INDENTURE
dated as of September 1, 1999
by and between
ABFS MORTGAGE LOAN TRUST 1999-3,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
Table of Contents
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions.................................................................................2
ARTICLE II
THE NOTES; PLEDGE OF SUBSEQUENT MORTGAGE LOANS
Section 2.01. Forms Generally.....................................................................................2
Section 2.02. Form of Certificate of Authentication...............................................................2
Section 2.03. General Provisions With Respect to Principal and Interest Payment...................................3
Section 2.04. Denominations.......................................................................................3
Section 2.05. Execution, Authentication, Delivery and Dating......................................................3
Section 2.06. Registration, Registration of Transfer and Exchange.................................................4
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes..........................................................5
Section 2.08. Payments of Principal and Interest..................................................................6
Section 2.09. Persons Deemed Owner................................................................................7
Section 2.10. Cancellation........................................................................................8
Section 2.11. Authentication and Delivery of Notes................................................................8
Section 2.12. Book-Entry Note....................................................................................10
Section 2.13. Termination of Book Entry System...................................................................10
Section 2.14. Pledge of Subsequent Mortgage Loans................................................................11
ARTICLE III
COVENANTS
Section 3.01. Payment of Notes...................................................................................13
Section 3.02. Maintenance of Office or Agency....................................................................13
Section 3.03. Money for Note Payments to Be Held In Trust........................................................13
Section 3.04. Existence of Trust.................................................................................15
Section 3.05. Protection of Trust Estate.........................................................................16
Section 3.06. Opinions as to the Trust Estate....................................................................16
Section 3.07. Performance of Obligations.........................................................................17
Section 3.08. Investment Company Act.............................................................................17
Section 3.09. Negative Covenants.................................................................................17
Section 3.10. Annual Statement as to Compliance..................................................................18
Section 3.11. Restricted Payments................................................................................18
Section 3.12. Treatment of Notes as Debt for Tax Purposes........................................................19
Section 3.13. Notice of Events of Default........................................................................19
Section 3.14. Further Instruments and Acts.......................................................................19
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture............................................................19
Section 4.02. Application of Trust Money.........................................................................20
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default...................................................................................21
Section 5.02. Acceleration of Maturity; Rescission and Annulment.................................................22
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..........................23
Section 5.04. Remedies...........................................................................................23
Section 5.05. Indenture Trustee May File Proofs of Claim.........................................................24
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Notes...................................24
Section 5.07. Application of Money Collected.....................................................................25
Section 5.08. Limitation on Suits................................................................................26
Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest..............................27
Section 5.10. Restoration of Rights and Remedies.................................................................27
Section 5.11. Rights and Remedies Cumulative.....................................................................27
Section 5.12. Delay or Omission Not Waiver.......................................................................27
Section 5.13. Control by Noteholders.............................................................................27
Section 5.14. Waiver of Past Defaults............................................................................28
Section 5.15. Undertaking for Costs..............................................................................28
Section 5.16. Waiver of Stay or Extension Laws...................................................................28
Section 5.17. Sale of Trust Estate...............................................................................29
Section 5.18. Action on Notes....................................................................................30
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the Trust....................................30
Section 5.20. Application of the Trust Indenture Act.............................................................31
Section 5.21. Note Insurer Default...............................................................................31
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee........................................................................31
Section 6.02. Notice of Default..................................................................................33
Section 6.03. Rights of Indenture Trustee........................................................................33
Section 6.04. Not Responsible for Recitals or Issuance of Notes..................................................34
Section 6.05. May Hold Notes.....................................................................................34
Section 6.06. Money Held in Trust................................................................................34
Section 6.07. Eligibility, Disqualification......................................................................35
Section 6.08. Indenture Trustee's Capital and Surplus............................................................35
Section 6.09. Resignation and Removal; Appointment of Successor..................................................35
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee...........................................36
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee...................37
Section 6.12. Preferential Collection of Claims Against Trust....................................................37
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees..............................................37
Section 6.14. Authenticating Agents..............................................................................39
Section 6.15. Review of Mortgage Files...........................................................................40
Section 6.16. Indenture Trustee Fees and Expenses................................................................40
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders.....................41
Section 7.02. Preservation of Information; Communications to Noteholders.........................................41
Section 7.03. Reports by Indenture Trustee.......................................................................42
Section 7.04. Reports by Trust...................................................................................42
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Accounts; Investment; Collection of Moneys.........................................................42
Section 8.02. Payments; Statements...............................................................................46
Section 8.03. Claims against the Note Insurance Policy...........................................................46
Section 8.04. General Provisions Regarding the Payment Accounts and Mortgage Loans...............................49
Section 8.05. Releases of Deleted Mortgage Loans.................................................................50
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to Certain Information.........................50
Section 8.07. Release of Trust Estate............................................................................50
Section 8.08. Amendment to Sale and Servicing Agreement..........................................................50
Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and Servicing Agreement............................51
Section 8.10. Servicer as Agent..................................................................................51
Section 8.11. Termination of Servicer............................................................................51
Section 8.12. Opinion of Counsel.................................................................................51
Section 8.13. Appointment of Collateral Agents...................................................................52
Section 8.14. Rights of the Note Insurer to Exercise Rights of Noteholders.......................................52
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note Insurer.....................................52
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.............................................53
Section 9.02. Supplemental Indentures With Consent of Noteholders................................................53
Section 9.03. Execution of Supplemental Indentures...............................................................55
Section 9.04. Effect of Supplemental Indentures..................................................................55
Section 9.05. Conformity With Trust Indenture Act................................................................55
Section 9.06. Reference in Notes to Supplemental Indentures......................................................55
Section 9.07. Amendments to Governing Documents..................................................................56
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption........................................................................................56
Section 10.02. Form of Redemption Notice.........................................................................57
Section 10.03. Notes Payable on Optional Redemption..............................................................58
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions..............................................................58
Section 11.02. Form of Documents Delivered to Indenture Trustee..................................................58
Section 11.03. Acts of Noteholders...............................................................................59
Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer and Trust...................................60
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.............................................61
Section 11.06. Rules by Indenture Trustee........................................................................62
Section 11.07. Conflict With Trust Indenture Act.................................................................62
Section 11.08. Effect of Headings and Table of Contents..........................................................62
Section 11.09. Successors and Assigns............................................................................62
Section 11.10. Separability......................................................................................62
Section 11.11. Benefits of Indenture.............................................................................62
Section 11.12. Legal Holidays....................................................................................62
Section 11.13. Governing Law.....................................................................................62
Section 11.14. Counterparts......................................................................................63
Section 11.15. Recording of Indenture............................................................................63
Section 11.16. Trust Obligation..................................................................................63
Section 11.17. No Petition.......................................................................................63
Section 11.18. Inspection........................................................................................63
Section 11.19. Usury.............................................................................................64
Section 11.20. Note Insurer Default..............................................................................64
Section 11.21. Third-Party Beneficiary...........................................................................64
APPENDICES, SCHEDULES AND EXHIBITS
Appendix I........Defined Terms
Schedule l........Mortgage Loan Schedule
Exhibit A.........Form of Note
Exhibit B.........Form of Subsequent Pledge Agreement
Exhibit C.........Form of Note Insurer Consent for Subsequent Mortgage Loans
CROSS-REFERENCE TABLE
Cross-reference sheet showing the location in the Indenture
of the provisions inserted pursuant to Sections 310 through 318(a) inclusive
of the Trust Indenture Act of 1939.1
Trust Indenture Act of 1939 Indenture Section
--------------------------- -----------------
Section 310
(a) (1)................................................................ 6.07
(a) (2)................................................................ 6.07, 6.08
(a) (3)................................................................ 6.13
(a) (4)................................................................ Not Applicable
(a) (5)................................................................ 6.07
(b).................................................................... 6.07, 6.09
(c).................................................................... Not Applicable
Section 311
(a).................................................................... 6.12
(b).................................................................... 6.12
(c).................................................................... Not Applicable
Section 312
.......................................................................(a) 7.01(a), 7.02(a)
(b)........................................................................ 7.02(b)
(c)........................................................................ 7.02(c)
(d)........................................................................ 7.03(a)
Section 313
(a).................................................................... 7.03(a)
(b).................................................................... 7.03(a)
(c).................................................................... 11.05
(d).................................................................... 7.03(b)
Section 314
(a)(1)................................................................. 7.04
(a)(2)................................................................. 7.04
(a)(3)................................................................. 7.04
(a)(4)................................................................. 7.04
(b)(1)................................................................. 2.11(c), 11.01
(b)(2)................................................................. 3.06
(c)(1)................................................................. 2.11(d), 4.01,
8.02(d), 11.01
(c)(2)................................................................. 2.11(c), 4.01,
8.02(d), 11.01
(c)(3)................................................................. 8.02(d)
(d)(1)................................................................. 11.01(a)
(d)(2)................................................................. 11.01(a)
(d)(3)................................................................. 11.01(a)
(e).................................................................... 11.0 1(b)
Section 315
(a).................................................................... 6.01(b), 6.01(c)(1)
(b).................................................................... 6.02, 11.05
(c).................................................................... 6.01(a)
(d)(1)................................................................. 6.01(b), 6.01(c)
(d)(2)................................................................. 6.01(c)(2)
(d)(3)................................................................. 6.01(c)(3)
(e).................................................................... 5.15
Section 316
(a).................................................................... 5.20
(b).................................................................... 5.09
(c).................................................................... 5.20
Section 317
(a)(1)................................................................. 5.03
(a)(2)................................................................. 5.05
(b).................................................................... 3.01
Section 318
(a).................................................................... 11.07
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1 This Cross-Reference Table is not part of the Indenture.
This INDENTURE, dated as of September 1, 1999 (as amended or
supplemented from time to time as permitted hereby, this "Indenture"), is
between ABFS MORTGAGE LOAN TRUST 1999-3, a Delaware statutory business trust
(together with its permitted successors and assigns, the "Trust"), and THE
CHASE MANHATTAN BANK, a New York banking corporation, as indenture trustee
(together with its permitted successors in the trusts hereunder, the
"Indenture Trustee").
Preliminary Statement
The Trust has duly authorized the execution and delivery of this
Indenture to provide for its Mortgage Backed Notes, Series 1999-3 (the
"Notes"), issuable as provided in this Indenture. All covenants and agreements
made by the Trust herein are for the benefit and security of the Holders of
the Notes and the Note Insurer. The Trust is entering into this Indenture, and
the Indenture Trustee is accepting the trusts created hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
All things necessary to make this Indenture a valid agreement of the
Trust in accordance with its terms have been done.
Granting Clause
The Trust hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Notes and the Note Insurer, all of the Trust's
right, title and interest in and to (a) the Mortgage Loans in both Pool I and
Pool II listed in the Mortgage Loan Schedule attached as Schedule I to this
Indenture (including property that secures a Mortgage Loan that becomes an REO
Property), including the related Mortgage Files delivered or to be delivered
to the Collateral Agent, on behalf of the Indenture Trustee, pursuant to the
Sale and Servicing Agreement, including all payments of principal received,
collected or otherwise recovered after the Cut-Off Date for each Mortgage
Loan, all payments of interest due on each Mortgage Loan after the Cut-Off
Date therefor whenever received and all other proceeds received in respect of
such Mortgage Loans, any Subsequent Mortgage Loans and any Qualified
Substitute Mortgage Loan, (b) the Unaffiliated Seller's Agreement and the Sale
and Servicing Agreement, (c) the Insurance Policies, (d) all cash, instruments
or other property held or required to be deposited in the Collection Account,
the Payment Accounts, the Note Insurance Payment Account, the Pre-Funding
Accounts, the Capitalized Interest Accounts and the Cross-collateralization
Reserve Accounts, including all investments made with funds in such Accounts
(but not including any income on funds deposited in, or investments made with
funds deposited in, such Accounts other than the Pre-Funding Accounts, which
income shall belong to and be for the account of the Servicer), and (e) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid assets, including, without limitation, all insurance
proceeds and condemnation awards. Such Grants are made, however, in trust, to
secure the Notes equally and ratably without prejudice, priority or
distinction between any Note and any other Note by reason of difference in
time of issuance or otherwise, and for the benefit of the Note Insurer to
secure (x) the payment of all amounts due on the Notes in accordance with
their terms, (y) the payment of all other sums payable under this Indenture
and (z) compliance with the provisions of this Indenture, all as provided in
this Indenture. All terms used in the foregoing granting clauses that are
defined in Appendix I are used with the meanings given in said Appendix I.
The Indenture Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions of this Indenture and agrees to
perform the duties herein required to the end that the interests of the
Holders of the Notes may be adequately and effectively protected. The
Indenture Trustee agrees that it will hold the Note Insurance Policy in trust
and that it will hold any proceeds of any claim upon the Note Insurance
Policy, solely for the use and benefit of the Noteholders in accordance with
the terms hereof and the Note Insurance Policy. In addition, the Indenture
Trustee agrees that it will acknowledge the Grant on each Subsequent Transfer
Date of the related Subsequent Mortgage Loans pursuant to the terms of the
related Subsequent Pledge Agreement, provided that the conditions precedent to
the pledge of such Subsequent Mortgage Loans contained in this Indenture and
in the Sale and Servicing Agreement are satisfied on or prior to such
Subsequent Transfer Date.
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions. Except as otherwise specified or as
the context may otherwise require, the following terms have the respective
meanings set forth in Appendix I for all purposes of this Indenture, and the
definitions of such terms are applicable to the singular as well as to the
plural forms of such terms and to the masculine as well as to the feminine
genders of such terms. Whenever reference is made herein to an Event of
Default or a Default known to the Indenture Trustee or of which the Indenture
Trustee has notice or knowledge, such reference shall be construed to refer
only to an Event of Default or Default of which the Indenture Trustee is
deemed to have notice or knowledge pursuant to Section 6.01(d). All other
terms used herein that are defined in the Trust Indenture Act (as hereinafter
defined), either directly or by reference therein, have the meanings assigned
to them therein.
ARTICLE II
THE NOTES; PLEDGE OF SUBSEQUENT MORTGAGE LOANS
Section 2.01. Forms Generally. The Notes shall be substantially in the
form set forth as Exhibit A attached hereto. Each Note may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any securities
exchange on which the Notes may be listed, or as may, consistently herewith,
be determined by the Trust, as evidenced by its execution thereof. Any portion
of the text of any Note may be set forth on the reverse thereof with an
appropriate reference on the face of the Note.
The Definitive Notes may be produced in any manner determined by the
Trust, as evidenced by its execution thereof.
Section 2.02. Form of Certificate of Authentication. The form of the
Authenticating Agent's certificate of authentication is as set forth on the
signature page of the form of the Note attached hereto as Exhibit A.
Section 2.03. General Provisions With Respect to Principal and Interest
Payment. The Notes shall be designated generally as the "ABFS Mortgage Loan
Trust 1999-3, Mortgage Backed Notes, Series 1999-3".
The Notes shall be issued in the form specified in Section 2.01
hereof. The Notes shall be issued in two Classes, the Class A-1 Notes and the
Class A-2 Notes. The aggregate Original Note Principal Balance of Notes that
may be authenticated and delivered under the Indenture is limited to
$186,065,000 of Class A-1 Notes and $32,835,000 of Class A-2 Notes, except for
the Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or
9.06 of this Indenture.
Subject to the provisions of Sections 3.01, 5.07, 5.09 and 8.02 of
this Indenture, the principal of each Class of Notes shall be payable in
installments ending no later than the related Final Stated Maturity Date,
unless the unpaid principal of such Notes become due and payable at an earlier
date by declaration of acceleration or call for redemption or otherwise.
All payments made with respect to any Note shall be applied first to
the interest then due and payable on such Note and then to the principal
thereof. All computations of interest accrued on any Class A-1 Note shall be
made on the basis of a year of 360 days and twelve 30-day months. All
computations of interest accrued on any Class A-2 Note shall be made on the
basis of a year of 360 days and the actual number of days elapsed in the
related Accrual Period.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Notes, if the Notes have become
or been declared due and payable following an Event of Default and such
acceleration of maturity and its consequences have not been rescinded and
annulled, then payments of principal of and interest on the Notes shall be
made in accordance with Section 5.07 hereof.
Section 2.04. Denominations. The Notes shall be issuable only as
registered Notes in the denominations equal to the Authorized Denominations.
Section 2.05. Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Trust by an Authorized Officer of the Owner
Trustee, acting at the direction of the Certificateholders. The signature of
such Authorized Officer of the Owner Trustee on the Notes may be manual or by
facsimile.
Notes bearing the manual or facsimile signature of an individual who
was at any time an Authorized Officer of the Owner Trustee shall bind the
Trust, notwithstanding that such individual has ceased to be an Authorized
Officer of the Owner Trustee prior to the authentication and delivery of such
Notes or was not an Authorized Officer of the Owner Trustee at the date of
such Notes.
At any time and from time to time after the execution and delivery
of this Indenture, the Trust may deliver Notes executed on behalf of the Trust
to the Authenticating Agent for authentication, and the Authenticating Agent
shall authenticate and deliver such Notes as provided in this Indenture and
not otherwise.
Each Note authenticated on the Closing Date shall be dated the
Closing Date. All other Notes that are authenticated after the Closing Date
for any other purpose hereunder shall be dated the date of their
authentication.
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 in
Section 2.02 hereof, executed by the Authenticating Agent by the manual
signature of one of its Authorized Officers or employees, and such certificate
of authentication upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
Section 2.06. egistration, Registration of Transfer and Exchange.
The Trust shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Trust shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee is hereby initially appointed "Note Registrar"
for the purpose of registering Notes and transfers of Notes as herein
provided. The Indenture Trustee shall remain the Note Registrar throughout the
term hereof. Upon any resignation of the Indenture Trustee, the Servicer, on
behalf of the Trust, shall promptly appoint a successor, with the approval of
the Note Insurer, or, in the absence of such appointment, the Servicer, on
behalf of the Trust, shall assume the duties of Note Registrar.
Upon surrender for registration of transfer of any Note at the
office or agency of the Trust to be maintained as provided in Section 3.02
hereof, the Owner Trustee on behalf of the Trust, acting at the direction of
the Certificateholders, shall execute, and the Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations and of a
like aggregate initial Note Principal Balance.
At the option of the Holder, Notes may be exchanged for other Notes
of any authorized denominations, and of a like aggregate Note Principal
Balance, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Owner Trustee shall
execute, and the Authenticating Agent shall authenticate and deliver, the
Notes that the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Trust, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in the form included in Exhibit A attached hereto, duly executed by
the Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Note Registrar, on behalf of the Trust, may require
payment of a sum sufficient to cover any tax or other governmental charge as
may be imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Section 2.07 hereof not involving any
transfer or any exchange made by the Note Insurer.
No transfer of a Note shall be made to the Unaffiliated Seller or,
to the actual knowledge of a Responsible Officer of the Indenture Trustee, to
any of the Unaffiliated Seller's Affiliates, successors or assigns.
The Note Registrar shall not register the transfer of a Note unless
the Note Registrar has received a representation letter from the transferee to
the effect that either (i) the transferee is not, and is not acquiring the
Note on behalf of or with the assets of, an employee benefit plan or other
retirement plan or arrangement that is subject to Title I of the Employee
Retirement Income Security Act or 1974, as amended, or Section 4975 of the
Code or (ii) the acquisition and holding of the Note by the transferee
qualifies for exemptive relief under a Department of Labor Prohibited
Transaction Class Exemption. Each Beneficial Owner of a Note which is a
Book-Entry Note shall be deemed to make one of the foregoing representations.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes. If (1) any
mutilated Note is surrendered to the Note Registrar or the Note Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (2) there is delivered to the Note Registrar such security or
indemnity as may be required by the Note Registrar to save each of the Trust,
the Owner Trustee, the Note Insurer and the Note Registrar harmless, then, in
the absence of notice to the Note Registrar that such Note has been acquired
by a bona fide purchaser, the Owner Trustee on behalf of the Trust, acting at
the direction of the Certificateholders, shall execute and upon its delivery
of a Trust Request the Authenticating Agent shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note,
a new Note or Notes of the same tenor and aggregate initial principal amount
bearing a number not contemporaneously outstanding. If, after the delivery of
such new Note, a bona fide purchaser of the original Note in lieu of which
such new Note was issued presents for payment such original Note, the Note
Registrar, shall be entitled to recover such new Note from the person to whom
it was delivered or any person taking therefrom, 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 expenses incurred by the
Trust, the Owner Trustee, the Note Insurer or the Note Registrar in connection
therewith. If any such mutilated, destroyed, lost or stolen Note shall have
become or shall be about to become due and payable, or shall have become
subject to redemption in full, instead of issuing a new Note, the Trust may
pay such Note without surrender thereof, except that any mutilated Note shall
be surrendered.
Upon the issuance of any new Note under this Section 2.07, the Note
Registrar, may require the payment 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 Trust, the
Indenture Trustee or the Note Registrar) connected therewith.
