Depositor and any Affiliate of any of the foregoing
Persons, (ii) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller,
the Issuer, the Depositor or any Affiliate of any of the foregoing Persons and
(iii) is not connected with the Issuer, any such other obligor, the Seller, the
Issuer, the Depositor or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
made by an Independent appraiser or other expert appointed by 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.
Index: With respect to any Mortgage Loan, the prime rate from time to
time for the adjustment of the Loan Rate set forth as such on the related
Mortgage Note.
Initial Loans: All [Mortgage Loans][Contracts] sold by the Seller to
the Purchaser on _________________ pursuant to the terms of the Mortgage Loan
Purchase Agreement, as specified in the Mortgage Loan Schedule.
Initial Principal Balance: With respect to the Certificates,
$_________; and the Bonds, $_____________.
Initial Subservicers: With respect to the _________ Loans,
______________________. With respect to the ________ Loans,
__________________________. With respect to the ______ Loans,
__________________________.
Insolvency Event: With respect to a specified Person, (a) the filing
of a decree or order for relief by a court having jurisdiction in the premises
in respect of such Person or any substantial part of its property in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such Person to the
entry of an order for relief in an involuntary case under any such law, or the
consent by such Person to the
A-13
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due or the admission by such Person in
writing (as to which the Indenture Trustee shall have notice) of its inability
to pay its debts generally, or the adoption by the Board of Directors or
managing member of such Person of a resolution which authorizes action by such
Person in furtherance of any of the foregoing.
[Insurance Agreement: The insurance and reimbursement agreement dated
as of _______________ among the [Master] Servicer, the Seller, the Depositor,
the Issuer and the Credit Enhancer, including any amendments and supplements
thereto.]
Insurance Proceeds: Proceeds paid by any insurer [(other than the
Credit Enhancer)] pursuant to any insurance policy covering a Mortgage Loan
which are required to be remitted to the [Master] Servicer, or amounts required
to be paid by the [Master] Servicer pursuant to the next to last sentence of
Section 3.04 of the 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.
Interest Collections: With respect to any Payment Date, the sum of all
payments by or on behalf of Mortgagors and any other amounts constituting
interest (including without limitation such portion of Insurance Proceeds, Net
Liquidation Proceeds and Repurchase Prices as is allocable to interest on the
applicable Mortgage Loan) as is paid by the Seller or the [Master] Servicer or
is collected by the Servicer under the Mortgage Loans, reduced by the Servicing
Fees for the related Collection Period and by any fees (including annual fees)
or late charges or similar administrative fees paid by Mortgagors during the
related Collection Period. The terms of the related Loan Agreement shall
determine the portion of each payment in respect of such Mortgage Loan that
constitutes principal or interest.
Interest Period: With respect to any Payment Date other than the first
Payment Date, the period beginning on the preceding Payment Date and ending on
the day preceding such Payment Date, and in the case of the first Payment Date,
the period beginning on the Closing Date and ending on the day preceding the
first Payment Date.
Interest Rate Adjustment Date: With respect to each Mortgage Loan, the
date or dates on which the Loan Rate is adjusted in accordance with the related
Mortgage Note.
Issuer: The [_] Trust 200_-____, a Delaware business trust, or its
successor in interest.
Issuer Request: 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.
[Land Home Contract: A Contract that is secured by a mortgage or deed
of trust on real estate on which the related Manufactured Home is situated (as
well as by such related Manufactured Home).]
A-14
[Land Home Contract File: As to each Land Home Contract, (a) the
original copy of the Land Home Contract, (b) the original related Mortgage with
evidence of recording thereon (or, if the original Mortgage has not yet been
returned by the applicable recording office, a copy thereof, certified by such
recording office, which will be replaced by the original Mortgage when it is so
returned) and any title document for the related Manufactured Home, (c) the
assignment of the Land Home Contract from the originator (if other than the
Seller) to the Seller, (d) if such Land Home Contract was originated by the
Seller, an endorsement of such Land Home Contract by the Seller, and (e) any
extension, modification or waiver agreement(s).]
