HOMEBANC MORTGAGE TRUST 2004-1
Issuer
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Securities Administrator
and
U.S. BANK NATIONAL ASSOCIATION
Indenture Trustee
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INDENTURE
Dated as of July 30, 2004
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MORTGAGE-BACKED NOTES
----------------------
TABLE OF CONTENTS
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SECTION PAGE
ARTICLE I
Definitions
Section 1.01 DEFINITIONS............................................................................2
Section 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT......................................2
Section 1.03 RULES OF CONSTRUCTION..................................................................2
ARTICLE II
Original Issuance of Notes
Section 2.01 FORM...................................................................................4
Section 2.02 EXECUTION, AUTHENTICATION AND DELIVERY.................................................4
ARTICLE III
Covenants
Section 3.01 MAINTENANCE OF PAYMENT ACCOUNT.........................................................5
Section 3.02 MAINTENANCE OF OFFICE OR AGENCY........................................................5
Section 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT...................................5
Section 3.04 EXISTENCE..............................................................................7
Section 3.05 PAYMENT OF PRINCIPAL AND INTEREST......................................................7
Section 3.06 PROTECTION OF TRUST ESTATE............................................................10
Section 3.07 OPINIONS AS TO TRUST ESTATE...........................................................11
Section 3.08 PERFORMANCE OF OBLIGATIONS............................................................12
Section 3.09 NEGATIVE COVENANTS....................................................................12
Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE.....................................................13
Section 3.11 [RESERVED]............................................................................13
Section 3.12 REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOANS..........................13
Section 3.13 AMENDMENTS TO SALE AND SERVICING AGREEMENT............................................13
Section 3.14 MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE..........................13
Section 3.15 INVESTMENT COMPANY ACT................................................................14
Section 3.16 ISSUER MAY CONSOLIDATE, ETC...........................................................14
Section 3.17 SUCCESSOR OR TRANSFEREE...............................................................16
Section 3.18 NO OTHER BUSINESS.....................................................................16
Section 3.19 NO BORROWING..........................................................................16
Section 3.20 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.....................................16
Section 3.21 CAPITAL EXPENDITURES..................................................................16
Section 3.22 DETERMINATION OF NOTE INTEREST RATE...................................................17
Section 3.23 RESTRICTED PAYMENTS...................................................................17
Section 3.24 NOTICE OF EVENTS OF DEFAULT...........................................................17
Section 3.25 FURTHER INSTRUMENTS AND ACTS..........................................................17
Section 3.26 CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE....................................17
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Section 3.27 ALLOCATION OF REALIZED LOSSES.........................................................18
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01 THE NOTES.............................................................................20
Section 4.02 REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF NOTES;
APPOINTMENT OF NOTE REGISTRAR AND CERTIFICATE REGISTRAR.................................................20
Section 4.03 MUTILATED, DESTROYED, LOST OR STOLEN NOTES............................................21
Section 4.04 PERSONS DEEMED OWNERS.................................................................22
Section 4.05 CANCELLATION..........................................................................22
Section 4.06 BOOK-ENTRY NOTES......................................................................22
Section 4.07 NOTICES TO DEPOSITORY.................................................................23
Section 4.08 DEFINITIVE NOTES......................................................................23
Section 4.09 TAX TREATMENT.........................................................................24
Section 4.10 SATISFACTION AND DISCHARGE OF INDENTURE...............................................24
Section 4.11 APPLICATION OF TRUST MONEY............................................................25
Section 4.12 [RESERVED]............................................................................26
Section 4.13 REPAYMENT OF MONIES HELD BY PAYING AGENT..............................................26
Section 4.14 TEMPORARY NOTES.......................................................................26
Section 4.15 REPRESENTATION REGARDING ERISA........................................................26
ARTICLE V
Default and Remedies
Section 5.01 EVENTS OF DEFAULT.....................................................................27
Section 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT....................................27
Section 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE TRUSTEE
.......................................................................................................28
Section 5.04 REMEDIES; PRIORITIES..................................................................30
Section 5.05 OPTIONAL PRESERVATION OF THE TRUST ESTATE.............................................31
Section 5.06 LIMITATION OF SUITS...................................................................32
Section 5.07 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND INTEREST
.......................................................................................................32
Section 5.08 RESTORATION OF RIGHTS AND REMEDIES....................................................33
Section 5.09 RIGHTS AND REMEDIES CUMULATIVE........................................................33
Section 5.10 DELAY OR OMISSION NOT A WAIVER........................................................33
Section 5.11 CONTROL BY NOTEHOLDERS................................................................33
Section 5.12 WAIVER OF PAST DEFAULTS...............................................................34
Section 5.13 UNDERTAKING FOR COSTS.................................................................34
Section 5.14 WAIVER OF STAY OR EXTENSION LAWS......................................................34
Section 5.15 SALE OF TRUST ESTATE..................................................................34
Section 5.16 ACTION ON NOTES.......................................................................36
Section 5.17 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS....................................36
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ARTICLE VI
The Indenture Trustee and Securities Administrator
Section 6.01 DUTIES OF INDENTURE TRUSTEE AND SECURITIES ADMINISTRATOR..............................38
Section 6.02 RIGHTS OF INDENTURE TRUSTEE AND SECURITIES ADMINISTRATOR..............................39
Section 6.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE................................................42
Section 6.04 INDENTURE TRUSTEE'S AND SECURITIES ADMINISTRATOR'S DISCLAIMERS........................42
Section 6.05 NOTICE OF EVENT OF DEFAULT............................................................42
Section 6.06 REPORTS BY INDENTURE TRUSTEE TO HOLDERS AND TAX ADMINISTRATION........................42
Section 6.07 COMPENSATION..........................................................................43
Section 6.08 REPLACEMENT OF INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR.....................43
Section 6.09 SUCCESSOR INDENTURE TRUSTEE AND SECURITIES ADMINISTRATOR BY MERGER....................44
Section 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE TRUSTEE.....................45
Section 6.11 ELIGIBILITY; DISQUALIFICATION.........................................................46
Section 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER......................................46
Section 6.13 REPRESENTATIONS AND WARRANTIES........................................................46
Section 6.14 DIRECTIONS TO INDENTURE TRUSTEE.......................................................47
Section 6.15 THE AGENTS............................................................................47
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF NOTEHOLDERS
.......................................................................................................48
Section 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS............................48
Section 7.03 STATEMENTS TO NOTEHOLDERS.............................................................48
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01 COLLECTION OF MONEY...................................................................52
Section 8.02 RESERVED..............................................................................52
Section 8.03 OFFICER'S CERTIFICATE.................................................................52
Section 8.04 TERMINATION UPON DISTRIBUTION TO NOTEHOLDERS..........................................52
Section 8.05 RELEASE OF TRUST ESTATE...............................................................52
Section 8.06 SURRENDER OF NOTES UPON FINAL PAYMENT.................................................53
Section 8.07 OPTIONAL REDEMPTION OF THE NOTES......................................................53
ARTICLE IX
Supplemental Indentures
Section 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS................................55
Section 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS...................................56
Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES..................................................58
Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURE......................................................58
Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT...................................................58
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Section 9.06 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.........................................58
ARTICLE X
Miscellaneous
Compliance Certificates and Opinions, etc........................................................................59
Section 10.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE......................................60
Section 10.03 ACTS OF NOTEHOLDERS...................................................................61
Section 10.04 NOTICES ETC., TO INDENTURE TRUSTEE, SECURITIES ADMINISTRATOR, ISSUER AND RATING
AGENCIES................................................................................................61
Section 10.05 NOTICES TO NOTEHOLDERS; WAIVER........................................................62
Section 10.06 CONFLICT WITH TRUST INDENTURE ACT.....................................................63
Section 10.07 EFFECT OF HEADINGS....................................................................63
Section 10.09 SEPARABILITY..........................................................................63
Section 10.10 [RESERVED]............................................................................63
Section 10.11 LEGAL HOLIDAYS........................................................................63
Section 10.12 GOVERNING LAW.........................................................................63
Section 10.13 COUNTERPARTS..........................................................................64
Section 10.14 RECORDING OF INDENTURE................................................................64
Section 10.15 ISSUER OBLIGATION.....................................................................64
Section 10.16 NO PETITION...........................................................................64
Section 10.17 INSPECTION............................................................................64
EXHIBITS
Exhibit A-1 -- Form of Class [I][II]-A Notes
Exhibit A-2 -- Form of Class [I][II]-B Notes
Exhibit A-3 -- Form of Class [I][II]-M-[1][2] Notes
Appendix A -- Definitions
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This Indenture, dated as of July 30, 2004, is entered into
between HomeBanc Mortgage Trust 2004-1, a Delaware statutory trust, as Issuer
(the "Issuer"), ▇▇▇▇▇ Fargo Bank, National Association, as Securities
Administrator (the "Securities Administrator"), and U.S. Bank National
Association, a national banking association, as Indenture Trustee (the
"Indenture Trustee").
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the Issuer's
HomeBanc Mortgage Trust 2004-1, Mortgage- Backed Notes, Series 2004-1 (the
"Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the
Closing Date, as trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created by (a) the Mortgage Loans, Substitute Mortgage Loans and the proceeds
thereof and all rights under the Related Documents; (b) all funds on deposit
from time to time in the Protected Account excluding any investment income from
such funds; (c) all funds on deposit from time to time in the Master Servicer
Collection Account allocable to the Mortgage Loans excluding any investment
income from such funds; (d) all funds on deposit from time to time in the
Payment Account; (e) any REO Property, (f) the Required Insurance Policies and
any amounts paid or payable by the insurer under any Insurance Policy (to the
extent the mortgagee has a claim thereto), (g) all rights under (i) the Mortgage
Loan Purchase Agreement as assigned to the Issuer to the extent provided in
Subsection 2.03(a) of the Sale and Servicing Agreement and (ii) the rights with
respect to the HomeBanc Servicing Agreement as assigned to the Issuer by the
Assignment Agreement; and (h) all present and future claims, demands, causes and
choses in action in respect of any or all of the foregoing and all payments on
or under, and all proceeds of every kind and nature whatsoever in respect of,
any or all of the foregoing and all payments on or under, and all proceeds of
every kind and nature whatsoever in the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, checks, deposit accounts,
rights to payment of any and every kind, and other forms of obligations and
receivables, instruments and other property which at any time constitute all or
part of or are included in the proceeds of any of the foregoing (collectively,
the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as trustee on behalf of the Holders of
the Notes, acknowledges such ▇▇▇▇▇, accepts the trust under this Indenture in
accordance with the provisions hereof and each of the Indenture Trustee and the
Securities Administrator agree to perform their respective duties as Indenture
Trustee and Securities Administrator as required herein.
ARTICLE I
Definitions
Section 1.01 DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture Act (the
"TIA"), the provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rules have
the meanings assigned to them by such definitions.
Section 1.03 RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and
words in the plural include the singular; and
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(vi) any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as from
time to time amended, modified or supplemented and includes (in the
case of agreements or instruments) references to all attachments
thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
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ARTICLE II
Original Issuance of Notes
Section 2.01 FORM. The Class A Notes, Class M Notes and Class B Notes,
together with the Indenture Trustee's certificate of authentication, shall be in
substantially the form set forth in Exhibits A-1, A-2 and A-3 to this Indenture,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders).
The terms of the Notes set forth in Exhibits A-1, A-2 and A-3 to this
Indenture are part of the terms of this Indenture.
Section 2.02 EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and
deliver the Class I-A, Class II-A, Class I-M-1, Class II-M-1, Class I-M-2, Class
II-M-2, Class I-B and Class II-B Notes for original issue in an aggregate
initial principal amount of $989,196,000. The Class I-A Notes shall be issued in
an aggregate initial principal amount of $200,000,000, the Class II-A Notes
shall be issued in an aggregate initial principal amount of $680,790,000, the
Class I-M-1 Notes shall be issued in an aggregate initial principal amount of
$9,551,000, the Class II-M-1 Notes shall be issued in an aggregate initial
principal amount of $32,637,000, the Class I-M-2 Notes shall be issued in an
aggregate initial principal amount of $9,439,000, the Class II-M-2 Notes shall
be issued in an aggregate initial principal amount of $32,637,000, the Class I-B
Notes shall be issued in an aggregate initial principal amount of $4,944,000 and
the Class II-B Notes shall be issued in an aggregate initial principal amount of
$19,198,000.
Each of the Notes shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes and the Notes shall be issuable in
the minimum initial Note Principal Balances of $25,000 and in integral multiples
of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
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ARTICLE III
Covenants
Section 3.01 MAINTENANCE OF PAYMENT ACCOUNT. The Indenture Trustee
shall maintain the Payment Account established pursuant to Section 4.04 of the
Sale and Servicing Agreement in accordance with the requirements of such
Section. The Indenture Trustee shall make all payments of principal of and
interest on the Notes, subject to Section 3.03 as provided in Section 3.05
herein from monies on deposit in the Payment Account.
Section 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
an office or agency where, subject to satisfaction of conditions set forth
herein, Notes may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders may be made at
the Corporate Trust Office and notices and demands may be made or delivered to
the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee
as its agent to receive all such surrenders, notices and demands.
Section 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT. (a)
As provided in Section 3.01, all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn from the Payment
Account pursuant to Section 3.05 shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, based on information provided by the
Securities Administrator to the Indenture Trustee or Paying Agent, as
applicable, and no amounts so withdrawn from the Payment Account for payments of
Notes shall be paid over to the Issuer except as provided in this Section 3.03.
The Securities Administrator shall calculate the amount to be distributed to
each Class and, based on such amounts, the Securities Administrator shall
determine the amount to be distributed to each Noteholder. All of the Securities
Administrator's calculations of payments shall be based solely on information
provided to the Securities Administrator by the Master Servicer pursuant to
Section 3.01 of the Sale and Servicing Agreement. Neither the Securities
Administrator nor the Indenture Trustee shall be required to confirm, verify or
recompute any such information but shall be entitled to rely conclusively on
such information. The Issuer hereby appoints the Indenture Trustee as its Paying
Agent.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent it hereby so agrees), subject to the provisions of
this Section 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of
amounts due with respect to the Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
5
(ii) give the Indenture Trustee notice of any default
by the Issuer of which it has actual knowledge in the making of any
payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Paying
Agent;
(iv) immediately resign as Paying Agent and forthwith
pay to the Indenture Trustee all sums held by it in trust for the
payment of Notes if at any time it ceases to meet the standards
required to be met by a Paying Agent at the time of its appointment;
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on any Notes of
any applicable withholding taxes imposed thereon and with respect to
any applicable reporting requirements in connection therewith; and
(vi) not commence a bankruptcy proceeding against the
Issuer in connection with this Indenture.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof (but
only to the extent of the amounts so paid to the Issuer), and all liability of
the Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; PROVIDED, HOWEVER, that the Indenture Trustee or such
Paying Agent, before being required to make any such repayment, shall at the
expense and direction of the Issuer cause to be published once, in an Authorized
Newspaper published in the English language, notice that such money remains
unclaimed and that, after a date specified therein which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Issuer. The Indenture Trustee may also
adopt and employ, at the expense and direction of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Notes have been called but
have not been surrendered for redemption or whose right to or interest in monies
due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent, at the last address of record for each
such Holder).
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Section 3.04 EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.
Section 3.05 PAYMENT OF PRINCIPAL AND INTEREST. (a) On each Payment
Date from amounts on deposit in the Payment Account, in accordance with payment
instructions provided to it by the Securities Administrator no later than two
Business Days prior to such Payment Date the Indenture Trustee shall pay to the
Persons specified below the Available Funds for such Payment Date.
(b) On each Payment Date, the Group I Available Funds shall be
distributed in the following order of priority, in each case to the extent of
the Group I Available Funds remaining for such Payment Date:
(i) to the Holders of the Class I-A Notes, the
related Accrued Note Interest for such Class for such Payment Date;
(ii) to the Holders of the Class I-M-1 Notes, the
related Accrued Note Interest for such Class for such Payment Date;
(iii) to the Holders of the Class I-M-2 Notes, the
related Accrued Note Interest for such Class for such Payment Date; and
(iv) to the Holders of the Class I-B Notes, the
related Accrued Note Interest for such Class for such Payment Date.
(c) On each Payment Date, the Holders of the Class I-A, Class I-M-1,
Class I-M-2 and Class I-B Notes shall be entitled to receive payments in respect
of principal equal the related Principal Distribution Amount for that Payment
Date, allocated on a pro rata basis, based on the Note Principal Balances
thereof, in reduction of the Note Principal Balances thereof, until the Note
Principal Balances thereof have been reduced to zero.
(d) On each Payment Date, any Net Monthly Excess Cashflow in respect of
the Group I Loans shall be paid as follows, in each case to the extent of such
remaining Net Monthly Excess Cashflow:
(i) to the Holders of the Group I Notes, pro rata, in
an amount equal to any related Undercollateralization Amount, payable
to such Holders as part of the related Principal Distribution Amount as
described under Section 3.05(c) above;
(ii) to the Holders of the Group II Notes, pro rata,
in an amount equal to any Crossable Undercollateralization Amount for
Loan Group II, payable to such Holders
7
as part of the related Principal Distribution Amount as described under
Section 3.05(f) below;
(iii) to the Holders of the Group I Notes, pro rata,
in an amount equal to any related Overcollateralization Increase
Amount, payable to such Holders as part of the related Principal
Distribution Amount as described under Section 3.05(c) above;
(iv) to the Holders of the Group II Notes, pro rata,
in an amount equal to any Crossable Losses for Loan group II, payable
to such Holders as part of the related Principal Distribution Amount as
described under Section 3.05(f) below;
(v) sequentially, in the following order, to the
Holders of the Class I-M-1, Class I-M-2 and Class I-B Notes in an
amount equal to the Allocated Realized Loss Amount for such Notes, to
the extent not previously reimbursed;
(vi) sequentially, in the following order, to the
Holders of the Class II-M-1, Class II-M-2 and Class II-B Notes in an
amount equal to any Allocated Realized Loss Amount for such Notes
remaining after giving effect to payments pursuant to Section
3.05(g)(v) below;
(vii) sequentially, in the following order, to the
Holders of the Class I-A, Class I-M-1, Class I-M-2 and Class I-B Notes
any related Basis Risk Shortfall Carry-Forward Amount for such Notes on
such Payment Date; and
(viii) any remaining amounts will be distributed to
the Certificate Paying Agent, as designee of the Issuer, for the
benefit of the Holders of the Trust Certificates.
(e) On each Payment Date, the Group II Available Funds shall be
distributed in the following order of priority, in each case to the extent of
the Group II Available Funds remaining for such Payment Date:
(i) to the Holders of the Class II-A Notes, the
related Accrued Note Interest for such Class for such Payment Date;
(ii) to the Holders of the Class II-M-1 Notes, the
related Accrued Note Interest for such Class for such Payment Date;
(iii) to the Holders of the Class II-M-2 Notes, the
related Accrued Note Interest for such Class for such Payment Date; and
(iv) to the Holders of the Class II-B Notes, the
related Accrued Note Interest for such Class for such Payment Date.
(f) On each Payment Date, the Holders of the Class II-A, Class II-M-1,
Class II-M-2 and Class II-B Notes shall be entitled to receive payments in
respect of principal equal the related Principal Distribution Amount for that
Payment Date, allocated on a pro rata basis, based on the
8
Note Principal Balances thereof, in reduction of the Note Principal Balances
thereof, until the Note Principal Balances thereof have been reduced to zero.
(g) On each Payment Date, any Net Monthly Excess Cashflow in respect of
the Group II Loans shall be paid as follows, in each case to the extent of such
remaining Net Monthly Excess Cashflow:
(i) to the Holders of the Group II Notes, pro rata,
in an amount equal to any related Undercollateralization Amount,
payable to such Holders as part of the related Principal Distribution
Amount as described under Section 3.05(f) above;
(ii) to the Holders of the Group I Notes, pro rata,
in an amount equal to any Crossable Undercollateralization Amount for
Loan Group I, payable to such Holders as part of the related Principal
Distribution Amount as described under Section 3.05(c) above;
(iii) to the Holders of the Group II Notes, pro rata,
in an amount equal to any related Overcollateralization Increase
Amount, payable to such Holders as part of the related Principal
Distribution Amount as described under Section 3.05(f) above;
(iv) to the Holders of the Group I Notes, pro rata,
in an amount equal to any Crossable Losses for Loan group I, payable to
such Holders as part of the related Principal Distribution Amount as
described under Section 3.05(c) above;
(v) sequentially, in the following order, to the
Holders of the Class II-M-1, Class II-M-2 and Class II-B Notes in an
amount equal to the Allocated Realized Loss Amount for such Notes, to
the extent not previously reimbursed;
(vi) sequentially, in the following order, to the
Holders of the Class I-M-1, Class I-M-2 and Class I-B Notes in an
amount equal to any Allocated Realized Loss Amount for such Notes
remaining after giving effect to payments pursuant to section
3.05(d)(v) above;
(vii) sequentially, in the following order, to the
Holders of the Class II-A, Class II-M-1, Class II-M-2 and Class II-B
Notes any related Basis Risk Shortfall Carry-Forward Amount for such
Notes on such Payment Date; and
(viii) any remaining amounts will be distributed to
the Certificate Paying Agent, as designee of the Issuer, for the
benefit of the Holders of the Trust Certificates.
(h) Each distribution with respect to a Book-Entry Note shall be paid
to the Depository, as Holder thereof, and the Depository shall be responsible
for crediting the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the Note
Owners 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 Note Owners
that it represents. None of the Indenture Trustee, the Note
9
Registrar, the Paying Agent, the Depositor, the Securities Administrator or the
Master Servicer shall have any responsibility therefor except as otherwise
provided by this Indenture.
(i) On each Payment Date, the Certificate Paying Agent shall deposit in
the Certificate Distribution Account all amounts it received pursuant to
Sections 3.05(d)(viii) and 3.05(g)(viii) for the purpose of distributing such
funds to the Certificateholders. The Certificate Paying Agent shall make
distributions to the Certificateholders under the Trust Agreement as directed by
the Securities Administrator hereunder.
(j) Any installment of interest or principal, if any, payable on any
Note that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall, if such Holder shall have so requested at least
five Business Days prior to the related Record Date, be paid to each Holder of
record on the preceding Record Date, by wire transfer to an account specified in
writing by such Holder as of the preceding Record Date or in all other cases or
if no such instructions have been delivered to the Indenture Trustee, by check
to such Noteholder mailed to such ▇▇▇▇▇▇'s address as it appears in the Note
Register in the amount required to be distributed to such Holder on such Payment
Date pursuant to such Holder's Notes; PROVIDED, HOWEVER, that the Indenture
Trustee shall not pay to such Holders any amount required to be withheld from a
payment to such Holder by the Code.
(k) The principal of each Note shall be due and payable in full on the
Final Scheduled Payment Date for such Note as provided in the forms of Note set
forth in Exhibits A-1, A-2 and A-3 to this Indenture. All principal payments on
the Notes shall be made to the Noteholders entitled thereto in accordance with
the Percentage Interests represented by such Notes. Upon notice to the Indenture
Trustee by the Issuer, the Indenture Trustee shall notify the Person in whose
name a Note is registered at the close of business on the Record Date preceding
the Final Scheduled Payment Date or other final Payment Date (including any
final Payment Date resulting from any redemption pursuant to Section 8.07
hereof). Such notice shall to the extent practicable be mailed no later than
five Business Days prior to such Final Scheduled Payment Date or other final
Payment Date and shall specify that payment of the principal amount and any
interest due with respect to such Note at the Final Scheduled Payment Date or
other final Payment Date will be payable only upon presentation and surrender of
such Note and shall specify the place where such Note may be presented and
surrendered for such final payment. No interest shall accrue on the Notes on or
after the Final Scheduled Payment Date or any such other final Payment Date.