Every new Note issued pursuant to this Section 2.07 in lieu of any
destroyed, lost or stolen Note shall constitute an original contractual
obligation of the Trust, whether or not the 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 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.08. Payments of Principal and Interest. (a) Payments on
Notes issued as Book-Entry Notes will be made by or on behalf of the Indenture
Trustee to the Clearing Agency or its nominee. Any installment of interest or
principal payable on any Definitive Notes that is punctually paid or duly
provided for by the Trust on the applicable Payment Date shall be paid to the
Person in whose name such Note (or one or more Predecessor Notes) is
registered at the close of business on the Record Date for such Class of Notes
and such Payment Date by either (i) check mailed to such Person's address as
it appears in the Note Register on such Record Date, or (ii) by wire transfer
of immediately available funds to the account of a Noteholder, if such
Noteholder (A) is the registered holder of Definitive Notes having an initial
principal amount of at least $1,000,000 and (B) has provided the Indenture
Trustee with wiring instructions in writing by five (5) Business Days prior to
the related Record Date or has provided the Indenture Trustee with such
instructions for any previous Payment Date, except for the final installment
of principal payable with respect to such Note, which shall be payable as
provided in subsection (b) of this Section 2.08. A fee may be charged by the
Indenture Trustee to a Holder of Definitive Notes for any payment made by wire
transfer. Any installment of interest or principal not punctually paid or duly
provided for shall be payable as soon as funds are available to the Indenture
Trustee for payment thereof, or if Section 5.07 applies, pursuant to Section
5.07.
(b) All reductions in the Note Principal Balance of a Note (or one or
more Predecessor Notes) effected by payments of installments of principal
made on any Payment Date shall be binding upon all Holders of such Note
and of any Note issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, whether or not such payment is
noted on such Note. The final installment of principal of each Note shall
be payable only upon presentation and surrender thereof on or after the
Payment Date therefor at the Corporate Trust Office of the Indenture
Trustee located within the United States of America pursuant to Section
3.02.
Whenever the Indenture Trustee expects that the entire unpaid Note
Principal Balance of any Note will become due and payable on the next Payment
Date, other than pursuant to a redemption pursuant to Article X, it shall, no
later than two (2) Business Days prior to such Payment Date, telecopy or hand
deliver to each Person in whose name a Note to be so retired is registered at
the close of business on such otherwise applicable Record Date a notice to the
effect that:
(i) the Indenture Trustee expects that funds sufficient to pay such
final installment will be available in the related Payment Account on
such Payment Date; and
(ii) if such funds are available, (A) such final installment will be
payable on such Payment Date, but only upon presentation and surrender of
such Note at the office or agency of the Note Registrar maintained for
such purpose pursuant to Section 3.02 (the address of which shall be set
forth in such notice) and (B) no interest shall accrue on such Note after
such Payment Date.
A copy of such form of notice shall be sent to the Note Insurer by
the Indenture Trustee.
Notices in connection with redemptions of Notes shall be mailed to
Noteholders in accordance with Section 10.02 hereof.
(c) Subject to the foregoing provisions of this Section 2.08, each
Note delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Note shall carry the rights to
unpaid principal and interest that were carried by such other Note. Any
checks mailed pursuant to subsection (a) of this Section 2.08 and
returned undelivered shall be held in accordance with Section 3.03
hereof.
(d) Each (i) Indenture Trustee's Remittance Report, prepared by the
Indenture Trustee, based solely on the Servicer Remittance Report
delivered to the Indenture Trustee pursuant to the Sale and Servicing
Agreement, and (ii) each report regarding the Mortgage Loans delivered to
the Indenture Trustee by the Servicer pursuant to Section 5.16(b) of the
Sale and Servicing Agreement, shall be delivered by the Indenture Trustee
to the Note Insurer, the Rating Agencies, the Servicer, the Owner
Trustee, the Depositor and each Noteholder as the statements required
pursuant to Section 8.06 hereof. Neither the Indenture Trustee nor the
Collateral Agent shall have any responsibility to recalculate, verify or
recompute information contained in any such tape, electronic data file or
disk or any such Servicer Remittance Report except to the extent
necessary to satisfy all obligations under this Section 2.08(d).
Within ninety (90) days after the end of each calendar year, the
Indenture Trustee will be required to furnish to each Person who at any time
during the calendar year was a Noteholder, if requested in writing by such
person, a statement containing the information set forth in subclauses (a),
(b) and (c) in the definition of "Indenture Trustee's Remittance Report,"
aggregated for such calendar year or the applicable portion thereof during
which such person was a Noteholder. Such obligation will be deemed to have
been satisfied to the extent that substantially comparable information is
provided pursuant to any requirements of the Code as are from time to time in
force.
From time to time (but no more than once per calendar month), upon
the written request of the Depositor, the Servicer or the Note Insurer, the
Indenture Trustee shall report to the Depositor, the Servicer and the Note
Insurer the amount then held in each Account (including investment earnings
accrued) held by the Indenture Trustee and the identity of the investments
included therein. From time to time, at the request of the Note Insurer, the
Indenture Trustee shall report to the Note Insurer with respect to the actual
knowledge of a Responsible Officer, without independent investigation, of any
breach of any of the representations or warranties relating to individual
Mortgage Loans set forth in Section 3.03 of the Unaffiliated Seller's
Agreement. The Indenture Trustee shall also provide the Note Insurer such
other information within its control as may be reasonably requested by it.
Section 2.09. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, any agent on behalf of the Trust
including but not limited to the Indenture Trustee, or the Note Insurer, may
treat the Person in whose name any Note is registered as the owner of such
Note (a) on the applicable Record Date for the purpose of receiving payments
of the principal of and interest on such Note and (b) on any other date for
all other purposes whatsoever, and none of the Trust, the Indenture Trustee or
any other agent of the Trust, or the Note Insurer shall be affected by notice
to the contrary.
Section 2.10. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Registrar, be delivered to the Note Registrar and
shall be promptly canceled by it. The Owner Trustee, on behalf of the Trust,
shall deliver to the Note Registrar for cancellation any Note previously
authenticated and delivered hereunder which the Owner Trustee, on behalf of
the Trust may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Note Registrar. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section 2.10, except as expressly permitted by this Indenture. All
cancelled Notes held by the Note Registrar shall be held by the Note Registrar
in accordance with its standard retention policy, unless the Owner Trustee, on
behalf of the Trust shall direct by a Trust Order that they be destroyed or
returned to it.
Section 2.11. Authentication and Delivery of Notes. The Notes shall
be executed by an Authorized Officer of the Owner Trustee, on behalf of the
Trust, and delivered to the Authenticating Agent for authentication, and
thereupon the same shall be authenticated and delivered by the Authenticating
Agent, upon a Trust Request and upon receipt by the Authenticating Agent of
all of the following:
(a) A Trust Order authorizing the execution, authentication and
delivery of the Notes and specifying the Note Principal Balance and the
Percentage Interest of such Notes to be authenticated and delivered.
(b) A Trust Order authorizing the execution and delivery of this
Indenture and the Sale and Servicing Agreement.
(c) One or more Opinions of Counsel (which opinion shall not be at
the expense of the Indenture Trustee or the Trust) addressed to the
Authenticating Agent and the Note Insurer or upon which the
Authenticating Agent and the Note Insurer are expressly permitted to
rely, complying with the requirements of Section 11.01, reasonably
satisfactory in form and substance to the Authenticating Agent and the
Note Insurer.
In rendering the opinions set forth above, such counsel may rely
upon Officer's Certificates of the Trust, the Owner Trustee, the Unaffiliated
Seller, the Originators, the Depositor, the Servicer and the Indenture
Trustee, without independent confirmation or verification with respect to
factual matters relevant to such opinions. In rendering the opinions set forth
above, such counsel need express no opinion as to (A) the existence of, or the
priority of the security interest created by the Indenture against, any liens
or other interests that arise by operation of law and that do not require any
filing or similar action in order to take priority over a perfected security
interest or (B) the priority of the security interest created by this
Indenture with respect to any claim or lien in favor of the United States or
any agency or instrumentality thereof (including federal tax liens and liens
arising under Title IV of ERISA).
The acceptability to the Note Insurer of the Opinion of Counsel
delivered to the Authenticating Agent and the Note Insurer at the Closing Date
shall be conclusively evidenced by the delivery on the Closing Date of the
Note Insurance Policy.
(d) An Officer's Certificate of the Trust complying with the
requirements of Section 11.01 and stating that:
(i) the Trust is not in Default under this Indenture and the
issuance of the Notes will not result in any breach of any of the
terms, conditions or provisions of, or constitute a default under,
the Trust's Certificate of Trust or any indenture, mortgage, deed of
trust or other agreement or instrument to which the Trust is a party
or by which it is bound, or any order of any court or administrative
agency entered in any proceeding to which the Trust is a party or by
which it may be bound or to which it may be subject, and that all
conditions precedent provided in this Indenture relating to the
authentication and delivery of the Notes have been complied with;
(ii) the Trust is the owner of each Mortgage Loan, free and
clear of any lien, security interest or charge, has not assigned any
interest or participation in any such Mortgage Loan (or, if any such
interest or participation has been assigned, it has been released)
and has the right to Grant each such Mortgage Loan to the Indenture
Trustee;
(iii) the information set forth in the Mortgage Loan Schedule
attached as Schedule I to this Indenture is correct;
(iv) the Trust has Granted to the Indenture Trustee all of its
right, title and interest in each Mortgage Loan; and
(v) as of the Closing Date, no lien in favor of the United
States described in Section 6321 of the Code, or lien in favor of
the Pension Benefit Guaranty Corporation described in Section
4068(a) of the ERISA, has been filed as described in subsections
6323(f) and 6323(g) of the Code upon any property belonging to the
Trust.
(e) An executed counterpart of the Sale and Servicing Agreement.
(f) An executed counterpart of the Unaffiliated Seller's Agreement.
(g) An executed counterpart of the Trust Agreement.
(h) An executed copy of the Insurance Agreement.
(i) An original executed copy of the Note Insurance Policy.
(j) A copy of a letter from ▇▇▇▇▇'▇ that is has assigned a rating of
"Aaa" to the Notes and a copy of a letter from S&P that it has assigned a
rating of "AAA" to the Notes.
Section 2.12. Book-Entry Note. (a) The Notes will be issued
initially as one or more certificates in the name of Cede & Co., as nominee
for the Clearing Agency maintaining book-entry records with respect to
ownership and transfer of such Notes, and registration of the Notes may not be
transferred by the Note Registrar except upon Book-Entry Termination. In such
case, the Note Registrar shall deal with the Clearing Agency as representative
of the Beneficial Owners of such Notes for purposes of exercising the rights
of Noteholders hereunder. Each payment of principal of and interest on a
Book-Entry Note shall be paid to the Clearing Agency, which shall credit the
amount of such payments to the accounts of its Clearing Agency Participants in
accordance with its normal procedures. Each Clearing Agency Participant shall
be responsible for disbursing such payments to the Beneficial Owners of the
Book-Entry Notes that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing
funds to the Beneficial Owners of the Book-Entry Notes that it represents. All
such credits and disbursements are to be made by the Clearing Agency and the
Clearing Agency Participants in accordance with the provisions of the Notes.
None of the Indenture Trustee, the Note Registrar, if any, the Trust or the
Note Insurer shall have any responsibility therefor except as otherwise
provided by applicable law. Requests and directions from, and votes of, such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Beneficial Owners.
Section 2.13. Termination of Book Entry System. (a) The book-entry system
through the Clearing Agency with respect to the Book-Entry Notes may be
terminated upon the happening of any of the following:
(i) The Clearing Agency advises the Indenture Trustee that the
Clearing Agency is no longer willing or able to discharge properly
its responsibilities as nominee and depositary with respect to the
Notes and the Indenture Trustee is unable to locate a qualified
successor Clearing Agency satisfactory to the Servicer, on behalf of
the Trust;
(ii) The Majority Certificateholders, on behalf of the Trust,
in their sole discretion, elects to terminate the book-entry system
by notice to the Clearing Agency and the Indenture Trustee; or
(iii) After the occurrence of an Event of Default (at which
time the Indenture Trustee shall use all reasonable efforts to
promptly notify each Beneficial Owner through the Clearing Agency of
such Event of Default), the Beneficial Owners of no less than 51% of
the Note Principal Balance of the Book-Entry Notes advise the
Indenture Trustee in writing, through the related Clearing Agency
Participants and the Clearing Agency, that the continuation of a
book-entry system through the Clearing Agency to the exclusion of
any Definitive Notes being issued to any person other than the
Clearing Agency or its nominee is no longer in the best interests of
the Beneficial Owners.
(b) Upon the occurrence of any event described in subsection (a) of
this Section 2.13, the Indenture Trustee shall use all reasonable efforts
to notify all Beneficial Owners, through the Clearing Agency, of the
occurrence of such event and of the availability of Definitive Notes to
Beneficial Owners requesting the same, in an aggregate outstanding Note
Principal Balance representing the interest of each, making such
adjustments and allowances as it may find necessary or appropriate as to
accrued interest and previous calls for redemption. Definitive Notes
shall be issued only upon surrender to the Indenture Trustee of the
global Note by the Clearing Agency, accompanied by registration
instructions for the Definitive Notes. Neither the Trust nor 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 issuance of the Definitive Notes, all
references herein to obligations imposed upon or to be performed by the
Clearing Agency shall cease to be applicable and the provisions relating
to Definitive Notes shall be applicable.
Section 2.14. Pledge of Subsequent Mortgage Loans. (a) Subject to
the satisfaction of the conditions set forth in paragraph (b) of this Section
2.14, in consideration of the Indenture Trustee's delivery on the related
Subsequent Transfer Dates to or upon the order of the Servicer, on behalf of
the Trust, of all or a portion of the balance of funds in either Pre-Funding
Account, the Trust shall on any Subsequent Transfer Date pledge, without
recourse, to the Indenture Trustee, for the benefit of the Noteholders and the
Note Insurer, all right, title and interest of the Trust in and to the related
Subsequent Mortgage Loans, including the outstanding principal of, and
interest due on, such Subsequent Mortgage Loans, and all other assets in the
Trust Estate relating to the Subsequent Mortgage Loans. In connection with
such pledge, and pursuant to Section 2.07 of the Unaffiliated Seller's
Agreement and Section 2.09 of the Sale and Servicing Agreement, the Trust does
hereby also irrevocably pledge to the Indenture Trustee, for the benefit of
the Noteholders and the Note Insurer, all of its rights under the Sale and
Servicing Agreement, the Unaffiliated Seller's Agreement, the related
Subsequent Contribution Agreement and the related Subsequent Transfer
Agreement, including, without limitation, its right to exercise the remedies
created by Sections 2.06 and 3.05 of the Unaffiliated Seller's Agreement for
defective documentation and for breaches of representations and warranties,
agreement and covenants of the Unaffiliated seller contained in Section 3.01,
3.02 and 3.03 of the Unaffiliated Seller's Agreement.
The amount released from either Pre-Funding Account with respect to
a transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%) of
the Aggregate Principal Balances of the Subsequent Mortgage Loans so pledged,
as of the related Subsequent Cut-Off Date.
(b) The Subsequent Mortgage Loans and the other property and rights
related thereto described in paragraph (a) of this Section 2.14 shall be
pledged by the Trust to the Indenture Trustee, for the benefit of the
Noteholders and the Note Insurer, only upon the satisfaction of each of
the following conditions on or prior to the related Subsequent Transfer
Date:
(i) the Unaffiliated Seller shall have provided the Trust, the
Depositor, the Indenture Trustee, the Collateral Agent, the Rating
Agencies and the Note Insurer with an Addition Notice at least two
(2) Business Days prior to the Subsequent Transfer Date, which shall
include a Mortgage Loan Schedule listing the Subsequent Mortgage
Loans, and shall have provided any other information reasonably
requested by any of the foregoing parties with respect to the
Subsequent Mortgage Loans;
(ii) the Unaffiliated Seller shall have caused the Servicer to
deposit in the Collection Account all collections of (x) principal
in respect of the Subsequent Mortgage Loans received after the
related Subsequent Cut-Off Date and (y) interest due on the
Subsequent Mortgage Loans after the related Subsequent Cut-Off Date;
(iii) as of each Subsequent Transfer Date, neither the
Unaffiliated Seller nor the Depositor shall be insolvent, neither
shall be made insolvent by such transfer and neither shall be aware
of any pending insolvency;
(iv) such Subsequent Transfer shall not result in a material
adverse tax consequence to the Trust or the Holders of the Notes;
(v) the related Pre-Funding Period shall not have terminated;
(vi) the Unaffiliated Seller shall have delivered to the
Indenture Trustee an Officer's Certificate confirming the
satisfaction of each condition precedent specified in this paragraph
(b) and each complies with the terms of the Unaffiliated Seller's
Agreement, including each of the representations and warranties made
with respect thereto in Section 3.03 of the Unaffiliated Seller's
Agreement; provided, that each representation in Section 3.03(tt)
(other than clause (v)) may be waived or modified with the prior
written consent of the Note Insurer;
(vii) there shall have been delivered to the Note Insurer, the
Trust, the Collateral Agent, the Rating Agencies and the Indenture
Trustee, Independent Opinions of Counsel with respect to the
transfer of the Subsequent Mortgage Loans substantially in the form
of the Opinions of Counsel delivered to the Depositor, the Note
Insurer, the Trust, the Collateral Agent, the Rating Agencies and
the Indenture Trustee on the Closing Date (i.e. bankruptcy,
corporate and tax opinions);
(viii) the Indenture Trustee shall have received a written
consent from the Note Insurer in the form of Exhibit C hereto;
(ix) the Originators, the Unaffiliated Seller and the Depositor
shall have delivered to the Indenture Trustee an executed copy of a
Subsequent Transfer Agreement, substantially in the form of Exhibit
A to the Unaffiliated Seller's Agreement;
(x) the Depositor and the Trust shall have delivered to the
Indenture Trustee an executed copy of a Subsequent Contribution
Agreement, substantially in the form of Exhibit G to the Sale and
Servicing Agreement, and
(xi) the Trust and the Indenture Trustee shall have executed a
Subsequent Pledge Agreement, substantially in the form of Exhibit B
hereto.
(c) In connection with the transfer, assignment and pledge of the
Subsequent Mortgage Loans, the Unaffiliated Seller shall satisfy the
document delivery requirements set forth in Section 2.05 of the Sale and
Servicing Agreement.
(d) On each Subsequent Transfer Date upon written instruction from
the Unaffiliated Seller, the Indenture Trustee shall withdraw from the
related Capitalized Interest Account and pay to the Unaffiliated Seller
on such Subsequent Transfer Date the Overfunded Interest Amount for such
Subsequent Transfer Date, as calculated by the Servicer and subject to
the approval of the Note Insurer.
ARTICLE III
COVENANTS
Section 3.01. Payment of Notes. The Servicer, on behalf of the Trust
will pay or cause to be duly and punctually paid the principal of, and
interest on, the Notes in accordance with the terms of the Notes and this
Indenture. The Notes shall be non-recourse obligations of the Trust and shall
be limited in right of payment to amounts available from the Trust Estate as
provided in this Indenture and the Trust shall not otherwise be liable for
payments on the Notes. No person shall be personally liable for any amounts
payable under the Notes. If any other provision of this Indenture conflicts or
is deemed to conflict with the provisions of this Section 3.01, the provisions
of this Section 3.01 shall control.
Section 3.02. Maintenance of Office or Agency. The Indenture Trustee
will always maintain its corporate trust office at a location in the United
States of America where Notes may be surrendered for registration of transfer
or exchange, and where notices and demands to or upon the Trust in respect of
the Notes and this Indenture may be served. Such location shall be the
Corporate Trust Office of the Indenture Trustee.
The Owner Trustee, at the direction of the Majority
Certificateholder, on behalf of the Trust may also from time to time, at the
expense of the Majority Certificateholders, designate one or more other
offices or agencies within the United States of America where the Notes may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, any designation of an
office or agency for payment of Notes shall be subject to Section 3.03 hereof.
The Owner Trustee, at the direction of the Majority Certificateholders, on
behalf of the Trust will give prompt written notice to the Indenture Trustee
and the Note Insurer of any such designation or rescission and of any change
in the location of any such other office or agency.
Section 3.03. Money for Note Payments to Be Held In Trust. All
payments of amounts due and payable with respect to any Notes that are to be
made from amounts withdrawn from the related Payment Account pursuant to
Sections 5.07 or 8.02 hereof shall be made on behalf of the Trust by the
Indenture Trustee, and no amounts so withdrawn from the related Payment
Account for payments on the Notes shall be paid over to the Trust under any
circumstances except as provided in this Section 3.03 or in Sections 5.07 or
8.02 hereof.
With respect to Definitive Notes, if the Trust shall have a Note
Registrar that is not also the Indenture Trustee, such Note Registrar shall
furnish, no later than the fifth (5th) calendar day after each Record Date, a
list, in such form as such Indenture Trustee may reasonably require, of the
names and addresses of the Holders of Notes and of the number of Individual
Notes held by each such Holder.