LIBOR: For any Interest Period other than the first Interest Period,
the rate for United States dollar deposits for one month which appears on the
Telerate Screen Page 3750 as of 11:00 A.M., London time, on the second LIBOR
Business Day prior to the first day of such Interest Period. With respect to the
first Interest Period, the rate for United States dollar deposits for one month
which appears on the Telerate Screen Page 3750 as of 11:00 A.M., [Chicago,
Illinois] time, two LIBOR Business Days prior to the Closing Date. 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 reasonably selected by the
Indenture Trustee after consultation with the [Master] Servicer), the rate will
be the Reference Bank Rate. If no such quotations can be obtained and no
Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Payment Date.
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, [Illinois] or
Minnesota, or in the city of London, England are required or authorized by law
to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.
Lifetime Rate Cap: With respect to each Mortgage Loan with respect to
which the related Mortgage Note provides for a lifetime rate cap, the maximum
Loan Rate permitted over the life of such Mortgage Loan under the terms of such
Mortgage Note, as set forth on the Mortgage Loan Schedule and initially as set
forth on Exhibit A to the Servicing Agreement.
Liquidated Mortgage Loan: With respect to any Payment Date, any
Mortgage Loan in respect of which the [Master] Servicer has determined, in
accordance with the servicing procedures specified in the Servicing Agreement,
as of the end of the related Collection Period that substantially all
Liquidation Proceeds which it reasonably expects to recover with respect to the
disposition of the related REO have been recovered.
Liquidation Expenses: Out-of-pocket expenses (exclusive of overhead)
which are incurred by or on behalf of the [Master] Servicer in connection with
the liquidation of any Mortgage Loan and not recovered under any insurance
policy, such expenses including, without limitation, legal fees and expenses,
any unreimbursed amount expended (including, without
A-15
limitation, amounts advanced to correct defaults on any mortgage loan which is
senior to such Mortgage Loan and amounts advanced to keep current or pay off a
mortgage loan that is senior to such Mortgage Loan) respecting the related
Mortgage Loan and any related and unreimbursed expenditures for real estate
property taxes or for property restoration, preservation or insurance against
casualty loss or damage.
Liquidation Loss Amounts: With respect to any Payment Date and any
Mortgage Loan that became a Liquidated Mortgage Loan during the related
Collection Period, the unrecovered portion of the related Principal Balance
thereof at the end of such Collection Period, after giving effect to the Net
Liquidation Proceeds applied in reduction of the Principal Balance.
Liquidation Proceeds: Proceeds (including Insurance Proceeds but not
including amounts drawn under the Credit Enhancement Instrument) received in
connection with the liquidation of any Mortgage Loan or related REO, whether
through trustee's sale, foreclosure sale or otherwise.
Loan Agreement: With respect to any Mortgage Loan, the credit line
account agreement executed by the related Mortgagor and any amendment or
modification thereof.
Loan Rate: With respect to any Mortgage Loan and any day, the per
annum rate of interest applicable under the related Loan Agreement.
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.
Loan Year: With respect to any Mortgage Loan, the one year period
commencing on the day succeeding the origination of such Mortgage Loan and
ending on the anniversary date of such Mortgage Loan, and each annual period
thereafter.
Lost Bond Affidavit: With respect to any Mortgage Loan as to which the
original Mortgage Note has been permanently lost or destroyed and has not been
replaced, an affidavit from the Seller or the related Underlying Seller
certifying that the original Mortgage Note has been lost, misplaced or destroyed
(together with a copy of the related Mortgage Note).
Manufactured Home: A unit of manufactured housing which meets the
requirements of Section 25(e)(10) of the Code, securing the indebtedness of the
Obligor under the related Contract.
[Master] Servicer: [Name of [Master] Servicer], a [_] corporation, and
its successors and assigns.
Master Servicing Fee: With respect to any _________ Loan or ________
Loan and any Collection Period, the product of (i) the Master Servicing Fee Rate
divided by 12 and (ii) the aggregate Principal Balance of the _________ Loans or
________ Loans, as applicable, as of the first day of such Collection Period,
and with respect to any ______ Loan and any Collection Period, the product of
(i) the Master Servicing Fee Rate divided by 12 and (ii) the aggregate Principal
Balance of the ______ Loans as of the first day of such Collection Period.
Master Servicing Fee Rate: With respect to any ____ Line Loan or any
_____________, ____% per annum. With respect to any ______ Loan, _____% per
annum.