Section 3.06 PROTECTION OF TRUST ESTATE. (a) The Issuer will from time
to time prepare, execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security
interest (and the priority thereof) of this Indenture or carry out more
effectively the purposes hereof;
(ii) perfect, publish notice of or protect the
validity of any Grant made or to be made by this Indenture;
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(iii) cause the Issuer or the Indenture Trustee to
enforce any of the rights to the Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate
and the rights of the Indenture Trustee and the Noteholders in the
Trust Estate against the claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture
Trustee shall not remove or permit the Custodian 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
date of the most recent Opinion of Counsel delivered pursuant to Section 3.07
hereof (or from the jurisdiction in which it was held as described in the
Opinion of Counsel delivered on the Closing Date pursuant to Section 3.07(a)
hereof, or if no Opinion of Counsel has yet been delivered pursuant to Section
3.07(b) hereof, 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).
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.06 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee with
appropriate instructions.
Section 3.07 OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and first
priority security interest in the Collateral and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and first priority security interest effective.
(b) On or before April 15 in each calendar year, beginning in 2005, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re- recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and first priority security interest in the Collateral and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Collateral until December 31
in the following calendar year.
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Section 3.08 PERFORMANCE OF OBLIGATIONS. (a) The Issuer will punctually
perform and observe all of its obligations and agreements contained in this
Indenture, the Basic Documents and in the instruments and agreements included in
the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any of the documents relating to the Mortgage
Loans or under any instrument included in the Trust Estate, or which would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any of the documents relating to
the Mortgage Loans or any such instrument, except such actions as the Master
Servicer is expressly permitted to take in the Sale and Servicing Agreement. The
Indenture Trustee, as pledgee of the Mortgage Loans, may exercise the rights of
the Issuer to direct the actions of the Master Servicer pursuant to the Sale and
Servicing Agreement.
(d) The Issuer may retain an administrator and may enter into contracts
with other Persons for the performance of the Issuer's obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.
Section 3.09 NEGATIVE COVENANTS. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture,
sell, transfer, exchange or otherwise dispose of the Trust Estate,
unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from
the principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate;
(iii) (A) permit the validity or effectiveness of
this Indenture to be impaired, or permit the lien of this Indenture to
be amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein or
the proceeds thereof or (C) permit the lien of this Indenture not to
constitute a valid first priority security interest in the Trust
Estate; or
(iv) waive or impair, or fail to assert rights under,
the Mortgage Loans, or impair or cause to be impaired the Issuer's
interest in the Mortgage Loans, the Mortgage
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Loan Purchase Agreement or in any Basic Document, if any such action
would materially and adversely affect the interests of the Noteholders.
Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Indenture Trustee, by March 1 of each year commencing with the calendar
year 2005, an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during
the previous calendar year and of its performance under this Indenture
has been made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's
knowledge, based on such review, the Issuer has complied with all
conditions and covenants under this Indenture throughout such year, or,
if there has been a default in its compliance with any such condition
or covenant, specifying each such default known to such Authorized
Officer and the nature and status thereof.
Section 3.11 [RESERVED].
Section 3.12 REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE
LOANS. The Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit
of the representations and warranties made by the Seller in the Mortgage Loan
Purchase Agreement concerning the Seller and the Mortgage Loans to the same
extent as though such representations and warranties were made directly to the
Indenture Trustee. If a Responsible Officer of the Indenture Trustee has actual
knowledge of any breach of any representation or warranty made by the Seller in
the Mortgage Loan Purchase Agreement, the Indenture Trustee shall promptly
notify the Seller of such finding and the Seller's obligation to cure such
defect or repurchase or substitute for the related Mortgage Loan.
Section 3.13 AMENDMENTS TO SALE AND SERVICING AGREEMENT. The Issuer
covenants with the Indenture Trustee that it will not enter into any amendment
or supplement to the Sale and Servicing Agreement without the prior written
consent of the Indenture Trustee.
Section 3.14 MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE
TRUSTEE. (a) Solely for purposes of perfection under Section 9-305 of the
Uniform Commercial Code or other similar applicable law, rule or regulation of
the state in which such property is held by the Master Servicer, the Issuer and
the Indenture Trustee hereby acknowledge that the Master Servicer is acting as
bailee of the Indenture Trustee in holding amounts on deposit in the Master
Servicer Collection Account, as well as its bailee in holding any Related
Documents released to the Master Servicer, and any other items constituting a
part of the Trust Estate which from time to time come into the possession of the
Master Servicer. It is intended that, by the Master Servicer's acceptance of
such bailee arrangement, the Indenture Trustee, as a secured party of the
Mortgage Loans, will be deemed to have possession of such Related Documents,
such monies and such other items for purposes of Section 9-305 of the Uniform
Commercial Code of the state in which such property is held by the Master
Servicer. The Indenture Trustee shall not be liable with respect to such
documents, monies or items while in possession of the Master Servicer and the
Master Servicer shall not otherwise be deemed to be the agent of the Indenture
Trustee.
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(b) Solely for purposes of perfection under Section 9-305 of the
Uniform Commercial Code or other similar applicable law, rule or regulation of
the state in which such property is held by the Servicer, the Issuer and the
Indenture Trustee hereby acknowledge that the Servicer is acting as bailee of
the Indenture Trustee in holding amounts on deposit in the Protected Account, as
well as its bailee in holding any Related Documents released to the Servicer,
and any other items constituting a part of the Trust Estate which from time to
time come into the possession of the Servicer. It is intended that, by the
Servicer's acceptance of such bailee arrangement, the Indenture Trustee, as a
secured party of the Mortgage Loans, will be deemed to have possession of such
Related Documents, such monies and such other items for purposes of Section
9-305 of the Uniform Commercial Code of the state in which such property is held
by the Servicer. The Indenture Trustee shall not be liable with respect to such
documents, monies or items while in possession of the Servicer and the Servicer
shall not otherwise be deemed to be the agent of the Indenture Trustee.
Section 3.15 INVESTMENT COMPANY ACT. The Issuer shall not become an
"investment company" or be under the "control" of an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
PROVIDED, HOWEVER, that the Issuer shall be in compliance with this Section 3.15
if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions imposed
in such order.
Section 3.16 ISSUER MAY CONSOLIDATE, ETC. (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by
or surviving such consolidation or merger shall be a Person organized
and existing under the laws of the United States of America or any
state or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form reasonably satisfactory to the Indenture Trustee, the
due and punctual payment of the principal of and interest on all Notes,
and all other amounts payable to the Indenture Trustee and the
Securities Administrator, the payment to the Certificate Paying Agent
of all amounts due to the Certificateholders, and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such
transaction, no Event of Default shall have occurred and be continuing;
(iii) each of the Rating Agencies shall have notified
the Issuer that such transaction shall not cause the rating of the
Notes to be reduced, suspended or withdrawn or to be considered by such
Rating Agency to be below investment grade;
(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered a copy thereof to the Indenture
Trustee) to the effect that such transaction will not (A) result in a
"significant modification" of the Notes under Treasury Regulation
section
14
1.1001-3, or adversely affect the status of the Notes as indebtedness
for federal income tax purposes and (B) cause the Trust to be subject
to an entity level tax for federal income tax purposes;
(v) any action that is necessary to maintain the lien
and security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such consolidation or merger and such supplemental indenture
comply with this Article III and that all conditions precedent herein
provided for or relating to such transaction have been complied with
(including any filing required by the Exchange Act), and that such
supplemental indenture is enforceable against the Issuer.
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or
transfer the properties and assets of the Issuer, the conveyance or
transfer of which is hereby restricted, shall (A) be a United States
citizen or a Person organized and existing under the laws of the United
States of America or any state thereof, (B) expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein, (C) expressly agree by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of the Holders of the
Notes, (D) unless otherwise provided in such supplemental indenture,
expressly agree to indemnify, defend and hold harmless the Issuer and
the Indenture Trustee against and from any loss, liability or expense
arising under or related to this Indenture and the Notes and (E)
expressly agree by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing;
(iii) each of the Rating Agencies shall have notified
the Issuer that such transaction shall not cause the ratings of the
Notes to be reduced, suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered a copy thereof to the Indenture
Trustee) to the effect that such transaction will not (A) result in a
"significant modification" of the Notes under Treasury Regulation
section 1.1001-3, or adversely affect the status of the Notes as
indebtedness for federal income tax purposes, and (B) cause the Trust
to be subject to an entity level tax for federal income tax purposes;
15
(v) any action that is necessary to maintain the lien
and security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any
filing required by the Exchange Act).
Section 3.17 SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.16(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.16(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.
Section 3.18 NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Mortgage Loans and the issuance of the Notes and Certificates in the manner
contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.
Section 3.19 NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes under this Indenture.
Section 3.20 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by this Indenture or the Basic Documents, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.
Section 3.21 CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
16
Section 3.22 DETERMINATION OF NOTE INTEREST RATE. On each Interest
Determination Date the Securities Administrator shall determine One-Month LIBOR
and the related Note Interest Rate for each Class of Notes for the following
Accrual Period. The establishment of One-Month LIBOR on each Interest
Determination Date by the Securities Administrator and the Securities
Administrator's calculation of the rate of interest applicable to each Class of
Notes for the related Accrual Period shall (in the absence of manifest error) be
final and binding.
Section 3.23 RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; PROVIDED, HOWEVER, that
the Issuer may make, or cause to be made, (x) distributions and payments to the
Owner Trustee, the Indenture Trustee, Noteholders and the Certificateholders as
contemplated by, and to the extent funds are available for such purpose under
this Indenture, the Sale and Servicing Agreement and the Trust Agreement and (y)
payments to the Master Servicer, the Servicer and the Special Servicer pursuant
to the terms of the Sale and Servicing Agreement. The Issuer will not, directly
or indirectly, make payments to or distributions from the Master Servicer
Collection Account or the Payment Account except in accordance with this
Indenture and the Basic Documents.
Section 3.24 NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee, the Securities Administrator and the Rating Agencies prompt
written notice of each Event of Default hereunder and under the Trust Agreement.
Section 3.25 FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
Section 3.26 CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE.
(a) With respect to that portion of the Collateral described in clauses
(a) through (h) of the definition of Trust Estate, the Issuer represents to the
Indenture Trustee that:
(i) This Indenture creates a valid and continuing
security interest (as defined in the applicable UCC) in the Collateral
in favor of the Indenture Trustee, which security interest is prior to
all other liens, and is enforceable as such as against creditors of and
purchasers from the Issuer.
(ii) In each case, within the meaning of the
applicable UCC: (A) the Collateral described in clauses (a) through (d)
constitutes "deposit accounts" or "instruments," as applicable; (B) the
Collateral described in clause (e) constitutes "real property;"(C) the
Collateral described in clause (f) constitutes "accounts;" and (D) the
Collateral described in clause (h) constitutes "general intangibles."
17
(iii) The Issuer owns and has good and marketable
title to the Collateral, free and clear of any lien, claim or
encumbrance of any Person.
(iv) The Issuer has taken all steps necessary to
cause the Indenture Trustee to become the account holder of the
Collateral.
(v) Other than the security interest granted to the
Indenture Trustee pursuant to this Indenture, the Issuer has not
pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Collateral.
(vi) The Collateral is not in the name of any Person
other than the Issuer or the Indenture Trustee. The Issuer has not
consented to the bank maintaining the Collateral to comply with
instructions of any Person other than the Indenture Trustee.
(b) With respect to any Collateral in which a security interest may be
perfected by filing, the Issuer has not authorized the filing of, and is not
aware of any financing statements against, the Issuer, that include a
description of collateral covering such Collateral, other than any financing
statement relating to the security interest granted to the Indenture Trustee
hereunder or that has been terminated. The Issuer is not aware of any judgment
or tax lien filings against the Issuer.
(c) The Issuer has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect the
security interest in all Collateral granted to the Indenture Trustee hereunder
in which a security interest may be perfected by filing. Any financing statement
that is filed in connection with this Section 3.26 shall contain a statement
that a purchase or security interest in any collateral described therein will
violate the rights of the secured party named in such financing statement.
(d) The foregoing representations may not be waived and shall survive
the issuance of the Notes.
Section 3.27 ALLOCATION OF REALIZED LOSSES. (a) Prior to each Payment
Date, the Master Servicer shall determine, based solely on information provided
to it by the Servicer, the total amount of Realized Losses that occurred during
the related Prepayment Period.
(b) Any realized Losses on the Mortgage Loans will be allocated or
covered on any payment date as follows FIRST, to the related Net Monthly Excess
Cashflow, by an increase in the related Overcollateralization Increase Amount
for that Payment Date as provided in Section 3.05 hereof; SECOND, to the
non-related Net Monthly Excess Cashflow, to the extent described in Section 3.05
hereof; THIRD, in reduction of the Overcollateralized Amount for the related and
non-related Loan Group, until reduced to zero (meaning, no losses will be
allocated to the Class M Notes or Class B Notes until the aggregate Note
Principal Balance of the Notes equals the aggregate Scheduled Principal Balance
of the Mortgage Loans); and FOURTH, if such Realized Loss is on a (x) Group I
Loan, to the Class I-B, Class I-M-2 and Class I-M-1 Notes, in that order, in
reduction of the Note Principal Balances thereof, until the Note Principal
Balance thereof have been reduced to zero and (y) Group II Loan, to the Class
II-B, Class II-M-2 and Class II-M-1 Notes, in that order, in
18
reduction of the Note Principal Balances thereof, until the Note Principal
Balance thereof have been reduced to zero. For purposes of clause THIRD all
Realized Losses will be allocated among both Loan Groups to their respective
Overcollateralization Amounts on a pro rata basis, based on the amount of
Realized Losses incurred during the related Prepayment Period which were not
covered on that Payment Date through a payment of Net Monthly Excess Cashflow,
until the aggregate Note Principal Balance of the Notes equals the aggregate
Scheduled Principal Balance of the Mortgage Loans (even if this results in an
Undercollateralization Amount) before being allocated to the related Notes as
provided in clause FOURTH. Realized Losses shall not be allocated to the Class A
Notes. All Realized Losses allocated to a Class of Notes will be allocated in
proportion to the Percentage Interests evidenced thereby.
(c) In addition, in the event that the Master Servicer receives any
Subsequent Recoveries from the Servicer, the Master Servicer shall deposit such
funds into the Master Servicer Collection Account in accordance with Section
4.02 of the Sale and Servicing Agreement. If, after taking into account such
Subsequent Recoveries, the amount of a Realized Loss is reduced, the amount of
such Subsequent Recoveries will be applied to increase the Note Principal
Balance of the related Class of Class M Notes or Class B Notes with the highest
payment priority to which Realized Losses have been allocated and not previously
reimbursed through the payment of an Allocated Realized Loss Amount pursuant to
Sections 3.05(d)(v) or (vi) or Sections 3.05(g)(v) or (vi), as applicable, but
not by more than the amount of Realized Losses previously allocated to that
Class of Class M Notes or Class B Notes pursuant to this Section 3.27. The
amount of any remaining Subsequent Recoveries will be applied to sequentially
increase the Note Principal Balance of the related Class of Class M Notes or the
Class B Notes, beginning with the Class of Notes with the next highest payment
priority, up to the amount of such Realized Losses previously allocated (but
only to the extent not previously reimbursed through the payment of an Allocated
Realized Loss Amount pursuant to Sections 3.05(d)(v) or (vi) or Sections
3.05(g)(v) or (vi)) to such Class of Class M Notes or the Class B Notes pursuant
to this Section 3.27. Holders of such Notes will not be entitled to any payment
in respect of current interest on the amount of such increases for any Accrual
Period preceding the Payment Date on which such increase occurs. Any such
increases shall be applied to the Note Principal Balance of each Class of Class
M Notes of such Class and the Class B Notes in accordance with its respective
Percentage Interest.
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ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01 THE NOTES. Each Class of Notes shall be registered in the
name of a nominee designated by the Depository. Beneficial Owners will hold
interests in the Notes through the book- entry facilities of the Depository in
minimum initial Note Principal Balances of $25,000 and integral multiples of
$1,000 in excess thereof.
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Notes for the
purposes of exercising the rights of Holders of the Notes hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08
hereof, Beneficial Owners shall not be entitled to definitive certificates for
the Notes as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Holder of the Notes shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Noteholders and give notice to the
Depository of such record date. Without the consent of the Issuer and the
Indenture Trustee, no Note may be transferred by the Depository except to a
successor Depository that agrees to hold such Note for the account of the
Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as
Depository, the Depositor may appoint a successor Depository. If no successor
Depository has been appointed within 30 days of the effective date of the
Depository's resignation or removal, each Beneficial Owner shall be entitled to
certificates representing the Notes it beneficially owns in the manner
prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer
by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Indenture Trustee and delivered by the Indenture
Trustee to or upon the order of the Issuer.
Section 4.02 REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE
OF NOTES; APPOINTMENT OF NOTE REGISTRAR AND CERTIFICATE REGISTRAR. The Issuer
shall cause to be kept at the office of the Note Registrar (which shall be the
office specified in Section 3.02) a Note Register in which, subject to such
reasonable regulations as it may prescribe, the Note Registrar shall provide for
the registration of Notes and of transfers and exchanges of Notes as herein
provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the office specified in
Section 3.02, the Issuer shall execute and the Note Registrar shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Notes in authorized initial Note Principal Balances evidencing the same
Class and aggregate Percentage Interests.
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Subject to the foregoing, at the option of the Noteholders, Notes may
be exchanged for other Notes of like tenor and in authorized initial Note
Principal Balances evidencing the same Class and aggregate Percentage Interests
upon surrender of the Notes to be exchanged at the office specified in Section
3.02. Whenever any Notes are so surrendered for exchange, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver the Notes which
the Noteholder making the exchange is entitled to receive. Each Note presented
or surrendered for registration of transfer or exchange shall (if so required by
the Note Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Note Registrar
duly executed by the Holder thereof or his attorney duly authorized in writing
with such signature guaranteed by a commercial bank or trust company located or
having a correspondent located in the city of New York. Notes delivered upon any
such transfer or exchange will evidence the same obligations, and will be
entitled to the same rights and privileges, as the Notes surrendered.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
The Issuer hereby appoints the Indenture Trustee as (i) Certificate
Registrar to keep at the office of its designated agent as specified in Section
3.02, a Certificate Register pursuant to Section 3.09 of the Trust Agreement in
which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of Certificates and of
transfers and exchanges thereof pursuant to Section 3.05 of the Trust Agreement
and (ii) Note Registrar under this Indenture. The Indenture Trustee hereby
accepts such appointments.
Section 4.03 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; PROVIDED, HOWEVER, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
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Upon the issuance of any replacement Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04 PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee, the
Paying Agent and any agent of the Issuer or the Indenture Trustee may treat the
Person in whose name any Note is registered (as of the day of determination) as
the owner of such Note for the purpose of receiving payments of principal of and
interest, if any, on such Note and for all other purposes whatsoever, whether or
not such Note be overdue, and neither the Issuer, the Indenture Trustee, the
Paying Agent nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.
Section 4.05 CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section 4.05, except as expressly
permitted by this Indenture. All cancelled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Request that they be destroyed or returned to it; PROVIDED, HOWEVER, that such
Issuer Request is timely and the Notes have not been previously disposed of by
the Indenture Trustee.
Section 4.06 BOOK-ENTRY NOTES. The Notes, upon original issuance, will
be issued in the form of typewritten Notes representing the Book-Entry Notes, to
be delivered to The Depository Trust Company, the initial Depository, by, or on
behalf of, the Issuer. The Notes shall initially be registered on the Note
Register in the name of Cede & Co., the nominee of the initial Depository, and
no Beneficial Owner will receive a Definitive Note representing such Beneficial
Owner's interest in such Note, except as provided in Section 4.08. With respect
to such Notes, unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Beneficial Owners pursuant to Section
4.08:
(i) the provisions of this Section 4.06 shall be in
full force and effect;
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(ii) the Note Registrar, the Paying Agent and the
Indenture Trustee shall be entitled to deal with the Depository for all
purposes of this Indenture (including the payment of principal of and
interest on the Notes and the giving of instructions or directions
hereunder) as the sole holder of the Notes, and shall have no
obligation to the Beneficial Owners of the Notes;
(iii) to the extent that the provisions of this
Section 4.06 conflict with any other provisions of this Indenture, the
provisions of this Section 4.06 shall control;
(iv) the rights of Beneficial Owners shall be
exercised only through the Depository and shall be limited to those
established by law and agreements between such Owners of Notes and the
Depository and/or the Depository Participants. Unless and until
Definitive Notes are issued pursuant to Section 4.08, the initial
Depository will make book- entry transfers among the Depository
Participants and receive and transmit payments of principal of and
interest on the Notes to such Depository Participants; and
(v) whenever this Indenture requires or permits
actions to be taken based upon instructions or directions of Holders of
Notes evidencing a specified percentage of the Note Principal Balances
of the Notes, the Depository shall be deemed to represent such
percentage with respect to the Notes only to the extent that it has
received instructions to such effect from Beneficial Owners and/or
Depository Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has
delivered such instructions to the Indenture Trustee.
Section 4.07 NOTICES TO DEPOSITORY. Whenever a notice or other
communication to the Note Holders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Beneficial Owners pursuant to
Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08 DEFINITIVE NOTES. If (i) the Depositor advises the
Indenture Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities with respect to the Book-Entry Notes and
the Depositor is unable to locate a qualified successor within 30 days or (ii)
the Depositor, at its option (with the consent of the Indenture Trustee, such
consent not to be unreasonably withheld) elects to terminate the book-entry
system through the Depository, then the Indenture Trustee shall request that the
Depository notify all Beneficial Owners of the occurrence of any such event and
of the availability of Definitive Notes to Beneficial Owners requesting the
same. Upon surrender to the Indenture Trustee of the typewritten Notes
representing the Book-Entry Notes by the Depository, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Depository. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
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In addition, if an Event of Default has occurred and is continuing,
each Note Owner materially adversely affected thereby may at its option request
a Definitive Note evidencing such Noteholder's interest in the related Class of
Notes. In order to make such request, such Noteholder shall, subject to the
rules and procedures of the Depository, provide the Depository or the related
Depository Participant with directions for the Indenture Trustee to exchange or
cause the exchange of the Noteholder's interest in such Class of Notes for an
equivalent interest in fully registered definitive form. Upon receipt by the
Indenture Trustee of instructions from the Depository directing the Indenture
Trustee to effect such exchange (such instructions to contain information
regarding the Class of Notes and the Note Principal Balance being exchanged, the
Depository Participant account to be debited with the decrease, the registered
holder of and delivery instructions for the Definitive Note, and any other
information reasonably required by the Indenture Trustee), (i) the Indenture
Trustee shall instruct the Depository to reduce the related Depository
Participant's account by the aggregate Note Principal Balance of the Definitive
Note, (ii) the Indenture Trustee shall execute, authenticate and deliver, in
accordance with the registration and delivery instructions provided by the
Depository, a Definitive Note evidencing such Noteholder's interest in such
Class of Notes and (iii) the Indenture Trustee shall execute and authenticate a
new Book-Entry Note reflecting the reduction in the Note Principal Balance of
such Class of Notes by the amount of the Definitive Notes.
Section 4.09 TAX TREATMENT. The Issuer has entered into this Indenture,
and the Notes will be issued with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness. The Issuer and the Securities Administrator (in accordance with
Section 6.06 hereof), by entering into this Indenture, and each Noteholder, by
its acceptance of its Note (and each Beneficial Owner by its acceptance of an
interest in the applicable Book-Entry Note), agree to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness.
Section 4.10 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.17, 3.19 and 3.20, (v) the rights, obligations (to the extent applicable to
the provisions of the Indenture remaining in effect) and immunities of the
Indenture Trustee and Securities Administrator hereunder (including the rights
of the Indenture Trustee and Securities Administrator under Section 6.07 and the
obligations of the Indenture Trustee under Section 4.11), and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them, and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes and shall release and deliver, or cause the Custodian to
deliver, the Collateral to or upon the order of the Issuer, when
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 4.03 hereof and (ii) Notes
for whose payment money has theretofore been deposited in trust
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or segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section 3.03)
have been delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
a. have become due and payable,
b. will become due and payable at the Final
Scheduled Payment Date within one year, or
c. have been called for early redemption and
the Trust has been terminated pursuant to
Section 8.07 hereof,
and the Issuer, in the case of a. or b. above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes
then outstanding not theretofore delivered to the Indenture Trustee for
cancellation when due on the Final Scheduled Payment Date or other
final Payment Date and has delivered to the Indenture Trustee a
verification report from a nationally recognized accounting firm
certifying that the amounts deposited with the Indenture Trustee are
sufficient to pay and discharge the entire indebtedness of such Notes,
or, in the case of c. above, the Issuer shall have complied with all
requirements of Section 8.07 hereof,
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder; and
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel, each meeting the
applicable requirements of Section 10.01 hereof, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with and, if the
Opinion of Counsel relates to a deposit made in connection with Section
4.10(A)(2)b. above, such opinion shall further be to the effect that
such deposit will constitute an "in-substance defeasance" within the
meaning of Revenue Ruling 85-42, 1985-1 C.B. 36, and in accordance
therewith, the Issuer will be the owner of the assets deposited in
trust for federal income tax purposes.