Whenever the Trust shall have a Paying Agent other than the
Indenture Trustee, the Servicer, on behalf of the Trust, will, on or before
the Business Day next preceding each Payment Date, direct the Indenture
Trustee to deposit with such Paying Agent an aggregate sum sufficient to pay
the amounts then becoming due (to the extent funds are then available for such
purpose in the related Payment Account), such sum to be held in trust for the
benefit of the Persons entitled thereto. Any moneys deposited with a Paying
Agent in excess of an amount sufficient to pay the amounts then becoming due
on the Notes with respect to which such deposit was made shall, upon Trust
Order, be paid over by such Paying Agent to the Indenture Trustee for
application in accordance with Article VIII hereof.
Subject to the prior written consent of the Note Insurer, any Paying
Agent other than the Indenture Trustee may be appointed by Trust Order and at
the expense of the Trust. The Trust shall not appoint any Paying Agent (other
than the Indenture Trustee) that is not, at the time of such appointment, a
depository institution or trust company whose obligations would be Permitted
Investments pursuant to clause (b) of the definition of the term "Permitted
Investments". The Servicer, on behalf of the Trust, will cause each Paying
Agent other than the Indenture Trustee to execute and deliver to the Indenture
Trustee and the Owner Trustee, on behalf of the Trust, 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:
(a) allocate all sums received for payment to the Holders of Notes
on each Payment Date among such Holders in the proportion specified in
the applicable Indenture Trustee's Remittance Report, in each case to the
extent permitted by applicable law;
(b) 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;
(c) if such Paying Agent is not the Indenture Trustee, immediately
resign as a Paying Agent and forthwith pay to the Indenture Trustee all
sums held by it in trust for the payment of the Notes if at any time the
Paying Agent ceases to meet the standards set forth above required to be
met by a Paying Agent at the time of its appointment;
(d) if such Paying Agent is not the Indenture Trustee, give the
Indenture Trustee notice of any Default by the Trust (or any other
obligor upon the Notes) in the making of any payment required to be made
with respect to any Notes for which it is acting as Paying Agent;
(e) if such Paying Agent is not the Indenture Trustee, 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; and
(f) comply with all requirements of the Code, and all regulations
thereunder, with respect to withholding from any payments made by it on
any Notes of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith;
provided, however, that with respect to withholding and reporting
requirements applicable to original issue discount (if any) on any of the
Notes, the Servicer, on behalf of the Trust, has provided the
calculations pertaining thereto to the Indenture Trustee and the Paying
Agent.
The Trust may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or any other purpose, by Trust
Order direct any Paying Agent, if other than the Indenture Trustee, 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
such 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.
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 two and one-half years after such amount has become due and
payable to the Holder of such Note (or if earlier, three months before the
date on which such amount would escheat to a governmental entity under
applicable law) shall be discharged from such trust and paid to the Trust; and
the Holder of such Note shall thereafter, as an unsecured general creditor,
look only to the Trust for payment thereof (but only to the extent of the
amounts so paid to the Trust), and all liability of the Indenture Trustee or
such Paying Agent with respect to such trust money shall thereupon cease. The
Indenture Trustee may adopt and employ, at the expense of the Trust, any
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
moneys due and payable but not claimed is determinable from the records of the
Indenture Trustee or any Paying Agent, at the last address of record for each
such Holder).
Section 3.04. Existence of Trust. (a) Subject to clauses (b) and (c)
of this Section 3.04, the Trust will keep in full effect its existence, rights
and franchises as a business trust under the laws of the State of Delaware or
under the laws of any other state of the United States of America, 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 the other Basic Documents.
(b) Subject to Section 3.09(g) hereof, and with the prior written
consent of the Note Insurer, any entity into which the Trust may be
merged or with which it may be consolidated, or any entity resulting from
any merger or consolidation to which the Trust shall be a party, shall be
the successor issuer under this Indenture without the execution or filing
of any paper, instrument or further act to be done on the part of the
parties hereto, anything in any agreement relating to such merger or
consolidation, by which any such Trust may seek to retain certain powers,
rights and privileges therefore obtaining for any period of time
following such merger or consolidation to the contrary notwithstanding
(other than Section 3.09(g)).
(c) Upon any consolidation or merger of or other succession to the
Trust in accordance with this Section 3.04, the Person formed by or
surviving such consolidation or merger (if other than the Trust) may
exercise every right and power of, and shall have all of the obligations
of, the Trust under this Indenture with the same effect as if such Person
had been named as the issuer herein.
Section 3.05. Protection of Trust Estate. (a) The Trust 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 as
may be necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate as made by this Indenture;
(ii) maintain or preserve the lien of this Indenture or carry
out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Mortgage Loans, the Sale and Servicing
Agreement, or the Unaffiliated Seller's Agreement; or
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, the Noteholders and the Note
Insurer in the Mortgage Loans and the other property held as part of
the Trust Estate against the claims of all Persons and parties.
(b) The Indenture Trustee shall not, and shall not permit the
Collateral Agent to, 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 Closing Date or cause
or permit ownership or the pledge of any portion of the Trust Estate that
consists of book-entry securities to be recorded on the books of a Person
located in a different jurisdiction from the jurisdiction in which such
ownership or pledge was recorded at such time unless the Indenture
Trustee shall have first received an Opinion of Counsel to the effect
that the lien and security interest created by this Indenture with
respect to such property will continue to be maintained after giving
effect to such action or actions.
Section 3.06. Opinions as to the Trust Estate. On or before April 30th
in each calendar year, beginning in 2000, the Servicer, on behalf of the
Trust, shall furnish to the Indenture Trustee and the Note Insurer an Opinion
of Counsel reasonably satisfactory in form and substance to the Indenture
Trustee and the Note Insurer either stating that, in the opinion of such
counsel, such action has been taken as is necessary to maintain the lien and
security interest created by this Indenture and reciting the details of such
action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe all such action, if any, that will, in the opinion of such
counsel, be required to be taken to maintain the lien and security interest of
this Indenture with respect to the Trust Estate until May 1st in the following
calendar year.
Section 3.07. Performance of Obligations. (a) The Trust shall punctually
perform and observe all of its obligations under this Indenture and the other
Basic Documents.
(b) The Trust shall not take any action and will use its Best
Efforts not to permit any action to be taken by others that would release
any Person from any of such Person's covenants or obligations under any
of the Mortgage Files or under any instrument included in the Trust
Estate, or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any of the documents or instruments contained in the
Mortgage Files, except as expressly permitted in this Indenture, the
other Basic Documents or such document included in the Mortgage File or
other instrument or unless such action will not adversely affect the
interests of the Noteholders and the Note Insurer.
(c) If the Servicer or the Owner Trustee, on behalf of the Trust,
shall have knowledge of the occurrence of a default under the Sale and
Servicing Agreement or the Unaffiliated Seller's Agreement, the Servicer
or the Owner Trustee, as applicable, shall promptly notify the Indenture
Trustee, the Note Insurer and the Rating Agencies thereof, and, in the
case of the Servicer, shall specify in such notice the action, if any,
the Servicer is taking with respect to such default.
(d) Upon any termination of the Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, the Indenture Trustee shall
promptly notify the Note Insurer and the Rating Agencies. As soon as any
successor Servicer is appointed, the Indenture Trustee shall notify the
Note Insurer and the Rating Agencies, specifying in such notice the name
and address of such successor Servicer.
Section 3.08. Investment Company Act. The Trust shall at all times
conduct its operations so as not to be subject to, or shall comply with, the
requirements of the Investment Company Act of 1940, as amended (or any
successor statute), and the rules and regulations thereunder.
Section 3.09. Negative Covenants. The Trust shall not:
(a) sell, transfer, exchange or otherwise dispose of any portion of
the Trust Estate, except as expressly permitted by this Indenture and the
other Basic Documents;
(b) claim any credit on, or make any deduction from, the principal
of, or interest on, any of the Notes by reason of the payment of any
taxes levied or assessed upon any portion of the Trust Estate;
(c) engage in any business or activity other than as permitted by
the Trust Agreement or other than in connection with, or relating to, the
issuance of the Notes pursuant to this Indenture, or amend the Trust
Agreement, as in effect on the Closing Date, other than in accordance
with Section 11.01 of the Trust Agreement;
(d) incur, issue, assume or otherwise become liable for an
indebtedness other than the Notes;
(e) incur, assume, guaranty or agree to indemnify any Person with
respect to any indebtedness of any Person, except for such indebtedness
as may be incurred by the Trust in connection with the issuance of the
Notes pursuant to this Indenture;
(f) subject to Article IX of the Trust Agreement, dissolve or
liquidate in whole or in part (until the Notes are paid in full);
(g) (i) permit the validity or effectiveness of this Indenture or
any Grant to be impaired, or permit the lien of this Indenture to be
impaired, amended, hypothecated, subordinated, terminated or discharged,
or permit any Person to be released from any covenants or obligations
under this Indenture, except as may be expressly permitted hereby, (ii)
permit any lien, charge, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part thereof or
any interest therein or the proceeds thereof, or (iii) permit the lien of
this Indenture not to constitute a valid perfected first priority
security interest in the Trust Estate; or
(h) take any other action that should reasonably be expected to, or
fail to take any action if such failure should reasonably be expected to,
cause the Trust to be taxable as (x) an association pursuant to Section
7701 of the Code or (y) a taxable mortgage pool pursuant to Section
7701(i) of the Code.
Section 3.10. Annual Statement as to Compliance. (a) On or before April
30, 2000, and each April 30 thereafter, the Servicer, on behalf of the Trust,
shall deliver to the Indenture Trustee, the Note Insurer and the Depositor a
written statement, signed by an Authorized Officer of the Servicer, on behalf
of the Trust, stating that:
(b) a review of the fulfillment by the Trust during such year of its
obligations under this Indenture has been made under such Authorized
Officer's supervision; and
(c) to the best of such Authorized Officer's knowledge, based on
such review, the Trust has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a
Default in the fulfillment of any such covenant or condition, specifying
each such Default known to such Authorized Officer and the nature and
status thereof.
Section 3.11. Restricted Payments. The Trust 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
Trust or otherwise with respect to any ownership or equity interest or
security in or of the Trust or to the Servicer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Trust may make, or cause to be made,
distributions to the Servicer, the Indenture Trustee, the Owner Trustee, the
Note Insurer and the Certificateholders as contemplated by, and to the extent
funds are available for such purpose under this Indenture and the other Basic
Documents and the Trust will not, directly or indirectly, make or cause to be
made payments to or distributions from any Payment Account except in
accordance with this Indenture.
Section 3.12. Treatment of Notes as Debt for Tax Purposes. For purposes
of federal, state and local income, franchise and any other income taxes, the
Trust will treat the Notes as indebtedness, and hereby instructs the Indenture
Trustee, Payee Agent and the Servicer, on behalf of the Trust to treat the
Notes as indebtedness for all applicable tax reporting purposes.
Section 3.13. Notice of Events of Default. The Servicer, on behalf of
the Trust, shall give the Indenture Trustee, the Note Insurer, the Rating
Agencies and the Depositor prompt written notice of each Event of Default
hereunder, each default on the part of the Servicer of its obligations under
the Sale and Servicing Agreement and each default on the part of the
Unaffiliated Seller of its obligations under the Unaffiliated Seller's
Agreement.
Section 3.14. Further Instruments and Acts. Upon written request of the
Indenture Trustee or the Note Insurer, the Owner Trustee, on behalf of the
Trust, 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.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. Whenever the
following conditions shall have been satisfied:
(a) either
(i) all Notes theretofore authenticated and delivered (other
than (x) Notes that have been destroyed, lost or stolen and that
have been replaced or paid as provided in Section 2.07 hereof, and
(y) Notes for whose payment money has theretofore been deposited in
trust and thereafter repaid to the Trust, as provided in Section
3.03 hereof) have been delivered to the Note Registrar for
cancellation; or
(ii) all Notes not theretofore delivered to the Note Registrar
for cancellation,
(A) have become due and payable, or
(B) will become due and payable at the Final Stated
Maturity Date within one (1) year, or
(C) are to be called for redemption pursuant to Section
10.01 hereof within one (1) year under irrevocable arrangements
satisfactory to the Indenture Trustee for the giving of notice
of redemption by the Indenture Trustee in the name, and at the
expense, of the Servicer,
(D) and the Servicer, in the case of clauses (ii)(A),
(ii)(B) or (ii)(C) above, has irrevocably deposited or caused
to be deposited with the Indenture Trustee, in trust for such
purpose, an amount sufficient to pay and discharge the entire
unpaid Note Principal Balance such Notes not theretofore
delivered to the Indenture Trustee for cancellation, for
principal and interest to the Final Stated Maturity Date or to
the applicable Redemption Date, as the case may be, and in the
case of Notes that were not paid at the Final Stated Maturity
Date of their entire unpaid Note Principal Balance, for all
overdue principal and all interest payable on such Notes to the
next succeeding Payment Date therefor;
(b) the Servicer, on behalf of the Trust, has paid or caused to be
paid all other sums payable hereunder by the Trust (including, without
limitation, amounts due the Note Insurer); and
(c) the Servicer, on behalf of the Trust, has delivered to the
Indenture Trustee and the Note Insurer an Officers' Certificate and an
Opinion of Counsel satisfactory in form and substance to the Indenture
Trustee and the Note Insurer each stating that all conditions precedent
herein providing for the satisfaction and discharge of this Indenture
have been complied with;
then, upon a Trust Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the
Indenture Trustee and each co-trustee and separate trustee, if any, then
acting as such hereunder shall, at the expense of the Trust (or of the
Servicer in the case of a redemption by the Servicer pursuant to Section 10.01
hereof), execute and deliver all such instruments as may be necessary to
acknowledge the satisfaction and discharge of this Indenture and shall pay, or
assign or transfer and deliver, to the Trust or upon Trust Order all cash,
securities and other property held by it as part of the Trust Estate remaining
after satisfaction of the conditions set forth in clauses (a) and (b) above.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Indenture Trustee and any Paying Agent to the Trust and
the Holders of Notes under Section 3.03 hereof, the obligations of the
Indenture Trustee to the Holders of Notes under Section 4.02 hereof and the
provisions of Section 2.07 hereof with respect to lost, stolen, destroyed or
mutilated Notes, registration of transfers of Notes and rights to receive
payments of principal of and interest on the Notes shall survive.
Section 4.02. Application of Trust Money. All money deposited with the
Indenture Trustee pursuant to Sections 3.03 and 4.01 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,
as the Indenture Trustee may determine, to the Persons entitled thereto, of
the principal and interest for whose payment such money has been deposited
with the Indenture Trustee.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default. "Event of Default", wherever
used herein, means, with respect to Notes issued hereunder, any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) if the Trust shall fail to distribute or cause to be distributed
to the Indenture Trustee, for the benefit of the holders of the Notes, on
any Payment Date, any Interest Payment Amount or shall fail to pay any
Net Mortgage Loan Interest Shortfalls on the Final Stated Maturity Date
for the applicable Class of Notes or shall fail to pay on the Final
Stated Maturity Date of the Class A-2 Notes, any Class A-2 Available
Funds Cap Carry-Forward Amount due on the Notes;
(b) if the Trust shall fail to distribute or cause to be distributed
to the Indenture Trustee, for the benefit of the holders of the Notes,
(x) on any Payment Date, an amount equal to the Principal Payment Amount
due on the Notes on such Payment Date, to the extent that sufficient
funds are on deposit in the Collection Account or (y) on the Final Stated
Maturity Date for any Class of Notes, the aggregate outstanding Note
Principal Balance of such Class of Notes;
(c) if the Trust shall breach or default in the due observance of
any one or more of the covenants set forth in clauses (a) through (h) of
Section 3.09 hereof;
(d) if the Trust shall consent to the appointment of a custodian,
receiver, trustee or liquidator (or other similar official) of itself, or
of a substantial part of its property, or shall admit in writing its
inability to pay its debts generally as they come due, or a court of
competent jurisdiction shall determine that the Trust is generally not
paying its debts as they come due, or the Trust shall make a general
assignment for the benefit of creditors;
(e) if the Trust shall file a voluntary petition in bankruptcy or a
voluntary petition or an answer seeking reorganization in a proceeding
under any bankruptcy laws (as now or hereafter in effect) or an answer
admitting the material allegation of a petition filed against the Trust
in any such proceeding, or the Trust shall, by voluntary petition, answer
or consent, seek relief under the provisions of any now existing or
future bankruptcy or other similar law providing for the reorganization
or winding-up of debtors, or providing for an agreement, composition,
extension or adjustment with its creditors;
(f) if an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing, without the
consent (express or legally implied) of the Trust, a custodian, receiver,
trustee or liquidator (or other similar official) of the Trust or any
substantial part of its property, or sequestering any substantial part of
its respective property, and any such order, judgment or decree or
appointment or sequestration shall remain in force undismissed, unstayed
or unvacated for a period of ninety (90) days after the date of entry
thereof; or
(g) if a petition against the Trust in a proceeding under applicable
bankruptcy laws or other insolvency laws, as now or hereafter in effect,
shall be filed and shall not be stayed, withdrawn or dismissed within
ninety (90) days thereafter, or if, under the provisions of any law
providing for reorganization or winding-up of debtors which may apply to
the Trust, any court of competent jurisdiction shall assume jurisdiction,
custody or control of the Trust or any substantial part of its property,
and such jurisdiction, custody or control shall remain in force
unrelinquished, unstayed or unterminated for a period of ninety (90)
days.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs and is continuing, then and in every such case, but
with the consent of the Note Insurer in the absence of a Note Insurer Default,
the Indenture Trustee may, and on request of the Note Insurer, in the absence
of a Note Insurer Default, or, with the prior written consent of the Note
Insurer, the Holders of Notes representing not less than 50% of the Note
Principal Balance of the Outstanding Notes of both Classes, shall, declare all
the Notes to be immediately due and payable by a notice in writing to the
Trust (and to the Indenture Trustee if given by Noteholders), and upon any
such declaration such Notes, in an amount equal to the entire unpaid Note
Principal Balance of such Notes, together with accrued and unpaid interest
thereon to the date of such acceleration, shall become immediately due and
payable, all subject to the prior written consent of the Note Insurer in the
absence of a Note Insurer Default.
At any time after such a declaration of acceleration of maturity of
the Notes has been made and before a judgment or decree for payment of the
money due has been obtained by the Indenture Trustee as hereinafter provided
in this Article V, the Note Insurer, in the absence of a Note Insurer Default,
or the Holders of Notes representing more than 50% of the Note Principal
Balance of the Outstanding Notes of both Classes, with the prior written
consent of the Note Insurer, by written notice to the Trust and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:
(a) the Trust has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(i) all payments of principal of, and interest on, all
Outstanding Notes and all other amounts that would then be due
hereunder or upon such Notes if the Event of Default giving rise to
such acceleration had not occurred; and
(ii) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee, its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the
principal of Notes that have become due solely by such acceleration, have
been cured or waived as provided in Section 5.14 hereof.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. Subject to the provisions of Section 3.01 hereof and the
following sentence, if an Event of Default occurs and is continuing, the
Indenture Trustee may, with the prior written consent of the Note Insurer,
proceed to protect and enforce its rights and the rights of the Noteholders
and the Note Insurer by any Proceedings the Indenture Trustee deems
appropriate 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 enforce any other proper remedy. Any
Proceedings brought by the Indenture Trustee, on behalf of the Noteholders and
the Note Insurer, or any Noteholder against the Trust shall be limited to the
preservation, enforcement and foreclosure of the liens, assignments, rights
and security interests under the Indenture and no attachment, execution or
other unit or process shall be sought, issued or levied upon any assets,
properties or funds of the Trust, other than the Trust Estate relative to the
Notes in respect of which such Event of Default has occurred. If there is a
foreclosure of any such liens, assignments, rights and security interests
under this Indenture, by private power of sale or otherwise, no judgment for
any deficiency upon the indebtedness represented by the Notes may be sought or
obtained by the Indenture Trustee or any Noteholder against the Trust. The
Indenture Trustee shall be entitled to recover the costs and expenses expended
by it pursuant to this Article V including reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel.
Section 5.04. Remedies. If an Event of Default shall have occurred and
be continuing and the Notes been declared due and payable and such declaration
and its consequences have not been rescinded and annulled, the Indenture
Trustee, at the direction of the Note Insurer (subject to Section 5.17 hereof,
to the extent applicable) may, for the benefit of the Noteholders and the Note
Insurer, do one or more of the following:
(a) institute Proceedings for the collection of all amounts then
payable on the Notes, or under this Indenture, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Trust
moneys adjudged due, subject in all cases to the provisions of Sections
3.01 and 5.03 hereof;
(b) in accordance with Section 5.17 hereof, 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;
(c) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(d) 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 Indenture Trustee or the Holders
of the Notes and the Note Insurer hereunder; and
(e) refrain from selling the Trust Estate and apply all funds on
deposit in each of the Accounts pursuant to Section 5.07 hereof.