A-16
Maximum Pool Balance: As to any Payment Date the highest Pool Balance
at the end of any Collection Period from the Closing Date up to and including
the related Collection Period.
Maximum Rate: With respect to any Interest Period, the Weighted
Average Net Loan Rate related to the Due Date in the month preceding the month
in which such Interest Period ends (adjusted to an effective rate reflecting
accrued interest calculated on the basis of the actual number of days in the
Collection Period commencing in the month in which such Interest Period
commences and a year assumed to consist of 360 days).
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.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by a Mortgagor from time to time under the related Mortgage Note as originally
executed (after adjustment, if any, for Principal Prepayments and for Deficient
Valuations occurring prior to such Due Date, and after any adjustment by reason
of any bankruptcy or similar proceeding or any moratorium or similar waiver or
grace period).
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
first or second lien on an estate in fee simple interest in real property
securing a Mortgage Loan.
[Mortgage File: with respect to each Mortgage Loan:
(i) The original Mortgage Note, endorsed without recourse in blank, or
in the name of the Trustee as trustee, and signed by an authorized officer
(which endorsement shall contain either an original signature or a facsimile
signature of an authorized officer of the Seller, and if in the form of an
allonge, the allonge shall be stapled to the Mortgage Note), with all
intervening endorsements showing a complete chain of title from the originator
to the Seller. If the Mortgage Loan was acquired by the endorser in a merger,
the endorsement must be by "____________, successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the endorser
while doing business under another name, the endorsement must be by
"____________ formerly known as [previous name]";
(ii) The original Mortgage, with evidence of recording indicated
thereon or a copy of the Mortgage certified by the public recording office in
which such Mortgage has been recorded;
(iii) The original of any guarantee executed in connection with the
Mortgage Note, if applicable;
(iv) Any rider or the original of any modification agreement executed
in connection with the related Mortgage Note or Mortgage, with evidence of
recording if required by applicable law;
(v) an original Assignment or Assignments of the Mortgage (which may
be included in a blanket assignment or assignments) from the Seller to "[_], as
Trustee under that certain Pooling and Servicing Agreement dated as of [_], [_]"
c/o the [Master] Servicer at an
A-17
address specified by the [Master] Servicer, and signed by an authorized officer,
which assignment shall be in form and substance acceptable for recording. If the
Mortgage Loan was acquired by the assignor in a merger, the assignment must be
by " , successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the assignor while doing business
under another name, the assignment must be by "formerly known as
[previous name]";
(vi) Originals of all intervening assignments of mortgage, which
together with the Mortgage shows a complete chain of title from the originator
to the Seller, with evidence of recording thereon, or a copy of the assignment
certified by the applicable recording office in which such assignment has been
recorded;
(vii) The original mortgagee policy of title insurance, including
riders and endorsements thereto, or if the policy has not yet been issued, (i) a
written commitment or interim binder for title issued by the title insurance or
escrow company dated as of the date the Mortgage Loan was funded, with a
statement by the title insurance company or closing attorney that the priority
of the lien of the related Mortgage during the period between the date of the
funding of the related Mortgage Loan and the date of the related title policy
(which title policy shall be dated the date of recording of the related
Mortgage) is insured, or (ii) a preliminary title report issued by a title
insurer in anticipation of issuing a title insurance policy which evidences
existing liens and gives a preliminary opinion as to the absence of any
encumbrance on title to the Mortgaged Property, except liens to be removed on or
before purchase by the Mortgagor or which constitute customary exceptions
acceptable to lenders generally; or other evidence of title insurance acceptable
to ▇▇▇▇▇▇ ▇▇▇ or Freddie Mac, in accordance with the ▇▇▇▇▇▇ ▇▇▇ Seller/Servicer
Guide or ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇/Servicer Guide, respectively;
(viii) A certified true copy of any power of attorney, if applicable;
and
(ix) Originals of any security agreement, chattel mortgage or the
equivalent executed in connection with the Mortgage, if any.]
