Exhibit 4.1
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INDENTURE
between
RENAISSANCE HOME EQUITY LOAN TRUST [_____]-[__]
as Issuer
and
[_____________________________],
as Indenture Trustee
Dated as of [_______] [___], 200[_]
RENAISSANCE HOME EQUITY LOAN TRUST [_____]-[__]
Home Equity Loan Asset-Backed Notes,
Series [_____]-[___]
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Table Of Contents
ARTICLE I
DEFINITIONS
Page
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SECTION 1.1 Definitions..............................................................................1
SECTION 1.2 Incorporation by Reference of Trust Indenture Act........................................9
SECTION 1.3 Rules of Construction....................................................................9
ARTICLE II
THE NOTES
SECTION 2.1 Form....................................................................................11
SECTION 2.2 Execution, Authentication, Delivery and Dating..........................................11
SECTION 2.3 Registration; Registration of Transfer and Exchange.....................................12
SECTION 2.4 Mutilated, Destroyed, Lost or Stolen Notes..............................................13
SECTION 2.5 Persons Deemed Owner....................................................................14
SECTION 2.6 Payment of Principal and Interest; Defaulted Interest...................................14
SECTION 2.7 Cancellation............................................................................15
SECTION 2.8 [Reserved]..............................................................................15
SECTION 2.9 Release of Trust Estate.................................................................15
SECTION 2.10 Book-Entry Notes........................................................................15
SECTION 2.11 Notices to Clearing Agency..............................................................16
SECTION 2.12 Definitive Notes........................................................................16
SECTION 2.13 Tax Treatment...........................................................................17
SECTION 2.14 ERISA Representation....................................................................17
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest.......................................................18
SECTION 3.2 Maintenance of Office or Agency.........................................................18
SECTION 3.3 Money for Payments To Be Held in Trust..................................................18
SECTION 3.4 Existence...............................................................................19
SECTION 3.5 Protection of Trust Estates.............................................................20
SECTION 3.6 Annual Opinions as to the Trust Estate..................................................20
SECTION 3.7 Performance of Obligations; Servicing of Home Equity Loans..............................21
SECTION 3.8 Negative Covenants......................................................................22
SECTION 3.9 Annual Statement as to Compliance.......................................................23
SECTION 3.10 Covenants of the Issuer.................................................................23
SECTION 3.11 Servicer's Obligations..................................................................24
SECTION 3.12 Restricted Payments.....................................................................24
SECTION 3.13 Treatment of Notes as Debt for All Purposes.............................................24
SECTION 3.14 Notice of Events of Default.............................................................24
SECTION 3.15 Further Instruments and Acts............................................................24
SECTION 3.16 Issuer May Consolidate, etc.............................................................24
SECTION 3.17 Successor or Transferee.................................................................26
SECTION 3.18 No Other Business.......................................................................26
SECTION 3.19 No Borrowing............................................................................26
SECTION 3.20 Guarantees, Loans, Advances and Other Liabilities.......................................26
SECTION 3.21 Capital Expenditures....................................................................26
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture.................................................27
SECTION 4.2 Application of Trust Money..............................................................28
SECTION 4.3 Subrogation and Cooperation.............................................................28
SECTION 4.4 Repayment of Moneys Held by Paying Agent................................................29
ARTICLE V
REMEDIES
SECTION 5.1 Events of Default.......................................................................30
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment......................................31
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee..............................................................................31
SECTION 5.4 Remedies; Priorities....................................................................34
SECTION 5.5 Optional Preservation of the Collateral.................................................36
SECTION 5.6 Limitation of Suits.....................................................................36
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal and Interest...................36
SECTION 5.8 Restoration of Rights and Remedies......................................................37
SECTION 5.9 Rights and Remedies Cumulative..........................................................37
SECTION 5.10 Delay or Omission Not a Waiver..........................................................37
SECTION 5.11 Control by Noteholders..................................................................37
SECTION 5.12 Waiver of Past Defaults.................................................................38
SECTION 5.13 Undertaking for Costs...................................................................38
SECTION 5.14 Waiver of Stay or Extension Laws........................................................38
SECTION 5.15 Action on Notes.........................................................................39
SECTION 5.16 Performance and Enforcement of Certain Obligations......................................39
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ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee.............................................................40
SECTION 6.2 Rights of Indenture Trustee.............................................................41
SECTION 6.3 Individual Rights of Indenture Trustee..................................................44
SECTION 6.4 Indenture Trustee's Disclaimer..........................................................44
SECTION 6.5 Notice of Defaults......................................................................44
SECTION 6.6 Reports by Indenture Trustee to Holders.................................................44
SECTION 6.7 Compensation and Indemnity..............................................................44
SECTION 6.8 Replacement of Indenture Trustee........................................................45
SECTION 6.9 Successor Indenture Trustee by Merger...................................................46
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.......................46
SECTION 6.11 Eligibility; Disqualification...........................................................47
SECTION 6.12 Preferential Collection of Claims Against Issuer........................................47
SECTION 6.13 Representations and Warranties..........................................................48
SECTION 6.14 Directions to Indenture Trustee.........................................................48
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders..........................................................................49
SECTION 7.2 Preservation of Information; Communications to Noteholders..............................49
SECTION 7.3 Reports by Issuer.......................................................................49
SECTION 7.4 Reports by Indenture Trustee............................................................50
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money.....................................................................51
SECTION 8.2 Accounts; Distributions.................................................................51
SECTION 8.3 [Reserved]..............................................................................52
SECTION 8.4 Servicer's Monthly Statements...........................................................52
SECTION 8.5 [Reserved]..............................................................................52
SECTION 8.6 Opinion of Counsel......................................................................52
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders..................................53
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SECTION 9.2 Supplemental Indentures with Consent of Noteholders.....................................54
SECTION 9.3 Execution of Supplemental Indentures....................................................56
SECTION 9.4 Effect of Supplemental Indenture........................................................56
SECTION 9.5 Conformity with Trust Indenture Act.....................................................56
SECTION 9.6 Reference in Notes to Supplemental Indentures...........................................56
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption..............................................................................57
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc...............................................58
SECTION 11.2 Form of Documents Delivered to Indenture Trustee........................................59
SECTION 11.3 Acts of Noteholders.....................................................................60
SECTION 11.4 Notices.................................................................................60
SECTION 11.5 Notices to Noteholders; Waiver..........................................................61
SECTION 11.6 Rights of the Insurer to Exercise Rights of Noteholders.................................62
SECTION 11.7 Conflict with Trust Indenture Act.......................................................62
SECTION 11.8 Effect of Headings and Table of Contents................................................63
SECTION 11.9 Successors and Assigns..................................................................63
SECTION 11.10 Separability............................................................................63
SECTION 11.11 Benefits of Indenture...................................................................63
SECTION 11.12 Legal Holidays..........................................................................63
SECTION 11.13 GOVERNING LAW...........................................................................63
SECTION 11.14 Counterparts............................................................................63
SECTION 11.15 Recording of Indenture..................................................................63
SECTION 11.16 Trust Obligation........................................................................63
SECTION 11.17 No Petition.............................................................................64
SECTION 11.18 Inspection..............................................................................64
SECTION 11.19 Inconsistencies With the Sale and Servicing Agreement...................................64
SECTION 11.20 Third-Party Beneficiaries...............................................................64
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EXHIBITS
SCHEDULE A-I - Schedule of Home Equity Loans for Sub-Trust 1
SCHEDULE A-II - Schedule of Home Equity Loans for Sub-Trust 2
SCHEDULE A-III - Schedule of Home Equity Loans for Sub-Trust 3
EXHIBIT A - Form of Notes
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INDENTURE dated as of [________] [___], [_____] between RENAISSANCE
HOME EQUITY LOAN TRUST [_____]-[__], a Delaware business trust (the "Issuer"),
and [________________], a(n) [___________] banking corporation, as trustee and
not in its individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the holders of the Issuer's Home
Equity Loan Asset-Backed Notes (the "Notes") and the Insurer:
GRANTING CLAUSE
Subject to the terms of this Indenture, the Issuer hereby Grants to the
Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of
the Class A-1 Noteholders and the Insurer, all of the Issuer's right, title and
interest in and to: (i) the Trust Estate relating to Group 1; (ii) all right,
title and interest of the Issuer in the Sale and Servicing Agreement, with
respect to the Group 1 Home Equity Loans (including the Issuer's right to cause
the Seller to repurchase Group 1 Home Equity Loans from the Issuer under certain
circumstances described therein); (iii) all present and future claims, demands,
causes of action 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, including all proceeds of
the conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing, each with respect to Group 1; (iv) all funds on deposit from time to
time in (a) the Principal and Interest Account relating to Group 1, (b) the
Cross-Collateralization Reserve Account relating to Group 1, and (c) the
Distribution Account relating to Group 1; (v) all other property of the Trust
relating to Group 1 from time to time; and (vi) any and all proceeds of the
foregoing (collectively with respect to Group 1, 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 Class A-1
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.
Subject to the terms of this Indenture, the Issuer hereby Grants to the
Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of
the Class A-2 Noteholders and the Insurer, all of the Issuer's right, title and
interest in and to: (i) the Trust Estate relating to Group 2; (ii) all right,
title and interest of the Issuer in the Sale and Servicing Agreement, with
respect to the Group 2 Home Equity Loans (including the Issuer's right to cause
the Seller to repurchase Group 2 Home Equity Loans from the Issuer under certain
circumstances described therein); (iii) all present and future claims, demands,
causes of action 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, including all proceeds of
the conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing, each with respect to Group 2; (iv) all funds on deposit from time to
time in (a) the Principal and Interest Account relating to Group 2, (b) the
Cross-Collateralization Reserve Account relating to Group 2, and (c) the
Distribution Account relating to Group 2; (v) all other property of the Trust
relating to Group 2 from time to time; and (vi) any and all proceeds of the
foregoing (collectively with respect to Group 2, the "Collateral").
1
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 Class A-2
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.