Section 5.05. Indenture Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, composition or other judicial Proceeding relative
to the Trust or any other obligor upon any of the Notes or the property of the
Trust or of such other obligor or their creditors, the Indenture Trustee
(irrespective of whether the 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 on the Trust for the payment of
any overdue principal or interest) shall, with the prior written consent of
the Note Insurer, be entitled and empowered, by intervention in such
Proceeding or otherwise to:
(a) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes and file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Indenture
Trustee, its agents and counsel), the Noteholders and the Note Insurer
allowed in such Proceeding, and
(b) collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such Proceeding is hereby authorized by each
Noteholder and the Note Insurer to make such payments to the Indenture
Trustee and, in the event that the Indenture Trustee shall consent to the
making of such payments directly to the Noteholders and the Note Insurer,
to pay to the Indenture Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Indenture
Trustee, its agents and counsel.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder or the Note Insurer any plan of reorganization, arrangement,
adjustment or composition affecting any of the Notes or the rights of any
Holder thereof, or the Note Insurer, or to authorize the Indenture Trustee to
vote in respect of the claim of any Noteholder or the Note Insurer in any such
Proceeding.
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of
Notes. All rights of action and claims under this Indenture or any of the
Notes may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any Proceeding
relating thereto, and any such Proceeding instituted by the Indenture Trustee,
at the direction of the Note Insurer, shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Holders of the Notes and the Note Insurer in respect of
which such judgment has been recovered after payment of amounts required to be
paid pursuant to clause (a) of Section 5.07 hereof.
Section 5.07. Application of Money Collected. If the Notes have been
declared due and payable following an Event of Default and such declaration
and its consequences have not been rescinded and annulled, any money collected
by the Indenture Trustee with respect to each Class of Notes pursuant to this
Article V or otherwise and any other monies that may then be held or
thereafter received by the Indenture Trustee as security for such Class of
Notes shall be applied in the following order, at the date or dates fixed by
the Indenture Trustee and, in case of the payment of the entire amount due on
account of principal of, and interest on, such Class of Notes, upon
presentation and surrender thereof:
(a) first, to the Indenture Trustee, any unpaid Indenture Trustee
Fees with respect to such Class then due and any other amounts payable
and due to the Indenture Trustee with respect to such Class under this
Indenture, including any costs or expenses incurred by it in connection
with the enforcement of the remedies provided for in this Article V;
(b) second, to the Servicer, any amounts required to pay the
Servicer for any unpaid Servicing Fees with respect to such Class then
due and to reimburse the Servicer for Periodic Advances with respect to
such Class previously made by, and not previously reimbursed to or
retained by, the Servicer and, upon the final liquidation of the related
Mortgage Loan or the final liquidation of the Trust Estate, Servicing
Advances with respect to such Class previously made by, and not
previously reimbursed to or retained by, the Servicer;
(c) third, to the payment of Interest Payment Amounts then due and
unpaid upon the Outstanding Notes of such Class through the day preceding
the date on which such payment is made;
(d) fourth, to the payment of the Note Principal Balance of each of
the Outstanding Notes of such Class, up to the amount of their respective
unpaid Note Principal Balance, ratably, without preference or priority of
any kind;
(e) fifth, to the Note Insurer, as subrogee to the rights of the
Noteholders, (x) the aggregate amount necessary to reimburse the Note
Insurer for any unreimbursed Reimbursement Amounts for such Class paid by
the Note Insurer on prior Payment Dates, together with interest thereon
at the "Late Payment Rate" specified in the Insurance Agreement from the
date such Reimbursement Amounts were due to the Note Insurer to such
Payment Date, (y) the amount of any unpaid Premium Amount for such Class
then due, together with interest thereon at the "Late Payment Rate"
specified in the Insurance Agreement from the date such amounts were due
to such Payment Date and (z) any other amounts due and owing to the Note
Insurer for such Class under the Insurance Agreement;
(f) sixth, to the payment of any Net Mortgage Loan Interest
Shortfalls of such Class through the day preceding the date on which such
payment is made;
(g) seventh, for payment in respect of the other Class of Notes, in
the priority set forth in this Section 5.07, to the extent of any
shortfall in the payment of the amounts described in clauses (a) through
(f) with respect to such other Class;
(h) eighth, with respect to the Class A-2 Notes only, to the payment
of any Class A-2 Available Funds Cap Carry-Forward Amount; and
(i) ninth, the remainder to the Holder of Trust Certificate
relating to such Class.
Section 5.08. Limitation on Suits. No Holder of a Note shall have any
right to institute any Proceedings, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Indenture
Trustee and the Note Insurer of a continuing Event of Default;
(b) the Holders of Notes representing not less than 25% of the Note
Principal Balance of the Outstanding Notes of both Classes shall have
made written request to the Indenture Trustee to institute Proceedings in
respect of such Event of Default in its own name as Indenture Trustee
hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee
indemnity in full against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Indenture Trustee, for sixty (60) days after its receipt of
such notice, request and offer of indemnity, has failed to institute any
such Proceeding;
(e) no direction inconsistent with such written request has been
given to the Indenture Trustee during such sixty (60) day period by the
Holders of Notes representing more than 50% of the Note Principal Balance
of the Outstanding Notes of both Classes; and
(f) the consent of the Note Insurer shall have been obtained; it
being understood and intended that no one or more Holders of Notes shall
have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders of Notes or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right
under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all the Holders of Notes.
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 50% of the Note Principal Balances of the
Outstanding Notes of both Classes, the Indenture Trustee shall take the action
prescribed by the group representing a greater percentage of the Note
Principal Balances of the Outstanding Notes of both Classes.
Section 5.09. Unconditional Rights of Noteholders to Receive Principal
and Interest. Subject to the provisions in this Indenture (including Sections
3.01 and 5.03 hereof) limiting the right to recover amounts due on a Note to
recovery from amounts in the portion of the Trust Estate relating to such
Note, the Holder of any Note shall have the right, to the extent permitted by
applicable law, which right is absolute and unconditional, to receive payment
of each installment of interest on such Note on the respective Payment Date
for such installments of interest, to receive payment of each installment of
principal of such Note when due (or, in the case of any Note called for
redemption, on the date fixed for such redemption) 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 5.10. Restoration of Rights and Remedies. If the Indenture
Trustee, the Note Insurer 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 to be adverse
to the Indenture Trustee, the Note Insurer or to such Noteholder, then and in
every such case the Indenture Trustee, the Note Insurer and the Noteholders
shall, subject to any determination in such Proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all
rights and remedies of the Indenture Trustee, the Note Insurer and the
Noteholders shall continue as though no such Proceeding had been instituted.
Section 5.11. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Note Insurer 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 5.12. Delay or Omission Not Waiver. No delay or omission of the
Indenture Trustee, the Note Insurer or of any Holder of any Note to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee, the Note Insurer or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee, the Note Insurer or by the Noteholders with the prior
consent of the Note Insurer, as the case may be.
Section 5.13. Control by Noteholders. The Holders of Notes representing
more than 50% of the Note Principal Balance of the Outstanding Notes of both
Classes on the applicable Record Date shall, with the consent of the Note
Insurer, have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee or exercising any
trust or power conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) any direction to the Indenture Trustee to undertake a Sale of
the Trust Estate shall be by the Holders of Notes representing the
percentage of the Note Principal Balance of the Outstanding Notes
specified in Section 5.17(b)(i) hereof, unless Section 5.17(b)(ii) hereof
is applicable; and
(c) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.01 hereof, the Indenture
Trustee need not take any action that it determines might involve it in
liability or be unjustly prejudicial to the Noteholders not consenting.
Section 5.14. Waiver of Past Defaults. The Holders of Notes representing
more than 50% of the Note Principal Balance of the Outstanding Notes of both
Classes on the applicable Record Date may on behalf of the Holders of all the
Notes, and with the consent of the Note Insurer, waive any past Default
hereunder and its consequences, except a Default:
(a) in the payment of principal or any installment of interest on
any Note; or
(b) in respect of a covenant or provision hereof that under Section
9.02 hereof cannot be modified or amended without the consent of the
Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Section 5.15. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it
as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.15 shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate Notes representing more than 10% of the
Note Principal Balance of the Outstanding Notes of both Classes, or to any
suit instituted by any Noteholder for the enforcement of the payment of any
Interest Payment Amount or Principal Payment Amount on any Note on or after
the related Payment Date or for the enforcement of the payment of principal of
any Note on or after the Final Stated Maturity Date (or, in the case of any
Note called for redemption, on or after the applicable Redemption Date).
Section 5.16. Waiver of Stay or Extension Laws. The Trust 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 of law wherever enacted, now or at any
time hereafter in force, that may affect the covenants in, or the performance
of, this Indenture; and the Trust (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 5.17. Sale of Trust Estate. (a) The power to effect any sale (a
"Sale") of any portion of the Trust Estate pursuant to Section 5.04 hereof
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 with respect thereto 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.
(b) To the extent permitted by law, the Indenture Trustee shall not
in any private Sale sell or otherwise dispose of the Trust Estate, or any
portion thereof, unless:
(i) the Holders of Notes representing not less than 50% of the
Note Principal Balance of the Notes of both Classes then Outstanding
consent to or direct the Indenture Trustee to make such Sale; or
(ii) the proceeds of such Sale would be not less than the
entire amount that would be payable to the Holders of the Notes, in
full payment thereof in accordance with Section 5.07 hereof, on the
Payment Date next succeeding the date of 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 disposition
thereof for purposes of this Section 5.17(b). In the absence of a Note Insurer
Default, no Sale hereunder shall be effective without the consent of the Note
Insurer.
(c) Unless the Holders of all Outstanding Notes 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 (ii) of subsection (b) of
this Section 5.17 has not been established by the Indenture Trustee and
no Person bids an amount equal to or greater than such amount, the
Indenture Trustee, acting in its capacity as Indenture Trustee (i) on
behalf of the Noteholders and the Note Insurer, shall prevent such Sale
and bid an amount (which shall include the Indenture Trustee's right, in
its capacity as Indenture Trustee, to credit bid) at least $1.00 more
than the highest other bid in order to preserve the Trust Estate on
behalf of the Noteholders and the Note Insurer.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(i) any Holder or Holders of Notes may bid for and 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 Outstanding Notes or claims for interest
thereon in lieu of cash up to the amount that 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;
(ii) the Indenture Trustee may bid for and acquire the property
offered for Sale in connection with any public Sale thereof, 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 that would be payable to the Holders of the Notes as a result
of such Sale in accordance with Section 5.07 hereof 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;
(iii) 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,
(iv) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Trust 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
(v) 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 moneys.
Section 5.18. Action on Notes. The Indenture Trustee's right to seek and
recover judgment under this Indenture shall not be affected by the seeking,
obtaining or application of any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Indenture Trustee, the Note Insurer or the Holders of Notes shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Trust or by the levy of any execution under such judgment upon any portion of
the Trust Estate.
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the
Trust. The Trust Estate Granted to the Indenture Trustee as security for the
Notes serves as security only for the Notes. Holders of the Notes shall have
no recourse against the trust estate granted as security for any other series
of Notes issued by the Trust, and no judgment against the Trust for any amount
due with respect to the Notes may be enforced against either the trust estate
securing any other series or any other assets of the Trust, nor may any
prejudgment lien or other attachment be sought against any such other trust
estate or any other assets of the Trust. The Noteholders shall have no
recourse against the Owner Trustee, the Indenture Trustee, the Note Registrar,
the Authenticating Agent, the Collateral Agent, the Depositor, the
Unaffiliated Seller, the Servicer or any of their respective Affiliates, or to
the assets of any of the foregoing entities.
Section 5.20. Application of the Trust Indenture Act. Pursuant to
Section 316(a) of the TIA, all provisions automatically provided for in Section
316(a) are hereby expressly excluded.
Section 5.21. Note Insurer Default. Notwithstanding anything elsewhere
in this Indenture or in the Notes to the contrary, if a Note Insurer Default
exists, the provisions of this Article V and all other provisions of this
Indenture which (a) permit the Note Insurer to exercise rights of the
Noteholders, (b) restrict the ability of the Noteholders or the Indenture
Trustee to act without the consent or approval of the Note Insurer, (c)
provide that a particular act or thing must be acceptable to the Note Insurer,
(d) permit the Note Insurer to direct (or otherwise to require) the actions of
the Indenture Trustee or the Noteholders, (e) provide that any action or
omission taken with the consent, approval or authorization of the Note Insurer
shall be authorized hereunder or shall not subject the party taking or
omitting to take such action to any liability hereunder or (f) which have a
similar effect, shall be of no further force and effect and the Indenture
Trustee shall administer the Trust Estate and perform its obligations
hereunder solely for the benefit of the Holders of the Notes. Nothing in the
foregoing sentence, nor any action taken pursuant thereto or in compliance
therewith, shall be deemed to have released the Note Insurer from any
obligation or liability it may have to any party or to the Noteholders
hereunder, under any other agreement, instrument or document (including,
without limitation, the Note Insurance Policy) or under applicable law.
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 such of
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 his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee need perform only those duties that
are specifically set forth in this Indenture and no others 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 request and 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. The Indenture
Trustee shall, however, examine such certificates and opinions to
determine whether they conform on their face to the requirements of
this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of subsection (b)
of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Sections 5.13 or 5.17
hereof or exercising any trust or power or remedy conferred upon the
Indenture Trustee under this Indenture.
(d) Except with respect to duties of the Indenture Trustee
prescribed by the TIA, as to which this Section 6.01(d) shall not apply,
for all purposes under this Indenture, the Indenture Trustee shall not be
deemed to have notice or knowledge of any Event of Default described in
Sections 5.01(e) or 5.01(f) hereof or any Default described in Sections
5.01(c) or 5.01(d) hereof or of any event described in Section 3.05
hereof unless a Responsible Officer assigned to and working in the
Indenture Trustee's corporate trust department and having direct
responsibility for this Indenture has actual knowledge thereof or unless
written notice of any event that is in fact such an Event of Default or
Default is received by the Indenture Trustee at the Corporate Trust
Office, and such notice references the Notes generally, the Trust, the
Trust Estate or this Indenture.
(e) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur any 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 for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it under this
Indenture or the other Basic Documents.
(f) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to the provisions of this Section 6.01.
(g) Notwithstanding any extinguishment of all right, title and
interest of the Trust in and to the Trust Estate following an Event of
Default and a consequent declaration of acceleration of the maturity of
the Notes, whether such extinguishment occurs through a Sale of the Trust
Estate to another Person, the acquisition of the Trust Estate by the
Indenture Trustee or otherwise, the rights, powers and duties of the
Indenture Trustee with respect to the Trust Estate (or the proceeds
thereof), the Noteholders and the Note Insurer and the rights of
Noteholders and the Note Insurer shall continue to be governed by the
terms of this Indenture.
(h) The Indenture Trustee, the Collateral Agent or any successor
Collateral Agent appointed pursuant to Section 9.08 of the Sale and
Servicing Agreement shall at all times retain possession of the Indenture
Trustee's Mortgage Files in the State of Delaware or the State of New
York (or, with respect to the Chase Bank of Texas, N.A., as initial
Collateral Agent, in the State of Texas), except for those Indenture
Trustee's Mortgage Files or portions thereof released to the Servicer or
the Note Insurer pursuant to this Indenture, the Unaffiliated Seller's
Agreement or the Sale and Servicing Agreement.
(i) Subject to the other provisions of this Indenture and without
limiting the generality of this Section 6.01, the Indenture Trustee shall
have no duty (A) to see to any recording, filing, or depositing of this
Indenture or any agreement referred to herein or any financing statement
or continuation statement evidencing a security interest, or to see to
the maintenance of any such recording, filing or depositing or to any
rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance, (C) to see to the payment or discharge of any tax, assessment,
or other governmental charge or any lien or encumbrance of any kind owing
with respect to, assessed or levied against, any part of the Trust Estate
from funds available in the Payment Accounts or (D) to confirm or verify
the contents of any reports or certificates of the Servicer delivered to
the Indenture Trustee pursuant to this Indenture believed by the
Indenture Trustee to be genuine and to have been signed or presented by
the proper party or parties.
Section 6.02. Notice of Default. Immediately after the occurrence of any
Default known to the Indenture Trustee, the Indenture Trustee shall transmit
by mail to the Note Insurer and the Depositor notice of each such Default and,
within ninety (90) days after the occurrence of any Default known to the
Indenture Trustee, the Indenture Trustee shall transmit by mail to all Holders
of Notes notice of each such Default, unless such Default shall have been
cured or waived; provided, however, that in no event shall the Indenture
Trustee provide notice, or fail to provide notice of a Default known to the
Indenture Trustee in a manner contrary to the requirements of the Trust
Indenture Act. Concurrently with the mailing of any such notice to the Holders
of the Notes, the Indenture Trustee shall transmit by mail a copy of such
notice to the Rating Agencies.
Section 6.03. Rights of Indenture Trustee. (a) Except as otherwise
provided in Section 6.01 hereof, the Indenture Trustee may rely on, and be
protected in acting or refraining to act upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Indenture Trustee need not investigate any fact or matter stated in any such
document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee. The
Indenture Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on any such Officer's Certificate or
Opinion of Counsel.
(c) With the consent of the Note Insurer, which consent shall not be
unreasonably withheld, the Indenture Trustee may act through agents and
shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or
within its rights or powers.
(e) The Indenture Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture or to
institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the Noteholders or
the Note Insurer, pursuant to the provisions of this Indenture, unless
such Noteholders or the Note Insurer shall have offered to the Indenture
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.
(f) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the Noteholders or the Note Insurer;
provided, however, that if the payment within a reasonable time to the
Indenture Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of
the Indenture Trustee, not reasonably assured to the Indenture Trustee by
the security afforded to it by the terms of this Indenture, the Indenture
Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to taking any such action.
(g) The right of the Indenture Trustee to perform any discretionary
act enumerated in this Indenture shall not be construed as a duty, and
the Indenture Trustee shall not be answerable for anything other than its
negligence or willful misconduct in the performance of such act.
Section 6.04. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except, with respect to the
Indenture Trustee, the certificates of authentication on the Notes, shall be
taken as the statements of the Trust, and the Owner Trustee, the Indenture
Trustee and the Authenticating Agent assume no responsibility for their
correctness. The Owner Trustee and the Indenture Trustee make no
representations with respect to the Trust Estate or as to the validity or
sufficiency of this Indenture or of the Notes. Neither the Indenture Trustee
nor the Owner Trustee shall be accountable for the use or application by the
Trust of the Notes or the proceeds thereof or any money paid to the Trust or
upon a Trust Order pursuant to the provisions hereof.
Section 6.05. May Hold Notes. The Indenture Trustee, any Agent, or any
other agent of the Trust, in its individual or any other capacity, may become
the owner or pledgee of Notes and, subject to Sections 6.07 and 6.13 hereof,
may otherwise deal with the Trust or any Affiliate of the Trust with the same
rights it would have if it were not Indenture Trustee, Agent or such other
agent.
Section 6.06. Money Held in Trust. Money held by the Indenture Trustee
in trust hereunder need not be segregated from other funds except to the
extent required by this Indenture or by law. The Indenture Trustee shall be
under no liability for interest on any money received by it hereunder except
as otherwise agreed with the Trust and except to the extent of income or other
gain on investments that are obligations of the Indenture Trustee, in its
commercial capacity, and income or other gain actually received by the
Indenture Trustee on investments, which are obligations of others.
Section 6.07. Eligibility, Disqualification. Irrespective of whether
this Indenture is qualified under the TIA, this Indenture shall always have an
indenture trustee who satisfies the requirements of TIA Sections 310(a)(1) and
310(a)(5). The Indenture Trustee shall always have a combined capital and
surplus as stated in Section 6.08 hereof. The Indenture Trustee shall be
subject to TIA Section 310(b).
Section 6.08. Indenture Trustee's Capital and Surplus. The Indenture
Trustee shall at all times (a)(i) have a combined capital and surplus of at
least $50,000,000, or (ii) be a member of a bank holding company system, the
aggregate combined capital and surplus of which is at least $100,000,000 and
(b) be rated (or have long-term debt rated) "BBB" or better by S&P and "Baa2"
by ▇▇▇▇▇'▇; provided, however, that the Indenture Trustee's separate capital
and surplus shall at all times be at least the amount required by TIA Section
310(a)(2). If the Indenture Trustee publishes annual reports of condition of
the type described in TIA Section 310(a)(1), its combined capital and surplus
for purposes of this Section 6.08 shall be as set forth in the latest such
report. If at any time the Indenture Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.08 and TIA Section 310(a)(2),
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article VI.
Section 6.09. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Indenture Trustee and no appointment of a
successor Indenture Trustee pursuant to this Article VI shall become effective
until the acceptance of appointment by the successor Indenture Trustee under
Section 6.10 hereof.
(b) The Indenture Trustee may resign at any time by giving written
notice thereof to the Trust, the Note Insurer and each Rating Agency. If
an instrument of acceptance by a successor Indenture Trustee shall not
have been delivered to the Indenture Trustee within thirty (30) days
after the giving of such notice of resignation, the resigning Indenture
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time by the Note
Insurer or, with the consent of the Note Insurer, by Act of the Holders
representing more than 50% of the Note Principal Balance of the
Outstanding Notes of both Classes, by written notice delivered to the
Indenture Trustee and to the Trust.