Mortgage Loan Group: Any of the _________ Loans, ________ Loans or the
______ Loans.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated as of the Cut-Off Date, between the Seller, as seller, and the
Depositor, as purchaser, with respect to the Mortgage Loans, dated as of
_______________.
[Mortgage Loan] [Contract] Schedule: The list of the [Mortgage Loans]
[Contracts] attached hereto as Exhibit F (as amended from time to time to
reflect the addition of Qualified Substitute [Mortgage Loans] [Contracts]),
which list shall include the following information as to each [Mortgage Loan]
[Contract], as applicable:
(i) the [Mortgage Loan] [Contract] identifying number;
(ii) the street address of the Mortgaged Property including state
and zip code;
(iii) the maturity of the [Mortgage Note] [Contract];
(iv) the Mortgage Rate;
A-18
(v) the Subservicer pass-through rate;
(vi) the Net Mortgage Rate;
(vii) the initial scheduled monthly payment of principal, if any,
and interest;
(viii) the Cut-off Date Principal Balance;
(ix) the [Loan-to-Value Ratio] [Combined Loan-to-Value Ratio] at
origination];
(x) a code indicating that the [Mortgage Loan] [Contract] is
secured by a second or vacation residence;
(xi) a code indicating that the [Mortgage Loan] [Contract] is
secured by a non-owner occupied residence
(xii) the Principal Balance at origination;
(xiii) the type of property securing the Mortgage Note;
(xiv) the appraised value;
(xv) [the date of the Mortgage Note;]
(xvi) the original term to maturity of the [Mortgage
Loan][Contract];
(xvii) [the Principal Balance of any Mortgage Loan senior
thereto ];
(xviii) loan purpose;
(xix) [the lien position of the related Mortgage];
(xx) the Master Servicer loan; and
(xxi) the remaining term of the [Mortgage Loan][Contract].
Such schedule may consist of multiple reports that collectively set
forth all of the information requested. The [Mortgage Loan[ [Contract Schedule]
will be amended from time to time to reflect Additional Loans.
Mortgage Loans: At any time, collectively, all Initial Loans and
Additional Loans, that have been sold to the Depositor under the Mortgage Loan
Purchase Agreement, in each case together with the Related Documents, and that
remain subject to the terms thereof.
Mortgage Note: With respect to a Mortgage Loan, the Loan Agreement
pursuant to which the related mortgagor agrees to pay the indebtedness evidenced
thereby and secured by the related Mortgage as modified or amended.
Mortgaged Property: The underlying property, including real property
and improvements thereon, securing a Mortgage Loan.
A-19
Mortgagor: The obligor or obligors under a Loan Agreement.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage
Loan, Liquidation Proceeds net of Liquidation Expenses.
Net Loan Rate: With respect to any _________ Loan and any ________
Loan and any day, the related Loan Rate less the related Servicing Fee Rate.
[With respect to any ______ Loan and any day, the Prime Rate then applicable to
the Loan Rate plus 1.00%, less the related Master Servicing Fee Rate.]
Net Principal Collections: With respect to any Distribution Date, the
excess, if any, of Security Principal Collections for the related Collection
Period created during the related Collection Period.
Officer's Certificate: With respect to the [Master] Servicer, a
certificate signed by the President, Managing Director, a Director, a Vice
President or an Assistant Vice President, of the [Master] Servicer and delivered
to the Indenture Trustee. With respect to the Issuer, a certificate signed by
any Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section [10.01] of the
Indenture, and delivered to the Indenture Trustee. Unless otherwise specified,
any reference in the Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
Opinion of Counsel: A written opinion of counsel who may be in-house
counsel for the [Master] Servicer if acceptable to the Indenture Trustee[, the
Credit Enhancer] and the Rating Agencies or counsel for the Depositor, as the
case may be.
Outstanding: With respect to the Bonds, as of the date of
determination, all Bonds theretofore executed, authenticated and delivered under
this Indenture except:
(i) Bonds theretofore cancelled by the Bond Registrar or
delivered to the Indenture Trustee for cancellation; and
(ii) Bonds in exchange for or in lieu of which other Bonds have
been executed, authenticated and delivered pursuant to the Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Bonds are held by a holder in due course;
[provided, however, that for purposes of effectuating the Credit Enhancer's
right of subrogation as set forth in Section 4.12 of the Indenture only, all
Bonds that have been paid with funds provided under the Credit Enhancement
Instrument shall be deemed to be Outstanding until the Credit Enhancer has been
reimbursed with respect thereto.]