Section 4.11 APPLICATION OF TRUST MONEY. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or the
Issuer, Certificate Paying Agent as designee of the Issuer, as the Indenture
Trustee may determine, to the Holders of Securities, of all sums due and to
become due thereon for principal and interest or otherwise; but such monies need
not be segregated from other funds except to the extent required herein or
required by law.
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Section 4.12 [RESERVED].
Section 4.13 REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Person shall be released from all further
liability with respect to such monies.
Section 4.14 TEMPORARY NOTES. Pending the preparation of any Definitive
Notes, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Notes that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of the
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the Corporate Trust Office, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Notes, the Issuer shall execute and the Indenture Trustee shall
authenticate and make available for delivery, in exchange therefor, Definitive
Notes of authorized denominations and of like tenor, class and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
Section 4.15 REPRESENTATION REGARDING ERISA. By acquiring a Note or
interest therein, each Holder of such Note or Beneficial Owner of any such
interest will be deemed to represent that either (1) it is not acquiring the
Note with Plan Assets or (2) (A) the acquisition, holding and transfer of such
Note will not give rise to a nonexempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code and (B) the Notes are rated investment
grade or better and such person believes that the Notes are properly treated as
indebtedness without substantial equity features for purposes of the Department
of Labor regulation 29 C.F.R. ss. 2510.3-101, and agrees to so treat the Notes.
Alternatively, regardless of the rating of the Notes, such person may provide
the Indenture Trustee and the Owner Trustee with an Opinion of Counsel, which
Opinion of Counsel will not be at the expense of the Issuer, the Depositor, the
Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Securities Administrator, the Master Servicer, the Servicer or the Special
Servicer which opines that the acquisition, holding and transfer of such Note or
interest therein is permissible under applicable law, will not constitute or
result in a non-exempt prohibited transaction under ERISA or Section 4975 of the
Code and will not subject the Issuer, the Seller, the Depositor, any
Underwriter, the Owner Trustee, the Indenture Trustee, the Securities
Administrator, the Master Servicer, the Servicer or the Special Servicer to any
obligation in addition to those undertaken in the Indenture and the other Basic
Documents.
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ARTICLE V
Default and Remedies
Section 5.01 EVENTS OF DEFAULT. The Issuer shall deliver to the
Indenture Trustee, within five days after learning of the occurrence of an Event
of Default, written notice in the form of an Officer's Certificate of any event
which with the giving of notice and the lapse of time would become an Event of
Default under clause (iii), (iv) or (v) of the definition of "Event of Default",
its status and what action the Issuer is taking or proposes to take with respect
thereto. The Indenture Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer has actual knowledge thereof or
unless written notice of such Event of Default is received by a Responsible
Officer and such notice references the Notes, the Trust Estate or this
Indenture.
Section 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee at the written direction of the Holders of Notes representing
not less than a majority of the aggregate Note Principal Balance of the Notes
may declare the Notes to be immediately due and payable, by a notice in writing
to the Issuer (and to the Indenture Trustee if such notice is given by
Noteholders), and upon any such declaration the unpaid Note Principal Balance of
the Notes, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, Holders of the Notes representing not
less than a majority of the aggregate Note Principal Balance of the Notes, by
written notice to the Issuer and the Indenture Trustee, may, subject to Section
5.12, waive the related Event of Default and rescind and annul such declaration
and its consequences if
(i) the Issuer has paid or deposited with the
Indenture Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on the
Notes and all other amounts that would then be due hereunder
or upon the Notes if the Event of Default giving rise to such
acceleration had not occurred;
(B) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment
of the principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
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Section 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) The Issuer covenants that if (i) default is made in the payment of
any interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the payment of
the principal of or any installment of the principal of any Note when the same
becomes due and payable, the Issuer shall, upon demand of the Indenture Trustee,
acting at the direction of the Holders of a majority of the aggregate Note
Principal Balances of the Notes, pay to the Indenture Trustee, for the benefit
of the Holders of Notes, the whole amount then due and payable on the Notes for
principal and interest, with interest at the applicable Note Interest Rate upon
the overdue principal, and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.16 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor the Notes, wherever
situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee, subject to the provisions of Section 10.16 hereof may, as more
particularly provided in Section 5.04 hereof, in its discretion, proceed to
protect and enforce its rights and the rights of the Noteholders, by such
appropriate Proceedings, as directed in writing by Holders of a majority of the
aggregate Note Principal Balances of the Notes, to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, as directed in writing by Holders
of a majority of the aggregate Note Principal Balances of the Notes,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture
28
Trustee (including any claim for reasonable compensation to the
Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in
such Proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of Notes in any election
of a trustee, a standby trustee or Person performing similar functions
in any such Proceedings;
(iii) to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute
all amounts received with respect to the claims of the Noteholders and
of the Indenture Trustee on their behalf, and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Holders of Notes allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes, subject to Section 5.05 hereof.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
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Section 5.04 REMEDIES; PRIORITIES. (a) If an Event of Default shall
have occurred and be continuing and if an acceleration has been declared and not
rescinded pursuant to Section 5.02 hereof, the Indenture Trustee subject to the
provisions of Section 10.16 hereof may, and shall, at the written direction of
the Holders of a majority of the aggregate Note Principal Balances of the Notes
(subject to Section 6.02(k)) do one or more of the following (subject to Section
5.05 hereof):
(i) institute Proceedings in its own name and as
trustee of an express trust for the collection of all amounts then
payable on the Notes or under this Indenture with respect thereto,
whether by declaration or otherwise, enforce any judgment obtained and
collect from the Issuer and any other obligor upon such Notes monies
adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate;
(iii) exercise any remedies of a secured party under
the UCC and take any other appropriate action to protect and enforce
the rights and remedies of the Indenture Trustee and the Holders of the
Notes; and
(iv) sell the Trust Estate or any portion thereof or
rights or interest therein, at one or more public or private sales
called and conducted in any manner permitted by law;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Note Principal Balance of the Notes, (B) the proceeds of such sale or
liquidation distributable to the Holders of the Notes are sufficient to
discharge in full all amounts then due and unpaid upon such Notes for principal
and interest or (C) the Indenture Trustee determines that the Mortgage Loans
will not continue to provide sufficient funds for the payment of principal of
and interest on the applicable Notes as they would have become due if the Notes
had not been declared due and payable, and the Indenture Trustee obtains the
consent of Holders of 662/3% of the aggregate Note Principal Balance of the
Notes. In determining such sufficiency or insufficiency with respect to clause
(B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an
opinion (obtained at the expense of the Trust) of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.
Notwithstanding the foregoing, so long as an "Event of Default" under the
HomeBanc Servicing Agreement has not occurred, any Sale of the Trust Estate
shall be made subject to the continued servicing of the Mortgage Loans by the
Servicer as provided in the HomeBanc Servicing Agreement.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee and the Securities
Administrator for amounts due under Section 6.07 hereof or the Sale and
Servicing Agreement, to the Master Servicer for amounts due under the
Sale and Servicing Agreement and to the Custodian for amounts due under
Section 3.4 of the Custodial Agreement;
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SECOND: to the Noteholders for amounts due and unpaid on the
Notes with respect to interest (not including any Basis Risk Shortfall
Carry-Forward Amounts), first, to the Class I-A Noteholders and Class
II-A Noteholders, second, to the Class I-M-1 Noteholders and Class
II-M-1 Noteholders, third, to the Class II-M-1 Noteholders and Class
II-M-2 Noteholders and fourth, to the Class I-B Noteholders and Class
II-B Noteholders according to the amounts due and payable on the Notes
for interest;
THIRD: to the Noteholders for amounts due and unpaid on the
Notes with respect to principal, and to each Noteholder ratably,
without preference or priority of any kind, according to the amounts
due and payable on such Notes for principal, until the Note Principal
Balance of each such Class is reduced to zero;
FOURTH: to the Noteholders, first to the Class I-M-1
Noteholders and Class II-M-1 Noteholders, second to the Class I-M-2
Noteholders and Class II-M-2 Noteholders and third, to the Class I-B
Noteholders and Class II-B Noteholders, the amount of any related
Allocated Realized Loss Amount not previously paid;
FIFTH: to the Noteholders for amounts due and unpaid on the
Notes with respect to any related Basis Risk Shortfall Carry-Forward
Amounts, (x) from amount remaining with respect to the Group I Loans,
first, to the Class I-A Noteholders, second, to the Class I-M-1
Noteholders, third, to the Class I-M-2 Noteholders and fourth, to the
Class I-B Noteholders and (y) from amount remaining with respect to the
Group II Loans, first, to the Class II-A Noteholders, second, to the
Class II-M-1 Noteholders, third, to the Class II-M-2 Noteholders and
fourth, to the Class II-B Noteholders; and
SIXTH: to the payment of the remainder, if any to the
Certificate Paying Agent on behalf of the Issuer or to any other person
legally entitled thereto.
The Indenture Trustee may fix a record date and Payment Date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the Payment Date and the amount to be paid.
Section 5.05 OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may elect to take and maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Noteholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Notes and other obligations of the Issuer and, the Indenture
Trustee shall take such desire into account when determining whether or not to
take and maintain possession of the Trust Estate. In determining whether to take
and maintain possession of the Trust Estate, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.
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Section 5.06 LIMITATION OF SUITS. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 10.16 hereof
(i) such Holder has previously given written notice
to the Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the
aggregate Note Principal Balances of the Notes have made a written
request to the Indenture Trustee to institute such Proceeding in
respect of such Event of Default in its own name as Indenture Trustee
hereunder;
(iii) such Holder or Holders have offered to the
Indenture Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its
receipt of such notice of request and offer of indemnity has failed to
institute such Proceedings; and
(v) no direction inconsistent with such written
request has been given to the Indenture Trustee during such 60-day
period by the Holders of a majority of the Note Principal Balances of
the Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
Subject to the last paragraph of Section 5.11 herein, in the event the
Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Notes, each representing less
than a majority of the Note Principal Balances of the Notes, the Indenture
Trustee shall take such action as requested by the Holders representing the
highest amount (in the aggregate) of Note Principal Balances notwithstanding any
other provisions of this Indenture.
Section 5.07 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
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Section 5.08 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
Section 5.09 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
Section 5.11 CONTROL BY NOTEHOLDERS. The Holders of a majority of the
aggregate Note Principal Balances of Notes shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee (subject to the Indenture Trustee's right to
receive indemnity, as provided herein); provided that:
(i) such direction shall not be in conflict with any
rule of law or with this Indenture;
(ii) any direction to the Indenture Trustee to sell
or liquidate the Trust Estate shall be by Holders of Notes representing
not less than 100% of the Note Principal Balances of the Notes; and
(iii) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not inconsistent with
such direction of the Holders of Notes representing a majority of the
Note Principal Balances of the Notes.
Notwithstanding the rights of Noteholders set forth in this Section 5.11 the
Indenture Trustee need not take any action that it deems unduly prejudicial to
any Noteholder or that it determines might subject it to liability.
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Section 5.12 WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02 hereof,
the Holders of Notes representing not less than a majority of the aggregate Note
Principal Balance of the Notes may waive any past Event of Default and its
consequences except an Event of Default (a) with respect to payment of principal
of or interest on any of the Notes or (b) in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the Holder of
each Note. In the case of any such waiver, the Issuer, the Indenture Trustee and
the Holders of the Notes shall be restored to their former positions and rights
hereunder, respectively, but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Section 5.13 UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Note and each Beneficial Owner of any interest
therein by such ▇▇▇▇▇▇'s or Beneficial Owner's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the Note
Principal Balances of the Notes or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture.
Section 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
Section 5.15 SALE OF TRUST ESTATE. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 hereof is expressly subject to the provisions of Section 5.05
hereof and this Section 5.15. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all amounts payable on the Notes and under this
Indenture 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.
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The Indenture Trustee hereby expressly waives its right to any amount fixed by
law as compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless
(1) the Holders of all Notes consent to or direct the
Indenture Trustee to make, such Sale, or
(2) the proceeds of such Sale would be not less than the
entire amount which would be payable to the Noteholders under the
Notes, in full payment thereof in accordance with Section 5.02 hereof,
on the Payment Date next succeeding the date of such Sale, or
(3) the Indenture Trustee determines that the conditions for
retention of the Trust Estate set forth in Section 5.05 hereof cannot
be satisfied (in making any such determination, the Indenture Trustee
may rely upon an opinion of an Independent investment banking firm
obtained and delivered as provided in Section 5.05 hereof) and the
Holders of Notes representing at least 66-2/3% of the Note Principal
Balances of the Notes consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) Unless the Holders representing at least 66-2/3% of the Note
Principal Balances of the 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 (2) of subsection (b) of this Section 5.15 has not been established by
the Indenture Trustee and no Person bids an amount equal to or greater than such
amount, the Indenture Trustee, acting in its capacity as Indenture Trustee on
behalf of the Noteholders, shall 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.
(d) In connection with a Sale of all or any portion of the Trust
Estate,
(1) 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 Notes or claims for interest thereon in lieu of cash up to
the amount which shall, upon distribution of the net proceeds of such
sale, be payable thereon, and such Notes, in case the amounts so
payable thereon shall be less than the amount due thereon, shall be
returned to the Holders thereof after being appropriately stamped to
show such partial payment;
(2) the Indenture Trustee, may bid for and acquire the
property offered for Sale in connection with any Sale thereof, and,
subject to any requirements of, and to the extent
35
permitted by, applicable law in connection therewith, may purchase all
or any portion of the Trust Estate in a private sale, and, in lieu of
paying cash therefor, may make settlement for the purchase price by
crediting the gross Sale price against the sum of (A) the amount which
would be distributable to the Holders of the Notes and Holders of
Certificates as a result of such sale 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;
(3) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance, prepared by the Issuer and
satisfactory to the Indenture Trustee, transferring its interest in any
portion of the Trust Estate in connection with a Sale thereof;
(4) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney- in-fact of the Issuer to transfer and convey its
interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale shall be bound
to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any monies.
Section 5.16 ACTION ON NOTES. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b) hereof.
Section 5.17 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Indenture Trustee to do so, the Issuer in
its capacity as holder of the Mortgage Loans, shall take all such lawful action
as the Indenture Trustee may request to cause the Issuer to compel or secure the
performance and observance by the Seller and the Master Servicer, as applicable,
of each of their obligations to the Issuer under or in connection with the
Mortgage Loan Purchase Agreement and the Sale and Servicing Agreement, and to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with the Mortgage Loan Purchase Agreement
and the Sale and Servicing Agreement to the extent and in the manner directed by
the Indenture Trustee, as pledgee of the Mortgage Loans, including the
transmission of notices of default on the part of the Seller or the Master
Servicer thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by the Seller or the Master Servicer
of each of their obligations under the Mortgage Loan Purchase Agreement and the
Sale and Servicing Agreement.
36
(b) The Indenture Trustee, as pledgee of the Mortgage Loans, may, and
at the direction (which direction shall be in writing or by telephone (confirmed
in writing promptly thereafter)) of the Holders of 66-2/3% of the Note Principal
Balances of the Notes (subject to Section 6.02(k)) shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller or the
Master Servicer under or in connection with the Mortgage Loan Purchase Agreement
and the Sale and Servicing Agreement, including the right or power to take any
action to compel or secure performance or observance by the Seller or the Master
Servicer, as the case may be, of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Mortgage Loan Purchase Agreement and the Sale and
Servicing Agreement, as the case may be, and any right of the Issuer to take
such action shall not be suspended.
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ARTICLE VI
The Indenture Trustee and Securities Administrator
Section 6.01 DUTIES OF INDENTURE TRUSTEE AND SECURITIES ADMINISTRATOR.
(a) If an Event of Default of which the Indenture Trustee has actual knowledge
or has received written notice has occurred and is continuing, the Indenture
Trustee shall exercise the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default of which the
Indenture Trustee has actual knowledge or has received written notice, in the
case of the Indenture Trustee and, at any time, in the case of the Securities
Administrator:
(i) the Indenture Trustee and the Securities
Administrator undertake to perform such duties and only such duties as
are specifically set forth in this Indenture and the other Basic
Documents to which it is a party and no implied covenants or
obligations shall be read into this Indenture and the other Basic
Documents against the Indenture Trustee or the Securities
Administrator; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee and the Securities Administrator may each
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to each of the Indenture Trustee and the Securities
Administrator and conforming to the requirements of this Indenture;
however, the Indenture Trustee and the Securities Administrator shall
each examine the certificates and opinions to determine whether or not
they conform on their face to the requirements of this Indenture.
(c) The Indenture Trustee and the Securities Administrator may not be
relieved from liability for each of its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section 6.01;
(ii) neither the Indenture Trustee nor the Securities
Administrator shall be liable for any error of judgment made in good
faith by a Responsible Officer unless it is proved that the Indenture
Trustee or the Securities Administrator was negligent in ascertaining
the pertinent facts; and
(iii) neither the Indenture Trustee nor the
Securities Administrator shall be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it from Noteholders or from the Issuer, which they are
entitled to give under the Basic Documents.
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(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other trust funds except to the extent required by law or the terms of this
Indenture, the Sale and Servicing Agreement or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee
or the Securities Administrator to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties hereunder or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or indemnity satisfactory to it
against such risk or liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
(h) The Indenture Trustee shall act in accordance with Sections 6.03
and 6.04 of the Sale and Servicing Agreement and shall act as successor to the
Master Servicer or appoint a successor Master Servicer in accordance with
Section 6.02 of the Sale and Servicing Agreement.
Section 6.02 RIGHTS OF INDENTURE TRUSTEE AND SECURITIES ADMINISTRATOR.
Except as provided in Section 6.01: (a) The Indenture Trustee and the Securities
Administrator may rely on any document believed by it to be genuine and to have
been signed or presented by the proper person. The Indenture Trustee and the
Securities Administrator need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee or the Securities Administrator acts
or refrains from acting, it may require an Officer's Certificate or an Opinion
of Counsel. Neither the Indenture Trustee nor the Securities Administrator shall
be liable for any action it takes or omits to take in good faith in reliance on
an Officer's Certificate or Opinion of Counsel.
(c) Neither the Indenture Trustee nor the Securities Administrator
shall be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers; PROVIDED, HOWEVER,
that the Indenture Trustee's or Securities Administrator's conduct does not
constitute willful misconduct, negligence or bad faith.
(d) The Indenture Trustee or the Securities Administrator may each
consult with counsel, and the advice or Opinion of Counsel (which shall not be
at the expense of the Indenture Trustee or the Securities Administrator) with
respect to legal matters relating to this Indenture and the Notes shall be full
and complete authorization and protection from liability in respect to any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(e) For the limited purpose of effecting any action to be undertaken by
each of the Indenture Trustee and the Securities Administrator, but not
specifically as a duty of the Indenture
39
Trustee or the Securities Administrator in the Indenture, each of the Indenture
Trustee and the Securities Administrator may execute any of the trusts or powers
hereunder or perform any duties hereunder, either directly or by or through
agents, attorneys, custodians or nominees appointed with due care, and shall not
be responsible for any willful misconduct or negligence on the part of any
agent, attorney, custodian or nominee so appointed.
(f) The Indenture Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Indenture Trustee's
economic self-interest for (i) serving as investment adviser, administrator,
shareholder servicing agent, custodian or sub-custodian with respect to certain
of the Permitted Investments, (ii) using Affiliates to effect transactions in
certain Permitted Investments and (iii) effecting transactions in certain
Permitted Investments. Such compensation shall not be considered an amount that
is reimbursable or payable to the Indenture Trustee (i) pursuant to Sections
3.05(d), 5.04(b) or 6.07 hereunder or (ii) out of Available Funds.
(g) Anything in this Indenture to the contrary notwithstanding, in no
event shall the Indenture Trustee or the Securities Administrator be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Indenture Trustee or
the Securities Administrator, respectively, has been advised of the likelihood
of such loss or damage and regardless of the form of action.
(h) None of the Securities Administrator, the Issuer or the Indenture
Trustee shall be responsible for the acts or omissions of the other, it being
understood that this Indenture shall not be construed to render them partners,
joint venturers or agents of one another.
(i) Neither the Indenture Trustee nor the Securities Administrator
shall be required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it, and none of the provisions contained in this
Indenture shall in any event require the Indenture Trustee or the Securities
Administrator to perform, or be responsible for the manner of performance of,
any of the obligations of the Master Servicer under the Sale and Servicing
Agreement, except during such time, if any, as the Indenture Trustee shall be
the successor to, and be vested with the rights, duties, powers and privileges
of, the Master Servicer in accordance with the terms of the Sale and Servicing
Agreement.
(j) Except for those actions that the Indenture Trustee or the
Securities Administrator are required to take hereunder, neither the Indenture
Trustee nor the Securities Administrator shall have any obligation or liability
to take any action or to refrain from taking any action hereunder in the absence
of written direction as provided hereunder.
(k) Neither the Indenture Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers vested in
it by this Indenture, other than its obligation to give notices pursuant to 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
pursuant to the provisions of this Indenture, unless such Noteholders shall have
offered to the Indenture Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be
40
incurred therein or thereby. Nothing contained herein shall, however, relieve
the Indenture Trustee of the obligation, upon the occurrence of an Event of
Default of which a Responsible Officer of the Indenture Trustee has actual
knowledge (which has not been cured or waived), to exercise such of the rights
and powers vested in it by this Indenture and to use the same degree of care and
skill in their exercise as a prudent person would exercise under the
circumstances in the conduct of his own affairs.
(l) Neither the Indenture Trustee nor the Securities Administrator
shall 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 Holders of Notes representing not less than 25%
of the Note Principal Balance of the Notes and provided that the payment within
a reasonable time to the Indenture Trustee or the Securities Administrator, as
applicable, 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 or
the Securities Administrator, as applicable, reasonably assured to the Indenture
Trustee or the Securities Administrator, as applicable, by the security afforded
to it by the terms of this Indenture. The Indenture Trustee or the Securities
Administrator may require reasonable indemnity against such expense or liability
as a condition to taking any such action. The reasonable expense of every such
examination shall be paid by the Noteholders requesting the investigation.
(m) Should the Indenture Trustee or the Securities Administrator deem
the nature of any action required on its part to be unclear, the Indenture
Trustee or the Securities Administrator, respectively, may require prior to such
action that it be provided by the Depositor with reasonable further
instructions.
(n) The right of the Indenture Trustee or the Securities Administrator
to perform any discretionary act enumerated in this Indenture shall not be
construed as a duty, and neither the Indenture Trustee nor the Securities
Administrator shall be accountable for other than its negligence or willful
misconduct in the performance of any such act.
(o) Neither the Indenture Trustee nor the Securities Administrator
shall be required to give any bond or surety with respect to the execution of
the trust created hereby or the powers granted hereunder.
(p) Neither the Indenture Trustee nor the Securities Administrator
shall have any duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Mortgage Loan by the
Seller pursuant to this Indenture or the Mortgage Loan Purchase Agreement, as
applicable, or the eligibility of any Mortgage Loan for purposes of this
Indenture.
(q) The Indenture Trustee shall not be deemed to have notice or actual
knowledge of any Event of Default unless actually known to a Responsible Officer
of the Indenture Trustee or written notice thereof (making reference to this
Indenture or the Notes) is received by the Indenture Trustee at the Corporate
Trust Office.
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Section 6.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee, subject to the
requirements of the Trust Indenture Act. Any Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Indenture Trustee
must comply with Sections 6.11 and 6.12 hereof.
(b) The Securities Administrator in its individual or any other
capacity may become the owner or pledgee of Notes and may otherwise deal with
the Issuer or its Affiliates with the same rights it would have if it were not
Securities Administrator, subject to the requirements of the Trust Indenture
Act.
Section 6.04 INDENTURE TRUSTEE'S AND SECURITIES ADMINISTRATOR'S
DISCLAIMERS. Neither the Indenture Trustee nor the Securities Administrator
shall be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the Notes or the other Basic Documents, neither
shall be accountable for the Issuer's use of the proceeds from the Notes, and
neither shall be responsible for any statement of the Issuer in the Indenture or
in any document issued in connection with the sale of the Notes or in the Notes
other than, with respect to the Indenture Trustee only, the Indenture Trustee's
certificate of authentication.
Section 6.05 NOTICE OF EVENT OF DEFAULT. Subject to Section 5.01, the
Indenture Trustee shall promptly mail to each Noteholder notice of the Event of
Default after a Responsible Officer of the Indenture Trustee obtains actual
knowledge or written notice of such event, unless such Event of Default shall
have been waived or cured. Except in the case of an Event of Default in payment
of principal of or interest on any Note, the Indenture Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
Section 6.06 REPORTS BY INDENTURE TRUSTEE TO HOLDERS AND TAX
ADMINISTRATION. The Securities Administrator shall deliver to each Noteholder
such information as may be required and such other customary information as the
Securities Administrator may determine and/or to be required by the Internal
Revenue Service or by a federal or state law or rules or regulations to enable
such holder to prepare its federal and state income tax returns.
The Securities Administrator shall prepare and file (or cause to be
prepared and filed), on behalf of the Owner Trustee, all tax returns (if any)
and information reports, tax elections and such annual or other reports of the
Issuer as are necessary for preparation of tax returns and information reports
as provided in Section 5.03 of the Trust Agreement, including without limitation
Form 1099. All tax returns and information reports shall be signed by the Owner
Trustee as provided in Section 5.03 of the Trust Agreement.
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Section 6.07 COMPENSATION. The fees of the Indenture Trustee shall be
paid by the Securities Administrator pursuant to a separate agreement between
the Indenture Trustee and Securities Administrator. In addition, the Indenture
Trustee and the Securities Administrator will each be entitled to recover from
the Payment Account pursuant to Section 4.05(a) of the Sale and Servicing
Agreement all reasonable out-of-pocket expenses, disbursements and advances and
the expenses of the Indenture Trustee and the Securities Administrator,
respectively, in connection with any breach of this Agreement or any claim or
legal action (including any pending or threatened claim or legal action) or
otherwise incurred or made by the Indenture Trustee or the Securities
Administrator, respectively, in the administration of the trusts hereunder
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from its
negligence or intentional misconduct or which is the responsibility of the
Noteholders as provided herein. Such compensation and reimbursement obligation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust. Additionally, each of the Indenture Trustee and the
Securities Administrator and any director, officer, employee or agent of the
Indenture Trustee or the Securities Administrator shall be indemnified by the
Trust and held harmless against any loss, liability or expense (including
reasonable attorney's fees and expenses) incurred in the administration of this
Agreement (other than its ordinary out of pocket expenses incurred hereunder) or
in connection with any claim or legal action relating to (a) the Basic
Agreements or (b) the Notes, other than any loss, liability or expense incurred
by reason of its negligence or intentional misconduct, or which is the
responsibility of the Noteholders as provided herein. Such indemnity and
agreement to hold harmless shall survive the termination of this Agreement or
the resignation or removal of the Indenture Trustee and the Securities
Administrator, as applicable, hereunder.
The Issuer's payment obligations to the Indenture Trustee and
Securities Administrator pursuant to this Section 6.07 shall survive the
discharge of this Indenture and the termination or resignation of the Indenture
Trustee or Securities Administrator. When the Indenture Trustee or the
Securities Administrator incurs expenses after the occurrence of an Event of
Default with respect to the Issuer, the expenses are intended to constitute
expenses of administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.
Section 6.08 REPLACEMENT OF INDENTURE TRUSTEE AND THE SECURITIES
ADMINISTRATOR. No resignation or removal of the Indenture Trustee or the
Securities Administrator and no appointment of a successor Indenture Trustee or
successor Securities Administrator shall become effective until the acceptance
of appointment by the successor Indenture Trustee or successor Securities
Administrator pursuant to this Section 6.08. The Indenture Trustee or the
Securities Administrator may resign at any time by so notifying the Issuer.
Holders of a majority of Note Principal Balances of the Notes may remove either
of the Indenture Trustee or the Securities Administrator by so notifying the
Indenture Trustee or the Securities Administrator and may appoint a successor
Indenture Trustee or successor Securities Administrator. The Issuer shall remove
the Indenture Trustee or the Securities Administrator, as applicable, if:
(i) the Indenture Trustee or the Securities
Administrator fails to comply with Section 6.11 hereof;
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(ii) the Indenture Trustee or the Securities
Administrator is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge
of the Indenture Trustee or the Securities Administrator or its
property; or
(iv) the Indenture Trustee or the Securities
Administrator otherwise becomes incapable of acting.
If the Indenture Trustee or the Securities Administrator resigns or is
removed or if a vacancy exists in the office of the Indenture Trustee or the
Securities Administrator for any reason (the Indenture Trustee or the Securities
Administrator in such event being referred to herein as the retiring Indenture
Trustee or the retiring Securities Administrator), the Issuer shall promptly
appoint a successor Indenture Trustee or successor Securities Administrator.
Each of a successor Indenture Trustee or successor Securities
Administrator shall deliver a written acceptance of its appointment to the
retiring Indenture Trustee or the retiring Securities Administrator, as
applicable, and to the Issuer. Thereupon, the resignation or removal of the
retiring Indenture Trustee or the retiring Securities Administrator shall become
effective, and the successor Indenture Trustee or successor Securities
Administrator shall have all the rights, powers and duties of the Indenture
Trustee or the Securities Administrator, as applicable, under this Indenture.
The successor Indenture Trustee or successor Securities Administrator shall each
mail a notice of its succession to Noteholders. The retiring Indenture Trustee
or the retiring Securities Administrator shall promptly transfer all property
held by it as Indenture Trustee or Securities Administrator, as applicable, to
the successor Indenture Trustee or successor Securities Administrator.
If a successor Indenture Trustee or successor Securities Administrator
does not take office within 60 days after the retiring Indenture Trustee or the
retiring Securities Administrator, as applicable, resigns or is removed, the
retiring Indenture Trustee or the retiring Securities Administrator, the Issuer
or the Holders of a majority of Note Principal Balances of the Notes may
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee or successor Securities Administrator.
Notwithstanding the replacement of the Indenture Trustee or the
Securities Administrator pursuant to this Section, the Issuer's obligations
under Section 6.07 shall continue for the benefit of the retiring Indenture
Trustee or the retiring Securities Administrator.
Section 6.09 SUCCESSOR INDENTURE TRUSTEE AND SECURITIES ADMINISTRATOR
BY MERGER. If the Indenture Trustee or the Securities Administrator consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation, without any
further act, shall be the successor Indenture Trustee or successor Securities
Administrator, as applicable; provided, that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11 hereof.
The Indenture Trustee and the Securities Administrator shall each provide the
Rating Agencies with prior written notice of any such transaction.
44
If at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture and any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee and deliver such Notes so
authenticated; and if at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is in the Notes or in this Indenture provided
that the certificate of the Indenture Trustee shall have.
Section 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Indenture Trustee shall be conferred or
imposed upon and exercised or performed by the Indenture Trustee and
such separate trustee or co-trustee jointly (it being understood that
such separate trustee or co-trustee is not authorized to act separately
without the Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular
act or acts are to be performed the Indenture Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Indenture
Trustee;
(ii) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept
the resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its
45
instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11 ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
and the Securities Administrator shall each have a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published annual report
of condition and it or its parent shall have a long-term debt rating of Baa3 or
better by ▇▇▇▇▇'▇ and BBB or better by Standard & Poor's. The Indenture Trustee
shall comply with TIA ss. 310(b), including the optional provision permitted by
the second sentence of TIA ss. 310(b)(9); PROVIDED, HOWEVER, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA ss. 310(b)(1) are met.
Section 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13 REPRESENTATIONS AND WARRANTIES. The Indenture Trustee
hereby represents that:
(i) The Indenture Trustee is duly organized and
validly existing as a national banking association in good standing
under the laws of the United States with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted;
(ii) The Indenture Trustee has the power and
authority to execute and deliver this Indenture and to carry out its
terms; and the execution, delivery and performance of this Indenture
have been duly authorized by the Indenture Trustee by all necessary
corporate action;
(iii) The consummation of the transactions
contemplated by this Indenture and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default under, the articles of incorporation or bylaws of the
Indenture Trustee or any agreement or other instrument to which the
Indenture Trustee is a party or by which it is bound; and
(iv) There are no proceedings or investigations
pending or to, the Indenture Trustee's knowledge, threatened before any
court, regulatory body, administrative agency
46
or other governmental instrumentality having jurisdiction over the
Indenture Trustee or its properties: (A) asserting the invalidity of
this Indenture (B) seeking to prevent the consummation of any of the
transactions contemplated by this Indenture or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Indenture Trustee of its obligations under, or the
validity or enforceability of, this Indenture.
Section 6.14 DIRECTIONS TO INDENTURE TRUSTEE. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the assets of
the Trust Estate in trust for the Noteholders;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibits A-1 and A-2 to this Indenture in accordance with the
terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture and the Sale and Servicing Agreement.
Section 6.15 THE AGENTS. The provisions of this Indenture relating to
the limitations of the Indenture Trustee's liability and to its rights and
protections shall inure also to the Paying Agent, Note Registrar and Certificate
Registrar.
Section 6.16 OTHER BASIC DOCUMENTS. The Indenture Trustee is hereby
authorized and directed to execute and deliver the Sale and Servicing Agreement
and any other Basic Documents (other than this Indenture) naming it as a party.
The Indenture Trustee shall not be responsible for the sufficiency of the terms
of any of the Basic Documents. In entering into and acting under the other Basic
Documents, the Indenture Trustee shall be entitled to all of the rights,
immunities, indemnities and other protections set forth in this Article VI.
47
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Notes as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; PROVIDED, HOWEVER,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished to the Indenture Trustee.
Section 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 hereof and the names and addresses of Holders of Notes received
by the Indenture Trustee in its capacity as Note Registrar. The Indenture
Trustee may destroy any list furnished to it as provided in such Section 7.01
upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA ss. 312(c).
Section 7.03 STATEMENTS TO NOTEHOLDERS. (a) With respect to each
Payment Date, the Securities Administrator shall make available to each
Noteholder and each Certificateholder, the Depositor, the Owner Trustee, the
Indenture Trustee, the Certificate Paying Agent and each Rating Agency, a
statement setting forth the following information as to the Notes, to the extent
applicable:
(i) the Note Principal Balance of each Class of Notes
immediately prior to such Payment Date;
(ii) the Group I Available Funds, Group II Available
Funds and Net Monthly Excess Cash Flow, with respect to Loan Group I
and Loan Group II, payable to each Class of Noteholders for such
Payment Date, and the Basis Risk Shortfall Carry-Forward Amount on each
Class of Notes for such Payment Date;
(iii) the amount of such distribution to each Class
of Notes applied to reduce the Note Principal Balance thereof;
(iv) the amount of such distribution to Holders of
each Class of Notes allocable to interest and the aggregate amount of
Accrued Note Interest with respect to each Class during the related
Accrual Period;
48
(v) the Note Rates for each Class of Notes with
respect to such Payment Date;
(vi) the Note Principal Balance of each Class of
Notes immediately after such Payment Date;
(vii) the amount of such distribution to the
Certificates;
(viii) the number and the aggregate Scheduled
Principal Balance of the Mortgage Loans in each Loan Group and in the
aggregate as of the end of the related Due Period;
(ix) the amount of Scheduled Principal and Principal
Prepayments, (including but separately identifying the principal amount
of Principal Prepayments, Insurance Proceeds, the purchase price in
connection with the purchase of Mortgage Loans, cash deposits in
connection with substitutions of Mortgage Loans and Excess Liquidation
Proceeds) and the number and principal balance of Mortgage Loans
purchased or substituted for during the relevant period and
cumulatively since the Cut-off Date for each Loan Group and in the
aggregate;
(x) the aggregate Note Principal Balance of each
Class of Notes, after giving effect to the amounts distributed on such
Payment Date, separately identifying any reduction thereof due to
Realized Losses other than pursuant to an actual distribution of
principal and the aggregate Note Principal Balance of the Group I
Notes, the Group II Notes and the Notes in the aggregate after giving
effect to the distribution of principal on such Payment Date;
(xi) information regarding any Mortgage Loan
delinquencies as of the end of the related Prepayment Period, including
the aggregate number and aggregate Outstanding Principal Balance of
Mortgage Loans (a) delinquent 30 to 59 days on a contractual basis, (b)
delinquent 60 to 89 days on a contractual basis, and (c) delinquent 90
or more days on a contractual basis, in each case as of the close of
business on the last Business Day of the immediately preceding month,
for each Loan Group and in the aggregate;
(xii) the Overcollateralization Increase Amount with
respect to each Loan Group, Overcollateralization Target Amount with
respect to each Loan Group and Overcollateralized Amount with respect
to each Loan Group, if any, in each case as the end of the related
Payment Date;
(xiii) the amount of any Monthly Advances,
Compensating Interest Payments and outstanding unreimbursed advances by
the Master Servicer or Servicer;
(xiv) the aggregate Realized Losses with respect to
the related Payment Date and cumulative Realized Losses since the
Closing Date, for each Loan Group and in the aggregate;
49
(xv) with respect to each Mortgage Loan which
incurred a Realized Loss during the related Prepayment Period, (i) the
loan number, (ii) the Scheduled Principal Balance of such Mortgage Loan
as of the Cut-off Date, (ii) the Scheduled Principal Balance of such
Mortgage Loan as of the beginning of the related Due Period, (iii) the
Excess Liquidation Proceeds with respect to such Mortgage Loan and (iv)
the amount of the Realized Loss with respect to such Mortgage Loan;
(xvi) the number and aggregate Scheduled Principal
Balance of Mortgage Loans repurchased by the Seller pursuant to the
Mortgage Loan Purchase Agreement for the related Payment Date and
cumulatively since the Closing Date determined in the aggregate for
each Loan Group and in the aggregate;
(xvii) the number and aggregate Outstanding Principal
Balance of all Mortgage Loans as to which the Mortgaged Property was
REO Property as of the end of the related Due Period for each Loan
Group and in the aggregate;
(xviii) the book value (the sum of (A) the
Outstanding Principal Balance of the Mortgage Loan, (B) accrued
interest through the date of foreclosure and (C) foreclosure expenses)
of any REO Property; provided that, in the event that such information
is not available to the Securities Administrator on the Payment Date,
such information shall be furnished promptly after it becomes
available;
(xix) the Average Loss Severity Percentage;
(xx) the number of Mortgage Loans in the foreclosure
process as of the end of the related Due Period and the aggregate
Outstanding Principal Balance of such Mortgage Loans for each Loan
Group and in the aggregate;
(xxi) the amount of any Interest Shortfalls less any
Compensating Interest paid by the Servicer or Master Servicer to cover
Interest Shortfalls for such Payment Date;
(xxii) the aggregate Scheduled Principal Balance of
Mortgage Loans purchased by the Servicer pursuant to Section 3.21 of
the Sale and Servicing Agreement for the related Payment Date and
cumulatively since the Closing Date for each Loan Group and in the
aggregate;
(xxiii) the aggregate Scheduled Principal Balance of
defaulted Mortgage Loans sold by the Servicer pursuant to Section 3.13
of the Sale and Servicing Agreement or Section 4.03 of the HomeBanc
Servicing Agreement for the related Payment Date and cumulatively since
the Closing Date for each Loan Group and in the aggregate; and
(xxiv) whether a Servicing Termination Trigger has
occurred.
In addition, by January 31 of each calendar year following any year
during which the Notes are outstanding, the Securities Administrator shall
furnish a report to each Noteholder of record if
50
so requested in writing at any time during each calendar year as to the
aggregate of amounts reported pursuant to (iii) and (iv) with respect to the
Notes for such calendar year.
The Securities Administrator may conclusively rely upon the information
provided by the Master Servicer pursuant to Section 3.01 of the Sale and
Servicing Agreement in its preparation of monthly statements to Noteholders. In
addition, the Securities Administrator shall furnish statements to
Certificateholders on each Payment Date in accordance with Section 5.04 of the
Trust Agreement.
The Securities Administrator may make available each month, to any
interested party, the monthly statement to Noteholders via the Securities
Administrator's website initially located at "▇▇▇.▇▇▇▇▇▇▇.▇▇▇." Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇. Parties that are unable to use the
above distribution option are entitled to have a paper copy mailed to them via
first class mail by calling the Securities Administrator's customer service desk
and indicating such. The Securities Administrator shall have the right to change
the way such reports are distributed in order to make such distribution more
convenient and/or more accessible to the parties, and the Securities
Administrator shall provide timely and adequate notification to all parties
regarding any such change.
To the extent timely received from the Securities Administrator, the
Indenture Trustee will also make monthly statements available each month to
Noteholders and Certificateholders via the Indenture Trustee's internet website.
The Indenture Trustee's internet website will initially be located at
"▇▇▇▇▇://▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇.▇▇▇". Assistance in using the Indenture
Trustee's website service can be obtained by calling the Indenture Trustee's
customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇.
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ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01 COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02 RESERVED.
Section 8.03 OFFICER'S CERTIFICATE. The Indenture Trustee shall receive
at least seven Business Days' notice when requested by the Issuer to take any
action pursuant to Section 8.05(a) hereof, accompanied by copies of any
instruments to be executed, and the Indenture Trustee shall, except in the case
of a repurchase of a Mortgage Loan pursuant to Sections 2.02 or 3.21 of the Sale
and Servicing Agreement, also require, as a condition to such action, an
Officer's Certificate, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with.
Section 8.04 TERMINATION UPON DISTRIBUTION TO NOTEHOLDERS. This
Indenture and the respective obligations and responsibilities of the Issuer, the
Securities Administrator and the Indenture Trustee created hereby shall
terminate upon the distribution to Noteholders, the Certificate Paying Agent on
behalf of the Certificateholders, the Securities Administrator and the Indenture
Trustee of all amounts required to be distributed pursuant to Article III;
PROVIDED, HOWEVER, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to
the Court of St. ▇▇▇▇▇, living on the date hereof.
Section 8.05 RELEASE OF TRUST ESTATE. (a) Subject to the payment of its
fees, expenses and indemnities, the Indenture Trustee may, and when required by
the provisions of this Indenture shall, execute instruments to release property
from the lien of this Indenture, or convey the Indenture Trustee's interest in
the same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture, including for the purposes of any repurchase by
the Seller of a Mortgage Loan pursuant to Section 2.02 of the Sale and Servicing
Agreement or any repurchase by the Servicer of a Mortgage Loan pursuant to
Section 3.21 of the Sale and Servicing Agreement; provided, however, any such
conveyance shall be without recourse to the Indenture Trustee and without any
obligation on its part to make any representations or warranties with respect to
such property released from the lien of this Indenture. No party relying upon an
instrument executed by
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the Indenture Trustee as provided in Article VIII hereunder shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent, or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding and (ii) all sums due to the Indenture Trustee pursuant to this
Indenture have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuer which, except in the case of a repurchase of a Mortgage Loan pursuant to
Sections 2.02 or 3.21 of the Sale and Servicing Agreement, shall also be
accompanied by an Officers' Certificate and an Opinion of Counsel stating that
all applicable requirements have been satisfied.
Section 8.06 SURRENDER OF NOTES UPON FINAL PAYMENT. By acceptance of
any Note, the Holder thereof agrees to surrender such Note to the Indenture
Trustee promptly, prior to such Noteholder's receipt of the final payment
thereon.
Section 8.07 OPTIONAL REDEMPTION OF THE NOTES. (a) The Holder of the
Certificates, or, if there is no single Holder, the Majority Certificateholder,
shall have the option to redeem the Notes in whole, but not in part, on any
Payment Date on or after the Payment Date on which the aggregate Scheduled
Principal Balance of the Mortgage Loans as of the end of the prior Due Period is
less than or equal to 20% of the aggregate Scheduled Principal Balance of the
Mortgage Loans as of the Cut- off Date. The aggregate redemption price for the
Notes will be equal to the unpaid Note Principal Balance of the Notes as of the
Payment Date on which the proposed redemption will take place in accordance with
the foregoing, together with accrued and unpaid interest thereon at the
applicable Note Interest Rate through such Payment Date (including any Basis
Risk Shortfall Carry-Forward Amounts), plus an amount sufficient to pay in full
all amounts owing to the Indenture Trustee, the Master Servicer and the
Securities Administrator pursuant to any Basic Document (which amounts shall be
specified by such Person in writing upon request of the Issuer, the Master
Servicer and the Securities Administrator, as applicable).
(b) In order to exercise the foregoing option, the Holder of the
Certificates, or the Majority Certificateholder, as applicable, shall provide
written notice of its exercise of such option to the Indenture Trustee, the
Securities Administrator, the Owner Trustee and the Master Servicer at least 15
days prior to its exercise. Following receipt of the notice, the Indenture
Trustee shall provide notice to the Noteholders of the final payment on the
Notes. In addition, the Holder of the Certificates, or the Majority
Certificateholder, as applicable shall, not less than one Business Day prior to
the proposed Payment Date on which such redemption is to be made, deposit the
aggregate redemption price specified in (a) above with the Indenture Trustee,
who shall deposit the aggregate redemption price into the Payment Account and
shall, on the Payment Date after receipt of the funds, apply such funds to make
final payments of principal and interest on the Notes in accordance with the
instructions of the Securities Administrator and Section 3.05 hereof and payment
in full to the Indenture Trustee, and this Indenture shall be discharged subject
to the provisions of Section 4.10 hereof. If for any reason the amount deposited
by the Holder of the Certificates, or the Majority Certificateholder, as
applicable is not sufficient to make such redemption or such redemption cannot
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be completed for any reason, the amount so deposited by the Holder of the
Certificates, or the Majority Certificateholder, as applicable with the
Indenture Trustee shall be immediately returned to the Holder of the
Certificates, or the Majority Certificateholder, as applicable in full and shall
not be used for any other purpose or be deemed to be part of the Trust Estate.
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ARTICLE IX
Supplemental Indentures
Section 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes but with prior notice to the
Rating Agency, the Issuer, the Securities Administrator and the Indenture
Trustee, when authorized by an Issuer Request in the case of the Securities
Administrator and the Indenture Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto (which shall conform to
the provisions of the TIA as in force at the date of the execution thereof), in
form satisfactory to the Indenture Trustee and the Securities Administrator, for
any of the following purposes:
(i) to correct or amplify the description of any
property at any time subject to the lien of this Indenture, or better
to assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subjected to the lien of this Indenture, or
to subject to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with
the applicable provisions hereof, of another person to the Issuer, and
the assumption by any such successor of the covenants of the Issuer
herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge
any property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement
any provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture;
(vi) to make any other provisions with respect to
matters or questions arising under this Indenture or in any
supplemental indenture; provided, that such action shall not materially
and adversely affect the interests of the Holders of the Notes;
(vii) to evidence and provide for the acceptance of
the appointment hereunder by a successor trustee with respect to the
Notes and to add to or change any of the provisions of this Indenture
as shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI hereof; or
(viii) to modify, eliminate or add to the provisions
of this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA;
55
PROVIDED, HOWEVER, that no such indenture supplements shall be entered into
unless the Indenture Trustee and the Securities Administrator shall have
received an Opinion of Counsel not at the expense of the Indenture Trustee or
the Securities Administrator as to the enforceability of any such indenture
supplement against the Issuer and to the effect that (i) such indenture
supplement is authorized or permitted hereunder and (ii) entering into such
indenture supplement will not result in a "significant modification" of the
Notes under Treasury Regulation Section 1.1001-3 or adversely affect the status
of the Notes as indebtedness for federal income tax purposes.
The Indenture Trustee and the Securities Administrator are hereby
authorized to join in the execution of any such supplemental indenture and to
make any further appropriate agreements and stipulations that may be therein
contained.
(b) The Issuer, the Securities Administrator and the Indenture Trustee,
when authorized by an Issuer Request in the case of the Securities Administrator
and the Indenture Trustee and the Indenture Trustee, may, also without the
consent of any of the Holders of the Notes and prior notice to the Rating
Agency, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; PROVIDED, HOWEVER, that
such action as evidenced by an Opinion of Counsel, (i) is authorized or
permitted by this Indenture, and shall not (ii) adversely affect in any material
respect the interests of any Noteholder and (iii) will not cause the Issuer to
be subject to an entity level tax for federal income tax purposes.
Section 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer, the Securities Administrator and the Indenture Trustee, when authorized
by an Issuer Request in the case of the Securities Administrator and the
Indenture Trustee, also may, with prior notice to the Rating Agency and, with
the consent of the Holders of not less than a majority of the Note Principal
Balance of each Class of Notes affected thereby, by Act (as defined in Section
10.03 hereof) of such Holders delivered to the Issuer, the Securities
Administrator and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall, without
the consent of the Holder of each Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal amount
thereof or the interest rate thereon, change the provisions of this
Indenture relating to the application of collections on, or the
proceeds of the sale of, the Trust Estate to payment of principal of or
interest on the Notes, or change any place of payment where, or the
coin or currency in which, any Note or the interest thereon is payable,
or impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any
such amount due on the Notes on or after the respective due dates
thereof;
(ii) reduce the percentage of the Note Principal
Balances of the Notes, the consent of the Holders of which is required
for any such supplemental indenture, or the
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consent of the Holders of which is required for any waiver of
compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this
Indenture;
(iii) modify or alter the provisions of the proviso
to the definition of the term "Outstanding" or modify or alter the
exception in the definition of the term "Holder";
(iv) reduce the percentage of the Note Principal
Balances of the Notes required to direct the Indenture Trustee to
direct the Issuer to sell or liquidate the Trust Estate pursuant to
Section 5.04 hereof;
(v) modify any provision of this Section 9.02 except
to increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the Basic Documents cannot
be modified or waived without the consent of the Holder of each Note
affected thereby;
(vi) modify any of the provisions of this Indenture
in such manner as to affect the calculation of the amount of any
payment of interest or principal due on any Note on any Payment Date
(including the calculation of any of the individual components of such
calculation); or
(vii) permit the creation of any lien ranking prior
to or on a parity with the lien of this Indenture with respect to any
part of the Trust Estate or, except as otherwise permitted or
contemplated herein, terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Note
of the security provided by the lien of this Indenture;
and PROVIDED, FURTHER, that such action shall not, as evidenced by an Opinion of
Counsel, cause the Issuer to be subject to an entity level tax.
Any such action shall not adversely affect in any material respect the
interest of any Holder (other than a Holder who shall consent to such
supplemental indenture) as evidenced by an Opinion of Counsel (provided by, and
at the expense of, the Person requesting such supplemental indenture) delivered
to the Indenture Trustee and the Securities Administrator.
It shall not be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer, the Securities
Administrator and the Indenture Trustee of any supplemental indenture pursuant
to this Section 9.02, the Indenture Trustee shall mail to the Holders of the
Notes to which such amendment or supplemental indenture relates a notice setting
forth in general terms the substance of such supplemental indenture. Any failure
of the Indenture Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
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Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee and the Securities Administrator shall
be entitled to receive, and subject to Sections 6.01 and 6.02 hereof, shall be
fully protected in relying upon, an Opinion of Counsel not at the expense of the
Indenture Trustee or the Securities Administrator stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee and the Securities Administrator each may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's or the Securities Administrator's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Securities Administrator, the
Issuer and the Holders of the Notes shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
Section 9.06 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
Miscellaneous
Section 10.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee or the Securities
Administrator to take any action under any provision of this Indenture, the
Issuer shall furnish to the Indenture Trustee and the Securities Administrator
(i) an Officer's Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with;
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with; and
(5) if the signatory of such certificate or opinion is
required to be Independent, the statement required by the definition of
the term "Independent Certificate".
(b) (i) Prior to the deposit of any Collateral or other
property or securities with the Indenture Trustee that is to be made
the basis for the release of any property or securities subject to the
lien of this Indenture, the Issuer shall, in addition to any obligation
imposed in Section 10.01 (a) or elsewhere in this Indenture, furnish to
the Indenture Trustee an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair
value (within 90 days prior to such deposit) to the Issuer of the
Collateral or other property or securities to be so deposited and a
report from a nationally recognized accounting firm verifying such
value.
(ii) Whenever the Issuer is required to furnish to
the Indenture Trustee an Officer's Certificate certifying or stating
the opinion of any signer thereof as to the matters described in clause
(b)(i) above, the Issuer shall also deliver to the Indenture Trustee an
59
Independent Certificate from a nationally recognized accounting firm as
to the same matters, if the fair value of the securities to be so
deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then current fiscal
year of the Issuer, as set forth in the certificates delivered pursuant
to clause (i) above and this clause (ii), is 10% or more of the Note
Principal Balances of the Notes, but such a certificate need not be
furnished with respect to any securities so deposited, if the fair
value thereof as set forth in the related Officer's Certificate is less
than $25,000 or less than one percent of the Note Principal Balances of
the Notes.
(iii) Whenever any property or securities are to be
released from the lien of this Indenture, the Issuer shall also furnish
to the Indenture Trustee an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair
value (within 90 days prior to such release) of the property or
securities proposed to be released and stating that in the opinion of
such person the proposed release will not impair the security under
this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to
the Indenture Trustee an Officer's Certificate certifying or stating
the opinion of any signer thereof as to the matters described in clause
(iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property or securities released
from the lien of this Indenture since the commencement of the
then-current calendar year, as set forth in the certificates required
by clause (iii) above and this clause (iv), equals 10% or more of the
Note Principal Balances of the Notes, but such certificate need not be
furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the then Note Principal
Balances of the Notes.
Section 10.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Seller or the Issuer, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 10.03 ACTS OF NOTEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section 10.03
hereof.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
Section 10.04 NOTICES ETC., TO INDENTURE TRUSTEE, SECURITIES
ADMINISTRATOR, ISSUER AND RATING AGENCIES. Any request, demand, authorization,
direction, notice, consent, waiver or act of Noteholders or other documents
provided or permitted by this Indenture shall be in writing and if such request,
demand, authorization, direction, notice, consent, waiver or act of Noteholders
is to be made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the
Issuer shall be sufficient for every purpose hereunder if in writing
and made, given, furnished or filed to or
61
with the Indenture Trustee at the Corporate Trust Office. The Indenture
Trustee shall promptly transmit any notice received by it from the
Noteholders to the Issuer;
(ii) the Securities Administrator by any Noteholder
or by the Issuer shall be sufficient for every purpose hereunder if
made, given, furnished or filed in writing to or with the Securities
Administrator at ▇▇▇▇▇ Fargo Bank, National Association, P.O. Box 98,
Columbia Maryland 21046 (or, in the case of overnight deliveries, ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇) (Attention: Corporate
Trust Services - HomeBanc 2004- 1), facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇, or
such other address as may hereafter be furnished to the other parties
hereto in writing. The Securities Administrator shall promptly transmit
any notice received by it from the Noteholders to the Issuer
(iii) the Issuer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in
writing and mailed first-class, postage prepaid to the Issuer addressed
to: HomeBanc Mortgage Trust 2004-1, in care of Wilmington Trust
Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇- ▇▇▇▇, Attention: Corporate Trust Administration, or at
any other address previously furnished in writing to the Indenture
Trustee by the Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agency by the Issuer, the
Indenture Trustee, the Securities Administrator or the Owner Trustee shall be in
writing, mailed first-class postage pre-paid, to, in the case of Standard &
Poor's, at the following address: Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed Surveillance
Department, in the case of Moody's, at the following address: ▇▇▇▇▇'▇ Investors
Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; or at such other
address as shall be designated by written notice to the other parties.
Section 10.05 NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Person's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when
62
such notice is required to be given pursuant to any provision of this Indenture,
then any manner of giving such notice as shall be satisfactory to the Indenture
Trustee shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
Section 10.06 CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA ▇▇.▇▇. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 10.07 EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 10.08 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
Section 10.09 SEPARABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 10.10 [RESERVED].
Section 10.11 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 10.12 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
63
Section 10.13 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 10.14 RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
at its expense (which may be counsel to the Issuer, the Indenture Trustee or any
other counsel reasonably acceptable to the Indenture Trustee) to the effect that
such recording is necessary either for the protection of the Noteholders or any
other Person secured hereunder or for the enforcement of any right or remedy
granted to the Indenture Trustee under this Indenture.
Section 10.15 ISSUER OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Securities
Administrator, the Owner Trustee or the Indenture Trustee on the Notes or under
this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director, employee or
agent of the Indenture Trustee or the Owner Trustee in its individual capacity,
any holder of a beneficial interest in the Issuer, the Securities Administrator,
the Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of Article
VI, VII and VIII of the Trust Agreement.
Section 10.16 NO PETITION. The Indenture Trustee and the Securities
Administrator, by entering into this Indenture, each Noteholder, by accepting a
Note, and each Certificateholder, by accepting a Certificate, hereby covenant
and agree that they will not at any time prior to one year from the date of
termination hereof, institute against the Depositor or the Issuer, or join in
any institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents; provided however, that nothing herein shall prohibit the
Indenture Trustee from filing proofs of claim in any proceeding.
Section 10.17 INSPECTION. The Issuer agrees that, at its expense, on
reasonable prior notice, it shall permit any representative of the Indenture
Trustee or the Securities Administrator, during the Issuer's normal business
hours, to examine all the books of account, records, reports and other papers of
the Issuer, to make copies and extracts therefrom, to cause such books to be
audited by Independent certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers, employees, and
Independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested. The Indenture Trustee shall cause its
64
representatives to hold in confidence all such information except to the extent
disclosure may be required by law, regulation, judicial process or made to the
Indenture Trustee's auditors, regulators, attorneys or other governmental
authorities and except to the extent that the Indenture Trustee or the
Securities Administrator may reasonably determine that such disclosure is
consistent with its obligations hereunder.
65
IN WITNESS WHEREOF, the Issuer, the Indenture Trustee and the
Securities Administrator have caused their names to be signed hereto by their
respective officers thereunto duly authorized, all as of the day and year first
above written.
HOMEBANC MORTGAGE TRUST
2004-1, as Issuer
BY: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Financial Services Officer
U.S. BANK NATIONAL
ASSOCIATION, as
Indenture Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Securities Administrator
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistance Vice President
STATE OF MASSACHUSETTES )
) ss.:
COUNTY OF SUFFOLK )
On this 30th day of July 2004, before me personally appeared ▇▇▇▇▇▇
▇▇▇▇▇▇▇ to me known, who being by me duly sworn, did depose and say, that s/he
is a Vice President of the Indenture Trustee, one of the corporations described
in and which executed the above instrument; and that he signed his name thereto
by like order.
Notary Public
______________________________
NOTARY PUBLIC
[NOTARIAL SEAL]
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this 30th day of July 2004, before me personally appeared ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ to me known, who being by me duly sworn, did depose and say, that s/he is
a Financial Services Officer of the Owner Trustee, one of the entities described
in and which executed the above instrument; and that she signed her name thereto
by like order.
Notary Public
______________________________
NOTARY PUBLIC
[NOTARIAL SEAL]
STATE OF MARYLAND )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On this 30th day of July 2004 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be an Assistant
Vice President of ▇▇▇▇▇ Fargo Bank, National Association, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS [I][II]-A NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE 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 HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE
DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF
THE INDENTURE.
THIS NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS NOTE.
PRINCIPAL OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
A-1-1
HOMEBANC MORTGAGE TRUST 2004-1
MORTGAGE-BACKED NOTES
CLASS [I][II]-A
AGGREGATE NOTE PRINCIPAL NOTE INTEREST
BALANCE: $[ ] RATE: Adjustable Rate
INITIAL NOTE PRINCIPAL NOTE NO. [_]
BALANCE OF THIS NOTE: $[ ]
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
HomeBanc Mortgage Trust 2004-1 (the "Issuer"), a Delaware statutory
trust, for value received, hereby promises to pay to Cede & Co. or registered
assigns, the principal sum of ($_________________) in monthly installments on
the twenty-fifth day of each month or, if such day is not a Business Day, the
next succeeding Business Day (each a "Payment Date"), commencing in August 2004
and ending on or before the Payment Date occurring in August 2029 (the "Final
Scheduled Payment Date") and to pay interest on the Note Principal Balance of
this Note (this "Note") outstanding from time to time as provided below.
This Note is one of a duly authorized issue of the Issuer's
Mortgage-Backed Notes, Series 2004-1 (the "Notes"), issued under an Indenture
dated as of July 30, 2004 (the "Indenture"), among the Issuer, ▇▇▇▇▇ Fargo Bank,
National Association (the "Securities Administrator") and U.S. Bank National
Association, as indenture trustee (the "Indenture Trustee", which term includes
any successor Indenture Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Issuer, the Indenture Trustee, and the
Holders of the Notes and the terms upon which the Notes are to be authenticated
and delivered. All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Payments of principal and interest on this Note will be made on each
Payment Date to the Noteholder of record as of the related Record Date. The
"Note Principal Balance" of a Note as of any date of determination is equal to
the initial Note Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Note on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Note on all
prior Payment Dates.
The principal of, and interest on, this Note are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Note shall
be equal to this Note's pro rata share of the aggregate payments on all Class
[I][II]-A Notes as described above, and shall be applied as between interest and
principal as provided in the Indenture.
A-1-2
All principal and interest accrued on the Notes, if not previously
paid, will become finally due and payable at the Final Scheduled Payment Date.
The Notes are subject to redemption in whole, but not in part, by the
Holder of the Certificates, or, if there is no single Holder, the Majority
Certificateholder, on any Payment Date on or after the Payment Date on which the
aggregate Scheduled Principal Balance of the Mortgage Loans as of the end of the
prior Due Period is less than or equal to 20% of the aggregate Scheduled
Principal Balance of the Mortgage Loans as of the Cut-off Date.
The Issuer 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 will be the sole source of payments on the Class [I][II]- A 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 as provided in the Indenture and (ii) such Holder shall have no recourse
to the Issuer, the Securities Administrator, the Owner Trustee, the Indenture
Trustee, the Depositor, EMC Mortgage Corporation, the Master Servicer, the
Servicer, the Special Servicer or any of their respective affiliates, or to the
assets of any of the foregoing entities, except the assets of the Issuer pledged
to secure the [I][II]-A Notes pursuant to the Indenture and the rights conveyed
by the Issuer under the Indenture.
Any payment of principal or interest payable on this Note which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Note is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Note Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Note, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Note delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, 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
designated by such Holder. All scheduled reductions in the principal amount of a
Note (or one or more predecessor Notes) effected by payments of principal made
on any Payment Date shall be binding upon all Holders of this 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
payment of this Note shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the office designated by the Indenture
Trustee or the office or agency of the Issuer maintained by it for such purpose
pursuant to Section 3.02 of the Indenture.
Subject to the foregoing provisions, each Note delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Note shall carry the right to unpaid principal and interest that were
carried by such other Note.
If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Notes, the Notes may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Note Principal Balance of the Notes, the amount payable to the Holder of this
Note will be equal to the sum of the unpaid Note Principal Balance of the Notes,
together with accrued and
A-1-3
unpaid interest thereon as described in the Indenture. The Indenture provides
that, notwithstanding the acceleration of the maturity of the Notes, under
certain circumstances specified therein, all amounts collected as proceeds of
the Trust Estate securing the Notes or otherwise shall continue to be applied to
payments of principal of and interest on the Notes as if they had not been
declared due and payable.
The Holder of this Note or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Note with Plan
Assets or (2) (A) the acquisition, holding and transfer of a Note will not give
rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code and (B) the Notes are rated investment grade or better and such
person believes that the Notes are properly treated as indebtedness without
substantial equity features for purposes of the DOL Regulations, and agrees to
so treat the Notes. Alternatively, regardless of the rating of the Notes, such
person may provide the Indenture Trustee and the Owner Trustee with an Opinion
of Counsel, which Opinion of Counsel will not be at the expense of the Issuer,
the Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Securities Administrator, the Master Servicer, the Special Servicer or any
successor servicer which opines that the acquisition, holding and transfer of
such Note or interest therein is permissible under applicable law, will not
constitute or result in a non-exempt prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Issuer, the Seller, the
Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master
Servicer, the Securities Administrator, the Servicer or the Special Servicer to
any obligation in addition to those undertaken in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Note Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Note at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Principal
Balance, will be issued to the designated transferee or transferees.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered as the owner
of such Note (i) on the applicable Record Date for the purpose of making
payments and interest of such Note, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Note be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the aggregate Note Principal Balance
of the Notes on behalf of the Holders of all the Notes, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Note (or any one or more predecessor
Notes) shall bind the Holder of every Note issued upon the registration of
transfer hereof
A-1-4
or in exchange hereof or in lieu hereof, whether or not notation of such consent
or waiver is made upon such Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of the Holders of the Notes issued thereunder.
Initially, the Notes will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Notes. The
Notes will be delivered by the clearing agency 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
same.
Unless the Certificate of Authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.
AS PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS
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.
A-1-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: July ___, 2004
HOMEBANC MORTGAGE TRUST 2004-1
BY: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely in its capacity as Owner Trustee
By:___________________________________
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [I][II]-A Notes referred to in the within-mentioned
Indenture.
U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee
By:______________________________________
Authorized Signatory
A-1-6
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of the Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and
not as tenants in common
UNIF GIFT MIN ACT -- __________ Custodian
______________________________
(Cust) (Minor)
under Uniform Gifts to Minor Act
_____________________
(State)
Additional abbreviations may also be used though not in
the above list.
A-1-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(Please print or typewrite name and address, including zip code, 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 by __________________________________
NOTICE: The signature(s) to this assignment must correspond with the
name as it appears upon the face of the within Note in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.
A-1-8
EXHIBIT A-2
FORM OF CLASS [I][II]-M-[_] NOTES
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [I][II]-A NOTES [AND
CLASS [I][II]-M-1 NOTES] AS DESCRIBED IN THE INDENTURE.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE 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 HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE
DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF
THE INDENTURE.
THIS NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS NOTE.
PRINCIPAL OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
A-2-1
HOMEBANC MORTGAGE TRUST 2004-1
MORTGAGE-BACKED NOTES
CLASS [I][II]-M-[_]
AGGREGATE NOTE PRINCIPAL NOTE INTEREST
BALANCE: $[ ] RATE: Adjustable Rate
INITIAL NOTE PRINCIPAL NOTE NO. 1
BALANCE OF THIS NOTE: $[ ]
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
HomeBanc Mortgage Trust 2004-1 (the "Issuer"), a Delaware statutory
trust, for value received, hereby promises to pay to Cede & Co. or registered
assigns, the principal sum of ______________________________ ($___________) in
monthly installments on the twenty-fifth day of each month or, if such day is
not a Business Day, the next succeeding Business Day (each a "Payment Date"),
commencing in August 2004 and ending on or before the Payment Date occurring in
August 2029 (the "Final Scheduled Payment Date") and to pay interest on the Note
Principal Balance of this Note (this "Note") outstanding from time to time as
provided below.
This Note is one of a duly authorized issue of the Issuer's
Mortgage-Backed Notes, Series 2004-1 (the "Notes"), issued under an Indenture
dated as of July 30, 2004 (the "Indenture"), among the Issuer, ▇▇▇▇▇ Fargo Bank,
National Association (the "Securities Administrator") and U.S. Bank National
Association, as indenture trustee (the "Indenture Trustee", which term includes
any successor Indenture Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Issuer, the Indenture Trustee, and the
Holders of the Notes and the terms upon which the Notes are to be authenticated
and delivered. All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Payments of principal and interest on this Note will be made on each
Payment Date to the Noteholder of record as of the related Record Date. The
"Note Principal Balance" of a Note as of any date of determination is equal to
the initial Note Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Note on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Note on all
prior Payment Dates.
The principal of, and interest on, this Note are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Note shall
be equal to this Note's pro rata share of the aggregate payments on all Class
[I][II]-M-[_] Notes as described above, and shall be applied as between interest
and principal as provided in the Indenture.
All principal and interest accrued on the Notes, if not previously
paid, will become finally due and payable at the Final Scheduled Payment Date.
A-2-2
The Notes are subject to redemption in whole, but not in part, by the
Holder of the Certificates, or, if there is no single Holder, the Majority
Certificateholder, on any Payment Date on or after the Payment Date on which the
aggregate Scheduled Principal Balance of the Mortgage Loans is less than or
equal to 20% of aggregate Scheduled Principal Balance of the Mortgage Loans as
of the Cut-off Date.
The Issuer 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 will be the sole source of payments on the Class [I][II]- M-[_]
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 as provided in the Indenture and (ii) such Holder shall have no
recourse to the Issuer, the Securities Administrator, the Owner Trustee, the
Indenture Trustee, the Depositor, EMC Mortgage Corporation, the Master Servicer,
the Servicer, the Special Servicer or any of their respective affiliates, or to
the assets of any of the foregoing entities, except the assets of the Issuer
pledged to secure the Class [I][II]-M-[_] Notes pursuant to the Indenture and
the rights conveyed by the Issuer under the Indenture.
Any payment of principal or interest payable on this Note which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Note is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Note Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Note, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Note delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, 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
designated by such Holder. All scheduled reductions in the principal amount of a
Note (or one or more predecessor Notes) effected by payments of principal made
on any Payment Date shall be binding upon all Holders of this 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
payment of this Note shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the office designated by the Indenture
Trustee or the office or agency of the Issuer maintained by it for such purpose
pursuant to Section 3.02 of the Indenture.
Subject to the foregoing provisions, each Note delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Note shall carry the right to unpaid principal and interest that were
carried by such other Note.
If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Notes, the Notes may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Note Principal Balance of the Notes, the amount payable to the Holder of this
Note will be equal to the sum of the unpaid Note Principal Balance of the Notes,
together with accrued and unpaid interest thereon as described in the Indenture.
The Indenture provides that, notwithstanding the acceleration of the maturity of
the Notes, under certain circumstances specified therein, all amounts collected
as proceeds of the Trust Estate securing the Notes or otherwise shall continue
to
A-2-3
be applied to payments of principal of and interest on the Notes as if they had
not been declared due and payable.
The Holder of this Note or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Note with Plan
Assets or (2) (A) the acquisition, holding and transfer of a Note will not give
rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code and (B) the Notes are rated investment grade or better and such
person believes that the Notes are properly treated as indebtedness without
substantial equity features for purposes of the DOL Regulations, and agrees to
so treat the Notes. Alternatively, regardless of the rating of the Notes, such
person may provide the Indenture Trustee and the Owner Trustee with an Opinion
of Counsel, which Opinion of Counsel will not be at the expense of the Issuer,
the Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Securities Administrator, the Master Servicer, the Special Servicer or any
successor servicer which opines that the acquisition, holding and transfer of
such Note or interest therein is permissible under applicable law, will not
constitute or result in a non-exempt prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Issuer, the Seller, the
Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master
Servicer, the Servicer, the Special Servicer or any successor servicer to any
obligation in addition to those undertaken in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Note Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Note at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Principal
Balance, will be issued to the designated transferee or transferees.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered as the owner
of such Note (i) on the applicable Record Date for the purpose of making
payments and interest of such Note, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Note be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the aggregate Note Principal Balance
of the Notes on behalf of the Holders of all the Notes, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Note (or any one or more predecessor
Notes) shall bind the Holder of every 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 such Note. The Indenture also permits the
Issuer and the Indenture Trustee to amend or waive
A-2-4
certain terms and conditions set forth in the Indenture without the consent of
the Holders of the Notes issued thereunder.
Initially, the Notes will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Notes. The
Notes will be delivered by the clearing agency 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
same.
Unless the Certificate of Authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.
AS PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS
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.
A-2-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: July ___, 2004
HOMEBANC MORTGAGE TRUST 2004-1
BY: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
in its capacity as Owner Trustee
By: _________________________________
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [I][II]-M-[_] Notes referred to in the within-mentioned
Indenture.
U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee
By: _________________________________
Authorized Signatory
A-2-6
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of the Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and
not as tenants in common
UNIF GIFT MIN ACT -- __________ Custodian
______________________________
(Cust) (Minor)
under Uniform Gifts to Minor Act
_____________________
(State)
Additional abbreviations may also be used though not in
the above list.
A-2-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
_____________________________________________
_____________________________________________
_____________________________________________
(Please print or typewrite name and address, including zip code, 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 by ______________________________________________
NOTICE: The signature(s) to this assignment must correspond with the
name as it appears upon the face of the within Note in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.
A-2-8
EXHIBIT A-3
FORM OF CLASS [I][II]-B NOTES
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [I][II]-A, CLASS
[I][II]-M-1 AND CLASS [I][II]-M-2 NOTES AS DESCRIBED IN THE INDENTURE.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE 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 HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE
DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF
THE INDENTURE.
THIS NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS NOTE.
PRINCIPAL OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
A-3-1
HOMEBANC MORTGAGE TRUST 2004-1
MORTGAGE-BACKED NOTES
CLASS [I][II]-B
AGGREGATE NOTE PRINCIPAL NOTE INTEREST
BALANCE: $[ ] RATE: Adjustable Rate
INITIAL NOTE PRINCIPAL NOTE NO. 1
BALANCE OF THIS NOTE: $[ ]
PERCENTAGE INTEREST: 100% CUSIP NO. [ ]
HomeBanc Mortgage Trust 2004-1 (the "Issuer"), a Delaware statutory
trust, for value received, hereby promises to pay to Cede & Co. or registered
assigns, the principal sum of ______________________________ ($___________) in
monthly installments on the twenty-fifth day of each month or, if such day is
not a Business Day, the next succeeding Business Day (each a "Payment Date"),
commencing in August 2004 and ending on or before the Payment Date occurring in
August 2029 (the "Final Scheduled Payment Date") and to pay interest on the Note
Principal Balance of this Note (this "Note") outstanding from time to time as
provided below.
This Note is one of a duly authorized issue of the Issuer's
Mortgage-Backed Notes, Series 2004-1 (the "Notes"), issued under an Indenture
dated as of July 30, 2004 (the "Indenture"), among the Issuer, ▇▇▇▇▇ Fargo Bank,
National Association (the "Securities Administrator") and U.S. Bank National
Association, as indenture trustee (the "Indenture Trustee", which term includes
any successor Indenture Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Issuer, the Indenture Trustee, and the
Holders of the Notes and the terms upon which the Notes are to be authenticated
and delivered. All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Payments of principal and interest on this Note will be made on each
Payment Date to the Noteholder of record as of the related Record Date. The
"Note Principal Balance" of a Note as of any date of determination is equal to
the initial Note Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Note on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Note on all
prior Payment Dates.
The principal of, and interest on, this Note are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Note shall
be equal to this Note's pro rata share of the aggregate payments on all Class
[I][II]-B Notes as described above, and shall be applied as between interest and
principal as provided in the Indenture.
All principal and interest accrued on the Notes, if not previously
paid, will become finally due and payable at the Final Scheduled Payment Date.
A-3-2
The Notes are subject to redemption in whole, but not in part, by the
Holder of the Certificates, or, if there is no single Holder, the Majority
Certificateholder, on any Payment Date on or after the Payment Date on which the
aggregate Scheduled Principal Balance of the Mortgage Loans is less than or
equal to 20% of aggregate Scheduled Principal Balance of the Mortgage Loans as
of the Cut-off Date.
The Issuer 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 will be the sole source of payments on the Class [I][II]- B 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 as provided in the Indenture and (ii) such Holder shall have no recourse
to the Issuer, the Securities Administrator, the Owner Trustee, the Indenture
Trustee, the Depositor, EMC Mortgage Corporation, the Master Servicer, the
Servicer, the Special Servicer or any of their respective affiliates, or to the
assets of any of the foregoing entities, except the assets of the Issuer pledged
to secure the Class [I][II]-B Notes pursuant to the Indenture and the rights
conveyed by the Issuer under the Indenture.
Any payment of principal or interest payable on this Note which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Note is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Note Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Note, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Note delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, 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
designated by such Holder. All scheduled reductions in the principal amount of a
Note (or one or more predecessor Notes) effected by payments of principal made
on any Payment Date shall be binding upon all Holders of this 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
payment of this Note shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the office designated by the Indenture
Trustee or the office or agency of the Issuer maintained by it for such purpose
pursuant to Section 3.02 of the Indenture.
Subject to the foregoing provisions, each Note delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Note shall carry the right to unpaid principal and interest that were
carried by such other Note.
If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Notes, the Notes may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Note Principal Balance of the Notes, the amount payable to the Holder of this
Note will be equal to the sum of the unpaid Note Principal Balance of the Notes,
together with accrued and unpaid interest thereon as described in the Indenture.
The Indenture provides that, notwithstanding the acceleration of the maturity of
the Notes, under certain circumstances specified therein, all
A-3-3
amounts collected as proceeds of the Trust Estate securing the Notes or
otherwise shall continue to be applied to payments of principal of and interest
on the Notes as if they had not been declared due and payable.
The Holder of this Note or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Note with Plan
Assets or (2) (A) the acquisition, holding and transfer of a Note will not give
rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code and (B) the Notes are rated investment grade or better and such
person believes that the Notes are properly treated as indebtedness without
substantial equity features for purposes of the DOL Regulations, and agrees to
so treat the Notes. Alternatively, regardless of the rating of the Notes, such
person may provide the Indenture Trustee and the Owner Trustee with an Opinion
of Counsel, which Opinion of Counsel will not be at the expense of the Issuer,
the Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Securities Administrator, the Master Servicer, the Servicer, the Special
Servicer or any successor servicer which opines that the acquisition, holding
and transfer of such Note or interest therein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Master Servicer, the Servicer, the Special Servicer or any successor servicer to
any obligation in addition to those undertaken in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Note Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Note at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Notes
of any authorized denominations and of a like aggregate initial Note Principal
Balance, will be issued to the designated transferee or transferees.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered as the owner
of such Note (i) on the applicable Record Date for the purpose of making
payments and interest of such Note, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Note be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer and the Holders of a majority of all Notes at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the aggregate Note Principal Balance
of the Notes on behalf of the Holders of all the Notes, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Note (or any one or more predecessor
Notes) shall bind the Holder of every 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 such Note. The Indenture also permits the
Issuer and the Indenture Trustee to amend or waive
A-3-4
certain terms and conditions set forth in the Indenture without the consent of
the Holders of the Notes issued thereunder.
Initially, the Notes will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Notes. The
Notes will be delivered by the clearing agency 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
same.
Unless the Certificate of Authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.
AS PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS
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.
A-3-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.
Dated: July ___, 2004
HOMEBANC MORTGAGE TRUST 2004-1
BY: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
in its capacity as Owner Trustee
By: _________________________________
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [I][II]-B Notes referred to in the within-mentioned
Indenture.
U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee
By: __________________________________
Authorized Signatory
A-3-6
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face
of the Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT -- __________ Custodian
______________________________
(Cust) (Minor)
under Uniform Gifts to Minor Act
_____________________
(State)
Additional abbreviations may also be used though not in
the above list.
A-3-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
________________________________________________
________________________________________________
________________________________________________
(Please print or typewrite name and address, including zip code, 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 by ______________________________________________
NOTICE: The signature(s) to this assignment must correspond with the
name as it appears upon the face of the within Note in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.
A-3-8
APPENDIX A
DEFINITIONS
ACCEPTED MASTER SERVICING PRACTICES: With respect to any
Mortgage Loan, as applicable, either (x) those customary mortgage servicing
practices of prudent mortgage servicing institutions that master service
mortgage loans of the same type and quality as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located, to the extent
applicable to the Master Servicer (except in its capacity as successor to the
Servicer), or (y) as provided in the HomeBanc Servicing Agreement, to the extent
applicable to the Servicer, but in no event below the standard set forth in
clause (x).
ACCOUNT: The Master Servicer Collection Account, the Payment
Account and the Protected Account as the context may require.
ACCRUAL PERIOD: With respect to each Class of Notes and any
Payment Date, the period from the preceding Payment Date (or, in the case of the
first Payment Date, from the Closing Date) through the day preceding such
Payment Date.
ACCRUED NOTE INTEREST: With respect to any Payment Date and
each Class of Notes, interest accrued during the related Accrual Period at the
then-applicable Note Interest Rate on the related Note Principal Balance thereof
immediately prior to such Payment Date, plus any Accrued Note Interest remaining
unpaid from any prior Payment Date with interest thereon at the related Note
Interest Rate. Accrued Note Interest for each Class of Notes shall be calculated
on the basis of a 360-day year consisting of twelve 30-day months.
AFFILIATE: With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
ALLOCATED REALIZED LOSS AMOUNT: With respect to any Class of
Class M Notes and Class B Notes and any Payment Date, an amount equal to the sum
of any Realized Loss allocated to that Class of Notes on that Payment Date and
any Allocated Realized Loss Amount for that Class remaining unpaid from the
previous Payment Date, in each case, with interest thereon at the applicable
Note Interest Rate for such Payment Date for such Class for the related Accrual
Period.
APPLICABLE CREDIT RATING: For any long-term deposit or
security, a credit rating of AAA in the case of S&P or Aaa in the case of
▇▇▇▇▇'▇. For any short-term deposit or security, a rating of A-l+ in the case of
S&P or P-1 in the case of ▇▇▇▇▇'▇.
APPRAISED VALUE: For any Mortgaged Property related to a
Mortgage Loan, the value thereof as determined by an appraisal made for the
originator of the Mortgage Loan at the time of origination of the Mortgage Loan
by an appraiser who met the requirements of the Servicer and ▇▇▇▇▇▇ ▇▇▇.
1
ASSIGNMENT AGREEMENT: The agreement attached as Exhibit D to
the Sale and Servicing Agreement, whereby the HomeBanc Servicing Agreement was
assigned to the Indenture Trustee for the benefit of the Noteholders.
ASSIGNMENT OF MORTGAGE: An assignment of Mortgage, notice of
transfer or equivalent instrument, in recordable form, which is sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to reflect of record the sale of the Mortgage, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county, if permitted by law.
AUTHORIZED NEWSPAPER: A newspaper of general circulation in
the Borough of Manhattan, The City of New York, printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
AUTHORIZED OFFICER: With respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee and Securities
Administrator on the Closing Date (as such list may be modified or supplemented
from time to time thereafter).
AVAILABLE FUNDS: The Group I Available Funds and Group II
Available Funds, as applicable.
AVAILABLE FUNDS RATE: The Group I Available Funds Rate and
Group II Available Funds Rate, as applicable.
AVERAGE LOSS SEVERITY PERCENTAGE: With respect to any Payment
Date, the percentage equivalent of a fraction, the numerator of which is the sum
of the Loss Severity Percentages for each Mortgage Loan which had a Realized
Loss and the denominator of which is the number of Mortgage Loans which had
Realized Losses.
BANKRUPTCY CODE: The United States Bankruptcy Code, as amended
as codified in 11 U.S.C. ▇▇.▇▇. 101-1330.
BANKRUPTCY LOSS: With respect to any Mortgage Loan, any
Deficient Valuation or Debt Service Reduction related to such Mortgage Loan as
reported by the Servicer to the Master Servicer.
BASIC DOCUMENTS: The Trust Agreement, the Certificate of
Trust, the Indenture, the Sale and Servicing Agreement, the Administration
Agreement, the HomeBanc Servicing Agreement, the Mortgage Loan Purchase
Agreement, the Assignment Agreement, the Special Servicing Agreement and the
other documents and certificates delivered in connection with any of the above.
BASIC PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Payment Date and each Loan Group, the lesser of (a) the excess of (i) the
related Available Funds for such Payment Date
2
over (ii) the aggregate amount of Accrued Note Interest for the related Notes
for such Payment Date and (b) the related Principal Remittance Amount for such
Payment Date.
BASIS RISK SHORTFALL: With respect to any Class of Notes, on
each Payment Date where clause (iii) of the definition of "Note Interest Rate"
is less than clauses (i) or (ii) of the definition of "Note Interest Rate", the
excess, if any, of (x) the aggregate Accrued Note Interest thereon for such
Payment Date calculated pursuant to the lesser of clause (i) or (ii) of the
definition of Note Interest Rate over (y) interest accrued on the related
Mortgage Loans at the related Available Funds Rate.
BASIS RISK SHORTFALL CARRY-FORWARD AMOUNT: With respect to
each Class of Notes and any Payment Date, as determined separately for each
Class of Notes, an amount equal to the aggregate amount of Basis Risk Shortfall
for such Notes on such Payment Date, plus any unpaid Basis Risk Shortfall for
such Class of Notes from prior Payment Dates, plus interest thereon at the Note
Interest Rate for such Payment Date for such Class for the related Accrual
Period, to the extent previously unreimbursed from the related Net Monthly
Excess Cash Flow.
BENEFICIAL OWNER: With respect to any Note, the Person who is
the beneficial owner of such Note as reflected on the books of the Depository or
on the books of a Person maintaining an account with such Depository (directly
as a Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).
BOOK-ENTRY NOTES: Beneficial interests in the Notes, ownership
and transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday,
or (ii) a day on which the New York Stock Exchange or Federal Reserve is closed
or on which banking institutions in the jurisdiction in which the Indenture
Trustee, the Master Servicer, the Servicer or the Securities Administrator is
located are authorized or obligated by law or executive order to be closed.
CALENDAR QUARTER: January 1 to March 31, April 1 to June 30,
July 1 to September 30, or October 1 to December 31, as applicable.
CERTIFICATE DISTRIBUTION ACCOUNT: The account or accounts
created and maintained pursuant to Section 3.10(c) of the Trust Agreement. The
Certificate Distribution Account shall be an Eligible Account.
CERTIFICATE PAYING AGENT: The meaning specified in Section
3.10 of the Trust Agreement.
CERTIFICATE PERCENTAGE INTEREST: With respect to each
Certificate, the Certificate Percentage Interest stated on the face thereof.
CERTIFICATE REGISTER: The register maintained by the
Certificate Registrar in which the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates.
3
CERTIFICATE REGISTRAR: Initially, the Indenture Trustee, in
its capacity as Certificate Registrar, or any successor to the Indenture Trustee
in such capacity.
CERTIFICATE OF TRUST: The Certificate of Trust filed for the
Trust pursuant to Section 3810(a) of the Statutory Trust Statute.
CERTIFICATES OR TRUST CERTIFICATES: The HomeBanc Mortgage Loan
Trust 2004-1 Trust Certificates, Series 2004-1, evidencing the beneficial
ownership interest in the Issuer and executed by the Owner Trustee in
substantially the form set forth in Exhibit A to the Trust Agreement.
CERTIFICATEHOLDER OR HOLDER: The Person in whose name a
Certificate is registered in the Certificate Register. Owners of Certificates
that have been pledged in good faith may be regarded as Holders if the pledgee
establishes to the satisfaction of the Indenture Trustee or the Owner Trustee,
as the case may be, the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Issuer, any other obligor upon the
Certificates or any Affiliate of any of the foregoing Persons.
CLASS: Any of the Class I-A, Class II-A, Class I-M-1, Class
II-M-1, Class I-M-2, Class II-M-2, Class I-B or Class II-B Notes.
CLASS A NOTES: The Class I-A Notes and Class II-A Notes in the
form attached as Exhibit A-1 to the Indenture.
CLASS B NOTES: The Class I-B Notes and Class II-B Notes in the
form attached as Exhibit A-3 to the Indenture.
CLASS M NOTES: The Class I-M-1, Class II-M-1, Class I-M-2 and
Class II-M-2 Notes in the form attached as Exhibit A-2 to the Indenture.
CLOSING DATE: July 30, 2004.
CODE: The Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
COLLATERAL: The meaning specified in the Granting Clause of
the Indenture.
COMMISSION: The Securities and Exchange Commission.
COMPENSATING INTEREST PAYMENT: As defined in Section 3.23 of
the Sale and Servicing Agreement.
CORPORATE TRUST OFFICE: With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Note Registrar at which at
any particular time its engagement under the Indenture shall be administered,
which office at the date of the execution of this instrument is located at US
Bank Corporate Trust Services, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
4
Corporate Trust Services - HomeBanc 2004-1. With respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee at which at any
particular time its corporate trust business shall be administered, which office
at the date of the execution of this Trust Agreement is located at Wilmington
Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: HomeBanc Mortgage Trust 2004-1 (HomeBanc 2004-1).
CROSSABLE LOSSES: With respect to each Loan Group and any
Payment Date, an amount equal to the sum of (i) any Realized Losses on the
related Mortgage Loans during the related Due Period, to the extent unreimbursed
by related Net Monthly Excess Cashflow on that Payment Date and (ii) any
previously unreimbursed Realized Losses on the related Mortgage Loans, to the
extent that such Realized Losses have not been reimbursed by related and
non-related Net Monthly Excess Cashflow on prior Payment Dates.
CROSSABLE UNDERCOLLATERALIZATION AMOUNT: With respect to each
Loan Group and any Payment Date, an amount equal to (x) the excess, if any, of
(i) the aggregate Note Principal Balance of the related Notes immediately prior
to that Payment Date, over (ii) the aggregate Scheduled Principal Balance of the
related Mortgage Loans as of the beginning of the related Due Period, minus (y)
any amounts in respect of the related Undercollateralization Amount paid from
related Net Monthly Excess Cashflow on that Payment Date.
CUSTODIAL AGREEMENT: The custodial agreement dated as of July
30, 2004, between the Issuer, the Indenture Trustee, the Depositor, the Master
Servicer and the Custodian, relating to the HomeBanc Mortgage Loan Trust 2004-1,
Mortgage-Backed Notes, Series 2004-1.
CUSTODIAN: JPMorgan Chase Bank and its successors and assigns.
CUT-OFF DATE: With respect to the Mortgage Loans, July 1,
2004.
CUT-OFF DATE BALANCE: $992,673,226.36
CUT-OFF DATE PRINCIPAL BALANCE: With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the Cut-off Date after applying
the principal portion of Monthly Payments due on or before such date, whether or
not received, and without regard to any payments due after such date.
DEBT SERVICE REDUCTION: Any reduction of the Scheduled
Payments which a Mortgagor is obligated to pay with respect to a Mortgage Loan
as a result of any proceeding under the Bankruptcy Code or any other similar
state law or other proceeding.
DEFAULT: Any occurrence which is or with notice or the lapse
of time or both would become an Event of Default.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a
valuation of the Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding indebtedness under the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code or
any other similar state law or other proceeding.
5
DEFINITIVE NOTES: The meaning specified in Section 4.06 of the
Indenture.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced with a Substitute Mortgage Loan.
DEPOSITOR: Structured Asset Mortgage Investments II Inc., a
Delaware corporation, or its successor in interest.
DEPOSITORY: The Depository Trust Company, the nominee of which
is Cede & Co., or any successor thereto.
DEPOSITORY PARTICIPANT: A Person for whom, from time to time,
the Depository effects book-entry transfers and pledges of securities deposited
with the Depository.
DESIGNATED DEPOSITORY INSTITUTION: A depository institution
(commercial bank, federal savings bank, mutual savings bank or savings and loan
association) or trust company (which may include the Indenture Trustee), the
deposits of which are fully insured by the FDIC to the extent provided by law.
DETERMINATION DATE: With respect to any Payment Date, the 15th
day of the related month, or if the 15th day of such month is not a Business
Day, the immediately preceding Business Day.
DUE DATE: With respect to each Mortgage Loan, the day of the
month on which each scheduled Monthly Payment is due.
DUE PERIOD: With respect to any Payment Date and the Mortgage
Loans, the period commencing on the second day of the month immediately
preceding the month of such Payment Date (or, with respect to the first Due
Period, the day following the Cut-off Date) and ending on the first day of the
month of such Payment Date.
ELIGIBLE ACCOUNT: Any of (i) a segregated account maintained
with a federal or state chartered depository institution (A) the short-term
obligations of which are rated A-1 or better by S&P and P-1 by ▇▇▇▇▇'▇ at the
time of any deposit therein or (B) insured by the FDIC (to the limits
established by such corporation), the uninsured deposits in which account are
otherwise secured such that, as evidenced by an Opinion of Counsel (obtained by
the Person requesting that the account be held pursuant to this clause (i))
delivered to the Indenture Trustee prior to the establishment of such account,
the Noteholders will have a claim with respect to the funds in such account and
a perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments, each of which shall mature not later than
the Business Day immediately preceding the Payment Date next following the date
of investment in such collateral or the Payment Date if such Permitted
Investment is an obligation of the institution that maintains the Payment
Account) securing such funds that is superior to claims of any other depositors
or general creditors of the depository institution with which such account is
maintained, (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company with trust
powers acting in its fiduciary capacity or (iii) a segregated account or
accounts of a depository institution
6
acceptable to the Rating Agencies (as evidenced in writing by the Rating
Agencies that use of any such account as the Payment Account will not have an
adverse effect on the then-current ratings assigned to the Classes of Notes then
rated by such Rating Agency). Eligible Accounts may bear interest.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
EVENT OF DEFAULT: With respect to the Indenture, any one of
the following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) a failure by the Issuer to pay (a) Accrued Note
Interest on any Class of Notes or (b) the Principal
Distribution Amount with respect to a Payment Date on such
Payment Date; or
(ii) the failure by the Issuer on the Final Scheduled
Payment Date to pay all Accrued Note Interest and to reduce
the Note Principal Balance of any of the Notes to zero; or
(iii) there occurs a default in the observance or
performance of any covenant or agreement of the Issuer made in
the Indenture, or any representation or warranty of the Issuer
made in the Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to
have been incorrect in any material respect as of the time
when the same shall have been made, and such default shall
continue or not be cured, or the circumstance or condition in
respect of which such representation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a
period of 30 days after there shall have been given, by
registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the
Holders of at least 25% of the aggregate Note Principal
Balance of the Outstanding Notes, a written notice specifying
such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a
notice of default hereunder; or
(iv) there occurs the filing of a decree or order for
relief by a court having jurisdiction in the premises in
respect of the Issuer or any substantial part of the Trust
Estate in an involuntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate,
or ordering the winding-up or liquidation of the Issuer's
affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
(v) there occurs the commencement by the Issuer of a
voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter
in effect, or the consent by the Issuer to the entry of an
order for relief in
7
an involuntary case under any such law, or the consent by the
Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of
the assets of the Trust Estate, or the making by the Issuer of
any general assignment for the benefit of creditors, or the
failure by the Issuer generally to pay its debts as such debts
become due, or the taking of any action by the Issuer in
furtherance of any of the foregoing.
EXCESS LIQUIDATION PROCEEDS: To the extent that such amount is
not required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, (ii) related
Liquidation Expenses (including Liquidation Expenses which are payable therefrom
to the Servicer, the Master Servicer or the Special Servicer in accordance with
the HomeBanc Servicing Agreement, the Special Servicing Agreement or the Sale
and Servicing Agreement) and (iii) unreimbursed advances by the Servicer or the
Master Servicer and Monthly Advances.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
EXPENSES: The meaning specified in Section 7.02 of the Trust
Agreement.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇ (formerly, the Federal National
Mortgage Association), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.
FEE AGREEMENT: The Fee Agreement dated as of July 30, 2004,
between the Owner Trustee, the Depositor and the Master Servicer.
FINAL CERTIFICATION: The final certification delivered by the
Custodian pursuant to Section 2.3(c) of the Custodial Agreement in the form
attached thereto as Exhibit Three.
FINAL SCHEDULED PAYMENT DATE: With respect to each Class of
Notes, the Payment Date in August 2029.
FREDDIE MAC: Freddie Mac (formerly, the Federal Home Loan
Mortgage Corporation), or any successor thereto.
GRANT: Pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of such collateral or other agreement or
8
instrument and all other moneys payable thereunder, to give and receive notices
and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party is
or may be entitled to do or receive thereunder or with respect thereto.
GROSS MARGIN: As to each Mortgage Loan, the fixed percentage
set forth in the related Mortgage Note and indicated on the Mortgage Loan
Schedule which percentage is added to the related Index on each Interest
Adjustment Date to determine (subject to rounding, the minimum and maximum
Mortgage Interest Rate and the Periodic Rate Cap) the Mortgage Interest Rate
until the next Interest Adjustment Date.
GROUP I AVAILABLE FUNDS: With respect to any Payment Date, the
sum of the following, in each case with respect to the Group I Loans: (a) all
previously undistributed payments on account of principal (including the
principal portion of Scheduled Payments, Principal Prepayments and the principal
portion of Excess Liquidation Proceeds) and all previously undistributed
payments on account of interest received after the Cut-off Date and on or prior
to the related Determination Date on the Group I Loans, (b) any Monthly Advances
and Compensating Interest Payments by the Servicer or the Master Servicer with
respect to the Group I Loans and such Payment Date and (c) any reimbursed amount
in connection with losses on investments of deposits in an account, except:
(1) all payments on the Group I Loans that were due on or
before the Cut-off Date;
(2) all Principal Prepayments and Liquidation Proceeds on
the Group I Loans received after the applicable
Prepayment Period;
(3) all payments, other than Principal Prepayments, on
the Group I Loans that represent early receipt of
Scheduled Payments due on a date or dates subsequent
to the related Due Date;
(4) amounts received on particular Group I Loans as late
payments of principal or interest and respecting
which, and to the extent that, there are any
unreimbursed Monthly Advances;
(5) amounts representing Monthly Advances on the Group I
Loans determined to be Nonrecoverable Advances;
(6) any investment earnings on amounts on deposit in the
Master Servicer Collection Account, the Payment
Account and amounts permitted to be withdrawn from
the Master Servicer Collection Account pursuant to
the Sale and Servicing Agreement and the Indenture
relating to the Group I Loans;
(7) amounts needed to pay the Servicing Fee, the Special
Servicing Fee or to reimburse the Servicer, the
Special Servicer or the Master Servicer for amounts
due under the HomeBanc Servicing Agreement, the
Special
9
Servicing Agreement and the Sale and Servicing
Agreement to the extent such amounts have not been
retained by, or paid previously to, the Servicer, the
Special Servicer or the Master Servicer and to the
extent such amounts relate to the Group I Loans; and
(8) any fees, expenses or other amounts reimbursable or
payable to the Indenture Trustee, the Securities
Administrator, the Owner Trustee and the Custodian
pursuant to the Sale and Servicing Agreement, the
Indenture, the Trust Agreement or the Custodial
Agreement and relating to the Group I Loans or, if
such costs, expenses or other amounts are not
exclusively related to the Group I Loans, then Loan
Group I's pro rata share (based on the percentage of
the aggregate Note Principal Balance of the Group I
Notes to the aggregate Note Principal Balance of all
of the Notes) of such costs, expenses and other
amounts.
GROUP I AVAILABLE FUNDS RATE: On any Payment Date and with
respect to the Group I Notes, the per annum rate equal to the product of (i) the
weighted average of the Net Rates on the Group I Mortgage Loans included in the
Trust as of the end of the prior Due Period, weighted on the basis of the
Scheduled Principal Balances thereof as of the end of the prior Due Period and
(ii) a fraction equal to (x) the aggregate Scheduled Principal Balance of the
Group I Mortgage Loans as of the end of the prior Due Period divided by (y) the
aggregate Note Principal Balance of the Group I Notes immediately prior to such
Payment Date.
GROUP I CUT-OFF DATE BALANCE: $224,720,552.24.
GROUP I LOAN: A Mortgage Loan identified as such on the
Mortgage Loan Schedule.
GROUP I NOTE: A Class I-A, Class I-M-1, Class I-M-2 or Class
I-B Note.
GROUP I OVERCOLLATERALIZATION TARGET AMOUNT: With respect to
any Payment Date and Loan Group I, 0.35% of the Group I Cut-off Date Balance.
GROUP II AVAILABLE FUNDS: With respect to any Payment Date,
the sum of the following, in each case with respect to the Group II Loans: (a)
all previously undistributed payments on account of principal (including the
principal portion of Scheduled Payments, Principal Prepayments and the principal
portion of Excess Liquidation Proceeds) and all previously undistributed
payments on account of interest received after the Cut-off Date and on or prior
to the related Determination Date on the Group II Loans, (b) any Monthly
Advances and Compensating Interest Payments by the Servicer or the Master
Servicer with respect to the Group II Loans and such Payment Date and (c) any
reimbursed amount in connection with losses on investments of deposits in an
account, except:
(1) all payments on the Group II Loans that were due on
or before the Cut-off Date;
10
(2) all Principal Prepayments and Liquidation Proceeds on
the Group II Loans received after the applicable
Prepayment Period;
(3) all payments, other than Principal Prepayments, on
the Group II Loans that represent early receipt of
Scheduled Payments due on a date or dates subsequent
to the related Due Date;
(4) amounts received on particular Group II Loans as late
payments of principal or interest and respecting
which, and to the extent that, there are any
unreimbursed Monthly Advances;
(5) amounts representing Monthly Advances on the Group II
Loans determined to be Nonrecoverable Advances;
(6) any investment earnings on amounts on deposit in the
Master Servicer Collection Account and the Payment
Account and amounts permitted to be withdrawn from
the Master Servicer Collection Account pursuant to
the Sale and Servicing Agreement and the Indenture
relating to the Group II Loans;
(7) amounts needed to pay the Servicing Fee, the Special
Servicing Fee or to reimburse the Servicer, the
Special Servicer or the Master Servicer for amounts
due under the HomeBanc Servicing Agreement, the
Special Servicing Agreement and the Sale and
Servicing Agreement to the extent such amounts have
not been retained by, or paid previously to, the
Servicer, the Special Servicer or the Master Servicer
and to the extent such amounts relate to the Group II
Loans; and
(8) any fees, expenses or other amounts reimbursable or
payable to the Indenture Trustee, the Securities
Administrator, the Owner Trustee and the Custodian
pursuant to the Sale and Servicing Agreement, the
Indenture, the Trust Agreement or the Custodial
Agreement and relating to the Group II Loans or, if
such costs, expenses or other amounts are not
exclusively related to the Group II Loans, then Loan
Group II's pro rata share (based on the percentage of
the aggregate Note Principal Balance of the Group II
Notes to the aggregate Note Principal Balance of all
of the Notes) of such costs, expenses and other
amounts.
GROUP II AVAILABLE FUNDS RATE: On any Payment Date and with
respect to the Group II Notes, the per annum rate equal to the product of (i)
the weighted average of the Net Rates on the Group II Mortgage Loans included in
the Trust as of the end of the prior Due Period, weighted on the basis of the
Scheduled Principal Balances thereof as of the end of the prior Due Period and
(ii) a fraction equal to (x) the aggregate Scheduled Principal Balance of the
Group II Mortgage Loans as of the end of the prior Due Period divided by (y) the
aggregate Note Principal Balance of the Group II Notes immediately prior to such
Payment Date.
11
GROUP II CUT-OFF DATE BALANCE: $767,952,704.16.
GROUP II LOAN: A Mortgage Loan identified as such on the
Mortgage Loan Schedule.
GROUP II NOTE: A Class II-A, Class II-M-1, Class II-M-2 or
Class II-B Note.
GROUP II OVERCOLLATERALIZATION TARGET AMOUNT: With respect to
any Payment Date and Loan Group II, 0.35% of the Group II Cut-off Date Balance.
HOMEBANC SERVICING AGREEMENT: The Purchase, Warranties and
Servicing Agreement, dated as of July 1, 2004, among EMC Mortgage Corporation,
as purchaser, HMB Acceptance Corp., as seller and HomeBanc Corp., as servicer
and guarantor.
INDEMNIFIED PARTY: The meaning specified in Section 7.02 of
the Trust Agreement.
INDENTURE: The indenture dated as of July 30, 2004, between
the Issuer, the Indenture Trustee and the Securities Administrator, relating to
the HomeBanc Mortgage Loan Trust 2004-1, Mortgage-Backed Notes, Series 2004-1.
INDENTURE TRUSTEE: U.S. Bank National Association, and its
successors and assigns or any successor indenture trustee appointed pursuant to
the terms of the Indenture.
INDEPENDENT: When used with respect to any specified Person,
the Person (i) is in fact independent of the Issuer, any other obligor on the
Notes, the Seller, the Master Servicer, the Depositor and any Affiliate of any
of the foregoing Persons, (ii) does not have any direct financial interest or
any material indirect financial interest in the Issuer, any such other obligor,
the Seller, the Master Servicer, the Depositor or any Affiliate of any of the
foregoing Persons and (iii) is not connected with the Issuer, any such other
obligor, the Seller, the Master Servicer, the Depositor or any Affiliate of any
of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
INDEPENDENT CERTIFICATE: A certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, made by an independent appraiser or other expert appointed by an
Issuer Request and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has
read the definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
INDEX: The index, if any, specified in a Mortgage Note by
reference to which the related Mortgage Interest Rate will be adjusted from time
to time.
INITIAL NOTE PRINCIPAL BALANCE: With respect to the Class I-A
Notes, $200,000,000, with respect to the Class I-M-1 Notes, $9,551,000, with
respect to the Class I-M-2 Notes, $9,439,000, with respect to the Class I-B
Notes, $4,944,000, with respect to the Class II-A Notes, $680,790,000, with
respect to the Class II-M-1 Notes, $32,637,000, with respect to the Class II-M-2
Notes, $32,637,000 and with respect to the Class II-B Notes, $19,198,000.
12
INITIAL CERTIFICATION: The initial certification delivered by
the Custodian pursuant to Section 2.3(a) of the Custodial Agreement in the form
attached thereto as Exhibit One.
INSURANCE POLICY: With respect to any Mortgage Loan, any
standard hazard insurance policy, flood insurance policy or title insurance
policy.
INSURANCE PROCEEDS: Amounts paid by the insurer under any
Insurance Policy covering any Mortgage Loan or Mortgaged Property other than
amounts required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse insured expenses.
INTEREST ADJUSTMENT DATE: With respect to a Mortgage Loan, the
date, if any, specified in the related Mortgage Note on which the Mortgage
Interest Rate is subject to adjustment.
INTEREST DETERMINATION DATE: With respect to the first Accrual
Period, the second LIBOR Business Day preceding the Closing Date, and with
respect to each Accrual Period thereafter, the second LIBOR Business Day
preceding the related Payment Date on which such Accrual Period commences.
INTEREST SHORTFALL: With respect to any Payment Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:
(a) Partial principal prepayments received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the amount of such prepayment and (ii) the amount of
interest for the calendar month of such prepayment (adjusted to the applicable
Net Rate) received at the time of such prepayment;
(b) Principal prepayments in full received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the Scheduled Principal Balance of such Mortgage Loan
immediately prior to such prepayment and (ii) the amount of interest for the
calendar month of such prepayment (adjusted to the applicable Net Rate) received
at the time of such prepayment; and
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage
Loan, the excess of (i) 30 days' interest (or, in the case of a principal
prepayment in full, interest to the date of prepayment) on the Scheduled
Principal Balance thereof (or, in the case of a principal prepayment in part, on
the amount so prepaid) at the related Net Rate over (ii) 30 days' interest (or,
in the case of a principal prepayment in full, interest to the date of
prepayment) on such Scheduled Principal Balance (or, in the case of a Principal
Prepayment in part, on the amount so prepaid) at the Net Rate required to be
paid by the Mortgagor as limited by application of the Relief Act.
INTERIM CERTIFICATION: The interim certification delivered by
the Custodian pursuant to Section 2.3(b) of the Custodial Agreement in the form
attached thereto as Exhibit Two.
13
INVESTMENT COMPANY ACT: The Investment Company Act of 1940, as
amended, and any amendments thereto.
IRS: The Internal Revenue Service.
ISSUER: HomeBanc Mortgage Trust 2004-1, a Delaware statutory
trust, or its successor in interest.
ISSUER REQUEST: A written order or request signed in the name
of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee.
LIBOR BUSINESS DAY: A day on which banks are open for dealing
in foreign currency and exchange in London and New York City.
LIEN: Any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority right or interest or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the UCC
(other than any such financing statement filed for informational purposes only)
or comparable law of any jurisdiction to evidence any of the foregoing.
LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to
which the Servicer or the Master Servicer has determined that all amounts it
expects to recover from or on account of such Mortgage Loan have been recovered.
LIQUIDATION DATE: With respect to any Liquidated Mortgage
Loan, the date on which the Master Servicer or the Servicer has certified that
such Mortgage Loan has become a Liquidated Mortgage Loan.
LIQUIDATION EXPENSES: With respect to a Mortgage Loan in
liquidation, unreimbursed expenses paid or incurred by or for the account of the
Master Servicer, the Servicer or the Special Servicer in connection with the
liquidation of such Mortgage Loan and the related Mortgage Property, such
expenses including (a) property protection expenses, (b) property sales
expenses, (c) foreclosure and sale costs, including court costs and reasonable
attorneys' fees, and (d) similar expenses reasonably paid or incurred in
connection with liquidation.
LIQUIDATION PROCEEDS: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through trustee's sale,
foreclosure sale, Insurance Proceeds, condemnation proceeds or otherwise and any
Subsequent Recoveries.
LOAN GROUP: Loan Group I and Loan Group II, as applicable.
LOAN GROUP I: The Group I Loans.
LOAN GROUP II: The Group II Loans.
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LOAN-TO-VALUE RATIO: Has the meaning assigned to such term in
the HomeBanc Servicing Agreement.
LOSS SEVERITY PERCENTAGE: With respect to any Payment Date,
the percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan and the denominator of which is the
Scheduled Principal Balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.
LOST NOTES: The original Mortgage Notes that have been lost,
as indicated on the Mortgage Loan Schedule.
MAJORITY CERTIFICATEHOLDER: A Holder of a 50.01% or greater
Certificate Percentage Interest of the Certificates.
MASTER SERVICER: ▇▇▇▇▇ Fargo Bank, National Association, and
its successors and assigns.
MASTER SERVICER CERTIFICATION: A written certification
covering servicing of the Mortgage Loans by the Servicer and signed by an
officer of the Master Servicer that complies with (i) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002, as amended from time to time, and (ii) the February 21, 2003 Statement by
the Staff of the Division of Corporation Finance of the Securities and Exchange
Commission Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules
13a-14 and 15d-14, as in effect from time to time; provided that if, after the
Closing Date (a) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 is amended, (b) the Statement
referred to in clause (ii) is modified or superceded by any subsequent
statement, rule or regulation of the Securities and Exchange Commission or any
statement of a division thereof, or (c) any future releases, rules and
regulations are published by the Securities and Exchange Commission from time to
time pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, which in any such case affects
the form or substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer and the Depositor following a negotiation in good faith to
determine how to comply with any such new requirements.
MASTER SERVICER COLLECTION ACCOUNT: The trust account or
accounts created and maintained pursuant to Section 4.02 of the Sale and
Servicing Agreement. The Master Servicer Collection Account shall be an Eligible
Account.
MASTER SERVICER EVENT OF DEFAULT: Has the meaning assigned to
such term in Section 6.01 of the Sale and Servicing Agreement.
MASTER SERVICING COMPENSATION: For any Payment Date, any
investment income on funds on deposit in the Master Servicer Collection Account
and the Payment Account which is payable to the Master Servicer on such Payment
Date pursuant to Sections 3.14, 4.02(c) and 4.04(d) of the Sale and Servicing
Agreement.
MAXIMUM NOTE INTEREST RATE: 11.50% per annum.
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MATERIAL DEFECT: The meaning specified in Section 2.02(a) of
the Sale and Servicing Agreement.
MAXIMUM LIFETIME MORTGAGE RATE: The maximum level to which a
Mortgage Interest Rate can adjust in accordance with its terms, regardless of
changes in the applicable Index.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R) System.
MINIMUM LIFETIME MORTGAGE RATE: The minimum level to which a
Mortgage Interest Rate can adjust in accordance with its terms, regardless of
changes in the applicable Index.
MOM LOAN: With respect to any Mortgage Loan, MERS acting as
the mortgagee of such Mortgage Loan, solely as nominee for the originator of
such Mortgage Loan and its successors and assigns, at the origination thereof,
or as nominee for any subsequent assignee of the originator pursuant to an
assignment of mortgage to MERS.
MONTHLY ADVANCE: An advance of principal or interest required
to be made by the Servicer pursuant to the HomeBanc Servicing Agreement or the
Master Servicer pursuant to Section 3.22 of the Sale and Servicing Agreement.
MONTHLY PAYMENT: With respect to any Mortgage Loan (including
any REO Property) and any Due Date, the payment of principal and interest due
thereon, or in the case of an Interest Only Mortgage Loan, the payment of (i)
interest or (ii) principal and interest, if applicable, accordance with the
amortization schedule at the time applicable thereto (after adjustment, if any,
for partial Principal Prepayments and for Deficient Valuations occurring prior
to such Due Date but before any adjustment to such amortization schedule by
reason of any bankruptcy, other than a Deficient Valuation, or similar
proceeding or any moratorium or similar waiver or grace period).
MORTGAGE: The mortgage, deed of trust or other instrument
reflected on the Mortgage Loan Schedule as securing a Mortgage Loan.
MORTGAGE FILE: The file containing the Related Documents
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to the Sale and Servicing Agreement.
MORTGAGE INTEREST RATE: The annual rate at which interest
accrues from time to time on any Mortgage Loan pursuant to the related Mortgage
Note, which rate is initially equal to the "Mortgage Interest Rate" set forth
with respect thereto on the Mortgage Loan Schedule.
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MORTGAGE LOAN: A mortgage loan transferred and assigned to the
Trust pursuant to Section 2.01 or Section 2.04 of the Sale and Servicing
Agreement, as identified in the Mortgage Loan Schedule, including a mortgage
loan the property securing which has become an REO Property.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase
Agreement dated as of July 30, 2004, between EMC Mortgage Corporation, as
seller, and Structured Asset Mortgage Investments II Inc., as purchaser, and all
amendments thereof and supplements thereto, attached to the Sale and Servicing
Agreement as Exhibit E.
MORTGAGE LOAN SCHEDULE: With respect to any date, the schedule
of Mortgage Loans held by the Issuer on such date. The schedule of Mortgage
Loans as of the Cut-off Date is the schedule set forth in Exhibit A to the Sale
and Servicing Agreement, which schedule sets forth as to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name;
(iii) the street address (including city, state and
zip code) of the Mortgaged Property;
(iv) the Mortgage Rate;
(v) the Servicing Fee Rate;
(vi) the Net Rate;
(vii) the original term to maturity;
(viii) the maturity date;
(ix) the stated remaining term to maturity;
(x) the original principal balance;
(xi) the first Payment Date;
(xii) the Monthly Payment in effect as of the Cut-off
Date;
(xiii) the Cut-off Date Principal Balance;
(xiv) the Loan-to-Value Ratio at origination;
(xv) the paid-through date of the Mortgage Loan;
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(xvi) the Issuer of any Primary Mortgage Insurance
Policy;
(xvii) the Index and the Gross Margin, if applicable;
(xviii) the Maximum Lifetime Mortgage Rate, if
applicable;
(xix) the Minimum Lifetime Mortgage Rate, if
applicable;
(xx) the Adjustment Date frequency and Payment Date
frequency, if applicable;
(xxi) the number of days delinquent, if any; and
(xxii) the Loan Group.
The Mortgage Loan Schedule shall also set forth the total
number of Mortgage Loans, the total of each of the amounts described under (x)
and (xiii) above for all of the Mortgage Loans, the weighted average by
principal balance of each of the rates described under (iv), (v) and (vi) above
for all of the Mortgage Loans and the weighted average remaining term to
maturity by unpaid principal balance as of the Cut-off Date for all of the
Mortgage Loans.
MORTGAGE NOTE: The originally executed note or other evidence
of the indebtedness of a Mortgagor under the related Mortgage Loan.
MORTGAGED PROPERTY: Land and improvements securing the
indebtedness of a Mortgagor under the related Mortgage Loan or, in the case of
REO Property, such REO Property.
MORTGAGOR: The obligor on a Mortgage Note.
NET MONTHLY EXCESS CASH FLOW: For any Payment Date and each
Loan Group, the excess of the related Available Funds for such Payment Date over
(y) the sum for such Payment Date of (A) the aggregate amount of Accrued Note
Interest for the related Notes and (B) the related Principal Remittance Amount.
NET RATE: With respect to each Mortgage Loan, the Mortgage
Interest Rate in effect from time to time less the sum of (x) the Servicing Fee
Rate and (y) the Special Servicing Fee Rate, if any, in each case expressed as a
per annum rate.
NONRECOVERABLE ADVANCE: Any advance or Monthly Advance (i)
which was previously made or is proposed to be made by the Master Servicer, the
Indenture Trustee solely as successor Master Servicer, or the Servicer and (ii)
which, in the good faith judgment of the Master Servicer, the Indenture Trustee
as successor Master Servicer or the Servicer, will not or, in the case of a
proposed advance or Monthly Advance, would not, be ultimately recoverable by the
Master Servicer, the Indenture Trustee as successor Master Servicer, or the
Servicer from Liquidation Proceeds, Insurance Proceeds or future payments on the
Mortgage Loan for which such advance or Monthly Advance was made or is proposed
to be made.
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NOTE: A Class A Note, Class M Note or Class B Note.
NOTE INTEREST RATE: With respect to each Payment Date and each
Class of Notes, a floating rate equal to the least of (i) One-Month LIBOR plus
the related Note Margin, (ii) the Maximum Note Interest Rate and (iii) the
related Available Funds Rate with respect to such Payment Date.
NOTE MARGIN: With respect to the Class I-A Notes, on any
Payment Date prior to the Step-Up Date, 0.430% per annum, and on any Payment
Date on and after the Step-Up Date, 0.860% per annum. With respect to the Class
I-M-1 Notes, on any Payment Date prior to the Step-Up Date, 0.600% per annum,
and on any Payment Date on and after the Step-Up Date, 0.900% per annum. With
respect to the Class I-M-2 Notes, on any Payment Date prior to the Step-Up Date,
1.15% per annum, and on any Payment Date on and after the Step-Up Date, 1.725%
per annum. With respect to the Class I-B Notes, on any Payment Date prior to the
Step-Up Date, 1.50% per annum, and on any Payment Date on and after the Step-Up
Date, 2.25% per annum. With respect to the Class II-A Notes, on any Payment Date
prior to the Step-Up Date, 0.430% per annum, and on any Payment Date on and
after the Step-Up Date, 0.860% per annum. With respect to the Class II-M-1
Notes, on any Payment Date prior to the Step-Up Date, 0.600% per annum, and on
any Payment Date on and after the Step-Up Date, 0.900% per annum. With respect
to the Class II-M-2 Notes, on any Payment Date prior to the Step-Up Date, 1.15%
per annum, and on any Payment Date on and after the Step-Up Date, 1.725% per
annum. With respect to the Class II-B Notes, on any Payment Date prior to the
Step-Up Date, 1.50% per annum, and on any Payment Date on and after the Step-Up
Date, 2.25% per annum.
NOTE OWNER: The Beneficial Owner of a Note.
NOTE PRINCIPAL BALANCE: With respect to any Note as of any
date of determination, the initial Note Principal Balance as stated on the face
thereof, minus all amounts distributed in respect of principal with respect to
such Note and, in the case of any Class M Note or the Class B Note, the
aggregate amount of any reductions in the Note Principal Balance thereof deemed
to have occurred in connection with allocations of Realized Losses on all prior
Payment Dates, plus in the case of any Class M Note or the Class B Note, any
Subsequent Recoveries on the Mortgage Loans in the related Loan Group added to
the Note Principal Balance of such Class M Note or the Class B Note pursuant to
Section 3.27 of the Indenture. With respect to any Class of Notes, the Note
Principal Balance thereof shall be equal to the sum of the Note Principal
Balances of all Outstanding Notes of such Class.
NOTE REGISTER: The register maintained by the Note Registrar
in which the Note Registrar shall provide for the registration of Notes and of
transfers and exchanges of Notes.
NOTE REGISTRAR: The Indenture Trustee, in its capacity as Note
Registrar, or any successor to the Indenture Trustee in such capacity.
NOTEHOLDER OR HOLDER: The Person in whose name a Note is
registered in the Note Register, except that, any Note registered in the name of
the Depositor, the Issuer, the Indenture Trustee, the Seller, the Securities
Administrator or the Master Servicer or any Affiliate of any of
19
them shall be deemed not to be a holder or holders, nor shall any so owned be
considered outstanding, for purposes of giving any request, demand,
authorization, direction, notice, consent or waiver under the Indenture or the
Trust Agreement; provided that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a Responsible Officer of
the Indenture Trustee has actual knowledge to be so owned shall be so
disregarded. Owners of Notes that have been pledged in good faith may be
regarded as Holders if the pledgee establishes to the satisfaction of the
Indenture Trustee or the Owner Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Issuer, any other obligor
upon the Notes or any Affiliate of any of the foregoing Persons.
OFFICER'S CERTIFICATE: With respect to the Master Servicer, a
certificate signed by the President, Managing Director, a Director, a Vice
President or an Assistant Vice President, of the Master Servicer and delivered
to the Indenture Trustee. With respect to the Issuer, a certificate signed by
any Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, and delivered to the Indenture Trustee. Unless otherwise specified,
any reference in the Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
ONE-MONTH LIBOR: With respect to any Accrual Period, the rate
determined by the Securities Administrator on the related Interest Determination
Date on the basis of the London interbank offered rate for one-month United
States dollar deposits, as such rates appear on the Telerate Screen Page 3750,
as of 11:00 a.m. (London time) on such Interest Determination Date.
In the event that on any Interest Determination Date, Telerate
Screen 3750 fails to indicate the London interbank offered rate for one-month
United States dollar deposits, then One-Month LIBOR for the related Interest
Accrual Period will be established by the Securities Administrator as follows:
(i) If on such Interest Determination Date two or
more Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall be the
arithmetic mean of such offered quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%).
(ii) If on such Interest Determination Date fewer
than two Reference Banks provide such offered quotations,
One-Month LIBOR for the related Accrual Period shall be the
higher of (i) One-Month LIBOR as determined on the previous
Interest Determination Date and (ii) the Reserve Interest
Rate.
The establishment of One-Month LIBOR on each Interest
Determination Date by the Securities Administrator and the Securities
Administrator's calculation of the rate of interest applicable for the related
Accrual Period shall (in the absence of manifest error) be final and binding.
OPINION OF COUNSEL: A written opinion of counsel acceptable to
the Indenture Trustee in its reasonable discretion which counsel may be in-house
counsel for the Depositor or the Seller
20
if acceptable to the Indenture Trustee and the Rating Agencies or outside
counsel for the Depositor, the Seller, the Issuer or the Master Servicer, as the
case may be.
OUTSTANDING: With respect to the Notes, as of the date of
determination, all Notes theretofore executed, authenticated and delivered under
this Indenture except:
(i) Notes theretofore canceled by the Note Registrar
or delivered to the Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other
Notes have been executed, authenticated and delivered pursuant
to the Indenture unless proof satisfactory to the Indenture
Trustee is presented that any such Notes are held by a holder
in due course.
OUTSTANDING MORTGAGE LOAN: With respect to any Due Date, a
Mortgage Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased or replaced.
OUTSTANDING PRINCIPAL BALANCE: As of the time of any
determination, the principal balance of a Mortgage Loan remaining to be paid by
the Mortgagor, or, in the case of an REO Property, the principal balance of the
related Mortgage Loan remaining to be paid by the Mortgagor at the time such
property was acquired by the Trust less any Excess Liquidation Proceeds with
respect thereto to the extent applied to principal.
OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any
Payment Date and each Loan Group, the lesser of (i) the related Net Monthly
Excess Cashflow for such Payment Date and (ii) the excess, if any, of (a) the
related Overcollateralization Target Amount over (b) the related
Overcollateralized Amount on such Payment Date (after taking into account
payments to the related Notes of the Basic Principal Distribution Amount on such
Payment Date).
OVERCOLLATERALIZATION TARGET AMOUNT: The Group I
Overcollateralization Target Amount and Group II Overcollateralization Target
Amount, as applicable.
OVERCOLLATERALIZED AMOUNT: As of any Payment Date and each
Loan Group, the amount, if any, by which (i) the aggregate principal balance of
the Mortgage Loans in such Loan Group (after giving effect to scheduled payments
of principal due during the related Due Period, to the extent received or
advanced, and unscheduled collections of principal received during the related
Prepayment Period including Realized Losses on the Mortgage Loans in such Loan
Group incurred during the related Prepayment Period) exceeds (ii) the aggregate
Note Principal Balance of the related Notes as of such Payment Date (assuming
that 100% of the related Principal Remittance Amount is applied as a principal
payment on the related Notes on such Payment Date).
OWNER TRUST ESTATE: The corpus of the Issuer created by the
Trust Agreement which consists of items referred to in Section 3.01 of the Trust
Agreement.
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OWNER TRUSTEE: Wilmington Trust Company and its successors and
assigns or any successor owner trustee appointed pursuant to the terms of the
Trust Agreement.
PAYING AGENT: Any paying agent or co-paying agent appointed
pursuant to Section 3.03 of the Indenture, which initially shall be the
Indenture Trustee.
PAYMENT ACCOUNT: The trust account or accounts created and
maintained pursuant to Section 4.04 of the Sale and Servicing Agreement, which
shall be denominated "U.S. Bank National Association, as Indenture Trustee f/b/o
holders of HomeBanc Mortgage Trust 2004-1, Mortgage- Backed Notes, Series 2004-1
- Payment Account." The Payment Account shall be an Eligible Account.
PAYMENT ACCOUNT DEPOSIT DATE: The Business Day prior to each
Payment Date.
PAYMENT DATE: The 25th day of each month, or if such day is
not a Business Day, then the next Business Day.
PERCENTAGE INTEREST: With respect to any Note, the percentage
obtained by dividing the Note Principal Balance of such Note by the aggregate
Note Principal Balances of all Notes of that Class. With respect to any
Certificate, the percentage as stated on the face thereof.
PERIODIC RATE CAP: With respect to each Mortgage Loan, the
maximum adjustment that can be made to the Mortgage Interest Rate on each
Interest Adjustment Date in accordance with its terms, regardless of changes in
the applicable Index.
PERMITTED INVESTMENTS: Any one or more of the following
obligations or securities held in the name of the Indenture Trustee for the
benefit of the Noteholders:
(i) direct obligations of, and obligations the timely payment
of which are fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States of America or any state thereof (including
the Indenture Trustee or the Master Servicer or its Affiliates acting in its
commercial banking capacity) and subject to supervision and examination by
federal and/or state banking authorities, provided that the commercial paper
and/or the short-term debt rating and/or the long-term unsecured debt
obligations of such depository institution or trust company at the time of such
investment or contractual commitment providing for such investment have the
Applicable Credit Rating or better from the Rating Agencies and (b) any other
demand or time deposit or certificate of deposit that is fully insured by the
Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or guaranteed by
an agency or instrumentality of the United States of America, the obligations of
which are backed by the full faith and credit of the United
22
States of America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (ii)(a) above where the
Indenture Trustee holds the security therefor;
(iv) securities bearing interest or sold at a discount issued
by any corporation (including the Indenture Trustee or the Master Servicer or
its Affiliates) incorporated under the laws of the United States of America or
any state thereof that have the Applicable Credit Rating or better from the
Rating Agencies at the time of such investment or contractual commitment
providing for such investment; provided, however, that securities issued by any
particular corporation will not be Permitted Investments to the extent that
investments therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the Trust to exceed
10% of the aggregate Outstanding Principal Balances of all the Mortgage Loans
and Permitted Investments held as part of the Trust as determined by the Master
Servicer;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof) having
the Applicable Credit Rating or better from the Rating Agencies at the time of
such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance
company or other corporation or entity;
(vii) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to the Rating Agencies
as evidenced in writing by the Rating Agencies to the Indenture Trustee; and
(viii) any money market or common trust fund having the
Applicable Credit Rating or better from the Rating Agencies, including any such
fund for which the Indenture Trustee or Master Servicer or any affiliate of the
Indenture Trustee or Master Servicer acts as a manager or an advisor; provided,
however, that no instrument or security shall be a Permitted Investment if such
instrument or security evidences a right to receive only interest payments with
respect to the obligations underlying such instrument or if such security
provides for payment of both principal and interest with a yield to maturity in
excess of 120% of the yield to maturity at par or if such instrument or security
is purchased at a price greater than par as determined by the Master Servicer.
PERSON: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PLAN: Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
▇▇▇▇▇ plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.
PLAN ASSETS: Assets of a Plan within the meaning of Department
of Labor regulation 29 C.F.R. ss. 2510.3-101.
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POOL BALANCE: With respect to any date of determination, the
aggregate of the Scheduled Principal Balances of all Mortgage Loans as of such
date.
PREPAYMENT INTEREST SHORTFALL: With respect to any Payment
Date, the Prepayment Interest Shortfall, if any, for such Payment Date net of
Compensating Interest Payments made with respect to such Payment Date.
PREPAYMENT PERIOD: With respect any Mortgage Loan and any
Payment Date, the calendar month immediately preceding the month in which such
payment occurs.
PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage
guaranty insurance policy issued in connection with a Mortgage Loan which
provides compensation to a Mortgage Note holder in the event of default by the
obligor under such Mortgage Note or the related Security Instrument, if any, or
any replacement policy therefor through the related Accrual Period for such
Class relating to a Payment Date.
PRINCIPAL DISTRIBUTION AMOUNT: For any Payment Date and each
Loan Group, the sum of (a) the related Basic Principal Distribution Amount, (b)
any amounts in respect of payments of the related Undercollateralization Amount
from related Net Monthly Excess Cashflow and related Crossable
Undercollateralization Amount from non-related Net Monthly Excess Cashflow on
that Payment Date and (c) the related Overcollateralization Increase Amount.
PRINCIPAL PREPAYMENT: Any payment (whether partial or full) or
other recovery of principal on a Mortgage Loan which is received in advance of
its scheduled Due Date to the extent that it is not accompanied by an amount as
to interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment, including Insurance
Proceeds and Repurchase Proceeds, but excluding the principal portion of Excess
Liquidation Proceeds.
PRINCIPAL REMITTANCE AMOUNT: With respect to any Payment Date
and each Loan Group, the sum of the following:
(i) the principal portion of each previously
undistributed Monthly Payment due after the Cut-off Date
received on or prior to the related Determination Date or
advanced prior to such Payment Date (other than Monthly
Payments due after the related Due Period, which shall be
treated as if received during the Due Period they were due) on
each Outstanding Mortgage Loan in such Loan Group;
(ii) the principal portion of all proceeds of any
Mortgage Loan in such Loan Group repurchased during the
related Prepayment Period (or deemed to have been so
repurchased in accordance with the Sale and Servicing
Agreement) pursuant to the Sale and Servicing Agreement and
the amount of any shortfall deposited in the Master Servicer
Collection Account in connection with the substitution of a
Deleted Mortgage Loan pursuant to the Sale and Servicing
Agreement during the related Collection Period; and
24
(iii) the principal portion of all other unscheduled
collections received during the related Prepayment Period
(including, without limitation, Principal Prepayments,
Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to
the extent applied by the Master Servicer as recoveries of
principal on the Mortgage Loans in such Loan Group pursuant to
the Sale and Servicing Agreement.
PROCEEDING: Any suit in equity, action at law or other
judicial or administrative proceeding.
PROSPECTUS: The Prospectus Supplement, dated July 29, 2004,
together with the attached Prospectus, dated May 14, 2004.
PROTECTED ACCOUNT: An account established and maintained for
the benefit of Noteholders by the Servicer with respect to the Mortgage Loans
and with respect to REO Property pursuant to the HomeBanc Servicing Agreement.
PURCHASER: Structured Asset Mortgage Investments II Inc., a
Delaware corporation, and its successors and assigns.
QUALIFIED INSURER: Any insurance company duly qualified as
such under the laws of the state or states in which the related Mortgaged
Property or Mortgaged Properties is or are located, duly authorized and licensed
in such state or states to transact the type of insurance business in which it
is engaged and approved as an insurer by the Master Servicer, so long as the
claims paying ability of which is acceptable to the Rating Agencies for
mortgage-backed notes having the same rating as the Notes rated by the Rating
Agencies as of the Closing Date.
RATING AGENCY: Any nationally recognized statistical rating
organization, or its successor, that rated the Notes at the request of the
Depositor at the time of the initial issuance of the Notes. Initially, Standard
& Poor's and ▇▇▇▇▇'▇. If such organization or a successor is no longer in
existence, "Rating Agency" with respect to the Notes shall be such nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Indenture Trustee and Master Servicer. References herein to the highest short
term unsecured rating category of a Rating Agency shall mean A-1 or better in
the case of Standard & Poor's, P-1 in the case of ▇▇▇▇▇'▇ and in the case of any
other Rating Agency shall mean such equivalent ratings. References herein to the
highest long-term rating category of a Rating Agency shall mean "AAA" in the
case of Standard & Poor's, "Aaa" in the case of ▇▇▇▇▇'▇ and in the case of any
other Rating Agency, such equivalent rating.
REALIZED LOSS: Any (i) Bankruptcy Loss or (ii) as to any
Liquidated Mortgage Loan, (x) the Outstanding Principal Balance of such
Liquidated Mortgage Loan plus accrued and unpaid interest thereon at the
Mortgage Interest Rate through the last day of the month of such liquidation,
less (y) the related Excess Liquidation Proceeds with respect to such Mortgage
Loan and the related Mortgage Property. In addition, to the extent the Master
Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the
amount of the Realized Loss with respect to that Mortgage Loan will be reduced
to the extent such recoveries are applied to reduce the Current Principal Amount
of any Class of Notes on any Payment Date.
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RECORD DATE: With respect to any Book-Entry Notes and any
Payment Date, the close of business on the Business Day immediately preceding
such Payment Date. With respect to any Notes that are not Book-Entry Notes, the
close of business on the last Business Day of the calendar month preceding such
Payment Date.
REFERENCE BANKS: Any leading banks engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, (ii) whose quotations appear on the
Telerate Screen Page 3750 on the Interest Determination Date in question, (iii)
which have been designated as such by the Securities Administrator and (iv)
which are not Affiliates of the Depositor or the Seller.
REGISTERED HOLDER: The Person in whose name a Note is
registered in the Note Register on the applicable Record Date.
REINVESTMENT AGREEMENTS: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Indenture Trustee).
RELATED DOCUMENTS: With respect to each Mortgage Loan, the
documents specified in Section 2.01(b)(i)-(vii) of the Sale and Servicing
Agreement and any documents required to be added to such documents pursuant to
the Sale and Servicing Agreement or the Mortgage Loan Purchase Agreement.
RELIEF ACT: The Servicemembers Civil Relief Act, as amended,
or any similar state law.
RELIEF ACT MORTGAGE LOAN: Any Mortgage Loan as to which the
Scheduled Payment thereof has been reduced due to the application of the Relief
Act.
REO PROPERTY: A Mortgaged Property acquired in the name of the
Indenture Trustee, for the benefit of the Noteholders, by foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
REPURCHASE PRICE: With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the Seller
pursuant to the Mortgage Loan Purchase Agreement or Article II of the Sale and
Servicing Agreement, an amount equal to the sum of (i)(a) 100% of the
Outstanding Principal Balance of such Mortgage Loan as of the date of repurchase
(or if the related Mortgaged Property was acquired with respect thereto, 100% of
the Outstanding Principal Balance at the date of the acquisition), plus (b)
accrued but unpaid interest on the Outstanding Principal Balance at the related
Mortgage Interest Rate, through and including the last day of the month of
repurchase, plus (c) any unreimbursed Monthly Advances and servicing advances
payable to the Servicer or to the Master Servicer and (ii) any costs and damages
(if any) incurred by the Trust in connection with any violation of such Mortgage
Loan of any predatory lending laws.
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REPURCHASE PROCEEDS: the Repurchase Price in connection with
any repurchase of a Mortgage Loan by the Seller and any cash deposit in
connection with the substitution of a Mortgage Loan.
REQUEST FOR RELEASE: A request for release in the form
attached to the Sale and Servicing Agreement as Exhibit B.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan,
any insurance policy which is required to be maintained from time to time under
the Sale and Servicing Agreement with respect to such Mortgage Loan.
RESERVE INTEREST RATE: With respect to any Interest
Determination Date, the rate per annum that the Securities Administrator
determines to be either (i) the arithmetic mean (rounded upwards if necessary to
the nearest whole multiple of 0.0625%) of the one-month United States dollar
lending rates which New York City banks selected by the Securities Administrator
are quoting on the relevant Interest Determination Date to the principal London
offices of leading banks in the London interbank market or (ii) in the event
that the Securities Administrator can determine no such arithmetic mean, the
lowest one-month United States dollar lending rate which New York City banks
selected by the Securities Administrator are quoting on such Interest
Determination Date to leading European banks.
RESPONSIBLE OFFICER: With respect to the Securities
Administrator, any officer of the Securities Administrator with direct
responsibility for the administration of the Indenture and also, with respect to
a particular matter, any other officer to whom such matter is referred because
of such officer's knowledge of and familiarity with the particular subject; and
with respect to the Indenture Trustee, any vice president, assistant vice
president, any assistant secretary or any assistant treasurer or any other
officer of the Indenture Trustee working in its Corporate Trust Department
customarily performing functions similar to those performed by any of the above
designated officers who at such time shall be officers to whom, with respect to
a particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject or who shall have direct
responsibility for the administration of this Indenture.
SALE AND SERVICING AGREEMENT: The Sale and Servicing
Agreement, dated July 30, 2004, among the Depositor, the Issuer, the Indenture
Trustee, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer and
securities administrator, and EMC Mortgage Corporation, as seller and company.
SCHEDULED PAYMENT: With respect to any Mortgage Loan and any
month, the scheduled payment or payments of principal and interest due during
such month on such Mortgage Loan which either is payable by a Mortgagor in such
month under the related Mortgage Note or, in the case of REO Property, would
otherwise have been payable under the related Mortgage Note.
SCHEDULED PRINCIPAL: The principal portion of any Scheduled
Payment.
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan
and any Payment Date (1) the unpaid principal balance of such Mortgage Loan as
of the close of business on the
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related Due Date (taking account of the principal payment to be made on such Due
Date and irrespective of any delinquency in its payment), as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any bankruptcy or similar proceeding
occurring after the Cut-off Date (other than a Deficient Valuation) or any
moratorium or similar waiver or grace period) less (2) any Principal Prepayments
and the principal portion of any Excess Liquidation Proceeds received during or
prior to the immediately preceding Prepayment Period; provided that the
Scheduled Principal Balance of any Liquidated Mortgage Loan is zero.
SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
SECURITIES ADMINISTRATOR: ▇▇▇▇▇ Fargo Bank, National
Association, or its successor in interest, or any successor securities
administrator appointed as herein provided.
SECURITY: Any of the Certificates or Notes.
SECURITYHOLDER or HOLDER: Any Noteholder or a
Certificateholder.
SECURITY INSTRUMENT: A written instrument creating a valid
first lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.
SELLER: EMC Mortgage Corporation, and its successors and
assigns.
SERVICER: Home Banc Corp., and its successors and assigns;
provided, however, in the event that any Mortgage Loan becomes a Specially
Serviced Mortgage Loan, "Servicer" shall also refer to the Special Servicer in
its capacity as servicer of any Specially Serviced Mortgage Loans.
SERVICER REMITTANCE DATE: With respect to each Mortgage Loan,
the date set forth in the Servicing Agreement.
SERVICING AGREEMENT: The HomeBanc Servicing Agreement or, in
the case of any Specially Serviced Mortgage Loan, the Special Servicing
Agreement.
SERVICING FEE: With respect to each Mortgage Loan and any
Payment Date, the fee payable monthly to the Servicer (or in the case of any
Mortgage Loan, the servicing of which is transferred to the Special Servicer,
the Special Servicer) in respect of servicing compensation that accrues at an
annual rate equal to the Servicing Fee Rate multiplied by the Scheduled
Principal Balance of such Mortgage Loan as of the first day of the related Due
Period.
SERVICING FEE RATE: With respect to any Mortgage Loan, 0.375%
per annum.
SERVICING OFFICEr: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and specimen signature appear
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on a list of servicing officers furnished to the Indenture Trustee by the Master
Servicer, as such list may be amended from time to time.
SPECIAL SERVICING AGREEMENT: The Letter Agreement, dated July
30, 2004, among the Servicer, the Special Servicer and the Master Servicer.
SPECIAL SERVICING FEE: With respect to each Specially Serviced
Mortgage Loan and any Payment Date, the additional fee payable monthly to the
Special Servicer in respect of special servicing compensation that accrues at an
annual rate equal to the Special Servicing Fee Rate multiplied by the Scheduled
Principal Balance of such Mortgage Loan as of the first day of the related Due
Period.
SPECIAL SERVICING FEE RATE: With respect to any Mortgage Loan
being serviced by the Special Servicer, 0.375% per annum.
SPECIALLY SERVICED MORTGAGE LOAN: The Mortgage Loans being
serviced by the Special Servicer pursuant to the Special Servicing Agreement.
STANDARD & POOR'S: Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor in interest.
STATUTORY TRUST STATUTE: Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. Code ss.ss.3801 ET SEQ., as the same may be amended from
time to time.
STEP-UP DATE: The Payment Date occurring after the first
Payment Date for which the aggregate Scheduled Principal Balance of the Mortgage
Loans as of the end of the related Due Period has been reduced to 20% or less of
the Cut-off Date Balance.
SUBSEQUENT RECOVERIES: As of any Payment Date, amounts
received by the Master Servicer during the related Due Period or surplus amounts
held by the Master Servicer to cover estimated expenses (including, but not
limited to, recoveries in respect of the representations and warranties made by
the Seller pursuant to the Mortgage Loan Purchase Agreement) specifically
related to a Liquidated Mortgage Loan or disposition of an REO Property prior to
the related Prepayment Period that resulted in a Realized Loss, after the
liquidation or disposition of such Mortgage Loan.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the
Indenture Trustee or the Custodian pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 of the Sale and Servicing Agreement, as applicable, in
each case, (i) which has an Outstanding Principal Balance not greater nor
materially less than the Mortgage Loan for which it is to be substituted; (ii)
which has a Mortgage Interest Rate and Net Rate not less than, and not
materially greater than, such Mortgage Loan; (iii) which has a maturity date not
materially earlier or later than such Mortgage Loan and not later than the
latest maturity date of any Mortgage Loan; (iv) which is of the same property
type and occupancy type as such Mortgage Loan; (v) which has a Loan-to-Value
Ratio not greater than the Loan-to-Value Ratio of such Mortgage Loan; (vi) which
is current in payment of principal and interest as of the date of substitution;
(vii) as to which the payment terms do not vary
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in any material respect from the payment terms of the Mortgage Loan for which it
is to be substituted and (viii) which has a Gross Margin and Maximum Lifetime
Mortgage Rate no less than those of such Mortgage Loan, has the same Index and
interval between Interest Adjustment Dates as such Mortgage Loan, and a Minimum
Lifetime Mortgage Rate no lower than that of such Mortgage Loan.
TELERATE SCREEN PAGE 3750: The display designated as page 3750
on the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks).
TREASURY REGULATIONS: Regulations, including proposed or
temporary Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
TRUST: HomeBanc Mortgage Trust 2004-1 to be created pursuant
to the Trust Agreement.
TRUST AGREEMENT: The Amended and Restated Trust Agreement
dated as of July 30, 2004, among the Owner Trustee, the Depositor and U.S. Bank
National Association, as Certificate Registrar and Certificate Paying Agent,
relating to the Trust.
TRUST ESTATE: The meaning specified in the Granting Clause of
the Indenture.
TRUST INDENTURE ACT OR TIA: The Trust Indenture Act of 1939,
as amended from time to time, as in effect on any relevant date.
UCC: The Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
UNDERLYING SELLER: HMB Acceptance Corp.
UNDERWRITERS: Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇.▇. ▇▇▇▇▇▇
Securities, Inc.
UNINSURED CAUSE: Any cause of damage to a Mortgaged Property
or related REO Property such that the complete restoration of such Mortgaged
Property or related REO Property is not fully reimbursable by the hazard
insurance policies required to be maintained pursuant to the HomeBanc Servicing
Agreement, without regard to whether or not such policy is maintained.
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