(d) If at any time:
(i) the Indenture Trustee shall have a conflicting interest
prohibited by Section 6.07 hereof and shall fail to resign or
eliminate such conflicting interest in accordance with Section 6.07
hereof after written request therefor by the Trust or by any
Noteholder; or
(ii) the Indenture Trustee shall cease to be eligible under
Section 6.08 hereof or shall become incapable of acting or shall be
adjudged bankrupt or insolvent, or a receiver of the Indenture
Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Indenture Trustee or of its
property or affairs for the purpose of rehabilitation, conservation
or liquidation;
then, in any such case, (x) the Owner Trustee, on behalf of the
Trust, by a Trust Order, with the consent of the Note Insurer, may remove
the Indenture Trustee, and the Owner Trustee, on behalf of the Trust, by a
Trust Order, shall join with the Indenture Trustee in the execution, delivery
and performance of all instruments and agreements necessary or proper to
appoint a successor Indenture Trustee acceptable to the Note Insurer and to
vest in such successor Indenture Trustee any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this
Indenture; provided, however, if the Owner Trustee, on behalf of the Trust,
and the Note Insurer do not join in such appointment within fifteen (15) days
after the receipt by it of a request to do so, or in case an Event of Default
has occurred and is continuing, the Indenture Trustee may petition a court of
competent jurisdiction to make such appointment, or (y) subject to Section
5.15 hereof, and, in the case of a conflicting interest as described in clause
(i) above, unless the Indenture Trustee's duty to resign has been stayed as
provided in TIA Section 310(b), the Note Insurer or any Noteholder who has
been a bona fide Holder of a Note for at least six (6) months may, on behalf
of himself and all others similarly situated, with the consent of the Note
Insurer, petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the
Indenture Trustee for any cause, the Owner Trustee, on behalf of the
Trust, by a Trust Order, shall promptly appoint a successor Indenture
Trustee acceptable to the Note Insurer. If within one (1) year after such
resignation, removal or incapability or the occurrence of such vacancy a
successor Indenture Trustee shall be appointed by the Note Insurer or,
with the consent of the Note Insurer, by Act of the Holders of Notes
representing more than 50% of the Note Principal Balance of the
Outstanding Notes of both Classes delivered to the Trust and the retiring
Indenture Trustee, the successor Indenture Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor
Indenture Trustee and supersede the predecessor Indenture Trustee
appointed by the Trust. If no successor Indenture Trustee shall have been
so appointed by the Trust, the Note Insurer or Noteholders and shall have
accepted appointment in the manner hereinafter provided, any Noteholder
who has been a bona fide Holder of a Note for at least six (6) months
may, on behalf of himself and all others similarly situated, with the
consent of the Note Insurer, petition any court of competent jurisdiction
for the appointment of a successor Indenture Trustee.
(f) The Servicer, on behalf of the Trust, shall give notice of each
resignation and each removal of the Indenture Trustee and each
appointment of a successor Indenture Trustee to the Holders of Notes and
the Note Insurer. Each notice shall include the name of the successor
Indenture Trustee and the address of its Corporate Trust Office.
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee.
Every successor Indenture Trustee appointed hereunder shall execute,
acknowledge and deliver to the Trust, the Note Insurer and the retiring
Indenture Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Indenture Trustee shall become
effective and such successor Indenture Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Indenture Trustee. Notwithstanding the foregoing, upon
a Trust Request of the Owner Trustee, on behalf of the Trust, or the successor
Indenture Trustee, such retiring Indenture Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Indenture Trustee all the rights, powers and trusts of the retiring Indenture
Trustee, and shall duly assign, transfer and deliver to such successor
Indenture Trustee all property and money held by such retiring Indenture
Trustee hereunder. Upon a written request of any such successor Indenture
Trustee, the Owner Trustee, on behalf of the Trust, shall, with the written
consent of the Note Insurer, execute and deliver any and all instruments for
more fully and certainly vesting in and confirming to such successor Indenture
Trustee all such rights, powers and trusts.
No successor Indenture Trustee shall accept its appointment unless
at the time of such acceptance such successor Indenture Trustee shall be
qualified and eligible under this Article VI.
Section 6.11. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation or banking association into
which the Indenture Trustee may be merged or converted or with which it may be
consolidated, or any corporation or banking association resulting from any
merger, conversion or consolidation to which the Indenture Trustee shall be a
party, or any corporation or banking association succeeding to all or
substantially all of the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee hereunder; provided, that such
corporation or banking association shall be otherwise qualified and eligible
under this Article VI, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Notes have
been authenticated, but not delivered, by the Indenture Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Indenture Trustee may adopt such authentication and deliver the
Notes so authenticated with the same effect as if such successor Indenture
Trustee had authenticated such Notes.
Section 6.12. Preferential Collection of Claims Against Trust. The
Indenture Trustee (and any co-trustee or separate trustee) shall be subject to
TIA Section 311(a), excluding any creditor relationship listed in TIA Section
31l(b), and an Indenture Trustee (and any co-trustee or separate trustee) who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees. At
any time or times, for the purpose of meeting the legal requirements of the
TIA or of any jurisdiction in which any of the Trust Estate may at the time be
located, the Indenture Trustee shall have power to appoint, and, upon the
written request of the Indenture Trustee, the Note Insurer or of the Holders
of Notes representing more than 50% of the Note Principal Balance of the
Outstanding Notes of both Classes with respect to which a co-trustee or
separate trustee is being appointed, with the written consent of the Note
Insurer, the Owner Trustee, on behalf of the Trust, shall for such purpose
join with the Indenture Trustee in the execution, delivery and performance of
all instruments and agreements necessary or proper to appoint, one or more
Persons approved by the Indenture Trustee either to act as co-trustee, jointly
with the Indenture Trustee, of all or any part of the Trust Estate, or to act
as separate trustee of any such property, in either case with such powers as
may be provided in the instrument of appointment, and to vest in such Person
or Persons in the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this Section
6.13. If the Owner Trustee, on behalf of the Trust, does not join in such
appointment within fifteen (15) days after the receipt by it of a request to
do so, or in case an Event of Default has occurred and is continuing, the
Indenture Trustee alone shall have power to make such appointment. All fees
and expenses of any co-trustee or separate trustee shall be payable by the
Trust.
Should any written instrument from the Trust be required by any
co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right or power, any
and all such instruments shall, on written request, be executed, acknowledged
and delivered by the Owner Trustee, on behalf of the Trust, with the written
consent of the Note Insurer.
Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following terms:
(a) The Notes shall be authenticated and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Indenture Trustee hereunder, shall be
exercised, solely by the Indenture Trustee.
(b) The rights, powers, duties and obligations hereby conferred or
imposed upon the Indenture Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Indenture Trustee or by the Indenture Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such
co-trustee or separate trustee.
(c) The Indenture Trustee at any time, by an instrument in writing,
executed by it, with the concurrence of the Owner Trustee, on behalf of
the Trust, evidenced by a Trust Order, may accept the resignation of or
remove any co-trustee or separate trustee appointed under this Section
6.13, and, in case an Event of Default has occurred and is continuing,
the Indenture Trustee shall have power to accept the resignation of, or
remove, any such co-trustee or separate trustee without the concurrence
of the Trust, but upon the written request of the Indenture Trustee, the
Owner Trustee, on behalf of the Trust, shall join with the Indenture
Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to effectuate such resignation or removal.
A successor to any co-trustee or separate trustee so resigned or removed
may be appointed in the manner provided in this Section 6.13.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Indenture Trustee, or any
other such trustee hereunder.
(e) Any Act of Noteholders delivered to the Indenture Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
Section 6.14. Authenticating Agents. The Owner Trustee, acting at the
direction of the Majority Certificateholders, shall appoint an Authenticating
Agent with power to act on the Trust's behalf, subject to the direction of the
Majority Certificateholders, in the authentication and delivery of the Notes
designated for such authentication and, containing provisions therein for such
authentication (unless the Owner Trustee, acting at the direction of the
Majority Certificateholders, has made other arrangements, satisfactory to the
Indenture Trustee and such Authenticating Agent, for notation on the Notes of
the authority of an Authenticating Agent appointed after the initial
authentication and delivery of such Notes) in connection with transfers and
exchanges under Section 2.06 hereof, as fully to all intents and purposes as
though the Authenticating Agent had been expressly authorized by Section 2.06
hereof to authenticate and deliver Notes. For all purposes of this Indenture
(other than in connection with the authentication and delivery of Notes
pursuant to Sections 2.05 and 2.11 hereof in connection with their initial
issuance), the authentication and delivery of Notes by the Authenticating
Agent pursuant to this Section 6.14 shall be deemed to be the authentication
and delivery of Notes "by the Indenture Trustee." Such Authenticating Agent
shall at all times be a Person that both meets the requirements of Section
6.07 hereof for the Indenture Trustee hereunder and has an office for
presentation of Notes in the United States of America. The Indenture Trustee
shall initially be the Authenticating Agent and shall be the Note Registrar as
provided in Section 2.06 hereof. The office from which the Indenture Trustee
shall perform its duties as Note Registrar and Authenticating Agent shall be
its Corporate Trust Office. Any Authenticating Agent appointed pursuant to the
terms of this Section 6.14 or pursuant to the terms of any supplemental
indenture shall deliver to the Indenture Trustee as a condition precedent to
the effectiveness of such appointment an instrument accepting the trusts,
duties and responsibilities of Authenticating Agent and of Note Registrar or
co-Note Registrar and indemnifying the Indenture Trustee for and holding the
Indenture Trustee harmless against, any loss, liability or expense (including
reasonable attorneys' fees) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance, administration of
the trust or exercise of authority by such Authenticating Agent, Note
Registrar or co-Note Registrar.
Any corporation or banking association into which any Authenticating
Agent may be merged or converted or with which it may be consolidated, or any
corporation or banking association resulting from any merger, consolidation or
conversion to which any Authenticating Agent shall be a party, or any
corporation or banking association succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 6.14, without the execution or filing of any further act on the part
of the parties hereto or the Authenticating Agent or such successor corporation
or banking association.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trust. The Owner Trustee, acting at the
direction of the Majority Certificateholders, may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination to
such Authenticating Agent and the Indenture Trustee. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section 6.14, the
Owner Trustee, acting at the direction of the Majority Certificateholders,
shall promptly appoint a successor Authenticating Agent, shall give written
notice of such appointment to the Indenture Trustee, and shall mail notice of
such appointment to all Holders of Notes.
The Indenture Trustee agrees, subject to Section 6.01(e) hereof, to
pay to any Authenticating Agent from time to time reasonable compensation for
its services and the Indenture Trustee shall be entitled to be reimbursed for
such payments pursuant to Section 6.16 hereof. The provisions of Sections 2.09,
6.04 and 6.05 hereof shall be applicable to any Authenticating Agent.
Section 6.15. Review of Mortgage Files. (a) The Indenture Trustee
shall, on or prior to the Closing Date, execute and deliver the acknowledgement
of receipt of the Note Insurance Policy required by Section 2.06(a) of the Sale
and Servicing Agreement.
(b) The Indenture Trustee shall cause the Collateral Agent to (i) on
or prior to the Closing Date, execute and deliver the acknowledgement of
receipt of the Mortgage Loans required by Section 2.06(b)(i) of the Sale
and Servicing Agreement, (ii) on or prior to thirty (30) days following
the Closing Date, execute and deliver the Initial Certificate required by
Section 2.06(b)(ii) of the Sale and Servicing Agreement, and (iii) on or
prior to ninety (90) days following the Closing Date, execute and deliver
the Final Certification required by Section 2.06(b)(iii) of the Sale and
Servicing Agreement.
(c) In giving each of the acknowledgements, the Initial
Certification and the Final Certification referred to in clauses (a) and
(b) of this Section 6.15, neither the Indenture Trustee nor the
Collateral Agent shall be under any duty or obligation (i) to inspect,
review or examine any such documents, instruments, securities or other
papers to determine that they or the signatures thereto are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to
be on their face or (ii) to determine whether any Mortgage File should
include a flood insurance policy, any rider, addenda, surety or guaranty
agreement, power of attorney, buy down agreement, assumption agreement,
modification agreement, written assurance or substitution agreement.
(d) In the event that the Mortgage Loans are required to be recorded
in accordance with the provisions of Article II of the Sale and Servicing
Agreement, no later than the fifth Business Day of each third month,
commencing in December 1999, the Indenture Trustee shall cause the
Collateral Agent to deliver to the Servicer and the Note Insurer a
recordation report dated as of the first day of such month, identifying
those Mortgage Loans for which it has not yet received (i) an original
recorded Mortgage or a copy thereof certified to be true and correct by
the public recording office in possession of such Mortgage or (ii) an
original recorded Assignment of Mortgage to the Indenture Trustee and any
required intervening Assignments of Mortgage or a copy thereof certified
to be a true and correct copy by the public recording office in
possession of such Assignment of Mortgage.
Section 6.16. Indenture Trustee Fees and Expenses. The Indenture Trustee
shall be entitled to receive the Indenture Trustee Fee on each Payment Date as
provided herein. The Indenture Trustee also shall be entitled to (i) payment
of or reimbursement for expenses, disbursements and advances incurred or made
by the Indenture Trustee in accordance with any of the provisions of this
Indenture (including, but not limited to, the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), and (ii) indemnification against losses, liability and expenses,
including reasonable attorney's fees, incurred, arising out of or in
connection with this Indenture, the Notes and the Sale and Servicing
Agreement. The Indenture Trustee and any director, officer, employee or agent
of the Indenture Trustee shall be indemnified by, first, the Trust and,
second, the Servicer and held harmless against any loss, liability or
reasonable expense incurred in connection with this Indenture or the Notes,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance by the Indenture
Trustee of its duties hereunder. The obligations of the Servicer and the Trust
under this Section 6.16 shall survive termination of the Trust and payment of
the Notes, and shall extend to any co-Indenture Trustee or separate-Indenture
Trustee appointed pursuant to this Article VI.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Note Registrar to Furnish Indenture Trustee Names and
Addresses of Noteholders. (a) The Note Registrar shall furnish or cause to be
furnished to the Indenture Trustee (i) semiannually, not less than forty-five
(45) days nor more than sixty (60) days after the Payment Date occurring
closest to six (6) months after the Closing Date and each Payment Date
occurring at six (6) month intervals thereafter, all information in the
possession or control of the Note Registrar, in such form as the Indenture
Trustee may reasonably require, as to names and addresses of the Holders of
Notes, and (ii) at such other times, as the Indenture Trustee may request in
writing, within thirty (30) days after receipt by the Note Registrar of any
such request, a list of similar form and content as of a date not more than
ten (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.
(b) In addition to furnishing to the Indenture Trustee the
Noteholder lists, if any, required under clause (a) of this Section 7.01,
the Note Registrar shall also furnish all Noteholder lists, if any,
required under Section 3.03 hereof at the times required by such Section
3.03.
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, if any, furnished to the Indenture Trustee
as provided in Section 7.01 hereof and the names and addresses of the 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
Section 7.01 hereof upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Trust, the Indenture Trustee and the Note Registrar shall
have the protection of TIA Section 312(c).
Section 7.03. Reports by Indenture Trustee. (a) Within sixty (60) days
after December 31 of each year (the "reporting date"), commencing December 31,
1999, (i) the Indenture Trustee shall, if required by TIA Section 313(a), mail
to all Holders a brief report dated as of such reporting date that complies
with TIA Section 313(a); (ii) the Indenture Trustee shall, to the extent not
set forth in the Indenture Trustee's Remittance Report pursuant to Section
2.08(d) hereof, also mail to Holders of Notes and the Note Insurer with
respect to which it has made advances, any reports with respect to such
advances that are required by TIA Section 313(b)(2); and, the Indenture
Trustee shall also mail to Holders of Notes and the Note Insurer any reports
required by TIA Section 313(b)(1). For purposes of the information required to
be included in any such reports pursuant to TIA Sections 313(a)(2), 313(b)(1)
(if applicable), or 313(b)(2), the principal amount of indenture securities
outstanding on the date as of which such information is provided shall be the
Note Principal Balance of the then Outstanding Notes covered by the report.
(b) A copy of each report required under this Section 7.03 shall, at
the time of such transmission to Holders of Notes and the Note Insurer be
filed by the Indenture Trustee with the Commission and with each
securities exchange upon which the Notes are listed. The Servicer, on
behalf of the Trust, will notify the Indenture Trustee when the Notes are
listed on any securities exchange.
Section 7.04. Reports by Trust. The Servicer, on behalf of the Trust,
(a) shall deliver to the Indenture Trustee within fifteen (15) days after the
Trust 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 by rules and
regulations prescribe) that the Trust is required to file with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, and (b) shall also comply with the other provisions of TIA Section
314(a).
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Accounts; Investment; Collection of Moneys. (a) The Trust
hereby directs the Indenture Trustee to establish, on or before the Closing
Date, for each Class of Notes, at its Corporate Trust Office, one or more
Eligible Accounts that shall collectively be the "Payment Account" for such
Class. The Indenture Trustee shall promptly deposit in the related Payment
Account (i) the Servicer Remittance Amount for the related Pool received by it
from the Servicer on the Servicer Payment Date pursuant to the Sale and
Servicing Agreement, (ii) any other funds from any deposits for such Pool to
be made by the Servicer pursuant to the Sale and Servicing Agreement, (iii)
any amount for such Pool required to be deposited in such Payment Account
pursuant to this Section 8.01, (iv) all amounts for such Pool received
pursuant to Section 8.03 hereof, (v) any amount for such Pool required to be
deposited pursuant to Section 8.05 hereof, (vi) on each Payment Date, in
accordance with the Servicer Remittance Report, the Shortfall Amount for the
related Class, until paid in full, first, from the Payment Account relating to
the other Class of Notes, to the extent of the Net Monthly Excess Cashflow
from the other Pool of Mortgage Loans, second, from the
Cross-collateralization Reserve Account relating to this Class of Notes, and
third, from the Cross-collateralization Reserve Account relating to the other
Class of Notes, (vii) on each Payment Date, in accordance with the Servicer
Remittance Report, the Net Mortgage Loan Interest Shortfalls for the related
Class of Notes, to the extent of the Net Monthly Excess Cashflow from the
other Pool of Mortgage Loans remaining after payment of: first, the Shortfall
Amount for the related Class, second, the Over-collateralization Increase
Amount for such other Pool and, third, the Reserve Payment Amount for such
other Pool and (viii) all other amounts for such Pool received for deposit in
such Payment Account, including the payment of any Loan Repurchase Price for a
Mortgage Loan in such Pool received by the Indenture Trustee. All amounts that
are deposited from time to time in a Payment Account are subject to withdrawal
by the Indenture Trustee for the purposes set forth in Sections 8.02 hereof.
All funds withdrawn from a Payment Account pursuant to Section 8.02 hereof for
the purpose of making payments to the Holders of Notes shall be applied in
accordance with Sections 3.03 and 8.02 hereof.
(b) The Trust hereby directs the Indenture Trustee to establish for
each Class of Notes, at its Corporate Trust Office, an Eligible Account
which shall be the "Pre-Funding Account" for such Class of Notes. On the
Closing Date, the Indenture Trustee shall deposit the Original Pre-Funded
Amount for each Class of Notes in the related Pre-Funding Account from
the proceeds of the sale of the related Class of Notes. The Indenture
Trustee shall withdraw and distribute or cause to be distributed funds on
deposit therein only at the times specified below, based on written
instructions provided by the Servicer or other party as indicated:
(i) on any Subsequent Transfer Date, the Unaffiliated Seller
shall instruct in writing the Indenture Trustee to withdraw from the
related Pre-Funding Account an amount equal to 100% of the aggregate
Principal Balances as of the related Subsequent Cut-Off Date of the
Subsequent Mortgage Loans sold to the Trust in respect of the
related Pool and pledged to the Indenture Trustee, for the benefit
of the Noteholders and the Note Insurer, on such Subsequent Transfer
Date and pay such amount to or upon the order of the Unaffiliated
Seller upon satisfaction of the conditions set forth in Section 2.14
hereof with respect to such transfer; the Indenture Trustee may
conclusively rely on such written instructions from the Unaffiliated
Seller;
(ii) if the Pre-Funding Amount for a Class of Notes (exclusive
of Pre-Funding Earnings for such Class) has been reduced to $100,000
or less by the October 1999 or the November 1999 Payment Date, then,
on such Payment Date, after giving effect to any reductions in the
related Pre-Funding Account on such date, the Indenture Trustee
shall withdraw, from the related Pre-Funding Account on such date
and deposit in the Payment Account relating to such Class, the
amount on deposit in such Pre-Funding Account, other than any
Pre-Funding Earnings, for payment to the related Noteholders as a
prepayment of principal on such Payment Date;
(iii) if any amounts remain on deposit in either Pre-Funding
Account at the close of business on November 30, 1999, the Indenture
Trustee shall withdraw, from such Pre-Funding Account on the
following Payment Date and deposit in the Payment Account relating
to the related Class, the amount on deposit in such Pre-Funding
Account, other than any Pre-Funding Earnings, for payment to the
related Noteholders as a prepayment of principal on such Payment
Date; and
(iv) on the October 1999, November 1999 and December 1999
Payment Dates, the Indenture Trustee shall transfer from each
Pre-Funding Account to the related Payment Account, the Pre-Funding
Earnings, if any, applicable to such Payment Date.