Outstanding Reserve Amount: With respect to any Payment Date, the
amount by which the sum of (x) the Pool Balance as of the last day of the
related Collection Period and (y) the amount on deposit in the Funding Account
in respect of Net Principal Collections, on such Payment Date exceeds the
Aggregate Security Balance on such Payment Date (after giving effect to all
amounts distributed and allocable to principal on the Securities and deposits to
and withdrawals from the Funding Account that are applied to reduce the Security
Balances on such Payment Date).
A-20
Owner Trust: The Imperial CMB Trust, Series 200_-____ to be created
pursuant to the Trust Agreement.
Owner Trust Estate: The corpus of the Issuer created by the Trust
Agreement which consists of [the Mortgage Loans.]
Owner Trustee: ______________________, and its successors and assigns
or any successor owner trustee appointed pursuant to the terms of the Trust
Agreement.
Paying Agent: Any paying agent or co-paying agent appointed pursuant
to Section 3.03 of the Indenture, which initially shall be ____________________.
Payment Account: The account established by the Indenture Trustee
pursuant to Section 8.02 of the Indenture and Section 5.01 of the Servicing
Agreement. The Payment Account shall be an Eligible Account.
Payment Date: The [20th] day of each month, or if such day is not a
Business Day, then the next Business Day.
Percentage Interest: With respect to any Bond, the percentage obtained
by dividing the Security Balance of such Bond by the aggregate of the Security
Balances of all Bonds of the same Class. With respect to any Certificate, the
percentage obtained by dividing the denomination specified on such Certificate
by the Initial Principal Balance of the Certificates.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pool Balance: With respect to any date, the aggregate of the Principal
Balances of all Mortgage Loans as of such date.
Predecessor Bond: With respect to any particular Bond, every previous
Bond evidencing all or a portion of the same debt as that evidenced by such
particular Bond; and, for the purpose of this definition, any Bond authenticated
and delivered under Section 4.03 of the Indenture in lieu of a mutilated, lost,
destroyed or stolen Bond shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Bond.
Primary Insurance Policy: Each primary policy of mortgage guaranty
insurance issued by a Qualified Insurer or any replacement policy therefor.
Prime Rate: The prime rate for corporate loans at U.S. commercial
banks, as published in The Wall Street Journal.
Principal Balance: With respect to any Mortgage Loan, other than a
Liquidated Mortgage Loan, and as of any day, the related Cut-Off Date Principal
Balance or Deposit Date Principal Balance, minus all collections credited as
principal in respect of any such Mortgage Loan in accordance with the related
Loan Agreement (except for any such collections that are allocable to the
Excluded Amount) and applied in reduction of the Principal Balance thereof. For
purposes of this definition, a Liquidated Mortgage Loan shall be deemed to have
an Principal Balance equal to the Principal Balance of the related Mortgage Loan
immediately prior to the final recovery of all related Liquidation Proceeds and
an Principal Balance of zero thereafter.
A-21
Principal Collection Distribution Amount: For any Payment Date, (i) at
any time during the Revolving Period, so long as an Amortization Event has not
occurred, Net Principal Collections and (ii) following an Amortization Event or
at any time after the end of the Revolving Period, Security Principal
Collections; provided, however, on any Payment Date with respect to which the
Outstanding Reserve Amount that would result if determined without regard to
this proviso exceeds the Reserve Amount Target the Principal Collection
Distribution Amount will be reduced by the amount of such excess until the
Outstanding Reserve Amount equals the Reserve Amount Target.
Principal Collections: With respect to any Payment Date and any
Mortgage Loan, the aggregate of the following amounts:
(i) the total amount of payments made by or on behalf of the
Mortgagor, received and applied as payments of principal on the Mortgage
Loan during the related Collection Period, as reported by the related
Subservicer;
(ii) any Net Liquidation Proceeds, allocable as a recovery of
principal, received in connection with the Mortgage Loan during the related
Collection Period;
(iii) if the Mortgage Loan was purchased by the [Master] Servicer
pursuant to Section 3.14 of the Servicing Agreement, or was repurchased by
the Seller pursuant to the Mortgage Loan Purchase Agreement, during the
related Collection Period, 100% of the Principal Balance of the Mortgage
Loan as of the date of such purchase or repurchase; and
(iv) any other amounts received as payments on or proceeds of the
Mortgage Loan during the Collection Period to the extent applied in
reduction of the principal amount thereof;
provided that Principal Collections shall not include any Foreclosure Profits,
and shall be reduced by any amounts withdrawn from the Collection Account
pursuant to clauses (iii), (iv), (vii) and (viii) of Section 3.03 of the
Servicing Agreement other than any portion of such amounts that are attributable
to the Excluded Amount in respect of any Mortgage Loan that are allocable to
principal of such Mortgage Loan and not otherwise excluded from the amounts
specified in (i) - (iv) above.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Purchase Price: The meaning specified in Section 2.2(a) of the
Mortgage Loan Purchase Agreement.