Subject to the terms of this Indenture, the Issuer hereby Grants to the
Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of
the Class A-3 Noteholders and the Insurer, all of the Issuer's right, title and
interest in and to: (i) the Trust Estate relating to Group 3; (ii) all right,
title and interest of the Issuer in the Sale and Servicing Agreement, with
respect to the Group 3 Home Equity Loans (including the Issuer's right to cause
the Seller to repurchase Group 3 Home Equity Loans from the Issuer under certain
circumstances described therein); (iii) all present and future claims, demands,
causes of action 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, including all proceeds of
the conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing, each with respect to Group 3; (iv) all funds on deposit from time to
time in (a) the Principal and Interest Account relating to Group 3, (b) the
Cross-Collateralization Reserve Account relating to Group 3, and (c) the
Distribution Account relating to Group 3; (v) all other property of the Trust
relating to Group 3 from time to time; and (vi) any and all proceeds of the
foregoing (collectively with respect to Group 3, 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 Class A-3
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 foregoing Grants shall inure to the benefit of the Insurer in
respect of draws made on the applicable Insurance Policy for each Loan Group and
amounts owing from time to time pursuant to the Insurance Agreement, and such
Grants shall continue in full force and effect for the benefit of the Insurer
until all such amounts owing to it have been repaid in full.
2
The Indenture Trustee, as Indenture Trustee on behalf of the holders of
each Group of Notes, acknowledges the foregoing Grants, accepts the trusts
hereunder in good faith and without notice of any adverse claim or liens and
agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of the holders of the related Notes and
the Insurer may be adequately and effectively protected. The Indenture Trustee
further agrees and acknowledges that each item of Collateral that is physically
delivered to the Indenture Trustee will be held by the Indenture Trustee in
[_________].
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
(a) 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
Sale and Servicing Agreement. All other capitalized terms used herein shall have
the meanings specified herein.
"Act" has the meaning specified in Section 11.3(a).
"Administration Agreement" means the Administration Agreement dated as
of [_________] [__], _____, among the Administrator, the Issuer, the Indenture
Trustee and [Champion Mortgage Co., Inc.]
"Administrator" means [______________________], a(n) [________] banking
corporation, or any successor Administrator under the Administration Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Amended and Restated Trust Agreement" means Amended and Restated Trust
Agreement dated as of [___________], [_____] among Delta Funding Corporation, as
Seller, the Depositor and the Owner Trustee, amending and restating the Trust
Agreement dated as of [___________] [___], [_____].
"Authorized Officer" means, with respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter) and, so
long as the Administration Agreement is in effect, any Vice President or more
senior officer of the Administrator or Renaissance Mortgage Acceptance Corp.
("Renaissance") who is authorized to act for the Administrator or Renaissance in
matters relating to the Issuer and to be acted upon by the Administrator or
Renaissance pursuant to the Administration Agreement and who is identified on
the list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"Book-Entry Notes" means any Note registered in the name of the
Depository or its nominee, ownership of which is reflected on the books of the
Depository or on the books of a Person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
1
"Business Day" has the meaning assigned thereto in the Sale and
Servicing Agreement.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit C to the Trust Agreement.
"Class A-1 Notes" means any Note, designated as a Class A-1 Note,
executed by the Issuer and authenticated by the Indenture Trustee substantially
in the form of Exhibit A hereto.
"Class A-2 Notes" means any Note, designated as a Class A-2 Note,
executed by the Issuer and authenticated by the Indenture Trustee substantially
in the form of Exhibit A hereto.
"Class A-3 Notes" means any Note, designated as a Class A-3 Note,
executed by the Issuer and authenticated by the Indenture Trustee substantially
in the form of Exhibit A hereto.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means [___________] [___], [_____].
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Commission" shall mean the Securities and Exchange Commission.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Agreement is located at
[_____________________________________], [____________________________________],
or at such other address as the Indenture Trustee may designate from time to
time by notice to the Noteholders, the Issuer and the Insurer or the principal
corporate trust office of any successor Indenture Trustee at the address
designated by such successor Indenture Trustee by notice to the Noteholders, the
Insurer, and the Issuer.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Article II.
2
"Depositor" shall mean Renaissance Mortgage Acceptance Corp., a
Delaware corporation, in its capacity as depositor under the Sale and Servicing
Agreement, and its successor in interest.
"Depository Institution" means any depository institution or trust
company, including the Indenture Trustee, that (i) has short-term debt
obligations and long-term debt obligations at the time of any deposit therein
and throughout the time the interest is maintained that are rated at least "P-1"
and "A2," respectively, by Moody's and "A-1" and "A," respectively, by Standard
& Poor's, and that the deposits in such account are fully insured to the maximum
extent provided by either the BIF or the SAIF and which is any of (a) a federal
savings and loan association duly organized, validly existing and in good
standing under the applicable banking laws of any state, (b) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (c) a national banking association duly organized, validly
existing and in good standing under the federal banking laws or (d) a principal
subsidiary of a bank holding company, and in each case of (a)-(d), approved in
writing by the Insurer. Such Depository Institution shall have (x) a segregated
trust account maintained with the corporate trust department of a federal or
state chartered depository or trust company, having capital and surplus of not
less than $50,000,000, acting in its fiduciary capacity or (y) an account
otherwise acceptable to each Rating Agency and the Insurer as evidenced by a
letter from each Rating Agency and the Insurer to the Owner Trustee and the
Indenture Trustee, without reduction or withdrawal of the then current ratings
of the Notes, without regard to the applicable Insurance Policy.
"Distribution Account" means the Distribution Account (as defined in
the Sale and Servicing Agreement), established by the Indenture Trustee.
"Distribution Date" shall mean the twenty-fifth day of each month or,
if such day is not a Business Day, then the next Business Day, beginning in
[____________].
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
"Final Distribution Date" means, with respect to any Note, the
Distribution Date occurring in [--------------].
"Grant" means mortgage, pledge, bargain, 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 this Indenture. A Grant of the Collateral with respect to a Group or any
other agreement or instrument shall include all rights, powers and options (but
none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Collateral or such Group
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.
3
"Group" means any of Group 1, Group 2 or Group 3 as the context
requires.
"Group 1" means the Class A-1 Notes and/or Loan Group 1 as the context
requires.
"Group 2" means the Class A-2 Notes and/or Loan Group 2 as the context
requires.
"Group 3" means the Class A-3 Notes and/or Loan Group 3 as the context
requires.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indenture Trust Estate" or "Trust Estate" means, with respect to each
Group, all money, instruments, rights and other property that are subject or
intended to be subject to the lien and security interest of this Indenture for
the benefit of the related Noteholders and the Insurer (including, without
limitation, all Collateral Granted to the Indenture Trustee relating to such
Group pursuant to the Granting Clause), including all proceeds thereof.
"Indenture Trustee" means [______________________________], a(n)
[_______] banking corporation, as Indenture Trustee under this Indenture, or any
successor Indenture Trustee appointed pursuant to the terms of this Indenture.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor on
the Notes, the Transferor and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Transferor or any Affiliate
of any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, the Transferor or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 herein,
made by an Independent appraiser or other expert appointed by an Issuer Order
and approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the definition
of "Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Insurance Agreement" shall have the meaning assigned thereto in the
Sale and Servicing Agreement
"Insurer" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
4
"Interest Period" shall have the meaning assigned thereto in the Sale
and Servicing Agreement.
"Issuer" means Renaissance Home Equity Loan Trust [_____]-[__] until a
successor replaces it in accordance with the terms of the Transaction Documents
and, thereafter, means the successor.
"Issuer Order" and "Issuer Request" mean 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" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
"LIBOR Business Day" shall have the meaning assigned thereto in the
Sale and Servicing Agreement.
"Loan Group" means any of Loan Group 1, Loan Group 2 or Loan Group 3.
"Loan Group 1" means the pool of Home Equity Loans identified in the
Schedule of Home Equity Loans for Sub-Trust 1.
"Loan Group 2" means the pool of Home Equity Loans identified in the
Schedule of Home Equity Loans for Sub-Trust 2.
"Loan Group 3" means the pool of Home Equity Loans identified in the
Schedule of Home Equity Loans for Sub-Trust 3.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereto.
"Note" means any of the Class A-1 Notes, the Class A-2 Notes or the
Class A-3 Notes.
["Note Depository Agreement" means the agreement dated ____________,
_____, among the Issuer, the Indenture Trustee and The Depository Trust Company,
as the initial Clearing Agency, relating to the Book-Entry Notes.]
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Note Rate" with respect to each Class of Notes, shall have the meaning
assigned thereto in the Sale and Servicing Agreement.
"Note Register" and "Note Registrar" have the respective meanings
specified in Article II.
"Noteholder" means a Holder of a Note.
5
"Obligations" shall mean the Home Equity Loans.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 herein, and
delivered to the Indenture Trustee. Unless otherwise specified, any reference in
this Indenture to an Officer's Certificate shall be to an Officer's Certificate
of any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be employees of
or counsel to the Issuer and who shall be satisfactory to the Indenture Trustee
and the Insurer, and which opinion or opinions shall be addressed to the
Indenture Trustee and the Insurer, as Indenture Trustee and the Insurer,
respectively, and shall comply with any applicable requirements of Section 11.1
herein and shall be in form and substance satisfactory to the Indenture Trustee
and the Insurer.
"Outstanding" means, with respect to any Note and as of the date of
determination, any Note theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or
provision for such notice has been made, satisfactory to the Indenture
Trustee);
(iii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser; and
(iv) Notes for which the Final Distribution Date has occurred;
provided, however, in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent, or waiver hereunder or under any Transaction
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Depositor, the Transferor or any Affiliate of any of the foregoing Persons shall
be disregarded and deemed not to be Outstanding, except 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 the Indenture Trustee knows to be so owned shall be so disregarded
and provided further that for purposes of determining the Insurer's subrogation
rights, a Note shall be deemed Outstanding to the extent of any payment made by
the Insurer. Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Indenture
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, the Transferor or
any Affiliate of any of the foregoing Persons.
6
"Outstanding Amount" means, with respect to a Group, the aggregate
principal amount of all Notes of such Group Outstanding at the date of
determination.
"Owner Trustee" means [____________________________], not in its
individual capacity but solely as Owner Trustee under the Original Trust
Agreement amended and restated by the Amended and Restated Trust Agreement.
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 of the Sale and Servicing Agreement and is authorized by the Issuer to make
payments to and distributions from the Distribution Account, including payment
of principal of or interest on the Notes on behalf of the Issuer.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization, limited liability company, limited
liability partnership, or government or any agency or political subdivision
thereof.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Article II in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Rating Agency Condition" means, with respect to certain actions
requiring prior Rating Agency consent, that each Rating Agency shall have been
given 10 days (or such shorter period as is acceptable to each Rating Agency)
prior notice thereof and that each of the Rating Agencies shall have notified
the Transferor, the Servicer and the Insurer in writing that such action will
not result in a reduction or withdrawal of the then current rating of the Notes
without regard to the applicable Insurance Policy.
"Rating Agency" means either of (i) Standard & Poor's or (ii) Moody's.
If no such organization or successor is any longer in existence, "Rating Agency"
shall be a nationally recognized statistical rating organization or other
comparable person designated by the Seller and the Insurer, notice of which
designation shall have been given to the Indenture Trustee.
"Record Date" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
"Redemption Date" means, in the case of a redemption of the Notes
pursuant to Section 10.1, the Distribution Date specified by the Indenture
Trustee pursuant to Section 10.1.
"Registered Holder" means the Person in whose name a Note is registered
on the Note Register on the applicable Record Date.
7
"Remittance Period" means, as to any Determination Date or Distribution
Date, the calendar month immediately preceding such Determination Date or
Distribution Date.
"Responsible Officer" shall have the meaning assigned thereto in the
Sale and Servicing Agreement.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
dated as of [___________] [___], [____], among the Issuer, the Transferor, the
Depositor, the Servicer and the Indenture Trustee.
"Schedule of Home Equity Loans" shall have the meaning assigned thereto
in the Sale and Servicing Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Servicer" shall mean [_____________________] in its capacity as
servicer under the Sale and Servicing Agreement, or any Successor Servicer
appointed in accordance with the terms of the Sale and Servicing Agreement.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"State" means any one of the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
or the District of Columbia.
"Sub-Trust" shall have the meaning specified in Section 3.1 of the
Trust Agreement and ▇▇▇-▇▇▇▇▇ ▇, ▇▇▇-▇▇▇▇▇ 2 or Sub-Trust 3, as applicable each
of which constitute a separate interest in the Trust Estate pursuant to Section
3806(b)(2) of the Business Trust Statute.
"Sub-Trust 1" shall mean the portion of the Trust Estate assigned to
Loan Group 1.
"Sub-Trust 2" shall mean the portion of the Trust Estate assigned to
Loan Group 2.
"Sub-Trust 3" shall mean the portion of the Trust Estate assigned to
Loan Group 3.
"Successor Servicer" has the meaning specified in Section 3.7(e)
hereof.
"Transaction Documents" has the meaning set forth in the Sale and
Servicing Agreement.
"Transferor" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
"Trust" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
8
"Trust Estate" shall mean, with respect to a Sub-Trust and a Loan
Group, the assets subject to the Sale and Servicing Agreement, the Trust
Agreement and this Indenture, assigned to the Indenture Trustee in respect of
such Sub-Trust and Loan Group, which assets consist of: (i) each Home Equity
Loan in the related Loan Group and the related Mortgage File, including its
Cut-Off Date Principal Balance and all collections in respect thereof received
after the Cut-Off Date; (ii) property that secured a Mortgage Loan in the
related Loan Group that is acquired by foreclosure or deed in lieu of
foreclosure; (iii) the Seller's rights under any insurance policies relating to
Home Equity Loans in the related Loan Group (including any Insurance Proceeds);
(iv)(a) the related Sub-Trust's interest in the Collection Account and the
Distribution Account and (b) amounts on deposit in the related sub-account of
each of the Principal and Interest Account and the Distribution Account; (v) the
Cross-Collateralization Reserve Account for the related Loan Group and amounts
on deposit in the Cross-Collateralization Reserve Account for the related Loan
Group and any Cross-Collateralization Payments made from another Loan Group;
(vi) the Depositor's rights under the Sale and Servicing Agreement (excluding
the Depositor's rights to indemnification under the indemnification provisions
thereof); (vii) any proceeds of any of the foregoing and (viii) all other assets
included or to be included in the Trust in respect of the related Sub-Trust for
the benefit of the related Noteholders and the Insurer. In addition, on or prior
to the Closing Date, the Seller shall cause the Insurer to deliver the Insurance
Policies to the Indenture Trustee for the benefit of the Noteholders.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"Indenture securities" means the Notes.
"Indenture security holder" means a Noteholder.
"Indenture to be qualified" means this Indenture.
"Indenture trustee" or "Institutional trustee" means the Indenture
Trustee.
"Obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.3 Rules of Construction.
Unless the context otherwise requires:
9
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in effect
from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural
include the singular; and
(vi) any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented (as provided in such agreements) 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.
10
ARTICLE II
THE NOTES
SECTION 2.1 Form. The Notes shall be designated as the "RENAISSANCE
HOME EQUITY LOAN TRUST [_____]-[__], Home Equity Loan Asset-Backed Notes, Series
[____] -[__]. Each Note shall be in substantially the form set forth in Exhibit
A with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution thereof. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the officers executing such Notes, as evidenced by their execution of such
Notes.
The terms of the Notes are set forth in Exhibit A. The terms of the
Notes are part of the terms of this Indenture.
SECTION 2.2 Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Issuer by an Authorized Officer of the Owner
Trustee. 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 Owner Trustee 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 receipt of an Issuer Order,
authenticate and deliver the Class A-1 Notes, Class A-2 Notes and the Class A-3
Notes for original issue in the principal amount equal to $[_________],
$[_________] and $[_________], respectively. The aggregate principal amount of
each of the Notes outstanding at any time may not exceed such respective amount.
The Notes that are authenticated and delivered by the Indenture Trustee
to or upon the order of the Issuer on the Closing Date shall be dated
[__________] [___], [____]. All other Notes that are authenticated after the
Closing Date for any other purpose under the Indenture shall be dated the date
of their authentication. The Notes shall be issuable as registered Notes in the
minimum denomination of $25,000 and 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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SECTION 2.3 Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee initially shall be the "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of the Note
Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer
as Note Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Holders of the Notes and
the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.2 hereof, the
Owner Trustee on behalf of the Issuer shall execute, and the Indenture Trustee
shall authenticate and the Noteholder shall obtain from the Indenture Trustee,
in the name of the designated transferee or transferees, one or more new Notes
in any authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes in
any authorized denominations, of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.4 or Section 9.6 hereof not involving any
transfer.
12
SECTION 2.4 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 reasonably 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 an Authorized Officer of the Owner Trustee 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, or shall have been called for redemption, instead
of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
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.
Upon the issuance of any replacement Note under this Section 2.4, 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 2.4 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 2.4 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.5 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest on, if
any, such Note and for all other purposes whatsoever, whether or not such Note
be overdue, and none of the Issuer, the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
13
SECTION 2.6 Payment of Principal and Interest; Defaulted Interest.
(a) Each Note shall accrue interest at the applicable Note Rate and
such interest shall be payable on each Distribution Date, subject to Section 3.1
hereof. 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
Distribution Date shall be paid to the Person in whose name such Note (or one or
more Predecessor Notes) is registered on the Record Date in the manner set forth
in Section 5.01(c) of the Sale and Servicing Agreement.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the form of the Notes set forth in Exhibit A.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, on the earliest of (i) the
Final Distribution Date, (ii) the Redemption Date or (iii) the date on which an
Event of Default shall have occurred and be continuing, if the Indenture
Trustee, the Insurer or the Holders of Notes representing not less than a
majority of the Outstanding Amount of the Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 5.2 hereof. All
principal payments on the Notes shall be in the manner set forth in the Sale and
Servicing Agreement. 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
Distribution Date on which the Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be mailed
or transmitted by facsimile prior to such Final Distribution Date and shall
specify that such final installment will be payable only upon presentation and
surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such installment. Notices in connection
with redemptions of Notes shall be mailed to Noteholders as provided in Section
8.01 of the Sale and Servicing Agreement.
14
SECTION 2.7 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 canceled 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 canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section, except as expressly permitted by
this Indenture. All canceled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Order that they
be destroyed or returned to it; provided, that such Issuer Order is timely and
the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.8 [Reserved].
SECTION 2.9 Release of Trust Estate.
(a) Except as otherwise provided in subsections (b) and (c) of this
Section 2.9 and Section 11.1 hereof and the terms of the Transaction Documents,
the Indenture Trustee shall release property from the lien of this Indenture
only upon consent of the Insurer and receipt of an Issuer Request accompanied by
an Officer's Certificate, an Opinion of Counsel and Independent Certificates in
accordance with TIA Sections 314(c) and 314(d)(l) or an Opinion of Counsel in
lieu of such Independent Certificates to the effect that the TIA does not
require any such Independent Certificates.
(b) The Servicer, on behalf of the Issuer and with the consent of the
Insurer, shall be entitled to obtain a release from the lien of this Indenture
for any Mortgage Loan and the related Mortgaged Property at any time in
accordance with the provisions of Section 3.08 of the Sale and Servicing
Agreement.
(c) The Indenture Trustee shall, if requested by the Servicer,
temporarily release to the Servicer the Indenture Trustee's Mortgage Loan File
pursuant to the provisions of Section 3.08 of the Sale and Servicing Agreement
upon compliance by the Servicer of the provisions thereof provided that the
Indenture Trustee's Mortgage Loan File shall have been stamped to signify the
Issuer's pledge to the Indenture Trustee under the Indenture.
SECTION 2.10 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 Clearing Agency or its
custodian, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the nominee
of the initial Clearing Agency, and no Note Owner thereof will receive a
definitive Note representing such Note Owner's interest in such Note, except as
provided in Section 2.12 below. Unless and until definitive, fully registered
Notes (the "Definitive Notes") have been issued to such Note Owners pursuant to
Section 2.12 below:
15
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the
sole holder of the Notes, and shall have no obligation to the Note
Owners
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions of
this Section shall control;
(iv) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants pursuant to the Note Depository
Agreement. Unless and until Definitive Notes are issued pursuant to
Section 2.12 below, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such
Clearing Agency 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 Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such percentage
only to the extent that it has received instructions to such effect
from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Notes and has delivered such instructions to the
Indenture Trustee.
SECTION 2.11 Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to such Note Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes, to the
Clearing Agency, and shall have no obligation to such Note Owners.
SECTION 2.12 Definitive Notes. If (i) the Clearing Agency or the Issuer
advises the Indenture Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Book-Entry Notes and the Clearing Agency or the Issuer is unable to locate a
qualified successor, (ii) the Issuer at its option advises the Indenture Trustee
in writing that it elects to terminate the book-entry system through the
Clearing Agency or (iii) after the occurrence of an Event of Default, Owners of
the Book-Entry Notes representing beneficial interests aggregating at least a
majority of the Outstanding Amount of such Notes advise the Clearing Agency in
writing that the continuation of a book-entry system through the Clearing Agency
is no longer in the best interests of such Note Owners, then the Clearing Agency
shall notify all Note Owners and the Indenture Trustee of the occurrence of such
event and of the availability of Definitive Notes to Note Owners requesting the
same. Upon surrender to the Indenture Trustee of the typewritten Notes
representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes in accordance with the instructions of
the Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
16
SECTION 2.13 Tax Treatment. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for all tax purposes, the
Class A-1 Notes will qualify as indebtedness secured by the Collateral relating
to Group 1, the Class A-2 Notes will qualify as indebtedness secured by the
Collateral relating to Group 2 and the Class A-3 Notes will qualify as
indebtedness secured by the Collateral relating to Group 3. The Issuer, by
entering into this Indenture, and each Noteholder, by its acceptance of a Note
(and each Note Owner by its acceptance of an interest in the applicable
Book-Entry Note), agree to treat the Notes for all purposes as indebtedness of
the Issuer.
SECTION 2.14 ERISA Representation. Each Noteholder, by its acceptance
of a Note, and each Note Owner, by its acceptance of an interest in a Book Entry
Note, will be deemed to have represented, by acquiring the Note, that either (x)
it is not an "employee benefit plan" within the meaning of Section 3(3) of ERISA
or a "plan" within the meaning of Section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended, or an entity whose underlying assets include plan
assets by virtue of a plan's investment in the entity, and is not purchasing the
Note directly or indirectly for, or on behalf of such a plan or entity, or (y)
the acquisition or holding of the Note by the acquirer qualifies for exemptive
relief under Prohibited Class Exemption ("PTCE") 96-23, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇,
▇▇▇▇ ▇▇-▇, ▇▇▇▇ 84-14 or some other applicable exemption.
17
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer will duly and
punctually pay (or will cause to be duly and punctually paid) the principal of
and interest, if any, on the Notes in accordance with the terms of the Notes and
this Indenture. Without limiting the foregoing, the Indenture Trustee shall,
pursuant to Section 5.01 of the Sale and Servicing Agreement, distribute all
amounts on deposit in the Distribution Account on each Distribution Date
deposited therein pursuant to the Sale and Servicing Agreement, and held therein
for distribution to the Noteholders for the benefit of such Noteholders and the
Insurer. Amounts properly withheld under the Code by any Person from a payment
to any Noteholder of interest and/or principal shall be considered as having
been paid by the Issuer to such Noteholder for all purposes of this Indenture.
The Notes shall be non-recourse obligations of the Issuer and shall be
limited in right of payment to amounts available from the Trust Estates, as
provided in this Indenture. The Issuer shall not otherwise be liable for
payments on the Notes. If any other provision of this Indenture shall be deemed
to conflict with the provisions of this Section 3.1, the provisions of this
Section 3.1 shall control.
SECTION 3.2 Maintenance of Office or Agency. The Issuer will maintain
in [________] an office or agency where 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 and to serve as Paying Agent with respect to the Notes. If at
any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office, and the
Issuer hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
SECTION 3.3 Money for Payments To Be Held in Trust. As provided in
Section 8.2(a) and (b), all payments of amounts due and payable with respect to
any Notes that are to be remitted from amounts withdrawn from the Distribution
Account pursuant to Section 8.2(c) shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Distribution Account for payments on the Notes shall be paid over to the Issuer
except as provided in this Section 3.3.
Any Paying Agent shall be appointed by Issuer Order with written notice
thereof to the Indenture Trustee. Any Paying Agent appointed by the Issuer shall
be a Person who would be eligible to be Indenture Trustee hereunder as provided
in Section 6.11 hereof. The Issuer shall not appoint any Paying Agent (other
than the Indenture Trustee) that is not, at the time of such appointment, a
Depository Institution.
The Issuer will cause each Paying Agent 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 3.3, that such Paying
Agent will:
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(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee and the Insurer notice of any
default by the Issuer (or any other obligor upon the Notes) of which it
has actual knowledge in the making of any payment required to be made
with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met
by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith; provided,
however, that with respect to withholding and reporting requirements
applicable to original issue discount (if any) on the Notes, the Issuer
shall have first provided the calculations pertaining thereto to the
Indenture Trustee.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any 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 terms 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.
Any termination and release of a Trust Estate shall be done in
accordance with the provisions of Section 8.01 of the Sale and Servicing
Agreement.
SECTION 3.4 Existence.
(a) Subject to Section 3.4(b) below, the Issuer will keep in full
effect its existence, rights and franchises as a business trust under the laws
of the State of Delaware (unless it becomes, or any successor Issuer hereunder
is or becomes, organized under the laws of any other State or of the United
States of America, in which case the Issuer will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes and the Trust Estate.
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(b) Any successor to the Owner Trustee appointed pursuant to Section
10.2 of the Trust Agreement shall be the successor Owner Trustee under this
Indenture without the execution or filing of any paper, instrument or further
act to be done on the part of the parties hereto.
(c) Upon any consolidation or merger of or other succession to the
Owner Trustee, the Person succeeding to the Owner Trustee under the Trust
Agreement may exercise every right and power of the Owner Trustee under this
Indenture with the same effect as if such Person had been named as the Owner
Trustee herein.
SECTION 3.5 Protection of Trust Estates. The Issuer will from time to
time execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable
to:
(i) provide further assurance with respect to a Grant of all
or any portion of the related Trust Estate;
(ii) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iv) enforce any rights with respect to each Trust Estate; or
(v) preserve and defend title to each Trust Estate and the
rights of the Indenture Trustee, the Insurer and the Noteholders in
such Trust Estate against the claims of all persons and parties.
SECTION 3.6 Annual Opinions as to the Trust Estate.
On or before [_______] 25th in each calendar year, beginning in
[_____], the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until [_______] 25th of the following
calendar year.
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SECTION 3.7 Performance of Obligations; Servicing of Home Equity Loans.
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any instrument
or agreement included in any Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with or otherwise obtain the assistance of
other Persons to assist it in performing its duties under this Indenture, and
any performance of such duties by a Person identified to the Indenture Trustee
in an Officer's Certificate of the Issuer shall be deemed to be action taken by
the Issuer. Initially, the Issuer has contracted with the Administrator and
Renaissance to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Transaction
Documents and in the instruments and agreements included in each Trust Estate,
including but not limited to (i) filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of this
Indenture, and the Sale and Servicing Agreement and (ii) recording or causing to
be recorded all Mortgages, Assignments of Mortgage, all intervening Assignments
of Mortgage and all assumption and modification agreements required to be
recorded by the terms of the Sale and Servicing Agreement in accordance with and
within the time periods provided for in this Indenture and/or the Sale and
Servicing Agreement, as applicable. Except as otherwise expressly provided
therein, the Issuer shall not waive, amend, modify, supplement or terminate any
Transaction Document or any provision thereof without the consent of the
Indenture Trustee, the Insurer and the Holders of at least a majority of the
Outstanding Amount of the Notes.
(d) Subject to the terms of the Sale and Servicing Agreement, if the
Issuer shall have knowledge of the occurrence of an Event of Servicing
Termination under the Sale and Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee, the Seller, the Depositor, the Insurer, the
Servicer and the Rating Agencies thereof, and shall specify in such notice the
action, if any, the Servicer is taking with respect of such default. If such an
Event of Servicing Termination shall arise from the failure of the Servicer to
perform any of its duties or obligations under the Sale and Servicing Agreement
with respect to the Home Equity Loans, the Issuer shall take all reasonable
steps available to it to remedy or cause to be remedied such failure.
(e) Subject to the terms of the Sale and Servicing Agreement, as
promptly as possible after the giving of notice of termination to the Servicer
of the Servicer's rights and powers pursuant to Section 8.01 of the Sale and
Servicing Agreement, a successor servicer (the "Successor Servicer") shall be
appointed pursuant to Section 7.02 of the Sale and Servicing Agreement. If the
Indenture Trustee shall succeed to the Servicer's duties as servicer of the Home
Equity Loans as provided herein, it shall do so in its individual capacity and
not in its capacity as Indenture Trustee and, accordingly, the provisions of
Article VI hereof shall be inapplicable to the Indenture Trustee in its duties
as successor Servicer and the servicing of the Home Equity Loans. In case the
Indenture Trustee shall become successor Servicer under the Sale and Servicing
Agreement, the Indenture Trustee shall be entitled to appoint as Successor
Servicer any one of its Affiliates acceptable to the Insurer, provided that it
shall be fully liable for the actions and omissions of such Affiliate in such
capacity as Successor Servicer.
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(f) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without the
prior written consent of the Indenture Trustee and the Insurer (which consent
shall not be unreasonably withheld), amend, modify, waive, supplement, terminate
or surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of any Trust Estate (except to the extent
otherwise provided in the Sale and Servicing Agreement or the other Transaction
Documents), or waive timely performance or observance by the Servicer or the
Seller under the Sale and Servicing Agreement; and (ii) that any such amendment
shall not (A) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, distributions that are required to be made for the benefit
of the Noteholders or (B) reduce the aforesaid percentage of the Notes that is
required to consent to any such amendment, without the consent of the Holders of
all the outstanding Notes. If any such amendment, modification, supplement or
waiver shall be so consented to by the Indenture Trustee and the Insurer, the
Issuer agrees, promptly following a request by the Indenture Trustee or the
Insurer to do so, to execute and deliver, in its own name and at its own
expense, such agreements, instruments, consents and other documents as the
Indenture Trustee or the Insurer may deem necessary or appropriate in the
circumstances.
SECTION 3.8 Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not, unless the Insurer otherwise consents in writing:
(i) except as expressly permitted by this Indenture or the
Sale and Servicing Agreement, sell, transfer, exchange or otherwise
dispose of any of the properties or assets of the Issuer, including
those included in any Trust Estate, unless directed to do so by the
Indenture Trustee and consented to by the Insurer;
(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 related
Trust Estate;
(iii) engage in any business or activity other than as
permitted by the Trust Agreement or other than in connection with, or
relating to, the issuance of Notes pursuant to this Indenture and the
Ownership Interest pursuant to the Trust Agreement, or amend the Trust
Agreement as in effect on the Closing Date other than in accordance
with Section 11.1 thereof; (iv) issue debt obligations under any other
indenture;
(v) incur or assume any indebtedness or guaranty any
indebtedness of any Person, except for such indebtedness as may be
incurred by the Issuer in connection with the issuance of the Notes
pursuant to this Indenture;
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(vi) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person;
(vii) (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 any Trust Estate or any part thereof or any interest therein or
the proceeds thereof (other than tax liens, mechanics' liens and other
liens that arise by operation of law, in each case on any of the
Mortgaged Properties and arising solely as a result of an action or
omission of the related Mortgagor) or (C) permit the lien of this
Indenture not to constitute a valid first priority (other than with
respect to any such tax, mechanics' or other lien) security interest in
each Trust Estate;
(viii) reserved; or
(ix) take any other action or fail to take any action which
may cause the Issuer to be taxable as (a) an association pursuant to
Section 7701 of the Code and the corresponding regulations or (b) a
taxable mortgage pool pursuant to Section 7701(i) of the Code and the
corresponding regulations.
SECTION 3.9 Annual Statement as to Compliance. The Issuer will deliver
to the Indenture Trustee and the Insurer, within 120 days after the end of each
fiscal year of the Issuer (commencing with the fiscal year [____]), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:
(i) a review of the activities of the Issuer during such year
and of its performance under this Indenture has been made under such
Authorized Officer's supervision; and
(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 3.10 Covenants of the Issuer.
All covenants of the Issuer in this Indenture are covenants of the
Issuer and are not covenants of the Owner Trustee. The Owner Trustee is, and any
successor Owner Trustee under the Trust Agreement will be, entering into this
Indenture solely as Owner Trustee under the Trust Agreement and not in its
respective individual capacity, and in no case whatsoever shall the Owner
Trustee or any such successor Owner Trustee be personally liable on, or for any
loss in respect of, any of the statements, representations, warranties or
obligations of the Issuer hereunder, as to all of which the parties hereto agree
to look solely to the property of the Issuer.
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SECTION 3.11 Servicer's Obligations. The Issuer shall cause the
Servicer to comply with its obligations under the terms of the Sale and
Servicing Agreement.
SECTION 3.12 Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made (x)
distributions to the Servicer, the Indenture Trustee, the Owner Trustee, the
Ownership Interest and the Noteholders as contemplated by, and to the extent
funds are available for such purpose under, the Sale and Servicing Agreement or
the Trust Agreement. The Issuer will not, directly or indirectly, make or cause
to be made payments to or distributions from the Collection Account except in
accordance with this Indenture and the Transaction Documents.
SECTION 3.13 Treatment of Notes as Debt for All Purposes.
The Issuer shall treat the Notes as indebtedness for all purposes.
SECTION 3.14 Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Seller, the Insurer and the Rating Agencies prompt
written notice of each Event of Default hereunder, each default on the part of
the Servicer of its obligations under the Sale and Servicing Agreement and each
default on the part of the Depositor or the Seller of its obligations under the
Sale and Servicing Agreement.
SECTION 3.15 Further Instruments and Acts. Upon request of the
Indenture Trustee or the Insurer, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 3.16 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 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;
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(iii) the Insurer shall have consented in writing thereto and
each Rating Agency shall have notified the Issuer that such transaction
will not cause a reduction or withdrawal by a Rating Agency of its then
current rating of the Notes, without regard to the applicable Insurance
Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the
Insurer) to the effect that such transaction will not have any material
adverse tax consequence to the Issuer, any Noteholder or the Insurer;
(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
and the Insurer an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation or merger and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in any 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, (B) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee
and the Insurer, in form satisfactory to the Indenture Trustee and the
Insurer, 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 agrees by means of such
supplemental indenture that all right, title and interest so conveyed
or transferred shall be subject and subordinate to the rights of
Holders of the Notes and the Insurer, (D) unless otherwise provided in
such supplemental indenture, expressly agrees to indemnify, defend and
hold harmless the Issuer and the Insurer against and from any loss,
liability or expense arising under or related to this Indenture and the
Notes and (E) expressly agrees by means of such supplemental indenture
that such Person (or if a group of Persons, then one specified Person)
shall make all filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Insurer shall have consented thereto, and each
Rating Agency shall have notified the Issuer that such transaction will
not cause a reduction or withdrawal by a Rating Agency of its then
current rating of the Notes, without regard to the applicable Insurance
Policy;
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(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, the Insurer or any Noteholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
and the Insurer 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) above, 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) above, the Issuer shall be released from
every covenant and agreement (except such obligations that survive such
transfer) 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, selling and managing the Home
Equity Loans and the issuance of the Notes in the manner contemplated by this
Indenture and the Transaction Documents and all activities incidental thereto.
SECTION 3.19 No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.20 Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture or the other Transaction 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).
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture. Subject to and in
accordance with Section 8.01 of the Sale and Servicing Agreement, this Indenture
shall cease to be of further effect with respect to the Notes (except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8 and
3.10 hereof, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.7
hereof and the obligations of the Indenture Trustee under Section 4.2 hereof)
and (vi) the rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of them),
and the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, when all of the following have occurred:
(A) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost
or stolen and that have been replaced or paid as
provided in Section 2.4 and (ii) Notes for whose
payment money has theretofore been deposited in trust
or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.3 above) 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 within one year
prior to the Final Distribution Date, or.
(c) are to be called for redemption within one
year under arrangements satisfactory to the
Indenture Trustee for the giving of notice
of redemption by the Indenture Trustee in
the name, and at the expense, of the Issuer,
and the Issuer, in the case of (a), (b) and (c) 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 not theretofore delivered to the Indenture Trustee for cancellation
when due to the Final Distribution Date or Redemption Date (if Notes shall have
been called for redemption pursuant to Section 10.1 hereof) and all amounts due
and owing the Insurer and the Indenture Trustee have been paid, as the case may
be;
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(B) the later of (a) twelve months after payment in full of all
outstanding obligations under the Notes, (b) the payment in full of all unpaid
fees and expenses of the Indenture Trustee hereunder and the other Transaction
Documents, (c) the payment of all amounts due and owing to the Insurer for
unpaid premiums and unreimbursed Insured Payments and all other amounts owing to
the Insurer, together with interest thereon as provided under the Insurance
Agreement and (d) the date on which the Issuer has paid or caused to be paid all
other sums payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee and the Insurer
an Officer's Certificate, an Opinion of Counsel and (if required by the TIA or
the Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of Section 11.1(a)
hereof and, subject to Section 11.2 hereof, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture with respect to the Notes have been complied with.
SECTION 4.2 Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Sections 3.3 and 4.1 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Sale and Servicing
Agreement, to the payment, either directly or through any Paying Agent to the
Holders of the particular Notes and the Insurer for the payment or redemption of
which such moneys have been deposited with the Indenture Trustee, of all sums
due and to become due thereon for principal and interest; but such moneys need
not be segregated from other funds except to the extent required herein or in
the Sale and Servicing Agreement or required by law.
SECTION 4.3 Subrogation and Cooperation.
(a) The Issuer and the Indenture Trustee acknowledge that (i) to the
extent the Insurer makes payments under an Insurance Policy on account of
principal of or interest on Home Equity Loans, the Insurer will be fully
subrogated to the rights of the Noteholders to receive such principal of and
interest on the Home Equity Loans of the related Trust Estate, and (ii) the
Insurer shall be paid such principal and interest only from the sources and in
the manner provided herein and in the Insurance Agreement for the payment of
such principal and interest.
The Indenture Trustee shall cooperate in all respects with any
reasonable request or direction by the Insurer for action to preserve or enforce
the Insurer's rights or interest under this Indenture or the Insurance
Agreement, consistent with this Indenture and without limiting the rights of the
Noteholders as otherwise set forth in the Indenture, including without
limitation upon the occurrence and continuance of an Insurer Default, a request
to take any one or more of the following actions:
(i) institute Proceedings for the collection of all amounts
then payable on the Notes or under this Indenture in respect to the
Notes and all amounts payable under the Insurance Agreement and to
enforce any judgment obtained and collect from the Issuer monies
adjudged due;
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(ii) sell any Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
(iii) file or record all assignments that have not previously
been recorded;
(iv) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Insurer hereunder.
Following the payment in full of the Notes, the Insurer shall continue
to have all rights and privileges provided to it under this Section 4.3 and in
all other provisions of this Indenture, until all amounts owing to the Insurer
have been paid in full.
SECTION 4.4 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.3 above and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
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ARTICLE V
REMEDIES
SECTION 5.1 Events of Default. "Event of Default," wherever used
herein, means with respect to the Notes any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any interest on any Note when the same
becomes due and payable, and continuance of such default for a period of five
(5) days; or
(b) default in the payment in full of the principal of any Note on the
Final Distribution Date; or
(c) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere in
this Section 5.1 specifically dealt with), or any representation or warranty of
the Issuer made in this Indenture, the Sale and Servicing Agreement 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 misrepresentation 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 Insurer or the Holders of at least 25% of the Outstanding Amount
of the 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
(d) reserved; or
(e) 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
any 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 any 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
(f) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by the Issuer to the entry of an order for
relief in an involuntary case under any such law, or the consent by the Issuer
to the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of any 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.
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The Issuer shall deliver to the Indenture Trustee, and the Insurer
within five days after the occurrence thereof, 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 (c) above, its status and
what action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2 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 direction of the Insurer or upon the prior written
direction of the Holders of Notes representing not less than a majority of the
Outstanding Amount of the Notes, with the written consent of the Insurer, may
declare all the Notes to be immediately due and payable, by a notice in writing
to the Issuer (and to the Indenture Trustee if given by Noteholders), and upon
any such declaration the unpaid principal amount of such 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 has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Insurer or the Holders of Notes representing a majority of the Outstanding
Amount of the Notes, with the written consent of the Insurer, by written notice
to the Issuer and the Indenture Trustee, may rescind and annul such declaration
and its consequences if:
(a) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(i) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(ii) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel; and
(b) 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 below.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
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(a) The Issuer covenants that if (i) default occurs 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 occurs in the payment of
the principal of or any installment of the principal of any Note when the same
becomes due and payable, and such default continues for a period of five days,
the Issuer will, upon demand of the Indenture Trustee or the Insurer if the
Insurer has made a payment under an Insurance Policy, pay to the Indenture
Trustee or the Insurer, as applicable, for the benefit of the Holders of the
Notes, the whole amount then due and payable on such Notes for principal and
interest, with interest upon the overdue principal and, to the extent payment at
such rate of interest shall be legally enforceable, upon overdue installments of
interest at the rate borne by the Notes 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, the Insurer and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee may, and shall at the direction of the
Insurer, 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 such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, with the consent of the Insurer, and shall at the written direction
of the Insurer or of the Holders of a majority of the Outstanding Amount of the
Notes, with the consent of the Insurer, as more particularly provided in Section
5.4 below, proceed to protect and enforce its rights and the rights of the
Noteholders and the Insurer, by such appropriate Proceedings as the Insurer
shall deem most effective to protect and enforce any such rights whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy
or legal or equitable right vested in the Indenture Trustee by this Indenture or
by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
any Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section 5.3, shall be
entitled and empowered by intervention in such Proceedings with the consent of
or at the direction of the Insurer 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 Trustee (including any
claim for reasonable compensation to the Indenture Trustee, each
predecessor Indenture Trustee and its 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 and the Insurer allowed in such Proceedings;
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(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes and the Insurer in any election
of a trustee, a standby trustee or Person performing similar functions
in any such Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders, the Indenture
Trustee and the Insurer 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, the Insurer or the Holders of Notes allowed
in any judicial proceedings relative to the Issuer, its creditors and
its property; and any trustee, receiver, liquidator, custodian or other
similar official in any such Proceeding is hereby authorized by each of
such Noteholders to make payments to the Indenture Trustee and, in the
event that the Indenture Trustee shall consent to the making of
payments directly to such Noteholders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor Indenture Trustee and their
respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee
and each predecessor Indenture Trustee except as a result of negligence
or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder or the Insurer 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 or the Insurer 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.
(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 Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
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SECTION 5.4 Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing of
which a Responsible Officer of the Indenture Trustee has actual knowledge, the
Indenture Trustee may with the consent of the Insurer, or, at the direction of
the Insurer, shall or, if an Insurer Default shall be continuing, at the
direction of a majority of the Holders of the Notes shall, do one or more of the
following (subject to Section 5.5 below):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
related Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, and all amounts payable under the Insurance
Agreement, enforce any judgment obtained, and collect from the Issuer
and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the
Collateral;
(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 or the related Noteholders or the
Insurer; and
(iv) sell the Collateral or any portion thereof or rights or
interest therein in a commercially reasonable manner, 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 any Collateral following an Event of Default, unless (A) the Indenture
Trustee obtains the consent of the Insurer and the Holders of 100% of the
Outstanding Amount of the Notes, (B) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to discharge in full all amounts
then due and unpaid upon such Notes for principal and interest and to reimburse
the Insurer for any unreimbursed Insured Payments and any other amounts due the
Insurer under the Insurance Agreement or (C) the Indenture Trustee determines
that the Collateral in the aggregate will not continue to provide sufficient
funds for the payment of principal of and interest on the Notes as they would
have become due if the Notes had not been declared due and payable, and the
Indenture Trustee obtains the consent of the Insurer and the Holders of 66-2/3%
of the Outstanding Amount of the Notes. In determining such sufficiency or
insufficiency with respect to clauses (B) and (C) above, 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 Estates for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, the Indenture Trustee, shall pay out the money or property in
the following order, appropriately allocated between each Group on the basis of
the Collateral securing each Group:
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FIRST: to the Indenture Trustee for the Indenture Trustee Fee
or Transition Expenses then due and any costs or expenses incurred by
it in connection with the enforcement of the remedies provided for in
this Article V and to the Owner Trustee for the Owner Trustee Fee then
due, each with respect to each Group;
SECOND: any amounts payable to the Servicer pursuant to
Section 5.01 of the Sale and Servicing Agreement (so long as not
Insurer Default as defined in clause (i) of the definition thereof has
occurred and is continuing) and any premium owing to the Insurer each
with respect to each Group;
THIRD: to the Noteholders for amounts due and unpaid on the
related Notes for each Group for interest pro rata, according to the
amounts due and payable on such Notes;
FOURTH: to the Noteholders for each Group for amounts due and
unpaid on the related Notes for principal, pro rata, among the Holders
of such Notes according to the amounts due and payable until the Note
Principal Balance of such Class of Notes is reduced to zero;
FIFTH: to the Insurer, (so long as no Insurer Default as
defined in clause (i) of the definition thereof has occurred and is
continuing) any other amounts owed to the Insurer under the Insurance
Agreement with respect to each Group;
SIXTH: to the Noteholders an amount in respect of any
Cross-Collateralization Payment to which a Group of Notes is entitled
and to the applicable Cross-Collateralization Reserve Account, the
amount of any Cross-Collateralization Reserve Deposit, and for the
benefit of the other Loan Group, the amount of any
Cross-Collateralization Payment, if applicable;
SEVENTH: to the Class A-3 Noteholders, any Interest Index
Carryover; and
EIGHTH: to the Owner Trustee for any amounts to be distributed
to the holder of the Ownership Interest.
The Indenture Trustee may fix a record date and Distribution Date for
any payment to be made to the Noteholders pursuant to this Section 5.4. At least
15 days before such record date, the Indenture Trustee shall mail to each
Noteholder and the Issuer a notice that states the record date, the Distribution
Date and the amount to be paid.
SECTION 5.5 Optional Preservation of the Collateral. If the Notes have
been declared to be due and payable under Section 5.2 above following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may with the consent of the Insurer, but need
not (but shall at the written direction of the Insurer), elect to maintain
possession of the Collateral for all Groups. 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 (although the parties hereto
understand that there exists the possibility of a shortfall in collections of
the Home Equity Loans), and the Indenture Trustee shall take such desire into
account when determining whether or not to maintain possession of the Collateral
for all Groups. In determining whether to maintain possession of the Collateral
for the Groups, 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 such Collateral for such purpose.
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SECTION 5.6 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 the Insurer has otherwise consented in writing thereto
and:
(a) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% of the Outstanding Amount of the
Notes have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(c) 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;
(d) the Indenture Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such Proceedings; and
(e) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the Holders of a majority
of the Outstanding Amount of the Notes.
It is understood and intended that no Noteholders 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 Noteholders 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.
SECTION 5.7 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 date thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) to
the extent funds are available therefor out of the related Collateral and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
SECTION 5.8 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.
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SECTION 5.9 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Insurer or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10 Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee, the Insurer or any Noteholder to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such right
or remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee, the Insurer or to the Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the Indenture
Trustee, the Insurer or by the Noteholders, as the case may be.
SECTION 5.11 Control by Noteholders. The Insurer (so long as no Insurer
Default exists) or if an Insurer Default exists the Holders of a majority of the
Outstanding Amount of the Notes of a Group, if only one Class is affected
thereby, or not less than a majority of the sum of the Outstanding Amounts of
each Class of Notes affected thereby, with the consent of the Insurer, shall
have the right to direct the time, method and place of conducting any Proceeding
for any remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) subject to the express terms of Section 5.4 above, any direction to
the Indenture Trustee to sell or liquidate the Collateral shall be in writing by
the Insurer (so long as no Insurer Default exists) or the Holders of Notes
representing not less than 100% of the Outstanding Amount of the Notes with the
consent of the Insurer;
(c) if the conditions set forth in Section 5.5 above have been
satisfied and the Indenture Trustee elects to retain the Collateral for the
Groups pursuant to such Section 5.5, then any direction to the Indenture Trustee
by Holders of Notes representing less than 100% of the Outstanding Amounts of
the Notes, to sell or liquidate the Collateral shall be of no force and effect;
and
(d) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of the Noteholders set forth in this Section
5.11, subject to Section 6.1 hereof, the Indenture Trustee need not take any
action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
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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 5.2 above, the
Insurer (so long as no Insurer Default exists) or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the Notes,
with the consent of the Insurer (so long as no Insurer Default exists), may
waive any past Default or Event of Default and its consequences except a Default
(a) in the payment of principal of or interest on any of the Notes or (b) in
respect of a covenant or provision hereof that cannot be modified or amended
without the consent of the Holder of each Note. In the case of any such waiver,
the Issuer, the Insurer, 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 Default or impair any
right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and 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 Default or Event of Default or impair any right consequent thereto.
SECTION 5.13 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.14 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 will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 5.15 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 5.4(b) above.
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SECTION 5.16 Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Insurer or the Indenture
Trustee, with the consent of the Insurer to do so, the Issuer shall take all
such lawful action as the Indenture Trustee or the Insurer, as applicable, may
request to compel or secure the performance and observance by the Seller and the
Servicer, as applicable, of each of their obligations to the Issuer under or in
connection with 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 Sale and Servicing Agreement to the extent and in the
manner directed by the Indenture Trustee or the Insurer, as applicable,
including the transmission of notices of default on the part of the Seller or
the Servicer thereunder and the institution of legal or administrative actions
or proceedings to compel or secure performance by the Seller or the Servicer of
each of their obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee, subject to the rights of the Insurer hereunder and under the
Sale and Servicing Agreement, may, and at the direction (which direction shall
be in writing or by telephone, confirmed in writing promptly thereafter) of the
Insurer or the Holders of a majority of the Outstanding Amount if there is an
Insurer Default shall, exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Seller or the Servicer under or in connection
with the Sale and Servicing Agreement, including the right or power to take any
action to compel or secure performance or observance by the Seller, the
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 Sale and Servicing Agreement, and any right of
the Issuer to take such action shall be suspended.
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ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 6.1;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.11 above or any
direction from the Insurer that the Insurer is entitled to give under
the terms of the Transaction Documents.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section
6.1.
(e) 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.
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(f) Money held in trust by the Indenture Trustee shall be segregated
from other funds except to the extent permitted by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it; and none of the provisions contained in this Indenture
shall in any event require the Indenture Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer or the
Issuer under this Indenture 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 Servicer in accordance with the terms of this Indenture.
(h) The Indenture Trustee shall challenge or cause to be challenged any
attempt at substantive consolidation of the assets and liabilities of the Issuer
with those of any Owner (as the term "Owner" is defined in the Trust Agreement)
in connection with any insolvency proceeding of the Issuer.
(i) 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 6.1 and to the provisions of
the TIA.
(j) Subject to the other provisions of this Indenture and without
limiting the generality of this Section 6.1, the Indenture Trustee shall have no
duty (A) to see to any recording, filing, or depositing of this Indenture or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording or filing or depositing or to any rerecording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of a Trust Estate other than from funds available in the
Distribution Account, (D) to confirm or verify the contents of any reports or
certificates of the Issuer, Insurer or Servicer delivered to the Indenture
Trustee pursuant to this Indenture believed by the Indenture Trustee to be
genuine and to have been signed or presented by the proper party or parties.
SECTION 6.2 Rights of Indenture Trustee.
(a) The Indenture Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting on any resolution, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
person. The Indenture Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require and shall be entitled to receive an Officer's Certificate or an Opinion
of Counsel. The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on an Officer's Certificate or Opinion
of Counsel.
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(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of such agent,
attorney, nominee or custodian appointed by the Indenture Trustee with due care.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that such action or omission by the
Indenture Trustee does not constitute willful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel selected by it with due care with respect to legal matters
relating to this Indenture, the Notes and the Transaction Documents to which it
is a party, shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of the Insurer or any of the Noteholders, pursuant to the
provisions of this Indenture, unless the Insurer or such Noteholders shall have
offered to the Indenture Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be 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 shall have actual knowledge (which has not been
cured), 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 or use under the circumstances in the conduct of
such person's own affairs.
(g) The Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Insurer or
a majority of the Outstanding Amount of the Notes; provided, however, that if
the payment within a reasonable time to the Indenture Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Indenture Trustee, not reasonably
assured to the Indenture Trustee by the security afforded to it by the terms of
this Indenture, the Indenture Trustee may require reasonable indemnity against
such cost, expense or liability as a condition to taking any such action. The
reasonable expense of every such examination shall be paid by the Issuer or, if
paid by the Indenture Trustee, shall be repaid by the Issuer upon demand.
(h) The right of the Indenture Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the Indenture
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
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(i) The Indenture Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust Fund created hereby or the
powers granted hereunder.
(j) The Indenture Trustee shall have no liability in connection with
the malfeasance or nonfeasance by the Issuer, the Servicer, the Depositor, the
Custodian, the Trust or the Administrator (in the case of the Custodian or
Administrator, to the extent that the Indenture Trustee is not acting in the
capacity of Custodian or Administrator). The Indenture Trustee shall have no
liability in connection with compliance by the Issuer, the Servicer, the
Administrator, the Custodian or the Trust (in the case of the Custodian or
Administrator, to the extent that the Indenture Trustee is not acting in the
capacity of Custodian or Administrator) with statutory or regulatory
requirements related to the Collateral or any Trust Estate. The Indenture
Trustee shall not make or be deemed to have made any representations or
warranties with respect to the Collateral or any Trust Estate or the validity or
sufficiency of any assignment of the Collateral or any Trust Estate to the
Indenture Trustee.
(k) In the event that the Indenture Trustee is also acting as Paying
Agent or Note Registrar hereunder, the rights, protection, immunities and
indemnities afforded to the Indenture Trustee pursuant to this Article VI shall
also be afforded to such Paying Agent or Note Registrar.
SECTION 6.3 Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12 below.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be (i) responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, (ii) shall not be accountable for the
Issuer's use of the proceeds from the Notes or (iii) responsible for any
statement of the Issuer in the Indenture or in any document issued in connection
with the sale of the Notes or in the Notes other than the Indenture Trustee's
certificate of authentication.
SECTION 6.5 Notice of Defaults. If a Default occurs and is continuing
and if it is actually known to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall give prompt notice thereof to the Insurer. The
Indenture Trustee shall not be charged with the knowledge of an Event of Default
unless a Responsible Officer has received written notice or has actual knowledge
thereof. The Indenture Trustee shall mail to each Noteholder, the Servicer and
the Seller notice of the Default within thirty (30) days after it occurs at the
expense of the Issuer. Except in the case of a Default in payment of principal
of or interest on any Note, the Indenture Trustee may withhold the notice to the
Noteholders if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of Noteholders.
SECTION 6.6 Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns. In
addition, upon Issuer Request, the Indenture Trustee shall promptly furnish such
information reasonably requested by the Issuer that is reasonably available to
the Indenture Trustee to enable the Issuer to perform its federal and state
income tax reporting obligations.
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SECTION 6.7 Compensation and Indemnity. As compensation for its
services hereunder, the Indenture Trustee shall be entitled to receive, on each
Distribution Date, the Indenture Trustee's Fee and Transition Expenses pursuant
to Section 5.01 of the Sale and Servicing Agreement (which compensation shall
not be limited by any law on compensation of a trustee of an express trust) and
shall be entitled to reimbursement in addition to Transition Expenses, for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer agrees to cause the Servicer to indemnify the Indenture Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. Such indemnity shall not be an expense of
the Trust. The Indenture Trustee shall notify the Issuer and the Servicer
promptly of any claim for which it may seek indemnity. Failure by the Indenture
Trustee to so notify the Issuer and the Servicer shall not relieve the Issuer of
its obligations hereunder. The Issuer shall or shall cause the Servicer to
defend any such claim, and the Indenture Trustee may have separate counsel and
the Issuer shall or shall cause the Servicer to pay the fees and expenses of
such counsel. Neither the Issuer nor the Servicer need to reimburse any expense
or to indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith. Anything in this Indenture to the contrary notwithstanding, in no
event shall the Indenture Trustee 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 has been advised of the
likelihood of such loss or damage and regardless of the form of action. This
indemnity shall survive the termination of this Indenture.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.7 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses or provides services after the occurrence of a
Default specified in Section 5.1(e) or (f) hereof with respect to the Issuer,
the expenses and fees for such services 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.
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SECTION 6.8 Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee acceptable to the Insurer pursuant to this Section. The
Indenture Trustee may resign at any time by so notifying the Issuer and the
Insurer. The Insurer or the Holders of a majority in Outstanding Amount of the
Notes (with the prior written consent of the Insurer) may remove the Indenture
Trustee by so notifying the Indenture Trustee and the Insurer (if given by such
Noteholders) and may appoint a successor Indenture Trustee acceptable to the
Insurer. The Issuer shall (with the prior written consent of the Insurer) remove
the Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11 below;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(d) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee with the consent of the
Insurer, which consent shall not be unreasonably withheld.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Insurer and to the Issuer.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding Amount
of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11 below, any
Noteholder may (with the consent of the Insurer) petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section 6.8, the Issuer's obligations under Section 6.7 above shall
continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9 Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11 below.
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In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders
and the Insurer, such title to the Trust Estates, or any part hereof, and,
subject to the other provisions of this Section 6.10, 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 below
and no notice to Noteholders of the appointment of any co-trustee or separate
trustee shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to each 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
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(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, jointly with the Indenture
Trustee, subject to all the provisions of this Indenture, specifically including
every provision of this Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee. The Indenture Trustee shall remain
primarily liable for all actions of a co-trustee.
SECTION 6.11 Eligibility; Disqualification. The Indenture Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. The Indenture
Trustee shall comply with TIA Section 310(b), including the optional provision
permitted by the second sentence of TIA Section 310(b)(9); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
SECTION 6.13 Representations and Warranties. The Indenture Trustee
hereby represents and warrants that:
(a) The Indenture Trustee is duly organized, validly existing and in
good standing under the laws of State of Illinois, with power and authority to
own its properties and to conduct its business as such properties are currently
owned and such business is currently conducted.
(b) 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.
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(c) 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 certificate 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.
(d) To the Indenture Trustee's best knowledge, the Indenture Trustee
does not have notice of any adverse claim (as such terms are used in Section
8-302 of the UCC in effect in the State of Delaware) with respect to the Home
Equity Loans.
SECTION 6.14 Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Home Equity Loans and hold the assets
of the Trust in trust for the Noteholders and the Insurer;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibit A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 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 the earlier of (i) each Record Date
and (ii) three months after the last Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Noteholders as of such Record Date, (b) at such other times as the Indenture
Trustee and the Insurer may request in writing, within 30 days after receipt by
the Issuer of any such request, a list of similar form and content as of a date
not more than 10 days prior to the time such list is furnished; provided,
however, that so long as the Indenture Trustee is the Note Registrar, no such
list shall be required to be furnished.
SECTION 7.2 Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.1 above and the names and addresses of Noteholders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.1 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
SECTION 7.3 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with the rules and regulations prescribed from time to time
by the Commission such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
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(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i) and
(ii) of this Section 7.3(a) and by rules and regulations prescribed
from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.4 Reports by Indenture Trustee. If required by TIA Section
313(a), within 60 days after each [________] [__], beginning with [_________]
[__], [____], the Indenture Trustee shall mail to each Noteholder as required by
TIA Section 313(c) and to the Insurer a brief report dated as of such date that
complies with TIA Section 313(a). The Indenture Trustee also shall comply with
TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each securities
exchange, if any, on which the Notes are listed. The Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any securities exchange.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. 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 any 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 herein.
SECTION 8.2 Accounts; Distributions.
(a) On or prior to the Closing Date, the Indenture Trustee shall
establish and maintain or cause to be established and maintained, in the name of
the Indenture Trustee for the benefit of the Noteholders, and the Insurer, the
Principal and Interest Account as provided in Article III of the Sale and
Servicing Agreement and the Distribution Account and the Cross-Collateralization
Reserve Accounts as provided Article V of the Sale and Servicing Agreement, into
which amounts shall be deposited in accordance with the terms of the Sale and
Servicing Agreement.
(b) The Indenture Trustee shall deposit any amounts representing
payments on and any collections in respect of the Home Equity Loans received by
it, if any, and any other amounts required by the terms of the Transaction
Documents to be deposited, immediately following receipt thereof, including,
without limitation, all amounts withdrawn by the Servicer from the Principal and
Interest Account pursuant to Article III of the Sale and Servicing Agreement for
deposit to the Distribution Account. Amounts on deposit in the Distribution
Account may be invested in Eligible Investments pursuant to Section 5.06 of the
Sale and Servicing Agreement.
(c) On each Distribution Date and the Redemption Date, to the extent
funds are available in the Distribution Account, the Indenture Trustee shall
make the distributions and payments in the amounts and in the priority set forth
in Section 5.01 of the Sale and Servicing Agreement (except as otherwise
provided in Section 5.4(b) herein).
(d) On each Distribution Date and the Redemption Date, to the extent of
the interest of the Indenture Trustee in the Distribution Account (as described
in Section 5.05 of the Sale and Servicing Agreement), the Indenture Trustee
hereby authorizes the Owner Trustee or the Paying Agent, as applicable, to make
the distributions from the Distribution Account as required pursuant to Sections
5.01 and 5.02 of the Sale and Servicing Agreement.
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SECTION 8.3 [Reserved].
SECTION 8.4 Servicer's Monthly Statements.
On each Distribution Date, the Indenture Trustee shall deliver the
Servicing Certificate (as defined in the Sale and Servicing Agreement) with
respect to such Distribution Date to DTC and the Rating Agencies.
SECTION 8.5 [Reserved].
SECTION 8.6 Opinion of Counsel. The Indenture Trustee shall receive at
least seven days notice when requested by the Issuer to take any action pursuant
to Section 2.9(a) herein, accompanied by copies of any instruments involved, and
the Indenture Trustee shall also require with a copy to the Insurer, as a
condition to such action, an Opinion of Counsel, 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
and such action will not materially and adversely impair the security for the
Notes or the rights of the Noteholders or the Insurer in contravention of the
provisions of this Indenture; provided, however, that such Opinion of Counsel
shall not be required to express an opinion as to the fair market value of a
Trust Estate. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, at any time and from time to time and only with
the prior written consent of the Insurer, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Noteholders or the Insurer, 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 or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided, that such action shall not adversely affect the
interests of the Noteholders or the Insurer;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the 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 herein; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
53
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Noteholders but with prior
consent of the Rating Agencies and the Insurer, 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 Noteholders under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel or satisfaction of the Rating Agency Condition, adversely
affect in any material respect the interests of any Noteholder or the Insurer or
cause the Issuer to be subject to entity level tax.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior consent of the Rating Agencies and the Insurer, and with the consent
of the Holders of not less than a majority of the Outstanding Amount of the
Notes affected thereby or a majority of the sum of the Outstanding Amount of
Notes of each Class if all Notes are affected thereby, by Act of such Holders
delivered to the Issuer and the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Note affected thereby:
(a) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest rate
thereon or the amount required to be paid on the Notes following the exercise of
the option set forth in Section 8.01 of the Sale and Servicing Agreement, change
the provisions of this Indenture relating to the application of collections on,
or the proceeds of the sale of, the related 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
herein, to the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or after the
Redemption Date);
(b) reduce the percentage of the Outstanding Amount of the Notes, the
consent of the Holders of which is required for any such supplemental indenture,
or the consent of the Holders of which is required for any waiver of compliance
with certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of
the term "Outstanding";
(d) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.4 herein;
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(e) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional provisions of
this Indenture or the Transaction Documents cannot be modified or waived without
the consent of the Holder of each Outstanding Note affected thereby;
(f) 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 Distribution Date (including the calculation of any of the
individual components of such calculation); or
(g) 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 related 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
provided further, that such action shall not, as evidenced by an Opinion of
Counsel, cause the Issuer to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
In connection with requesting the consent of the Noteholders pursuant
to this Section 9.2, 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 at the
Issuer's expense. It shall not be necessary for any Act of Noteholders under
this Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
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SECTION 9.3 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2 herein, shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture and all conditions
precedent to the execution of such supplemental indenture have been met. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be deemed to be modified and amended in accordance therewith with respect to the
Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.5 Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption.
The Servicer may effect an early termination of the Notes pursuant to
Section 8.01 of the Sale and Servicing Agreement on or after the Clean-Up Call
Date, pursuant to the provisions of Section 8.01(b) of the Sale and Servicing
Agreement.
The Indenture Trustee shall furnish notice of any such redemption in
accordance with Section 8.01 of the Sale and Servicing Agreement.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer made to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee and to the Insurer (i) an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with, (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with and (iii) (if required by
the TIA) an Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section 11.1, 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; and
(4) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
(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
(except in the case of the release of Home Equity Loans in accordance with the
Sale and Servicing Agreement), the Issuer shall, in addition to any obligation
imposed in Section 11.1(a) herein or elsewhere in this Indenture, furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days of
such deposit) to the Issuer of the Collateral or other property or securities to
be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to
the Issuer of the Collateral, other property or securities to be so
deposited and of all other such Collateral, other property or
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 aggregate Note Principal
Balance of each of the Classes of Notes, but such a certificate need
not be furnished with respect to any securities so deposited, if the
fair value thereof to the Issuer as set forth in the related Officer's
Certificate is less than either (A) $25,000 or (B) one percent of the
aggregate Note Principal Balance of each of the Classes of Notes.
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(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property 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
aggregate Note Principal Balance of each of the Classes of 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 aggregate Note Principal Balance of each of the
Classes of Notes.
SECTION 11.2 Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
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 Servicer or the Issuer, stating that the information
with respect to such factual matters is in the possession of the Servicer 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 hereof.
SECTION 11.3 Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.1 hereof) conclusive
in favor of the Indenture Trustee and the Issuer, if made in the manner provided
in this Section 11.3.
(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 Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
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SECTION 11.4 Notices. 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:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office, or
(b) 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: Renaissance Home Equity Loan Trust
[____]-[__], in care of [___________________________________________], with
copies to the Administrator addressed to: [__________________________________],
[________________________________] and to the Servicer addressed to:
[________________________________], or at any other address previously furnished
in writing to the Indenture Trustee by the Issuer or the Administrator. The
Issuer shall promptly transmit any notice received by it from the Noteholders to
the Indenture Trustee.
(c) the Insurer, by the Issuer, the Indenture Trustee or by any
Noteholders shall be sufficient for every purpose hereunder to in writing and
mailed, first-class postage pre-paid, or personally delivered or telecopied to:
[___________________________________________], [__________________]. The Insurer
shall promptly transmit any notice received by it from the Issuer, the Indenture
Trustee or the Noteholders to the Issuer or Indenture Trustee, as the case may
be.
Notices required to be given to the Rating Agencies by the Indenture
Trustee or the Owner Trustee shall be in writing, personally delivered or mailed
by certified mail, return receipt requested, to (i) in the case of Moody's, at
the following address: ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (ii) in the case of Standard & Poor's, at
the following address: Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇; or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 11.5 Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
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In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder.
SECTION 11.6 Rights of the Insurer to Exercise Rights of Noteholders.
By accepting its Note, each Noteholder agrees that unless an Insurer Default
exists, the Insurer shall have the right to exercise all rights of the
Noteholders as specified under this Agreement without any further consent of the
Noteholders. Any right conferred to the Insurer hereunder shall be suspended and
shall run to the benefit of the Noteholders during any period in which there
exists an Insurer Default, provided, however, that during an Insurer Default,
the consent of the Insurer must be obtained with respect to any amendments that
may materially adversely affect the Insurer.
SECTION 11.7 Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10 Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11 Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, the Insurer, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
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SECTION 11.12 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15 Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the 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 11.16 Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VII, VIII and IX of the Trust
Agreement.
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SECTION 11.17 No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Transferor (and any
wholly-owned subsidiary thereof), the Depositor, the Servicer or the Issuer, or
join in any institution against the Transferor (and any wholly-owned subsidiary
thereof), the Depositor, the Servicer 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 Transaction Documents.
SECTION 11.18 Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or the
Insurer, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee and the Insurer (to the extent described in the
Insurance Agreement) shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
SECTION 11.19 Inconsistencies With the Sale and Servicing Agreement. In
the event certain provisions of this Agreement conflict with the provisions of
the Sale and Servicing Agreement, the parties hereto agree that the provisions
of the Sale and Servicing Agreement shall be controlling.
SECTION 11.20 Third-Party Beneficiaries. This Indenture will inure to
the benefit of and be binding upon the parties hereto, the Noteholders, the Note
Owners, the Insurer and their respective successors and permitted assigns.
Except as otherwise provided in this Indenture, no other person will have any
right or obligation hereunder.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
RENAISSANCE HOME EQUITY LOAN
TRUST [____]-[__]
By:
-----------------------------------,
not in its individual capacity but
solely as Owner Trustee
By:
-------------------------------
Name:
Title:
[__________________________________]
as Indenture Trustee
By:
-----------------------------------
Name:
Title:
▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared [_______________], known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
[___________________________________________], not in its individual capacity,
but solely as Owner Trustee on behalf of RENAISSANCE HOME EQUITY LOAN TRUST
[____]-[__], a Delaware business trust, and that such person executed the same
as the act of said business trust for the purpose and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this [ ] day of [_____],
[_____].
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Notary Public in and for the State of ________
(Seal)
My commission expires:
----------------------------------
▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared [____________________], known
to me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of
[______________________________], a [________] banking corporation, and that
such person executed the same as the act of said corporation for the purpose and
consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this [ ] day of [_________],
[_____]. ----
----------------------------------------------
Notary Public in and for the State of ________
(Seal)
My commission expires:
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2
SCHEDULE A-I
HOME EQUITY LOAN SCHEDULE FOR SUBTRUST 1
3
SCHEDULE A-II
HOME EQUITY LOAN SCHEDULE FOR SUB-TRUST 2
4
SCHEDULE A-III
HOME EQUITY LOAN SCHEDULE FOR SUBTRUST 3
5
EXHIBIT A
FORM OF NOTES
6