(c) The Trust hereby directs the Indenture Trustee to establish for
each Class of Notes, at its Corporate Trust Office, an Eligible Account
which shall be the "Capitalized Interest Account" for such Class of
Notes. On the Closing Date, the Indenture Trustee shall deposit the
Original Capitalized Interest Amount for each Class of Notes in the
related Capitalized Interest Account from the proceeds of the sale of the
related Class of Notes. The Indenture Trustee shall withdraw and
distribute or cause to be distributed funds on deposit therein only at
the times specified below, based on written instructions provided by the
Servicer or other party as indicated:
(i) on the October 1999, November 1999 and December 1999
Payment Dates, the Indenture Trustee shall transfer from each
Capitalized Interest Account to the related Payment Account, the
applicable Capitalized Interest Requirement, if any, for such Class
and such Payment Date; and
(ii) on the Payment Date immediately following, or on which,
the amount on deposit in the related Pre-Funding Account is reduced
to zero, any amounts remaining in either Capitalized Interest
Account, after taking into account the transfers in respect of the
Payment Date described in clause (i) above, shall be paid to the
Unaffiliated Seller.
(d) The Trust hereby directs the Indenture Trustee to establish, on
or before the Closing Date, for each Class of Notes, at its Corporate
Trust Office, an Eligible Account that shall be the
"Cross-collateralization Reserve Account" for such Class. The Indenture
Trustee shall deposit and withdraw funds in each Cross-collateralization
Reserve Account in accordance with the provisions of Sections 8.01(a) and
8.02(a) hereof.
(e) So long as no Default or Event of Default shall have occurred
and be continuing, amounts held in the Accounts, other than the
Collection Account and the Note Insurance Payment Account, shall at the
written direction of the Servicer be invested in Permitted Investments,
which Permitted Investments shall mature no later than the Business Day
preceding the immediately following Payment Date.
All income or other gains, if any, from investment of moneys
deposited in the Payment and Collection Accounts shall be for the benefit of
the Servicer and on each Payment Date, any such amounts may be released from
the Accounts and paid to the Servicer as part of its compensation for acting
as Servicer. Any loss resulting from such investment of moneys deposited in an
Account shall be reimbursed immediately as incurred to the related Account by
the Servicer. Subject to Section 6.01 hereof and the preceding sentence,
neither the Indenture Trustee nor the Servicer shall in any way be held liable
by reason of any insufficiency in the Accounts.
The Indenture Trustee shall not in any way be held liable by
reason of any insufficiency in any Account held by the Indenture Trustee
resulting from any investment loss on any Permitted Investment included
therein (except to the extent that the Indenture Trustee is the obligor and
has defaulted thereon).
(f) 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 hold all such money and property received by it as part of
the Trust Estate and shall apply it as provided in this Indenture.
If the Indenture Trustee shall not have received the
Servicer Remittance Amount by close of business on any related Servicer
Payment Date, the Indenture Trustee shall, unless the Servicer shall have made
provisions satisfactory to the Indenture Trustee for delivery to the Indenture
Trustee of an amount equal to such Servicer Remittance Amount, deliver a
notice, with a copy to the Note Insurer, to the Servicer of its failure to
remit such Servicer Remittance Amount and that such failure, if not remedied
by the close of business on the Business Day after the date upon which such
notice is delivered to the Servicer, shall constitute a Servicer Event of
Default under the Sale and Servicing Agreement. If the Indenture Trustee shall
subsequently receive any such Servicer Remittance Amount by the close of
business on such Business Day, such Servicer Event of Default shall not be
deemed to have occurred. Notwithstanding any other provision hereof, the
Indenture Trustee shall deliver to the Servicer, or its designee or assignee,
any Servicer Remittance Amount received with respect to a Mortgage Loan after
the related Servicer Payment Date to the extent that the Servicer previously
made payment or provision for payment with respect to such Servicer Remittance
Amount in accordance with this Section 8.01, and any such Servicer Remittance
Amount shall not be deemed part of the Trust Estate.
Except as otherwise expressly provided in this Indenture and
the Sale and Servicing Agreement, if, following delivery by the Indenture
Trustee of the notice described above, the Servicer shall fail to remit the
Servicer Remittance Amount on any Servicer Payment Date, the Indenture Trustee
shall deliver a second notice to the Servicer, the Trust and the Note Insurer
by the close of business on the third Business Day prior to the related
Payment Date indicating that a Servicer Event of Default occurred and is
continuing under the Sale and Servicing Agreement. Thereupon, the Indenture
Trustee shall take such actions as are required of the Indenture Trustee under
Article VII of the Sale and Servicing Agreement. In addition, if a default
occurs in any other performance required under the Sale and Servicing
Agreement, the Indenture Trustee may, and upon the request of the Note Insurer
or, with the consent of the Note Insurer, the Holders of Notes representing
more than 50% of the Note Principal Balance of the Outstanding Notes of both
Classes shall, 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 to proceed thereafter
as provided in Article V hereof.
Section 8.02. Payments; Statements. On each Payment Date, unless the
Notes have been declared due and payable pursuant to Section 5.02 hereof and
moneys collected by the Indenture Trustee are being applied in accordance with
Section 5.07 hereof, Available Funds on deposit in each Payment Account on any
Payment Date or Redemption Date shall be withdrawn from such Payment Account,
in the amounts required (based solely on the Servicer's Remittance Report
delivered to the Indenture Trustee on or before such Payment Date), for
application on such Payment Date in respect of payments for the related Class
of Notes as follows:
(i) to the Indenture Trustee, an amount equal to the Indenture
Trustee Fees then due to it with respect to the related Class of
Notes;
(ii) from amounts then on deposit in the related Payment
Account (excluding any Insured Payments), to the Note Insurer, the
lesser of (x) the excess of (i) the amount then on deposit in such
Payment Account over (ii) the Insured Payment Amount for such Pool
on such Payment Date and (y) the sum of the amount of all
Reimbursement Amounts relating to such Class of Notes which have not
been previously paid as of such Payment Date and any other amounts
relating to such Class then due to the Note Insurer pursuant to the
Insurance Agreement;
(iii) from amounts then on deposit in the related Payment
Account, to the Holders of the related Class of Notes, the Payment
Amount for such Class;
(iv) from amounts then on deposit in the related Payment
Account, to the Cross-collateralization Reserve Account relating to
the other Class of Notes, the Reserve Payment Amount for such Class;
(v) from amounts then on deposit in the related Payment
Account, to the Holders of the related Class of Notes, the amount of
any Net Mortgage Loan Interest Shortfalls for such Class;
(vi) with respect to the Class A-2 Notes, from amounts then on
deposit in the Payment Account relating to the Class A-2 Notes, to
the Holders of the Class A-2 Notes, the Class A-2 Available Funds
Cap Carry-Forward Amount; and
(vii) following the making by the Indenture Trustee of all
allocations, transfers and disbursements described above, from
amounts then on deposit in the related Payment Account, the
Indenture Trustee shall distribute to the Holders of the related
Trust Certificates, the amount remaining on such Payment Date, if
any.
Section 8.03. Claims against the Note Insurance Policy. (a) Within two
(2) Business Days of receipt of each Servicer Remittance Report, the Indenture
Trustee shall determine with respect to the immediately following Payment
Date, the amount to be on deposit in each Payment Account on such Payment Date
as a result of the (i) Servicer's remittance of the Servicer Remittance Amount
on the related Servicer Payment Date, and (ii) any transfers to each Payment
Account made from the related Capitalized Interest Account and/or the related
Pre-Funding Account relating to such Payment Date pursuant to Section 8.01
hereof, excluding the amount of any Insured Payment and prior to the
application of the amounts described in clauses (i) through (viii) of Section
8.02 hereof for the related Payment Date.
(b) If on any Payment Date there is an Available Funds Shortfall for
either Pool, the Indenture Trustee shall complete a Notice in the form of
Exhibit A to the Note Insurance Policy and submit such notice to the Note
Insurer no later than 12:00 noon New York City time on the second
Business Day preceding such Payment Date as a claim for an Insured
Payment in an amount equal to such Available Funds Shortfall for such
Pool.
(c) The Indenture Trustee shall establish a separate Eligible
Account for the benefit of Holders of the Notes and the Note Insurer
referred to herein as the "Note Insurance Payment Account" over which the
Indenture Trustee shall have exclusive control and sole right of
withdrawal. The Indenture Trustee shall deposit upon receipt any amount
paid under the Note Insurance Policy in the Note Insurance Payment
Account and distribute such amount only for purposes of payment to the
Noteholders of the related Pool of the Insured Payment Amount for such
Pool for which a claim was made and such amount may not be applied to
satisfy any costs, expenses or liabilities of the Servicer, the Indenture
Trustee or the Trust. Amounts paid under the Note Insurance Policy, to
the extent needed to pay the Insured Payment Amount shall be transferred
to the related Payment Account on the related Payment Date and disbursed
by the Indenture Trustee to the Noteholders in accordance with Section
8.02. It shall not be necessary for such payments to be made by checks or
wire transfers separate from the checks or wire transfers used to pay the
Insured Payment Amount with other funds available to make such payment.
However, the amount of any payment of principal or of interest on the
Notes to be paid from funds transferred from the Note Insurance Payment
Account shall be noted as provided in subsection (d) of this Section 8.03
in the Note Register and in the Indenture Trustee's Remittance Report.
Funds held in the Note Insurance Payment Account shall not be invested.
Any funds remaining in the Note Insurance Payment Account on the first
Business Day following a Payment Date shall be returned to the Note
Insurer pursuant to the written instructions of the Note Insurer by the
end of such Business Day.
(d) The Indenture Trustee shall keep a complete and accurate record
of the amount of interest and principal paid in respect of any Note from
moneys received under the Note Insurance Policy. The Note Insurer shall
have the right to inspect such records at reasonable times during normal
business hours upon one (1) Business Day's prior notice to the Indenture
Trustee.
(e) In the event that the Indenture Trustee has received a certified
copy of an order of the appropriate court that any Insured Payment has
been voided in whole or in part as a preference payment under applicable
bankruptcy law, the Indenture Trustee shall so notify the Note Insurer,
shall comply with the provisions of the Note Insurance Policy to obtain
payment by the Note Insurer of such voided Insured Payment, and shall, at
the time it provides notice to the Note Insurer, notify, by mail to the
Noteholders of the affected Notes that, in the event any Noteholder's
Insured Payment is so recovered, such Noteholder will be entitled to
payment pursuant to the Note Insurance Policy, a copy of which shall be
made available through the Indenture Trustee, the Note Insurer or the
Note Insurer's fiscal agent, if any, and the Indenture Trustee shall
furnish to the Note Insurer or its fiscal agent, if any, its records
evidencing the payments which have been made by the Indenture Trustee and
subsequently recovered from the Noteholders, and dates on which such
payments were made.
(f) The Indenture Trustee shall promptly notify the Note Insurer of
any proceeding or the institution of any action, of which a Responsible
Officer of the Indenture Trustee has actual knowledge, seeking the
avoidance as a preferential transfer under applicable bankruptcy,
insolvency, receivership or similar law (a "Preference Claim") of any
payment made with respect to the Notes. Each Noteholder, by its purchase
of Notes, the Servicer and the Indenture Trustee agree that, the Note
Insurer (so long as no Note Insurer Default exists) may at any time
during the continuation of any proceeding relating to a Preference Claim
direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to such
Preference Claim and (ii) the posting of any surety, supersedeas or
performance bond pending any such appeal. In addition and without
limitation of the foregoing, the Note Insurer shall be subrogated to, and
each Noteholder, the Servicer and the Indenture Trustee hereby delegate
and assign to the Note Insurer, to the fullest extent permitted by law,
the rights of the Servicer, the Indenture Trustee and each Noteholder in
the conduct of any such Preference Claim, including, without limitation,
all rights of any party to any adversary proceeding or action with
respect to any court order issued in connection with any such Preference
Claim.
(g) The Indenture Trustee shall, upon retirement of the Notes,
furnish to the Note Insurer a notice of such retirement, and, upon
retirement of the Notes and the expiration of the term of the Note
Insurance Policy, surrender the Note Insurance Policy to the Note Insurer
for cancellation.
(h) Unless a Note Insurer Default exists and is continuing, the
Indenture Trustee and the Trust shall cooperate in all respects with any
reasonable request by the Note Insurer for action to preserve or enforce
the Note Insurer's rights or interests hereunder without limiting the
rights or affecting the interests of the Noteholders as otherwise set
forth herein.
(i) Each Noteholder, by its purchase of Notes, and the Indenture
Trustee hereby agree that, unless a Note Insurer Default exists and is
continuing, the Note Insurer shall have the right to direct all matters
relating to the Notes in any proceeding in a bankruptcy of the Trust,
including without limitation any proceeding relating to a Preference
Amount and the posting of any surety or Note pending any such appeal.
(j) Anything herein to the contrary notwithstanding, any payment
with respect to principal of or interest on the Notes which is made with
moneys received pursuant to the terms of the Note Insurance Policy shall
not be considered payment of the Notes from the Trust. The Trust and the
Indenture Trustee acknowledge, and each Holder by its acceptance of a
Note agrees, that without the need for any further action on the part of
the Note Insurer, the Trust, the Indenture Trustee or the Note Registrar
(x) to the extent the Note Insurer makes payments, directly or
indirectly, on account of principal of or interest on the Notes to the
Holders of such Notes, the Note Insurer will be fully subrogated to, and
each Noteholder, the Trust and the Indenture Trustee hereby delegate and
assign to the Note Insurer, to the fullest extent permitted by law, the
rights of such Holders to receive such principal and interest from the
Trust, including, without limitation, any amounts due to the Noteholders
in respect of securities law violations arising from the offer and sale
of the Notes, and (y) the Note Insurer shall be paid such amounts from
the sources and in the manner provided herein for the payment of such
amounts.
Section 8.04. General Provisions Regarding the Payment Accounts and
Mortgage Loans. (a) Each Payment Account shall relate solely to the Notes of
the related Class and to the Mortgage Loans in the related Pool, Permitted
Investments and other property securing the related Notes. Funds and other
property in each Payment Account shall not be commingled with the other
Payment Account or any other moneys or property of the Trust or any Affiliate
thereof. Notwithstanding the foregoing, the Indenture Trustee may hold any
funds or other property received or held by it as part of a Payment Account in
collective accounts maintained by it in the normal course of its business and
containing funds or property held by it for other Persons (which may include
the Trust or an Affiliate); provided, that such accounts are under the sole
control of the Indenture Trustee and the Indenture Trustee maintains adequate
records indicating the ownership of all such funds or property and the
portions thereof held for credit to the related Payment Account.
(b) If any amounts are needed for payment from a Payment Account and
sufficient uninvested funds are not available therein to make such
payment, the Indenture Trustee shall cause to be sold or otherwise
converted to cash a sufficient amount of the investments in such Payment
Account.
(c) The Indenture Trustee shall, at all times while any Notes are
Outstanding, maintain in its possession, or in the possession of an agent
whose actions with respect to such items are under the sole control of
the Indenture Trustee, all certificates or other instruments, if any,
evidencing any investment of funds in the Payment Accounts. The Indenture
Trustee shall relinquish possession of such items, or direct its agent to
do so, only for purposes of collecting the final payment receivable on
such investment or certificate or, in connection with the sale of any
investment held in the Payment Accounts, against delivery of the amount
receivable in connection with any sale.
(d) The Indenture Trustee shall not invest any part of the Trust
Estate in Permitted Investments that constitute uncertificated securities
(as defined in Section 8-102 of the Uniform Commercial Code, as enacted
in the relevant jurisdiction) or in any other book-entry securities
unless it has received an Opinion of Counsel reasonably satisfactory in
form and substance to the Indenture Trustee setting forth, with respect
to each type of security for which authority to invest is being sought,
the procedures that must be followed to maintain the lien and security
interest created by this Indenture with respect to the Trust Estate.
Section 8.05. Releases of Deleted Mortgage Loans. Upon notice or
discovery by a Responsible Officer of the Indenture Trustee that any of the
representations or warranties of the Unaffiliated Seller set forth in Section
3.03 of the Unaffiliated Seller's Agreement was materially incorrect or
otherwise misleading with respect to any Mortgage Loan as of the time made,
the Indenture Trustee shall direct the Unaffiliated Seller to either cure,
repurchase or substitute for such Mortgage Loan as provided in Section 3.05 of
the Unaffiliated Seller's Agreement. Upon any purchase of or substitution for
a Deleted Mortgage Loan by the Unaffiliated Seller in accordance with Section
3.05 of the Unaffiliated Seller's Agreement, the Indenture Trustee shall cause
the Collateral Agent to deliver the Indenture Trustee's Mortgage File relating
to such Deleted Mortgage Loan to the Unaffiliated Seller, and the Trust, the
Collateral Agent and the Indenture Trustee shall execute such instruments of
transfer as are necessary to convey title to such Deleted Mortgage Loan to the
Unaffiliated Seller from the lien of this Indenture. Nothing in this Section
8.05 should be construed to obligate the Indenture Trustee to actively monitor
the correctness or accuracy of the representations and warranties of the
Unaffiliated Seller.
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to
Certain Information. On each Payment Date, the Indenture Trustee shall deliver
the written reports required by Section 2.08(d) to Noteholders of record as of
the related Record Date (including the Clearing Agency, if any).
The Indenture Trustee shall make available at its Corporate
Trust Office, during normal business hours, for review by any Noteholder or
any person identified to the Indenture Trustee as a prospective Noteholder,
originals or copies of the following items: (a) the Indenture and any
amendments thereto, (b) all Indenture Trustee's Remittance Reports and other
reports delivered since the Closing Date pursuant to Section 2.08(d) hereof,
(c) any Officers' Certificates delivered to the Indenture Trustee since the
Closing Date as described in the Indenture and (d) any Accountants' reports
delivered to the Indenture Trustee since the Closing Date as required under
the Sale and Servicing Agreement. Copies of any and all of the foregoing items
will be available from the Indenture Trustee upon request; however, the
Indenture Trustee will be permitted to require payment of a sum sufficient to
cover the reasonable costs and expenses of providing such copies and shall not
be required to provide such copies without reasonable assurances that such sum
will be paid.
Section 8.07. Release of Trust Estate. The Indenture Trustee shall, at
such time as there are no Notes Outstanding, release all of the Trust Estate
to the Trust (other than any cash held for the payment of the Notes pursuant
to Section 3.03 or 4.02 hereof).
Section 8.08. Amendment to Sale and Servicing Agreement. The Indenture
Trustee may, without the consent of any Holder, enter into or consent to any
amendment or supplement to the Sale and Servicing Agreement for the purpose of
increasing the obligations or duties of any party other than the Indenture
Trustee or the Holders of the Notes. The Indenture Trustee may, in its
discretion, decline to enter into or consent to any such supplement or
amendment: (i) unless the Indenture Trustee receives an Opinion of Counsel
that the position of the Holders would not be materially adversely affected or
written confirmation of satisfaction of the Rating Agency Condition or (ii) if
its own rights, duties or immunities would be adversely affected.
Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and
Servicing Agreement. As is appropriate for the servicing or foreclosure of any
Mortgage Loan, the Indenture Trustee shall cause the Collateral Agent to
deliver to the Servicer the Mortgage Files for such Mortgage Loan upon receipt
by the Indenture Trustee and the Collateral Agent on or prior to the date such
release is to be made of:
(a) such Officer's Certificates, if any, as are required by the Sale
and Servicing Agreement; and
(b) a Request for Release, executed by the Servicer, providing that
the Servicer will hold or retain the Indenture Trustee's Mortgage Files
in trust for the benefit of the Indenture Trustee, the Note Insurer and
the Holders of Notes.
Section 8.10. Servicer as Agent. In order to facilitate the servicing of
the Mortgage Loans by the Servicer of such Mortgage Loans, the Servicer of the
Mortgage Loans has been appointed by the Trust to retain, in accordance with
the provisions of the Sale and Servicing Agreement and this Indenture, all
Servicer Remittance Amounts on such Mortgage Loans prior to their deposit into
the related Payment Account on or prior to the related Servicer Payment Date.
Section 8.11. Termination of Servicer. In the event of an event of the
occurrence of a Servicer Event of Default specified in Section 7.01 of the
Sale and Servicing Agreement, the Indenture Trustee may, with the consent of
the Note Insurer or, with the prior written consent of the Note Insurer, the
Holder of Notes representing not less than 50% of the Note Principal Balance
of the Outstanding Notes of both Classes, and shall, upon the direction of the
Note Insurer (or as otherwise provided in the Sale and Servicing Agreement),
terminate the Servicer as provided in Section 7.01 of the Sale and Servicing
Agreement. If the Indenture Trustee terminates the Servicer, the Indenture
Trustee shall, pursuant to Section 7.02 of the Sale and Servicing Agreement,
assume the duties of the Servicer or appoint a successor Servicer acceptable
to the Trust, the Note Insurer and the Rating Agencies and meeting the
requirements set forth in the Sale and Servicing Agreement.