Purchaser: IMH Assets Corp., a California corporation, and its
successors and assigns.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in
A-22
such states and to write the insurance provided by the insurance policy issued
by it, approved as an insurer by the [Master] Servicer [and as a FNMA-approved
mortgage insurer].
Rating Agency: Any nationally recognized statistical rating
organization, or its successor, that rated the Securities at the request of the
Depositor at the time of the initial issuance of the Securities. Initially,
Moody's or Standard & Poor's. If such organization or a successor is no longer
in existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, designated by the Depositor,
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 mean A-1 or better in the case of Standard & Poor's and P-1 or better in
the case of Moody's and in the case of any other Rating Agency shall mean such
equivalent 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 Moody's and in the case of any other Rating Agency, such
equivalent rating.
Realized Losses: Any losses incurred on defaulted HELOCs that have
been finally liquidated.
Record Date: With respect to the Bonds and any Payment Date, the
Business Day next preceding such Payment Date and with respect to the
Certificates and any Payment Date, the last Business Day of the month preceding
the month of such Payment Date.
Reference Bank Rate: With respect to any Interest Period, as follows:
the arithmetic mean (rounded upwards, if necessary, to the nearest one sixteenth
of a percent) of the offered rates for United States dollar deposits for one
month which are offered by the Reference Banks as of 11:00 A.M., _______,
________ time, on the second LIBOR Business Day prior to the first day of such
Interest Period to prime banks in the London interbank market for a period of
one month in amounts approximately equal to the sum of the Outstanding Amount of
Bonds and the Certificate Principal Balance; provided that at least two such
Reference Banks provide such rate. If fewer than two offered rates appear, the
Reference Bank Rate will be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by the Depositor after consultation
with the Indenture Trustee, as of 11:00 a.m., _______, [Illinois] 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 Aggregate Security Balance. If no
such quotations can be obtained, the Reference Bank Rate shall be the Reference
Bank Rate applicable to the preceding Interest Period.
Reference Banks: [Bank of Tokyo, Barclays Bank PLC, National
Westminster Bank and Bankers Trust Company].
Registered Holder: The Person in whose name a Bond is registered in
the Bond Register on the applicable Record Date.
Related Documents: With respect to each Mortgage Loan, the documents
specified in Section 2.1(c) of the Mortgage Loan Purchase Agreement and any
documents required to be added to such documents pursuant to the Mortgage Loan
Purchase Agreement, the Trust Agreement or the Servicing Agreement.
REO: A Mortgaged Property that is acquired by the Issuer in
foreclosure or by deed in lieu of foreclosure.
A-23
Repurchase Event: With respect to any Mortgage Loan, either (i) a
discovery that, as of the Closing Date with respect to an Initial Loan, or as of
the related Deposit Date with respect to an Additional Loan, as applicable, the
related Mortgage was not a valid lien on the related Mortgaged Property subject
only to (A) the lien of any prior mortgage indicated on the Mortgage Loan
Schedule, (B) the lien of real property taxes and assessments not yet due and
payable, (C) covenants, conditions, and restrictions, rights of way, easements
and other matters of public record as of the date of recording of such Mortgage
and such other permissible title exceptions as are permitted and (D) other
matters to which like properties are commonly subject which do not materially
adversely affect the value, use, enjoyment or marketability of the related
Mortgaged Property or (ii) with respect to any Mortgage Loan as to which the
Seller delivers an affidavit certifying that the original Mortgage Note has been
lost or destroyed, a subsequent default on such Mortgage Loan if the enforcement
thereof or of the related Mortgage is materially and adversely affected by the
absence of such original Mortgage Note.
Repurchase Price: With respect to any Mortgage Loan required to be
repurchased on any date pursuant to the Mortgage Loan Purchase Agreement or
purchased by the [Master] Servicer pursuant to the Servicing Agreement, an
amount equal to the sum of (i) 100% of the Principal Balance thereof (without
reduction for any amounts charged off) and (ii) unpaid accrued interest at the
Loan Rate on the outstanding principal balance thereof from the Due Date to
which interest was last paid by the Mortgagor to the first day of the month
following the month of purchase. No portion of any Repurchase Price shall be
included in the Excluded Amount for any Payment Date.
Revolving Period: The period commencing on the Closing Date and ending
on ______________________.
Reserve Amount Target: As to any Payment Date prior to the Payment
Date in _____________, [_]% of the greater of (i) the Pool Balance as of the
Cut-Off Date and (ii) the Maximum Pool Balance as of the end of the Related
Collection Period (the "Initial Reserve Amount Target"). As to any Payment Date
on or after the Payment Date in __________, the greater of (A) the lesser of (x)
the Initial Reserve Amount Target and (y) [_]% of the Pool Balance as of the end
of the related Collection Period and (B) [_]% of the greater of (i) the Pool
Balance as of the Cut-Off Date and (ii) the Maximum Pool Balance; provided, any
scheduled reduction to the Reserve Amount Target described above shall not be
made as of any Payment Date unless (i) the outstanding Principal Balance of the
Mortgage Loans delinquent 60 days or more averaged over the last 12 months as a
percentage of the aggregate outstanding Principal Balance of all Mortgage Loans
averaged over the last 12 months does not exceed [_]% (or if the Pool Balance is
less than [ %] of the Maximum Pool Balance, [_]%) and (ii) aggregate Liquidated
Loss Amounts on the Mortgage Loans to date for such Payment Date occurring
during the first two years after the Closing Date or occurring during the 3rd,
4th, 5th, or 6th (or any year thereafter) after the Closing Date, are less than
[_], [_], [_], [_] or [_]% respectively, of the Maximum Pool Balance and (iii)
there has been no draw on the Credit Enhancement Instrument. The Reserve Amount
Target may be reduced with the prior written consent of the Credit Enhancer and
the Rating Agencies.
Responsible Officer: With respect to the Indenture Trustee, any
officer of the Indenture Trustee with direct responsibility for the
administration of the Trust Agreement and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
A-24
Schedule Annex: With respect to any Additional Loans, the schedule
provided by the Seller to the Depositor or its assignee pursuant to Section 2.3
of the Mortgage Loan Purchase Agreement, which shall include all items of
information of the type shown on, and shall be deemed to be incorporated in, the
Mortgage Loan Schedule.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
Security: Any of the Certificates or Bonds.
Security Balance: The Principal Balance of the Bonds or the
Certificates, as the case may be.
Security Collections: With respect to any Payment Date, the sum of the
following amounts:
(i) the aggregate of all Security Interest Collections received
during the related Collection Period [plus net investment earnings or
amounts on deposit in the Funding Account];
(ii) Net Principal Collections for such Payment Date; and
(iii) all Substitution Adjustment Amounts to be deposited to the
Payment Account for such Payment Date.
Securityholder or Holder: Any Bondholder or a Certificateholder.
Security Interest Collections: With respect to any Payment Date,
Interest Collections during the related Collection Period excluding the portion
thereof allocable to the Excluded Amount.
Security Percentage: With respect to any Payment Date and Security,
the percentage equivalent of a fraction the numerator of which is the Security
Balance of such Security immediately prior to such Payment Date and the
denominator of which is the aggregate of the Security Balances of all Securities
as of such date.
Security Principal Collections: With respect to any Payment Date,
Principal Collections during the related Collection Period excluding the portion
thereof allocable to the Excluded Amount.
Seller: [Name of Seller], a Delaware corporation, and its successors
and assigns.
Seller's Agreement: With respect to each _________ Loan, the agreement
between the Seller, as purchaser, and the related Seller, as seller.
Servicing Agreement: The Servicing Agreement dated as of
_______________ between __________________________________, as Indenture
Trustee, and the [Master] Servicer, as [Master] Servicer.