Section 8.12. Opinion of Counsel. The Indenture Trustee shall be
entitled to receive at least five (5) Business Days' notice of any action to
be taken pursuant to Sections 8.08 and 8.09 hereof (other than in connection
with releases of Mortgage Loans that were subject to a prepayment in full),
accompanied by copies of any instruments involved, and the Indenture Trustee
shall be entitled to receive an Opinion of Counsel, in form and substance
reasonably 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. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Indenture Trustee in connection with any
such action.
Section 8.13. Appointment of Collateral Agents. The Indenture Trustee
may, at no additional cost to the Trust or to the Indenture Trustee, with the
consent of the Note Insurer, appoint one or more Collateral Agents to hold all
or a portion of the Indenture Trustee Mortgage Files, as Agent for the
Indenture Trustee. Such Collateral Agent shall meet the requirements of
Article IX of the Sale and Servicing Agreement. Matters concerning the
Collateral Agents shall be governed by said Article IX. Chase Bank of Texas,
N.A. is hereby appointed as the initial Collateral Agent hereunder.
Section 8.14. Rights of the Note Insurer to Exercise Rights of
Noteholders. By accepting its Notes, each Noteholder agrees that unless a Note
Insurer Default exists, the Note Insurer shall have the right to exercise all
rights of the Noteholders under this Indenture, without any further consent of
the Noteholders, including, without limitation:
(a) the right to require the Servicer to effect foreclosures upon
Mortgage Loans upon failure of the Servicer to do so;
(b) the right to require the Unaffiliated Seller to repurchase or
substitute for Deleted Mortgage Loans pursuant to Section 8.05;
(c) the right to direct the actions of the Indenture Trustee during
the continuance of an Event of Default; and
(d) the right to vote on proposed amendments to this Indenture.
In addition, each Noteholder agrees that, unless a Note Insurer
Default exists, the rights specifically set forth above may be exercised by
the Noteholders only with the prior written consent of the Note Insurer.
Except as otherwise provided in Section 8.03 hereof and
notwithstanding any provision in this Indenture to the contrary, so long as a
Note Insurer Default has occurred and is continuing, the Note Insurer shall
have no rights to exercise any voting rights of the Noteholders hereunder, nor
shall the Indenture Trustee be required to obtain the consent of, or act at
the direction of, the Note Insurer.
All notices, statements, reports, certificates or opinions
required by this Indenture to be sent to any other party hereto or to the
Noteholders shall also be sent to the Note Insurer.
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note
Insurer. The Collateral Agent, on behalf of the Indenture Trustee, shall hold
the Trust Estate and the Indenture Trustee's Mortgage Files, for the benefit
of the Noteholders and the Note Insurer, and all references in this Indenture
and in the Notes to the benefit of Holders of the Notes shall be deemed to
include the Note Insurer (provided there does not exist a Note Insurer
Default).
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
With the consent of the Note Insurer and without the consent of the Holders of
any Notes, the Trust and the Indenture Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(a) 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;
(b) to add to the conditions, limitations and restrictions on the
authorized amount, terms and purposes of the issuance, authentication and
delivery of any Notes, as herein set forth, additional conditions,
limitations and restrictions thereafter to be observed;
(c) to evidence the succession of another Person to the Trust to the
extent permitted herein, and the assumption by any such successor of the
covenants of the Trust herein and in the Notes contained;
(d) to add to the covenants of the Trust, for the benefit of the
Holders of all Notes and the Note Insurer, or to surrender any right or
power herein conferred upon the Trust;
(e) to cure any ambiguity, to correct or supplement any provision
herein that may be defective or inconsistent with any other provision
herein, or to amend any other provisions with respect to matters or
questions arising under this Indenture, which shall not be inconsistent
with the provisions of this Indenture, provided that such action shall
not adversely affect in any material respect the interests of the Holders
of the Notes or the Holders of the Trust Certificates; provided, that the
amendment shall -------- not be deemed to adversely affect in any
material respect the interests of the Holders of the Notes and the Note
Insurer if the Person requesting the amendment obtains written
confirmation of the satisfaction of the Rating Agency Condition; or
(f) 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.
Section 9.02. Supplemental Indentures With Consent of Noteholders. With
the consent of the Note Insurer and with the consent of Holders of Notes
representing not less than a majority of the Note Principal Balance of all
Outstanding Notes of both Classes by Act of said Holders delivered to the
Trust and the Indenture Trustee, the Trust and the Indenture Trustee may 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
Outstanding Note affected thereby:
(a) change any Payment Date or the Final Stated Maturity Date of the
Notes or, with respect to the Notes, reduce the Note Principal Balance
thereof or the Note Rate thereon, change the earliest date on which any
Note may be redeemed at the option of the Servicer, change any place of
payment where, or the coin or currency in which, any Note or any interest
thereon is payable, or impair the right to institute suit for the
enforcement of the payment of any installment of interest due on any Note
on or after the Final Stated Maturity Date thereof or for the enforcement
of the payment of the entire remaining unpaid principal amount of any
Note on or after the Final Stated Maturity Date (or, in the case of
redemption, on or after the applicable Redemption Date);
(b) reduce the percentage of the Note Principal Balance of the
Outstanding Notes, the consent of the Holders of which is required for
any such supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with provisions of this
Indenture or Defaults hereunder and their consequences provided for in
this Indenture;
(c) modify any of the provisions of this Section 9.02 or Sections
5.13 or 5.17(b) hereof, except to increase any percentage specified
therein or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Note affected thereby;
(d) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(e) permit the creation of any lien other than the lien of this
Indenture with respect to any part of the Trust Estate or terminate the
lien of this Indenture on any property at any time subject hereto or
deprive the Holder of any Note of the security afforded by the lien of
this Indenture;
(f) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the Interest Payment Amount or Principal
Payment Amount for any Payment Date and any Class (including the
calculation of any of the individual components of such amounts) or to
affect rights of the Holders of the Notes to the benefits of any
provisions for the mandatory redemption of Notes contained herein; or
(g) incur any indebtedness, other than the Notes, that would cause
the Trust or the Trust Estate to be treated as a "taxable mortgage pool"
within the meaning of Code Section 7701(i).
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 Trust 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 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
accepting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to receive,
and (subject to Section 6.01 hereof) 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 or immunities under
this Indenture or otherwise. The Servicer, on behalf of the Trust, shall cause
executed copies of any supplemental indentures to be delivered to the Note
Insurer and the Rating Agencies.
Section 9.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Notes to which
such supplemental indenture relates that have theretofore been or thereafter
are authenticated and delivered hereunder shall be bound thereby.
Section 9.05. Conformity With Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article IX shall conform to the
requirements of the TIA as then in effect so long as this Indenture shall then
be qualified under the TIA.
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 Owner Trustee,
acting at the direction of the Majority Certificateholders, shall so
determine, new Notes so modified as to conform, in the opinion of the
Indenture Trustee and the Owner Trustee, acting at the direction of the
Majority Certificateholders, to any such supplemental indenture may be
prepared by the Servicer and executed by the Owner Trustee, acting at the
direction of the Majority Certificateholders, on behalf of the Trust, and
authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.
Section 9.07. Amendments to Governing Documents. The Indenture Trustee
shall, upon a Trust Request, consent to any proposed amendment to the Trust's
governing documents, or an amendment to or waiver of any provision of any
other document relating to the Trust's governing documents, such consent to be
given without the necessity of obtaining the consent of the Holders of any
Notes upon receipt by the Indenture Trustee of:
(a) an Officer's Certificate, to which such proposed amendment or
waiver shall be attached, stating that such attached copy is a true copy
of the proposed amendment or waiver and that all conditions precedent to
such consent specified in this Section 9.07 have been satisfied; and
(b) written confirmation of the satisfaction of the Rating Agency
Condition with respect to such proposed amendment.
Notwithstanding the foregoing, the Indenture Trustee may decline to
consent to a proposed waiver or amendment that adversely affects its own
rights, duties or immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require that
any Person obtain the consent of the Indenture Trustee to any amendment or
waiver or any provision of any document where the making of such amendment
or the giving of such waiver without obtaining the consent of the Indenture
Trustee is not prohibited by this Indenture or by the terms of the document
that is the subject of the proposed amendment or waiver.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption. (a) At the option of Holders of 100% of the
Percentage Interests of the Trust Certificates in respect of which the larger
pool of Mortgage Loans (by Aggregate Principal Balance) is remaining or, if
such Holders fail to exercise such option, at the option of the Servicer, and,
in each case at such parties' sole cost and expense, this Indenture may be
terminated and all the Notes may be redeemed in whole, but not in part, on any
Redemption Date after the Clean-Up Call Date at the Termination Price.
(b) Any such purchase or redemption shall be accomplished by deposit
by the exercising party, into the related Payment Account or Accounts of
the Termination Price on the Servicer Payment Date preceding the
Redemption Date. The amounts on deposit therein shall be distributed by
the Indenture Trustee on such Redemption Date in accordance with the
priority set forth in Section 8.02 hereof. No termination or redemption
is permitted without the prior written consent of the Note Insurer if it
would result in a draw on the Note Insurance Policy.
(c) Notice by the Trust Certificateholders refereed to in paragraph
(a) of this Section 10.01 of the election to redeem the Notes pursuant to
subsection (a) of this Section 10.01 shall be furnished to the Indenture
Trustee not later than thirty (30) days prior to the Payment Date
selected for such redemption. Upon receiving such notice, the Indenture
Trustee shall notify each Holder of such Notes and Note Insurer of such
election pursuant to Section 10.02 hereof. Any expenses associated with
the compliance of the provisions hereof in connection with a redemption
of the Notes shall be paid by the Trust Certificateholders exercising
such redemption or the Servicer, as the case may be.
If the Indenture Trustee does not receive notice from the Trust
Certificateholders referred to in paragraph (a) of this Section 10.01
that they intend to exercise their option to redeem the Notes at least
thirty (30) days prior to the first Payment Date on which they are
entitled to do so, the Indenture Trustee shall promptly notify the
Servicer that it may effect a redemption of the Notes by responding to
the Indenture Trustee's notice no later than fifteen (15) days prior to
the next succeeding Payment Date.
(d) Upon the redemption of all of the Notes, the Mortgage Loans in
the Trust Estate shall be released and delivered to the Trust
Certificateholders effecting such redemption or the Servicer, as the case
may be.
(e) Upon receipt of the notice from the relevant Trust
Certificateholders or the Servicer of their respective election to redeem
the Notes pursuant to Section 10.01(a) hereof (which shall state, in the
case of an election by the Servicer, that the Servicer has determined
that the conditions to redemption at the option of the Servicer have been
satisfied and setting forth the amount, if any, to be withdrawn from each
Payment Account and paid to the Servicer as reimbursement for
Nonrecoverable Advances in respect of the related Mortgage Loans and such
other information as may be required to accomplish such redemption), the
Indenture Trustee shall prepare and deliver to the Trust, the Servicer
and the Note Insurer, no later than the related Redemption Date, an
Indenture Trustee's Remittance Report.
Section 10.02. Form of Redemption Notice. Notice of redemption shall be
given by the Indenture Trustee in the name of and at the expense of the Trust
by first class mail, postage prepaid, mailed not less than ten days prior to
the Redemption Date to each Holder of Notes to be redeemed, such Holders being
determined as of the Record Date for such Payment Date, and to the Note
Insurer.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the price at which the Notes of such Class will be redeemed; and
(c) the fact of payment in full on such Notes, the place where such
Notes are to be surrendered for final payment (which shall be the office
or agency of the Trust to be maintained as provided in Section 3.02
hereof), and that no interest shall accrue on such Note for any period
after the date fixed for redemption.
Failure to give notice of redemption, or any defect therein,
to any Holder of any Note selected for redemption shall not impair or affect
the validity of the redemption of any other Note.
Section 10.03. Notes Payable on Optional Redemption. Notice of redemption
having been given as provided in Section 10.02 hereof, the Notes to be
redeemed shall, on the applicable Redemption Date, become due and payable and
(unless the Trust shall default in such payment) no interest shall accrue on
such Notes for any period after such Redemption Date; provided, however, that
if such payment is not made on the Redemption Date, the Note Principal Balance
shall, until paid, bear interest from the Redemption Date at the applicable
Note Rate.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions. (a) Upon any
application or request by any Person to the Indenture Trustee to take any
action under any provision of this Indenture, such Person shall furnish to the
Indenture Trustee 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 an Opinion of Counsel, if requested by the
Indenture Trustee, 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 relating
to such particular application or request, no additional certificate or
opinion need be furnished.
(b) Every certificate, opinion or letter with respect to compliance
with a condition or covenant provided for in this Indenture, including
one furnished pursuant to specific requirements of this Indenture
relating to a particular application or request (other than certificates
provided pursuant to TIA Section 314(a)(4)) shall include and shall be
deemed to include (regardless of whether specifically stated therein) the
following:
(i) a statement that each individual signing such certificate,
opinion or letter has read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate, opinion or letter are based;
(iii) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 11.02. 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 the Trust 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 Opinion of Counsel may be based on the
written opinion of other counsel, in which event such Opinion of Counsel shall
be accompanied by a copy of such other counsel's opinion and shall include a
statement to the effect that such counsel believes that such counsel and the
Indenture Trustee may reasonably rely upon the opinion of such other counsel.
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.
Wherever in this Indenture, in connection with any
application or certificate or report to the Indenture Trustee, it is provided
that the Trust shall deliver any document as a condition of the granting of
such application, or as evidence of the Trust'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 Trust 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 Section 6.01(b)(ii)
hereof.
Whenever in this Indenture it is provided that the absence
of the occurrence and continuation of a Default or Event of Default is a
condition precedent to the taking of any action by the Indenture Trustee at
the request or direction of the Trust, then, notwithstanding that the
satisfaction of such condition is a condition precedent to the Trust's right
to make such request or direction, the Indenture Trustee shall be protected in
acting in accordance with such request or direction if it does not have
knowledge of the occurrence and continuation of such Default or Event of
Default as provided in Section 6.01(d) hereof.
Section 11.03. 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 an agent 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 Trust. 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 hereof) conclusive
in favor of the Indenture Trustee and the Trust, if made in the manner
provided in this Section 11.03.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Whenever such execution is by an officer of a
corporation or a member of a partnership on behalf of such corporation or
partnership, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration of transfer 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 Trust in
reliance thereon, whether or not notation of such action is made upon
such Notes.
Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer and
Trust. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Indenture Trustee by any Noteholder or by the Trust shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with and received by the Indenture Trustee at its
Corporate Trust Office; or
(b) the Trust by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder (except as provided in Section
5.01(c) and (d)) hereof if in writing and mailed, first-class postage
prepaid, to the Trust addressed to it at ABFS Mortgage Loan Trust 1999-3,
in care of First Union Trust Company, National Association, One ▇▇▇▇▇▇
Square, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
Attention: Corporate Trust Administration, or at any other address
previously furnished in writing to the Indenture Trustee by the Trust.
(c) the Note Insurer 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 Financial Security Assurance Inc.
addressed to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention:
Surveillance Department (in each case in which notice or other
communication to the Note Insurer refers to an Event of Default, a claim
on the Note Insurance Policy or with respect to which failure on the part
of the Note Insurer to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication should also
be sent to the attention of each of the General Counsel and the
Head--Financial Guaranty Group and shall be marked to indicate "URGENT
MATERIAL ENCLOSED"), or at any other address previously furnished in
writing to the Indenture Trustee by the Note Insurer; or
(d) the Depositor by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed,
first-class, postage paid, to Prudential Securities Secured Financing
Corporation c/o Prudential Securities Incorporated, ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Attention: Managing Director - Asset-Backed
Finance Group, or at any other address previously furnished in writing to
the Indenture Trustee by the Depositor; or
(e) the Unaffiliated Seller or the Servicer by the Indenture Trustee
or by any Noteholder shall be sufficient for every purpose hereunder if
in writing and mailed, first-class, postage paid, to such party, in care
of American Business Financial Services, Inc., ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
Attention: General Counsel or at any other address previously furnished
in writing to the Indenture Trustee by the Unaffiliated Seller or the
Servicer; or
(f) the Underwriter by any party or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to Prudential Securities Incorporated, ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Managing Director -
Asset-Backed Finance, or at any other address previously furnished in
writing to the Indenture Trustee by the Underwriter.
Notices required to be given to the Rating Agencies by the Trust
or the Indenture Trustee shall be in writing, personally delivered or
mailed first-class postage pre-paid, to (i) in the case of Moody's, at the
following address: ▇▇▇▇▇'▇ Investors Service, Inc., Residential Mortgage
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (ii) in
the case of S&P, at the following address: Standard & Poor's Ratings Services,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Asset-Backed
Surveillance Department and (iii) in the case of the Indenture Trustee, at the
following address: ▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Capital Markets Fiduciary Services, telephone
(▇▇▇) ▇▇▇-▇▇▇▇, telecopy (▇▇▇) ▇▇▇-▇▇▇▇; or as to each of the foregoing, at
such other address as shall be designed by written notice to the other
parties.
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.
Where this Indenture provides for notice to Noteholders of any event or the
mailing of any report to Noteholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to
whom such report is required to be mailed, at the address of such Noteholder
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 or
the mailing of such report. In any case where a notice or report to
Noteholders is mailed in the manner provided above, neither the failure to
mail such notice or report, nor any defect in any notice or report so mailed,
to any particular Noteholder shall affect the sufficiency of such notice or
report with respect to other Noteholders, and any notice or report that is
mailed in the manner herein provided shall be conclusively presumed to have
been duly given or provided.
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 waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Section 11.06. Rules by Indenture Trustee. The Indenture Trustee may
make reasonable rules for any meeting of Noteholders.
Section 11.07. 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 TIA, such
required provision shall control.
Section 11.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 11.09. Successors and Assigns. All covenants and agreements in
this Indenture by the Trust shall bind its successors and assigns, whether so
expressed or not.
Section 11.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 11.11. Benefits of Indenture. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any separate trustee or co-trustee
appointed under Section 6.14 hereof and the Noteholders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
Section 11.12. Legal Holidays. In any case where the date of any Payment
Date, Redemption Date or any other date on which principal of or interest on
any Note is proposed to be paid 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 nominal date of any such
Payment Date, Redemption Date or other date for the payment of principal of or
interest on any Note and no interest shall accrue for the period from and
after any such nominal date, provided such payment is made in full on such
next succeeding Business Day.
Section 11.13. Governing Law. IN VIEW OF THE FACT THAT NOTEHOLDERS ARE
EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE
TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A
WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS
OF THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
Section 11.14. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.15. Recording of Indenture. This Indenture is subject to
recording in any appropriate public recording offices, such recording to be
effected by the Servicer, on behalf of the Trust, and at its expense in
compliance with any Opinion of Counsel delivered pursuant to Sections 2.11(c)
or 3.06 hereof.
Section 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Trust, 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 Trust 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 Trust, 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 Trust hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of the Trust Agreement.
Section 11.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder and Beneficial Owner, by accepting a Note,
hereby covenant and agree that they will not at any time institute against the
Unaffiliated Seller or the Trust, or join in any institution against the
Unaffiliated Seller or the Trust 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. In addition, the Indenture Trustee will on behalf of the Holders of
the Notes, (a) file a written objection to any motion or other proceeding
seeking the substantive consolidation of any Originator with the Unaffiliated
Seller or the Trust, (b) file an appropriate memorandum of points and
authorities or other brief in support of such objection, or (c) endeavor to
establish at the hearing on such objection that the substantive consolidation
of such entity would be materially prejudicial to the Noteholders.
This Section 11.17 will survive for one year and one day following
the termination of this Indenture.
Section 11.18. Inspection. The Trust agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee and the
Note Insurer, during the Trust's normal business hours, to examine all of
books of account, records, reports and other papers of the Trust, to make
copies and extracts therefrom, to cause such books to be audited by
Independent Accountants selected by the Indenture Trustee or the Note Insurer,
as the case may be, and to discuss its affairs, finances and accounts with its
officers, employees and Independent Accountants (and by this provision the
Trust hereby authorizes its Accountants to discuss with such representatives
such affairs, finances and accounts), all at such reasonable times and as
often as may be reasonably requested. Any expense incident to the exercise by
the Indenture Trustee of any right under this Section 11.18 shall be borne by
the Trust.
Section 11.19. Usury. The amount of interest payable or paid on any Note
under the terms of this Indenture shall be limited to an amount that shall not
exceed the maximum nonusurious rate of interest allowed by the applicable laws
of the United States or the State of New York (whichever shall permit the
higher rate), that could lawfully be contracted for, charged or received (the
"Highest Lawful Rate"). In the event any payment of interest on any Note
exceeds the Highest Lawful Rate, the Trust stipulates that such excess amount
will be deemed to have been paid as a result of an error on the part of both
the Indenture Trustee, acting on behalf of the Holder of such Note, and the
Trust, and the Holder receiving such excess payment shall promptly, upon
discovery of such error or upon notice thereof from the Trust or the Indenture
Trustee, refund the amount of such excess or, at the option of the Indenture
Trustee, apply the excess to the payment of principal of such Note, if any,
remaining unpaid. In addition, all sums paid or agreed to be paid to the
Indenture Trustee for the benefit of Holders of Notes for the use, forbearance
or detention of money shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such
Notes.