A-25
Servicing Certificate: A certificate completed and executed by a
Servicing Officer on behalf of the [Master] Servicer in accordance with Section
4.01 of the Servicing Agreement.
Servicing Fee: With respect to any Mortgage Loan, the sum of the
related Master Servicing Fee and the related Subservicing Fee.
Servicing Fee Rate: With respect to any Mortgage Loan, the sum of the
related Master Servicing Fee Rate and the related Subservicing Fee Rate.
Servicing Officer: Any officer of the [Master] Servicer involved in,
or responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Indenture Trustee (with a copy to the Credit Enhancer) by the [Master]
Servicer, as such list may be amended from time to time.
Single Certificate: A Certificate in the denomination of $1,000.
Single Bond: A Bond in the amount of $1,000.
Standard & Poor's: Standard & Poor's Ratings Group or its successor in
interest.
Subservicer: Any Person with whom the [Master] Servicer has entered
into a Subservicing Agreement as a Subservicer by the [Master] Servicer,
including the Initial Subservicers.
Subservicing Account: An Eligible Account established or maintained by
a Sub servicer as provided for in Section 3.02(c) of the Servicing Agreement.
Subservicing Agreement: The written contract between the [Master]
Servicer and any Subservicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.01 of the Servicing Agreement.
Subservicing Fee: With respect to any _________ Loan and any
Collection Period, the fee retained monthly by the Subservicer (or, in the case
of a nonsubserviced Mortgage Loan, by the [Master] Servicer) equal to the
product of (i) the Subservicing Fee Rate divided by 12 and (ii) the aggregate
Principal Balance of the _________ Loans as of the first day of such Collection
Period. With respect to any ________ Loan and any Collection Period, the fee
retained monthly by the Subservicer (or, in the case of a nonsubserviced
Mortgage Loan, by the [Master] Servicer) equal to the product of (i) the
Subservicing Fee Rate divided by 12 and (ii) the aggregate Principal Balance of
the ________ Loans as of the first day of such Collection Period. With respect
to any ______ Loan and any Collection Period, the fee retained monthly by the
Subservicer (or, in the case of a nonsubserviced Mortgage Loan, by the [Master]
Servicer) equal to (i) the weighted average of the applicable Subservicing Fee
Rates divided by 12 and (ii) the aggregate Principal Balance of the ______ Loans
as of the first day of such Collection Period.
Subservicing Fee Rate: With respect to ___________ Loan, [_]% per
annum.
A-26
Substitution Adjustment Amounts: With respect to any Eligible
Substitute Mortgage Loan, the amount as defined in Section 3.1(b) of the
Mortgage Loan Purchase Agreement.
Teaser Loan: With respect to the Additional Loans, any Mortgage Loan
which provides for an initial period during which the Loan Rate is less than the
sum of the current Index plus the applicable Gross Margin.
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). 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
Issuer after consultation with the Indenture Trustee), the rate will be the
Reference Bank Rate.
Treasury Regulations: Regulations, including proposed or temporary
Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Trust Agreement: The Trust Agreement dated as of ________________
between the Owner Trustee and the Depositor.
Trust Estate: The meaning specified in the Granting Clause of the
Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as
amended from time to time, as in effect on any relevant date.
UCC: The Uniform Commercial Code, as amended from time to time, as in
effect in any specified jurisdiction.
Underlying Seller: With respect to the ________ Loans, ________. With
respect to the ______ Loans, ____.
Unpaid Certificate Distribution Amount Shortfall: With respect to any
Payment Date, the aggregate amount, if any, of Certificate Distribution Amount
that was accrued in respect of a prior Payment Date and has not been distributed
to Certificateholders.
Weighted Average Net Loan Rate: With respect to the Mortgage Loans in
the aggregate, and any Due Date, the average of the Net Loan Rate for each
Mortgage Loan as of the last day of the related Due Period weighted on the basis
of the related Principal Balances outstanding as of the last day of the related
Due Period (except for the ______ Loans where the Net Loan Rate will represent
the average Net Loan Rate during the related Due Periods weighted on the basis
of the daily Principal Balance during the related Due Period for such Mortgage
Loans) for each Mortgage Loan as determined by the [Master] Servicer in
accordance with the [Master] Servicer's normal servicing procedures.
A-27