Section 11.20. Note Insurer Default. Any right conferred to the Note
Insurer shall be suspended during any period in which a Note Insurer Default
exists. At such time as the Notes are no longer Outstanding under this
Indenture, and no amounts owed to the Note Insurer under the Basic Documents
remain unpaid, the Note Insurer's rights under this Indenture shall terminate.
Section 11.21. Third-Party Beneficiary. The Note Insurer is intended as a
third- party beneficiary of this Indenture which shall be binding upon and
inure to the benefit of the Note Insurer; provided, that, notwithstanding the
foregoing, for so long as a Note Insurer Default is continuing with respect to
its obligations under the Note Insurance Policy, the Noteholders shall succeed
to the Note Insurer's rights hereunder. Without limiting the generality of the
foregoing, all covenants and agreements in this Indenture that expressly
confer rights upon the Note Insurer shall be for the benefit of and run
directly to the Note Insurer, and the Note Insurer shall be entitled to rely
on and enforce such covenants to the same extent as if it were a party to this
Indenture.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Trust and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers
thereunto duly authorized, all as of the day and year first above written.
ABFS MORTGAGE LOAN TRUST 1999-3
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not
in its individual capacity,
but solely as Owner Trustee
under the Trust Agreement
By:
----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By:
-----------------------------------
Name:
Title:
[Signature Page to Indenture]
SCHEDULE I
MORTGAGE LOAN SCHEDULE
[See Schedule 1 to Unaffiliated Seller's Agreement.]
EXHIBIT A
FORM OF NOTE
ABFS MORTGAGE LOAN TRUST 1999-3
CLASS A-[1][2] NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE NOTE IS A NON-RECOURSE OBLIGATION OF THE TRUST, AND IS LIMITED
IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AND THE NOTE
INSURANCE POLICY AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE TRUST IS
NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
-------------------------------------------
Note No.: CUSIP No.:
A-[1][2]-
Class A-1 Original Note Principal Balance: Percentage Interest:
$__________ 100%
Date of Indenture: First Payment Date:
As of September 1, 1999 October 15, 1999
------------------------------------------
ABFS MORTGAGE LOAN TRUST 1999-3
MORTGAGE BACKED NOTES, SERIES 1999-3, CLASS A-[1][2]
ABFS Mortgage Loan Trust 1999-3, a statutory business trust
organized and existing under the laws of the State of Delaware (herein
referred to as the "Trust"), for value received, hereby promises to pay to
CEDE & CO., or registered assigns, the principal sum of $__________
(_________________________ Thousand Dollars) payable on each Payment Date in
an amount equal to the result obtained by multiplying (x) the Percentage
Interest of this Note set forth on the cover page hereof, by (y) the aggregate
amount, if any, payable from the related Payment Account in respect of
principal on the Class A-[1][2] Notes, pursuant to the Indenture, dated as of
September 1, 1999, between the Trust and The Chase Manhattan Bank, a New York
banking corporation, as Indenture Trustee (the "Indenture Trustee"); provided,
however, that the entire unpaid Note Principal Balance of this Note shall be
due and payable on the earlier of (i) the Payment Date occurring in December
2030 (this Note's "Final Stated Maturity Date"), (ii) the Redemption Date, if
any, applicable to this Notes pursuant to Article X of the Indenture or (iii)
the date on which an Event of Default shall have occurred and be continuing,
if the Notes have been declared to be immediately due and payable in the
manner provided in Section 5.02 of the Indenture. Capitalized terms used but
not defined herein are defined in Appendix I to the Indenture.
Pursuant to the terms of the Indenture, payments will be made on the
15th day of each month or, if such day is not a Business Day, on the Business
Day immediately following such 15th day (each a "Payment Date"), commencing on
the first Payment Date specified on the cover page hereof, to the Person in
whose name this Note is registered at the close of business on the applicable
Record Date, in an amount equal to the product of (a) the Percentage Interest
evidenced by this Note and (b) the sum of the amounts to be paid on the Class
A-[1][2] Notes with respect to such Payment Date, all as more specifically set
forth in the Indenture.
Notwithstanding the foregoing, in the case of Definitive Notes, upon
written request at least five (5) days prior to the related Record Date with
appropriate instructions by the Holder of this Note (holding an aggregate
initial Note Principal Balance of at least $1,000,000), any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States of
America designated by such Holder reasonably satisfactory to the Indenture
Trustee.
On each Payment Date, Noteholders will be entitled to receive
interest payments in an aggregate amount equal to the Current Interest for
such Class for such Payment Date, together with principal payments in an
aggregate amount equal to the Principal Payment Amount for such Class for such
Payment Date, plus, until the Over-collateralization Amount for the related
Pool and such Payment Date is equal to the Specified Over-collateralization
Amount for such Pool and such Payment Date, the Net Monthly Excess Cashflow,
if any, for such Pool and such Payment Date. The "Note Principal Balance" of a
Note as of any date of determination is equal to the initial Note Principal
Balance thereof as of the Closing Date, reduced by the aggregate of all
amounts previously paid with respect to such Note on account of principal.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Trust
with respect to this Note shall be applied first to interest due and payable
on this Note as provided above and then to the unpaid principal of this Note.
This Note is one of a duly authorized issue of Notes of the Trust,
designated as the "ABFS Mortgage Loan Trust 1999-3, Mortgage Backed Notes,
Series 1999-3, Class A-[1][2]," issued under the Indenture, to which Indenture
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Trust,
the Indenture Trustee and the Holders of the Notes. Also issued under the
Indenture are the "ABFS Mortgage Loan Trust 1999-3, Mortgage Backed Notes,
Series 1999-3, Class A[1][2]." To the extent that any provision of this Note
contradicts or is inconsistent with the provisions of the Indenture, the
provisions of the Indenture shall control and supersede such contradictory or
inconsistent provision herein. The Notes are subject to all terms of the
Indenture.
The Class A-[1][2] Notes are and will be equally and ratably secured
by the Mortgage Loans in the Pool [I][II], the other collateral related
thereto pledged as security therefor as provided in the Indenture, and, to the
extent provided in the Indenture, by the Mortgage Loans in Pool [I][II].
As described above, the entire unpaid Note Principal Balance of this
Note shall be due and payable on the earlier of the Final Stated Maturity Date
and any Redemption Date applicable to such Class, pursuant to Article X of the
Indenture. Notwithstanding the foregoing, the entire unpaid Note Principal
Balance of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing if the Indenture Trustee, at the
direction or upon the prior written consent of Financial Security Assurance
Inc. (the "Note Insurer") in the absence of a Note Insurer Default, or the
Holders of the Notes representing not less than 50% of the Note Principal
Balance of the Outstanding Notes (with the prior written consent of the Note
Insurer in the absence of a Note Insurer Default) of both Classes, shall have
declared the Notes to be immediately due and payable in the manner provided in
Section 5.02 of the Indenture. All principal payments on the Notes shall be
made pro rata to the Noteholders entitled thereto.
The Note Insurer, in consideration of the payment of the premium and
subject to the terms of the Note Guaranty Insurance Policy (the "Note
Insurance Policy") thereby has unconditionally and irrevocably guaranteed the
payment of the Insured Payments.
Pursuant to the Indenture, unless a Note Insurer Default exists (i)
the Note Insurer shall be deemed to be the holder of the Notes for certain
purposes specified in the Indenture and will be entitled to exercise all
rights of the Noteholders thereunder, including the rights of Noteholders
relating to the occurrence of, and the remedies with respect to, an Event of
Default, without the consent of such Noteholders, and (ii) the Indenture
Trustee may take actions which would otherwise be at its option or within its
discretion, including actions relating to the occurrence of, and the remedies
with respect to, an Event of Default, only at the direction of the Note
Insurer. In addition, on each Payment Date, after the Noteholders have been
paid all amounts to which they are entitled, the Note Insurer will be entitled
to be reimbursed for any unreimbursed Insured Payments, unreimbursed Premium
Amounts (each with interest thereon at the "Late Payment Rate" specified in
the Insurance Agreement) and any other amounts owed under the Note Insurance
Policy.
The Trust shall not be liable upon the indebtedness evidenced by the
Notes except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate and payments under the Note Insurance Policy will be sole source
of payments on the Notes, and each Holder hereof, by its acceptance of this
Note, agrees that (i) such Note will be limited in right of payment to amounts
available from the Trust Estate and the Note Insurance Policy as provided in
the Indenture and (ii) such Holder shall have no recourse to the Trust, the
Owner Trustee, the Indenture Trustee, the Depositor, the Seller, the Servicer
or any of their respective affiliates, or to the assets of any of the
foregoing entities, except the assets of the Trust pledged to secure the Notes
pursuant to the Indenture.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Notwithstanding the foregoing, in the case of Definitive
Notes, upon written request at least five days prior to the related Record
Date with appropriate instructions by the Holder of this Note (holding an
aggregate initial Note Principal Balance of at least $1,000,000), any payment
of principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States of
America designated by such Holder reasonably satisfactory to the Indenture
Trustee. Any reduction in the principal amount of this Note (or any one or
more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee,
in the name of and on behalf of the Trust, will notify the Person who was the
Holder hereof as of the Record Date preceding such Payment Date by notice
mailed or transmitted by facsimile prior to such Payment Date, and the amount
then due and payable shall be payable only upon presentation and surrender of
this Note at the Indenture Trustee's principal Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes.
As provided in the Indenture, both Classes of Notes may be redeemed
in whole, but not in part, at the option of the holders of 100% of the
Percentage Interests of the Trust Certificates in respect of which the larger
pool of Mortgage Loans (by Aggregate Principal Balance) is remaining or, if
such Certificateholders elect not to exercise such option, by the Servicer, on
any Payment Date on and after the date on which the aggregate unpaid Note
Principal Balance of the Notes is less than or equal to 10% of the aggregate
Original Note Principal Balance of the Notes.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Trust pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
In the case of a transfer of a Class A-[1][2] Note, the Note
Registrar shall not register the transfer of this Note unless the Note
Registrar has received a representation letter from the transferee to the
effect that either (i) the transferee is not, and is not acquiring the Note on
behalf of or with the assets of, an employee benefit plan or other retirement
plan or arrangement that is subject to Title I of the Employee Retirement
Income Security Act or 1974, as amended, or Section 4975 of the Code or (ii)
the acquisition and holding of this Note by the transferee qualifies for
exemptive relief under a Department of Labor Prohibited Transaction Class
Exemption. Each Beneficial Owner, by acceptance of a beneficial interest
herein, shall be deemed to make one of the foregoing representations.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in
the case of a Beneficial Owner, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Trust, the Owner Trustee or the Indenture Trustee on
the Notes or under the Indenture or any certificate or other writing delivered
in connection therewith, against (i) the Indenture Trustee or the Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Trust or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Trust, 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 and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in
the case of a Beneficial Owner, a beneficial interest in a Note, covenants and
agrees by accepting the benefits of the Indenture that such Noteholder or
Beneficial Owner will not at any time institute against American Business
Financial Services, Inc. or the Trust, or join in any institution against
American Business Financial Services, Inc. or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, the Indenture, the Trust Agreement, the
Unaffiliated Seller's Agreement, the Sale and Servicing Agreement, the
Insurance Agreement and the Indemnification Agreement (the "Basic Documents").
The Trust has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness of the
Trust secured by the Trust Estate. Each Noteholder, by acceptance of a Note
(and each Beneficial Owner by acceptance of a beneficial interest in a Note),
agrees to treat the Notes for federal, state and local income, single business
and franchise tax purposes as indebtedness of the Trust.
Prior to the due presentment for registration of transfer of this
Note, the Trust, the Indenture Trustee and any agent of the Trust or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Trust, the Indenture Trustee or any such
agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Trust and the rights of the Holders of the Notes under the Indenture at
any time by the Trust with the consent of the Note Insurer and the Holders of
Notes representing a majority of the Note Principal Balance of all Outstanding
Notes. The Indenture also contains provisions permitting the (i) Note Insurer
or (ii) if a Note Insurer Default exists, the Holders of Notes representing
specified percentages of the Note Principal Balance of Outstanding Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Trust with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Note
Insurer or by the Holder of this Note (or any one or more Predecessor Notes)
shall be conclusive and binding upon such Holder and upon all future Holders
of this Note and of any Note issued upon the registration of transfer hereof
or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
amendment thereof, in certain limited circumstances, or the waiver of certain
terms and conditions set forth in the Indenture, without the consent of
Holders of the Notes issued thereunder.
The term "Trust" as used in this Note includes any successor to the
Trust under the Indenture.
Initially, each Class of Notes will be represented by one Note
registered in the name of Cede & Co. as nominees of the Clearing Agency. The
Notes will be delivered in denominations as provided in the Indenture and
subject to certain limitations therein set forth. The Notes are exchangeable
for a like aggregate initial Note Principal Balance of Notes of different
authorized denominations, as requested by the Holder surrendering the same.
THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Trust, which
is absolute and unconditional, to pay the principal of and interest on this
Note at the times, place and rate, and in the coin or currency herein
prescribed.
Unless the certificate of authentication hereon has been executed by
the Authenticating Agent whose name appears below by manual signature, this
Note shall not be entitled to any benefit under the Indenture referred to
herein, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Trust has caused this Instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Dated:
ABFS MORTGAGE LOAN TRUST 1999-3
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
----------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-[1][2] Notes designated above and
referred to in the within-mentioned Indenture.
Dated:
THE CHASE MANHATTAN BANK,
as Authenticating Agent
By:
---------------------------
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
-----------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints
__________________________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:_______________________________________________*/
Signature Guaranteed:
_____________________________________________________*/
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may
be determined by the Note Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT B
FORM OF SUBSEQUENT PLEDGE AGREEMENT
This SUBSEQUENT PLEDGE AGREEMENT, dated as of _____________, 1999
(the "Subsequent Transfer Date"), is entered into by and between ABFS MORTGAGE
LOAN TRUST 1999-3, as issuer (the "Trust"), and THE CHASE MANHATTAN BANK, as
indenture trustee (the "Indenture Trustee").
W I T N E S S E T H:
Reference is hereby made to that certain Indenture, dated as of
September 1, 1999 (the "Indenture"), by and between the Trust and the
Indenture Trustee. Pursuant to the Indenture, the Trust agreed to pledge, and
the Indenture Trustee agreed to accept, from time to time, a security interest
in Subsequent Mortgage Loans (as defined below). The Indenture provides that
each such pledge of Subsequent Mortgage Loans be evidenced by the execution
and delivery of a Subsequent Pledge Agreement such as this Subsequent Pledge
Agreement.
The assets pledged to the Indenture Trustee pursuant to this
Subsequent Pledge Agreement consist of (a) the Subsequent Mortgage Loans in
Pool I and Pool II listed in the Mortgage Loan Schedule attached hereto
(including property that secures a Subsequent Mortgage Loan that becomes an
REO Property), including the related Mortgage Files delivered or to be
delivered to the Collateral Agent, on behalf of the Indenture Trustee,
including all payments of principal received, collected or otherwise recovered
after the Subsequent Cut-Off Date for each Subsequent Mortgage Loan, all
payments of interest accruing on each Subsequent Mortgage Loan after the
Subsequent Cut-Off Date therefor whenever received and all other proceeds
received in respect of such Subsequent Mortgage Loans, (b) the Insurance
Policies relating to the Subsequent Mortgage Loans, and (c) all proceeds of
the conversion, voluntary or involuntary, of any of the foregoing into cash or
other liquid assets, including, without limitation, all insurance proceeds and
condemnation awards.
The "Subsequent Mortgage Loans" are those listed on the Schedule of
Mortgage Loans attached hereto. The Aggregate Principal Balance of such
subsequent Mortgage Loans as of the Subsequent Cut-Off Date is $__________ in
Pool I and $_________ in Pool II.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. For the purposes of this Subsequent Pledge
Agreement, capitalized terms used herein but not otherwise defined shall have
the respective meanings assigned to such terms in Appendix I to the Indenture.
Section 2. Pledge. In consideration of the receipt of $__________
(such amount being approximately 100% of the Aggregate Principal Balance of
the Subsequent Mortgage Loans) from the Indenture Trustee, the Trust hereby
pledges to the Indenture Trustee, for the benefit of the Noteholders and the
Note Insurer, without recourse, all of the Trust's right, title and interest
in, to, and under the Subsequent Mortgage Loans and related assets described
above, whether now existing or hereafter arising.
In connection with such pledge, the Originators and the Unaffiliated
Seller shall satisfy the document delivery requirements set forth in Section
2.05 of the Sale and Servicing Agreement with respect to each Subsequent
Mortgage Loan.
In connection with such pledge, the Servicer shall make a Special
Advance of $________ as set forth in Section 5.18(b) of the Sale and Servicing
Agreement.
Section 3. Representations and Warranties Concerning the Subsequent
Mortgage Loans. With respect to each Subsequent Mortgage Loan, the Trust
hereby assigns each of the representations and warranties made by the
Originators and the Unaffiliated Seller in Section 3 of the Subsequent
Transfer Agreement, for the benefit of the Indenture Trustee, the Note Insurer
and the Noteholders, on which the Indenture Trustee relies in accepting the
pledge of the Subsequent Mortgage Loans and the Note Insurer relies in
connection with the Note Insurance Policy. Such representations and warranties
speak as of the Subsequent Transfer Date unless otherwise indicated, and shall
survive each pledge, assignment, transfer and conveyance of the respective
Subsequent Mortgage Loans to the Indenture Trustee, for the benefit of the
Noteholders and the Note Insurer.
Section 4. Repurchase of Subsequent Mortgage Loans. Upon discovery
by any of the Depositor, the Unaffiliated Seller, an Originator, the Indenture
Trustee, the Servicer (on behalf of the Trust), the Note Insurer or any
Noteholder of a breach of any of the representations and warranties made by
the Originators and the Unaffiliated Seller pursuant to Section 3.03 of the
Unaffiliated Seller's Agreement or Section 3 of any Subsequent Transfer
Agreement, the party discovering such breach shall give prompt written notice
to such other Person; provided, that the Indenture Trustee shall have no duty
to inquire or to investigate the breach of any such representations and
warranties. The Originators and the Unaffiliated Seller will be obligated to
repurchase a Subsequent Mortgage Loan which breaches a representation or
warranty in accordance with the provisions of Section 4.02 of the Sale and
Servicing Agreement or to indemnify as described in Section 3.05(g) of the
Unaffiliated Seller's Agreement. Such repurchase and indemnification
obligation of the Originators and the Unaffiliated Seller shall constitute the
sole remedy against the Originators and the Unaffiliated Seller, and the Trust
for such breach available to the Servicer, the Trust, the Owner Trustee, the
Indenture Trustee, the Note Insurer and the Noteholders.
Section 5. Amendment. This Subsequent Pledge Agreement may be
amended from time to time by the Trust and the Indenture Trustee only with the
prior written consent of the Note Insurer (or, in the event of a Note Insurer
Default, the Majority Holders).
Section 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUBSEQUENT
PLEDGE AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 5 SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSEQUENT
PLEDGE AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND FOR ANY
COUNTERCLAIM THEREIN.
Section 7. Counterparts. This Subsequent Pledge Agreement may be
executed in counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which shall constitute one and
the same instrument.
Section 8. Binding Effect; Third-Party Beneficiaries. This
Subsequent Pledge Agreement will inure to the benefit of and be binding upon
the parties hereto, the Note Insurer, the Noteholders, and their respective
successors and permitted assigns.
Section 9. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
Section 10. Exhibits. The exhibits attached hereto and referred to
herein shall constitute a part of this Subsequent Pledge Agreement and are
incorporated into this Subsequent Pledge Agreement for all purposes.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Trust and the Indenture Trustee have caused
this Subsequent Pledge Agreement to be duly executed by their respective
officers as of the day and year first above written.
ABFS MORTGAGE LOAN TRUST
1999-3, as Issuer
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity but solely
as Owner Trustee
By:
------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By:
------------------------------------
Name:
Title:
[Signature Page to Subsequent Pledge Agreement]
EXHIBIT C
FORM OF NOTE INSURER CONSENT TO
SUBSEQUENT MORTGAGE LOANS
__________, 1999
The Chase Manhattan Bank,
as Indenture Trustee
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Capital Markets Fiduciary Services
Re: ABFS Mortgage Loan Trust 1999-3;
Mortgage Backed Notes, Series 1999-3
------------------------------------
Ladies and Gentlemen:
Reference is made to the Indenture, dated as of September 1, 1999
(the "Indenture"), by and between ABFS Mortgage Loan Trust 1999-3, as issuer
(the "Trust"), and you, as indenture trustee (the "Indenture Trustee").
Pursuant to Section 2.14(b)(viii) of the Indenture, the undersigned hereby
approves and consents to the acquisition of the Subsequent Mortgage Loans
listed on Schedule I attached hereto aggregating $____________ in Aggregate
Principal Balance by the Trust and the subsequent pledge of such Subsequent
Mortgage Loans by the Trust to the Indenture Trustee, for the benefit of the
Noteholders and the Note Insurer.
FINANCIAL SECURITY ASSURANCE INC.
By: __________________________
Name:
Title: