EXHIBIT 4.2
INDENTURE
BETWEEN
[ ] TRUST, LLC Series [ ] TRUST,
AS ISSUER,
AND
[ ],
AS INDENTURE TRUSTEE
Dated as of , 200
Relating to
[ ] TRUST, LLC
MORTGAGE BACKED NOTES, SERIES 200 -
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................................................3
Section 1.01. General Definitions...............................................................3
ARTICLE II THE NOTES.................................................................................26
Section 2.01. Forms Generally..................................................................26
Section 2.02. Forms of Certificate of Authentication...........................................26
Section 2.03. General Provisions With Respect to Principal and Interest Payment................27
Section 2.04. Denominations....................................................................27
Section 2.05. Execution, Authentication, Delivery and Dating...................................27
Section 2.06. Registration, Registration of Transfer and Exchange..............................28
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes.......................................29
Section 2.08. Payments of Principal and Interest...............................................30
Section 2.09. Persons Deemed Owner.............................................................31
Section 2.10. Cancellation.....................................................................32
Section 2.11. Authentication and Delivery of Notes.............................................32
Section 2.12. Book-Entry Note..................................................................34
Section 2.13. Termination of Book Entry System.................................................34
ARTICLE III COVENANTS.................................................................................35
Section 3.01. Payment of Notes.................................................................35
Section 3.02. Maintenance of Office or Agency..................................................35
Section 3.03. Money for Note Payments to Be Held In Trust......................................35
Section 3.04. Existence of Issuer..............................................................37
Section 3.05. Protection of Trust Estate.......................................................38
Section 3.06. Annual Opinions as to Collateral.................................................38
Section 3.07. Performance of Obligations; Servicing Agreement..................................39
Section 3.08. Investment Company Act...........................................................39
Section 3.09. Negative Covenants...............................................................39
Section 3.10. Annual Statement as to Compliance................................................40
Section 3.11. Restricted Payments..............................................................41
Section 3.12. Treatment of Notes as Debt for Tax Purposes......................................41
Section 3.13. Notice of Events of Default......................................................41
Section 3.14. Further Instruments and Acts.....................................................41
ARTICLE IV SATISFACTION AND DISCHARGE................................................................41
Section 4.01. Satisfaction and Discharge of Indenture..........................................41
Section 4.02. Application of Trust Money.......................................................43
ARTICLE V DEFAULTS AND REMEDIES.....................................................................43
Section 5.01. Event of Default.................................................................43
Section 5.02. Acceleration of Maturity; Rescission and Annulment...............................44
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee........45
Section 5.04. Remedies.........................................................................45
Section 5.05. Indenture Trustee May File Proofs of Claim.......................................46
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Notes.................47
Section 5.07. Application of Money Collected...................................................47
Section 5.08. Limitation on Suits..............................................................48
Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest............49
Section 5.10. Restoration of Rights and Remedies...............................................49
Section 5.11. Rights and Remedies Cumulative...................................................49
Section 5.12. Delay or Omission Not Waiver.....................................................49
Section 5.13. Control by Noteholders...........................................................50
Section 5.14. Waiver of Past Defaults..........................................................50
Section 5.15. Undertaking for Costs............................................................50
Section 5.16. Waiver of Stay or Extension Laws.................................................51
Section 5.17. Sale of Trust Estate.............................................................51
Section 5.18. Action on Notes..................................................................52
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the Issuer.................53
Section 5.20. Application of the Trust Indenture Act...........................................53
ARTICLE VI THE INDENTURE TRUSTEE.....................................................................53
Section 6.01. Duties of Indenture Trustee......................................................53
Section 6.02. Notice of Default................................................................54
Section 6.03. Rights of Indenture Trustee......................................................55
Section 6.04. Not Responsible for Recitals or Issuance of Notes................................55
Section 6.05. May Hold Notes...................................................................55
Section 6.06. Money Held in Trust..............................................................55
Section 6.07. Eligibility, Disqualification....................................................56
Section 6.08. Indenture Trustee's Capital and Surplus..........................................56
Section 6.09. Resignation and Removal; Appointment of Successor................................56
Section 6.10. Acceptance of Appointment by Successor...........................................57
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture
Trustee..........................................................................58
Section 6.12. Preferential Collection of Claims Against Issuer.................................58
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees............................58
Section 6.14. Authenticating Agents............................................................60
Section 6.15. Review of Mortgage Files.........................................................61
Section 6.16. Indenture Trustee Fees and Expenses..............................................62
Section 6.17. Tax Reporting....................................................................63
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS............................................................63
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders...........63
Section 7.02. Preservation of Information; Communications to Noteholders.......................63
Section 7.03. Reports by Indenture Trustee.....................................................64
Section 7.04. Reports by Issuer................................................................64
Section 7.05 Exchange Act Reporting...........................................................64
ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES................................64
Section 8.01. Collection of Moneys.............................................................64
Section 8.02. Note Account; Distributions......................................................65
Section 8.03. Claims Upon the Insurance Policy; Insurance Policy Payments Account..............67
Section 8.04. General Provisions Regarding the Note Accounts and Mortgage Loans................69
Section 8.05. Releases of Defective Mortgage Loans.............................................70
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to Certain Information.......70
Section 8.07. Trust Estate Mortgage Files......................................................71
Section 8.08. Amendment to Servicing Agreement.................................................71
Section 8.09. Delivery of the Mortgage Files Pursuant to Servicing Agreement...................71
Section 8.10. Servicer as Agent................................................................72
Section 8.11. Termination of Servicer..........................................................72
Section 8.12. Opinion of Counsel...............................................................72
Section 8.13. Appointment of Custodians........................................................72
Section 8.14. Rights of the Note Insurer to Exercise Rights of Noteholders.....................73
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note Insurer...................73
Section 8.16. [Reserved.]......................................................................74
ARTICLE IX SUPPLEMENTAL INDENTURES...................................................................74
Section 9.01. Supplemental Indentures Without Consent of Noteholders...........................74
Section 9.02. Supplemental Indentures With Consent of Noteholders..............................75
Section 9.03. Execution of Supplemental Indentures.............................................76
Section 9.04. Effect of Supplemental Indentures................................................76
Section 9.05. Conformity With Trust Indenture Act..............................................76
Section 9.06. Reference in Notes to Supplemental Indentures....................................76
Section 9.07. Amendments to Governing Documents................................................77
ARTICLE X REDEMPTION OF NOTES.......................................................................77
Section 10.01. Redemption.......................................................................77
Section 10.02. Form of Redemption Notice........................................................78
Section 10.03. Notes Payable on Optional Redemption.............................................79
ARTICLE XI MISCELLANEOUS.............................................................................79
Section 11.01. Compliance Certificates and Opinions.............................................79
Section 11.02. Form of Documents Delivered to Indenture Trustee.................................79
Section 11.03. Acts of Noteholders..............................................................80
Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer and Issuer.................81
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices............................82
Section 11.06. Rules by Indenture Trustee.......................................................83
Section 11.07. Conflict With Trust Indenture Act................................................83
Section 11.08. Effect of Headings and Table of Contents.........................................83
Section 11.09. Successors and Assigns...........................................................83
Section 11.10. Separability.....................................................................83
Section 11.11. Benefits of Indenture............................................................83
Section 11.12. Legal Holidays...................................................................83
Section 11.13. Governing Law....................................................................83
Section 11.14. Counterparts.....................................................................84
Section 11.15. Recording of Indenture...........................................................84
Section 11.16. Issuer Obligation................................................................84
Section 11.17. No Petition......................................................................84
Section 11.18. Inspection.......................................................................85
Section 11.19. Usury............................................................................85
Section 11.20. Third Party Beneficiary..........................................................85
SCHEDULES AND EXHIBITS
Schedule l........Mortgage Loan Schedule
Exhibit A.........Form of Note
Exhibit B.........Insurance Policy
Exhibit C.........Form of Notice of Claim
Exhibit D.........PMI Mortgage Loans
CROSS-REFERENCE TABLE
Cross-reference sheet showing the location in the Indenture of the provisions inserted pursuant to
Sections 310 through 318(a) inclusive of the Trust Indenture Act of 1939.*
Trust Indenture Act of 1939 Indenture Section
Section 310
(a) (1)................................................. 6.07
(a) (2)................................................. 6.07, 6.08
(a) (3)................................................. 6.13
(a) (4)................................................. Not Applicable
(a) (5)................................................. 6.07
(b)..................................................... 6.07, 6.09
(c)..................................................... Not Applicable
Section 311
(a)..................................................... 6.12
(b)..................................................... 6.12
(c)..................................................... Not Applicable
Section 312
(a)..................................................... 7.01(a), 7.02(a)
(b)..................................................... 7.02(b)
(c)..................................................... 7.02(c)
Section 313
(a)..................................................... 7.03(a)
(b)..................................................... 7.03(a)
(c)..................................................... 11.05
(d)..................................................... 7.03(b)
Section 314
(a)(1).................................................. 7.04
(a)(2).................................................. 7.04
(a)(3).................................................. 7.04
(a)(4).................................................. 7.04
(b)(1).................................................. 2.11(c), 11.01
(b)(2).................................................. 3.06
(c)(1).................................................. 2.11(d), 4.01, 8.02(d),
11.01
(c)(2).................................................. 2.11(c), 4.01, 8.02(d),
11.01
(c)(3).................................................. 8.02(d)
(d)(1).................................................. 11.01(a)
(d)(2).................................................. 11.01(a)
(d)(3).................................................. 11.01(a)
(e)..................................................... 11.0 1(b)
Section 315
(a)..................................................... 6.01(b), 6.01(c)(1)
(b)..................................................... 6.02, 11.05
(c)..................................................... 6.01(a)
(d)(1).................................................. 6.01(b), 6.01(c)
(d)(2).................................................. 6.01(c)(2)
(d)(3).................................................. 6.01(c)(3)
(e)..................................................... 5.15
Section 316
(a)..................................................... 5.20
(b)..................................................... 5.09
(c)..................................................... 5.20
Section 317
(a)(1).................................................. 5.03
(a)(2).................................................. 5.05
(b)..................................................... 3.01
Section 318
(a)..................................................... 11.07
__________________________________________
*This Cross-Reference Table is not part of the Indenture.
THIS INDENTURE, dated as of (as amended or supplemented from time to time as permitted hereby,
this "Indenture"), is between [ ] Trust, LLC Series [ ] Trust, a Delaware statutory
trust (together with its permitted successors and assigns, the "Issuer") and , as indenture trustee
(together with its permitted successors in the trusts hereunder, the "Indenture Trustee").
Preliminary Statement
The Issuer has duly authorized the execution and delivery of this Indenture to provide for its Mortgage
Backed Notes, Series 200 - (the "Notes"), issuable as provided in this Indenture. All covenants and agreements
made by the Issuer herein are for the benefit and security of the Holders of the Notes and the Note Insurer. The
Issuer is entering into this Indenture, and the Indenture Trustee is accepting the trusts created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the Issuer in accordance with its terms
have been done.
Granting Clause
The Issuer hereby Grants to the Indenture Trustee, for the exclusive benefit of the Holders of the Notes
and the Note Insurer, all of the Issuer's right, title and interest in and to (a) the Mortgage Loans listed in
Schedule I to this Indenture (including property that secures a Mortgage Loan that becomes an REO Property),
including the related Mortgage Files delivered or to be delivered to the Custodian, on behalf of the Indenture
Trustee, pursuant to the Mortgage Loan Sale Agreement, all payments of principal received, collected or otherwise
recovered after the Cut-off Date for each Mortgage Loan, all payments of interest accruing on each Mortgage Loan
after the Cut-off Date therefor whenever received and all other proceeds received in respect of such Mortgage
Loans, and any Qualified Replacement Mortgage Loan, (b) the Servicing Agreement, (c) the Mortgage Loan Sale
Agreement, (d) the Mortgage Loan Contribution Agreement, (e) the Management Agreement, (f) the Other Insurance
Policies, (g) all cash, instruments or other property held or required to be deposited in the Collection Account
and the Note Account, including all investments made with funds in such accounts (but not including any income on
funds deposited in, or investments made with funds deposited in, the Collection Account and the Note Account,
which income shall belong to and be for the account of the Servicer), and (h) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including, without
limitation, all insurance proceeds and condemnation awards. Such Grants are made, however, in trust, to secure
the Notes equally and ratably without prejudice, priority or distinction between any Note and any other Note by
reason of difference in time of issuance or otherwise, and for the benefit of the Note Insurer to secure (x) the
payment of all amounts due on the Notes in accordance with their terms, (y) the payment of all other sums payable
under this Indenture and (z) compliance with the provisions of this Indenture, all as provided in this
Indenture. All terms used in the foregoing granting clauses that are defined in Section 1.01 are used with the
meanings given in said Section.
The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with the
provisions of this Indenture and agrees to perform the duties herein required to the end that the interests of
the Holders of the Notes may be adequately and effectively protected. The Indenture Trustee agrees that it will
hold the Insurance Policy and the PMI Policy in trust and that it will hold any proceeds of any claim upon the
Insurance Policy and PMI Policy, solely for the use and benefit of the Noteholders in accordance with the terms
hereof and the Insurance Policy and the PMI Policy, respectively.
ARTICLE I
DEFINITIONS
Section 1.01 General Definitions.
Except as otherwise specified or as the context may otherwise require, the following terms have the
respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are
applicable to the singular as well as to the plural forms of such terms and to the masculine as well as to the
feminine genders of such terms. Whenever reference is made herein to an Event of Default or a Default known to
the Indenture Trustee or of which the Indenture Trustee has notice or knowledge, such reference shall be
construed to refer only to an Event of Default or Default of which the Indenture Trustee is deemed to have notice
or knowledge pursuant to Section 6.01(d). All other terms used herein that are defined in the Trust Indenture
Act (as hereinafter defined), either directly or by reference therein, have the meanings assigned to them therein.
"Accountant": A Person engaged in the practice of accounting who (except when this Indenture provides
that an Accountant must be Independent) may be employed by or affiliated with the Issuer or an Affiliate of the
Issuer.
"Act": With respect to any Noteholder, as defined in Section 11.03.
"Administrative Fee Amount": For the Notes and any Payment Date, the sum of the Monthly Servicing Fee
and the Indenture Trustee's Fee, each relating to such Payment Date.
"Affiliate": 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 specified 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, relation to individuals or
otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agent": Any Note Registrar, Paying Agent, Authenticating Agent or Custodian.
"Aggregate Principal Balance": With respect to the Mortgage Loan Pool and any Payment Date, the
aggregate of the Principal Balances of the Mortgage Loans as of the related Determination Date (or other
specified date).
"Assignments": The original instrument of assignment of a Mortgage, including any interim assignments,
from the originator or any other holder of any Mortgage Loan to the Indenture Trustee (that in each case may, to
the extent permitted by the laws of the state in which the related Mortgaged Property is located, be a blanket
instrument of assignment covering other Mortgages and Mortgage Notes as well and that may also be an instrument
of assignment running directly from the mortgagee of record under the related Mortgage to the Indenture Trustee).
"Authenticating Agent": The Person, if any, appointed as Authenticating Agent by the Issuer pursuant to
Section 6.14, until any successor Authenticating Agent for the Notes is named, and thereafter "Authenticating
Agent" shall mean such successor. The Authenticating Agent shall be the Indenture Trustee. Any Authenticating
Agent other than the Indenture Trustee shall sign an instrument under which it agrees to be bound by all of the
terms of this Indenture applicable to the Authenticating Agent.
"Authorized Officer": With respect to (i) the Indenture Trustee, any Responsible Officer, (ii) the
Owner Trustee, the president, any vice president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer, any financial services officer or any other
officer of the Owner Trustee customarily performing functions similar to those performed by the above officers
and (iii) any other Person, the Chairman, Chief Operating Officer, President or any Vice President of such Person.
"Available Funds": With respect to any Payment Date, the sum of the amounts described in clauses (a)
through (g) below, less (i) the Administrative Fee Amount in respect of such Payment Date, (ii) Monthly Advances
and Servicing Advances previously made that are reimbursable to the Servicer (other than those included in
liquidation expenses for any Liquidated Mortgage Loan and reimbursed from the related Liquidation Proceeds and
from Insurance Proceeds) with respect to the related Collection Period to the extent permitted by the Servicing
Agreement and (iii) the aggregate amounts (A) deposited into the Collection Account or the Note Account that may
not be withdrawn therefrom pursuant to a final and nonappealable order of a United States bankruptcy court of
competent jurisdiction imposing a stay pursuant to Section 362 of the Bankruptcy Code and that would otherwise
have been included in Available Funds on such Payment Date and (B) received by the Indenture Trustee that are
recoverable and sought to be recovered from the Issuer as a voidable preference by a trustee in bankruptcy
pursuant to the Bankruptcy Code in accordance with a final nonappealable order of a court of competent
jurisdiction:
(a) all scheduled payments of interest received with respect to the Mortgage Loans and due during the
related Due Period and all other interest payments on or in respect of such Mortgage Loans received by
or on behalf of the Servicer during the related Collection Period (including Payments Ahead that are
allocable to interest for the related Due Period), net of amounts representing interest accrued on such
Mortgage Loans in respect of any period prior to the Cut-off Dates, plus any Compensating Interest
payments made by the Servicer in respect of the related Mortgage Loans and any net income from related
REO Properties for such Collection Period;
(b) all scheduled payments of principal received with respect to the Mortgage Loans and due during the
related Due Period and all other principal payments (including Principal Prepayments and Prepayment
Premiums) received or deemed to be received during the related Collection Period (including Payments
Ahead that are allocable as principal for the related Due Period) in respect of such Mortgage Loans;
(c) the aggregate of any Trust Insurance Proceeds collected by the Servicer during the related Collection
Period;
(d) the aggregate of any Net Liquidation Proceeds collected by the Servicer during the related Collection
Period;
(e) the aggregate of the Purchase Prices received in respect of any Mortgage Loans that are required or
permitted to be repurchased, released, removed or substituted by the Seller during or in respect of the
related Collection Period, to the extent such amounts are received by the Indenture Trustee on or before
the related Deposit Date;
(f) the amount of any Monthly Advances made by the Servicer for such Payment Date; and
(g) the aggregate of amounts deposited in the Note Account during such Collection Period in connection with
redemption of the Notes pursuant to Article X.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended.
"Basic Documents": This Indenture, the Trust Agreement, the Servicing Agreement, the Mortgage Loan Sale
Agreement, the Mortgage Loan Contribution Agreement, the Management Agreement, the Insurance Agreement and the
Indemnification Agreement.
"Beneficial Owner": With respect to a Book-Entry Note, the Person who is the beneficial owner of such
Note as reflected on the books of the Clearing Agency for the Notes or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect participant, in accordance with the rules of such
Clearing Agency).
"Best Efforts": Efforts determined to be in good faith and reasonably diligent by the Person performing
such efforts, specifically the Issuer or the Servicer, as the case may be, in its reasonable discretion. Such
efforts do not require the Issuer or the Servicer, as the case may be, to enter into any litigation, arbitration
or other legal or quasi-legal proceeding, nor do they require the Issuer or the Servicer, as the case may be, to
advance or expend fees or sums of money in addition to those specifically set forth in this Indenture and the
Servicing Agreement.
"Book-Entry Notes": Any Notes registered in the name of the Clearing Agency or its nominee, ownership
of which is reflected on the books of the Clearing Agency or on the books of a person maintaining an account with
such Clearing Agency (directly or as an indirect participant in accordance with the rules of such Clearing
Agency).
"Book-Entry Termination": The time at which the book-entry registration of the Book-Entry Notes shall
terminate, as specified in Section 2.13.
"Business Day": Any day other than (i) a Saturday or Sunday or (ii) a day that is either a legal
holiday or a day on which the Note Insurer is closed or on which banking institutions in the State of New York,
the State of North Carolina, the state in which the Corporate Trust Office is located or the State of Delaware
are authorized or obligated by law, regulation or executive order to be closed.
"Certificate": As defined in the Trust Agreement.
"Certificate Distribution Account": As defined in the Trust Agreement.
"Certificateholders": As defined in the Trust Agreement.
"Clearing Agency": An organization registered as a "clearing agency" pursuant to Section 17A of the
Securities and Exchange Act of 1934, as amended, and the regulations of the Commission thereunder and shall
initially be The Depository Trust Company of New York, the nominee for which is Cede & Co.
"Clearing Agency Participants": The entities for whom the Clearing Agency will maintain book-entry
records of ownership and transfer of Book-Entry Notes, which may include securities brokers and dealers, banks
and trust companies and clearing corporations and certain other organizations.
"Closing Date": , the date of initial issuance of the Notes.
"Code": The Internal Revenue Code of 1986, as amended, and as may be further amended from time to time,
as successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form and proposed regulations thereunder to the extent that, by reason of their proposed
effective date, such proposed regulations would apply.
"Collateral": The items Granted to the Indenture Trustee under the Granting Clause of this Indenture.
"Collection Account": The segregated trust account established by the Servicer and maintained pursuant
to Section 2.02(b) of the Servicing Agreement.
"Collection Period": As to any Payment Date, the period beginning on the first day of the calendar
month immediately preceding the month in which such Payment Date occurs (except that, in the case of the first
Payment Date, the related Collection Period will commence on the Cut-off Date for each Mortgage Loan) and ending
on the last day of such calendar month.
"Combined Loan-to-Value Ratio": As defined in the Mortgage Loan Sale Agreement.
"Commission": The Securities and Exchange Commission, as from time to time constituted, created under
the Securities Exchange Act of 1934, or if at any time such Commission is not existing and performing the duties
now assigned to it under the Trust Indenture Act, then the body performing such duties at such time under the
Trust Indenture Act or similar legislation replacing the Trust Indenture Act.
"Compensating Interest": As defined in the Servicing Agreement.
"Corporate Trust Office": The principal office of the Indenture Trustee at which at any particular time
its corporate trust business with respect to this Indenture shall be principally administered, which office at
the date of the execution of this Indenture is located at , Attention: [ ]
Trust, LLC Series [ ] Trust, with a copy to the Indenture Trustee at , Attention: Re: [
] Trust, LLC Series [ ] Trust.
"Cumulative Loss Percentage": As defined in the Servicing Agreement.
"Current Note Balance": With respect to any Note as of any date of determination, the original
principal amount of such Note, reduced by all prior payments (including Insured Payments), if any, made with
respect to principal of such Note.
"Custodial Agreement": The Custody Agreement, dated as of , among the Servicer, the Custodian
and the Indenture Trustee.
"Custodian": A Person who is at any time appointed by the Indenture Trustee pursuant to Section 8.13 as
a document custodian for the Mortgage Files, which Person shall not be the Issuer or an Affiliate of the Issuer.
The Custodian shall initially be .
"Cut-off Date": .
"Default": Any occurrence that is, or with notice or the lapse of time or both would become, an Event
of Default.
"Defective Mortgage Loan": Any Mortgage Loan that is required to be repurchased or substituted by the
Seller pursuant to the Mortgage Loan Sale Agreement.
"Deficiency Amount": With respect to the Notes and any Payment Date, (A) the excess, if any, of (i) the
Note Interest (net of any Relief Act Interest Shortfalls and Prepayment Interest Shortfalls) for such Payment
Date over (ii) funds on deposit in the Note Account available to be distributed therefor on such Payment Date and
(B) the Guaranteed Principal Amount.
"Definitive Notes": Notes other than Book-Entry Notes.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by a Qualified Replacement Mortgage
Loan.
"Delinquency Amount": As of any Payment Date, the product of the Rolling Delinquency Percentage for
such Payment Date and the Mortgage Loans as of the average Aggregate Principal Balance of the Mortgage Loans as
of the immediately preceding three Determination Dates.
"Delinquency Percentage": For any Payment Date, the rolling three month average of the fraction,
expressed as a percentage, (i) the numerator of which is the aggregate of the Principal Balances as of the
related Determination Date of all Mortgage Loans that were 90 or more days contractually delinquent, in
foreclosure, REO Property or for which the related Mortgagor was in a bankruptcy proceeding and the related
Mortgage Loan was 90 or more days contractually delinquent or paying a reduced Monthly Payment as a result of a
bankruptcy workout as of end of the related Collection Period and the denominator of which is the Aggregate
Principal Balance of all Mortgage Loans as of the related Determination Date.
"Deposit Date": The date each month on which funds on deposit in the Collection Account are remitted by
the Servicer to the Indenture Trustee for deposit into the Note Account, which date shall be with respect to any
Payment Date, the 18th day of the month in which such Payment Date occurs, or the next succeeding Business Day,
if such 18th day is not a Business Day.
"Depositor": Wachovia Asset Funding Trust, LLC.
"Determination Date": As to any Payment Date, the last day of the Due Period relating to such Payment
Date.
"Due Period": With respect to any Payment Date, the period commencing on the second day of the calendar
month immediately preceding the calendar month in which such Payment Date occurs (or, with respect to the first
Payment Date, commencing the day following the Cut-off Date for each Mortgage Loan) and ending on the first day
of the calendar month in which such Payment Date occurs.
"Eligible Account": Either (A) a segregated account or accounts maintained with an institution the
deposits of which are insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the FDIC,
the unsecured and uncollateralized debt obligations of which shall be rated " " or better by [Rating Agency]
and " " or better by [Rating Agency] and in the highest short term rating category by [Rating Agencies], and
that is either (i) a federal savings and loan association duly organized, validly existing and in good standing
under the federal banking laws, (ii) an institution duly organized, validly existing and in good standing under
the applicable banking laws of any state, (iii) a national banking association duly organized, validly existing
and in good standing under the federal banking laws, (iv) a principal subsidiary of a bank holding company, or
(v) which is approved in writing by the Note Insurer or (B) a trust account maintained with the trust department
of a federal or state chartered depository institution or trust company, having capital and surplus of not less
than $50,000,000, acting in its fiduciary capacity, the unsecured and uncollateralized debt obligations of which
shall be rated " " or better by [Rating Agency]. Any Eligible Accounts maintained with the Indenture Trustee
shall conform to the preceding clause (B).
"Event of Default": As defined in Section 5.01.
"Excess Cash": With respect to any Payment Date, will be equal to Available Funds for such Payment
Date, reduced by the sum of (i) the amount payable to the PMI Insurer as premium for such Payment Date under the
PMI Policy, (ii) the Note Insurer Premium owing to the Note Insurer in respect of the Notes for such Payment
Date, (iii) the Note Interest for such Payment Date, (iv) the Monthly Principal for such Payment Date and (v) the
amount owing to the Note Insurer under the Insurance Agreement for reimbursement for prior draws made on the
Insurance Policy in respect of the Notes and any other amounts owing to the Note Insurer under the Insurance
Agreement (including any unpaid Note Insurer Premiums in respect of the Notes).
"Excess Cash Payment". As defined in clause fourth of Section 8.02(c).
"FDIC": The Federal Deposit Insurance Corporation and its successors in interest.
"Final Certification": A certification as to the completeness of each Mortgage File prepared by the
Custodian on behalf of the Indenture Trustee, and provided by the Indenture Trustee on or before the first
anniversary of the Closing Date pursuant to Section 6.15(b).
"Final Maturity Date": The Payment Date in [Date].
"Fiscal Agent": As defined in the Insurance Policy.
"Full Prepayment": With respect to any Mortgage Loan, when any one of the following occurs:
(i) payment is made by the Mortgagor to the Servicer of 100% of the outstanding principal balance of such Mortgage
Loan, together with all accrued and unpaid interest thereon at the Mortgage Interest Rate on such Mortgage Loan,
(ii) payment is made to the Indenture Trustee of the Purchase Price of such Mortgage Loan in connection with the
purchase of such Mortgage Loan by the Seller or the Servicer or (iii) payment is made to the Servicer of all
Insurance Proceeds and Liquidation Proceeds, and other payments, if any, that have been determined by the
Servicer in accordance with the provisions of the Servicing Agreement to be finally recoverable, in the
Servicer's reasonable judgment, in respect of such Mortgage Loan.
"Grant": To assign, transfer, mortgage, pledge, create and grant a security interest in, deposit,
set-over and confirm. A Grant of a Mortgage Loan and related Mortgage Files, a Permitted Investment, the
Servicing Agreement, the Mortgage Loan Sale Agreement, the Mortgage Loan Contribution Agreement, or any other
instrument shall include all rights, powers and options (but none of the obligations) of the Granting party
thereunder, including, without limitation, the immediate and continuing right to claim for, collect, receive and
give receipts for principal and interest payments thereunder, insurance proceeds, Purchase Prices and all other
moneys payable thereunder and all proceeds thereof, 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.
"Guaranteed Principal Amount": (a) With respect to any Payment Date (other than Payment Date specified
in (b)), the Overcollateralization Deficit, if any, for such Payment Date and (b) on the earlier to occur of the
Payment Date in [Date] (after giving effect to all distributions of principal on the Notes) or the Redemption
Date (after giving effect to all distribution of principal on the Notes), an amount equal to the Note Balance.
"Highest Lawful Rate": As defined in Section 11.19.
"Indemnification Agreement": As defined in the Insurance Agreement.
"Indenture": This instrument as originally executed and, if from time to time supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, as so
supplemented or amended. All references in this instrument to designated "Articles", "Sections", "Subsections"
and other subdivisions are to the designated Articles, Sections, Subsections and other subdivisions of this
instrument as originally executed. The words "herein", "hereof", "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section, Subsection or other subdivision.
"Indenture Trustee": , and any Person resulting from or surviving any consolidation or merger to
which it may be a party until a successor Person shall have become the Indenture Trustee pursuant to the
applicable provisions of this Indenture, and thereafter "Indenture Trustee" shall mean such successor Person.
"Indenture Trustee's Fee": With respect to the Notes, the Indenture Trustee's monthly fee, equal to
1/12th of % of the Aggregate Principal Balance of the Mortgage Loans as of the first day of the
applicable Due Period.
"Independent": When used with respect to any specified Person, means such a Person who (i) is in fact
independent of the Issuer and any other obligor upon the Notes, (ii) does not have any direct financial interest
or any material indirect financial interest in the Issuer or in any such other obligor or in an Affiliate of the
Issuer or such other obligor, and (iii) is not connected with the Issuer or any such other obligor as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing similar functions. Whenever it
is herein provided that any Independent Person's opinion or certificate shall be furnished to the Indenture
Trustee, such Person shall be appointed by an Issuer Order and such opinion or certificate shall state that the
signer has read this definition and that the signer is Independent within the meaning hereof.
"Individual Note": A Note of an original principal amount of $ (provided, however, one Note
may be less than that amount); a Note of an original principal amount in excess of $ shall be deemed to
be a number of Individual Notes equal to the quotient obtained by dividing such original principal amount by
$ .
"Initial Certification": A certification as to the completeness of each Mortgage File prepared by the
Custodian on behalf of the Indenture Trustee and provided by the Custodian on the Closing Date pursuant to
Section 6.15(a).
"Initial Redemption Date": The first Payment Date on which the aggregate Note Balance is less than 10%
of the Original Note Balance.
"Insurance Agreement": The Insurance and Indemnity Agreement, dated as of , among the Note
Insurer, the Issuer, the Seller and the Depositor.
"Insurance Policy": The note guaranty insurance policy No. , dated , issued by the
Note Insurer to the Indenture Trustee for the benefit of the Noteholders, pursuant to which the Note Insurer
guarantees payment of Insured Payments. A specimen of the Insurance Policy is attached hereto as Exhibit B.
"Insurance Policy Payments Account": The account established pursuant to Section 8.03 hereof.
"Insured Payments": As to the Notes and any Payment Date, the amount required to be paid by the Note
Insurer under the Insurance Policy.
"Insurance Proceeds": As defined in the Servicing Agreement.
"Interest Period": With respect to a Payment Date, the calendar month immediately preceding the month
in which such Payment Date occurs.
"Issuer": Wachovia Asset Funding Trust, LLC [________] , a Delaware statutory trust.
"Issuer Order" and "Issuer Request": A written order or request of the Issuer signed on behalf of the
Issuer by an Authorized Officer of the Owner Trustee or, in the case of such order or request required by
Section 2.11, by an Authorized Officer of the holder of the Certificate and delivered to the Indenture Trustee or
the Authenticating Agent, as applicable.
"Letter Agreement": The Letter of Representations to The Depository Trust Company from the Indenture
Trustee and the Issuer dated .
"Liquidated Mortgage Loan": As defined in the Servicing Agreement.
"Liquidation Date": With respect to any Mortgage Loan, the date of the final receipt of all Liquidation
Proceeds, Insurance Proceeds or other payments with respect to such Mortgage Loan.
"Liquidation Proceeds": As defined in the Servicing Agreement.
"Loan-to-Value Ratio": As defined in the Mortgage Loan Sale Agreement.
"Management Agreement": That certain agreement, dated as of , between the Issuer and the
Indenture Trustee pursuant to which the Indenture Trustee, as manager, will perform certain obligations of the
Issuer hereunder.
"Maturity": With respect to any Note, the date on which the entire unpaid principal amount of such Note
becomes due and payable as therein or herein provided, whether at the Final Maturity Date or by declaration of
acceleration, call for redemption or otherwise.
"Monthly Advance": As defined the Servicing Agreement.
"Monthly Payment": With respect to any Mortgage Note, the amount of each monthly payment payable under
such Mortgage Note by the Mortgagor in accordance with its terms, including, one month's accrued interest on the
related Principal Balance at the then applicable Mortgage Interest Rate, but net of any portion of such monthly
payment that represents late payment charges, extension fees or collections allocable to payments to be made by
Mortgagors for payment of insurance premiums or similar items.
"Monthly Principal": For the Notes and any Payment Date, an amount equal to (a) the aggregate of
(i) all scheduled payments of principal received (or advanced or to be advanced on the related Deposit Date) with
respect to the Mortgage Loans and due during the related Due Period and all other amounts collected, received or
otherwise recovered in respect of principal on such Mortgage Loans (including Principal Prepayments, but not
including Payments Ahead that are not allocable to principal for the related Due Period) during or in respect of
the related Collection Period, (ii) the aggregate of the amounts allocable to principal deposited in the Note
Account on the related Deposit Date by the Issuer, the Depositor, the Servicer or the Note Insurer in connection
with a repurchase, release, removal or substitution of any Mortgage Loans pursuant to this Indenture, and
(iii) in connection with the redemption of the Notes, that portion of the Redemption Price in respect of
principal, reduced by (b) the amount of any Overcollateralization Surplus and Payment Date.
"Monthly Servicing Fee": As defined in the Servicing Agreement.
["Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. and its successors in interest.]
"Mortgage": The mortgage, deed of trust or other instrument creating a first lien on an estate in fee
simple in real property securing a Mortgage Loan.
"Mortgage File": As defined in the Mortgage Loan Sale Agreement.
"Mortgage Interest Rate": With respect to each Mortgage Loan, the rate per annum set forth in the
related Mortgage Note at which interest accrues on such Mortgage Loan, in each case after giving effect to any
modification of a Mortgage Loan for any period in connection with a bankruptcy or similar proceeding involving
the related Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted or agreed to by the
Servicer in accordance with the Servicing Agreement.
"Mortgage Loan": Each of the mortgage loans Granted to the Indenture Trustee under this Indenture as
security for the Notes and that from time to time comprise part of the Trust Estate, including any property that
secures a Mortgage that becomes REO Property. The Mortgage Loans are listed on the Mortgage Loan Schedule
annexed hereto as Schedule I.
"Mortgage Loan Contribution Agreement": That certain agreement, dated as of , between the
Depositor and the Issuer pursuant to which the Mortgage Loans will be acquired from the Depositor by the Issuer
for inclusion in the Trust Estate.
"Mortgage Loan Pool": The pool of Mortgage Loans Granted to the Indenture Trustee under this Indenture
as security for the Notes.
"Mortgage Loan Sale Agreement": That certain agreement, dated as of , between the Seller and
the Depositor pursuant to which the Mortgage Loans will be acquired from the Seller by the Depositor.
"Mortgage Loan Schedule": As of any date, the schedule of mortgage loans included in the Trust Estate,
Schedule I hereto identifies the Mortgage Loans being Granted to the Indenture Trustee on the Closing Date. The
Mortgage Loan Schedule shall be amended by the Servicer as appropriate from time to time to reflect the deletion
and substitution of Mortgage Loans in accordance with the terms of the Basic Documents. The Mortgage Loan
Schedule shall identify each Mortgage Loan by the Servicer's loan number and address (including the state) of the
related Mortgaged Property and shall set forth as to each Mortgage Loan the initial Loan-to-Value Ratio or
Combined Loan-to-Value Ratio, the Principal Balance as of the Cut-off Date, the Mortgage Interest Rate, the
currently Monthly Payment amount and the stated maturity date of the related Mortgage Note. The Issuer shall
cause the initial Mortgage Loan Schedule to be delivered by the Seller to the Indenture Trustee in both physical
and computer-readable form.
"Mortgage Note": The note or other instrument evidencing the indebtedness of a Mortgagor under the
related Mortgage Loan.
"Mortgaged Property": The underlying property securing a Mortgage Note.
"Mortgagor": The obligor under a Mortgage Note.
"Net Liquidation Proceeds": As defined in the Servicing Agreement.
"Nonrecoverable Advance": As defined in the Servicing Agreement.
"Note Account": The segregated trust account, which shall be an Eligible Account, established and
maintained pursuant to Section 8.02 and entitled " , as Indenture Trustee for [Issuer
Name] - Mortgage Backed Notes, Series 200 - Note Account," on behalf of the Noteholders and the Note
Insurer.
"Note Balance": With respect to the Notes, the aggregate of the Current Note Balances of all Notes
Outstanding at the time of determination.
"Noteholder" or "Holder": The Person in whose name a Note is registered in the Note Register, except
that, solely for the purpose of taking any action under Section 5.02 or giving of any consent pursuant to this
Indenture, any Note registered in the name of the Issuer, the Seller, the Servicer or the Depositor or any
Persons actually known by a Responsible Officer of the Indenture Trustee to be an Affiliate of the Issuer, the
Seller, the Servicer or the Depositor shall be deemed not to be Outstanding and the percentage interest evidenced
thereby shall not be taken into account in determining whether Holders of the requisite percentage interests
necessary to take any such action or effect any such consent have acted or consented unless the Issuer, the
Seller, the Servicer, the Depositor or any such Person is an owner of record of all of the Notes.
"Note Insurer": , a stock insurance company, and successors thereto.
"Note Insurer Premium Letter": The commitment letter dated , from the Note Insurer to the
Seller regarding the issuance of a financial guaranty insurance policy.
"Note Insurer Default": The existence and continuance of any of the following:
(a) the Note Insurer fails to make a payment required under the Insurance Policy in accordance with its
terms;
(b) the Note Insurer (A) files any petition or commences any case or proceeding under any provision or
chapter of the Bankruptcy Code or any other similar federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation or reorganization, (B) makes a general assignment for the
benefit of its creditors, or (C) has an order for relief entered against it under the Bankruptcy Code or
any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation
or reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of Insurance or other competent regulatory
authority enters a final and nonappealable order, judgment or decree (A) appointing a custodian,
trustee, agent or receiver for the Note Insurer or for all or any material portion of its property or
(B) authorizing the taking of possession by a custodian, trustee, agent or receiver of the Note Insurer
(or the taking of possession of all or any material portion of the property of the Note Insurer).
Notwithstanding anything to the contrary contained herein, upon the existence and continuance of a Note
Insurer Default, the consent by the Note Insurer shall not be required to any action or inaction hereunder and
the Note Insurer shall not have any rights with respect thereto; provided, however, that such rights shall be
immediately reinstated following cure of such Note Insurer Default.
"Note Insurer Premium": The premium due to the Note Insurer under the Note Insurer Premium Letter on
the Closing Date and on each Payment Date thereafter, which amount as to each Payment Date shall be equal to the
product of the Note Insurer Premium Rate and the related Note Balance immediately prior to such Payment Date.
"Note Insurer Premium Rate": The premium percentage specified in the Note Insurer Premium Letter.
"Note Interest": As to the Notes and any Payment Date, the amount of interest payable to Holders of
such Notes on such Payment Date, which amount shall be equal to interest at 1/12th of the Note Interest Rate on
the Note Balance as of the preceding Payment Date (after giving effect to the payment, if any, in reduction of
principal made on such Notes on such preceding Payment Date). All calculations of interest on the Notes will be
computed on the basis of twelve thirty-day months and a year of 360 days.
"Note Interest Rate": With respect to each Interest Period prior to the Initial Redemption Date,
% per annum, and for each Interest Period thereafter, ______% per annum.
"Note Register": As defined in Section 2.06.
"Note Registrar": As defined in Section 2.06.
"Notes": The [Issuer Name] - Mortgage Backed Notes, Series 200 - , issued pursuant to this
Indenture.
"Notice of Claim": The notice required to be furnished by the Indenture Trustee to the Note Insurer in
the event an Insured Payment is required to be paid under the Insurance Policy with respect to any Payment Date,
in the form set forth as Exhibit C hereto.
"Officers' Certificate": A certificate signed by the Chairman of the Board, the Vice Chairman of the
Board, the President, Chief Operating Officer or a Vice President of the Seller, the Depositor, the Servicer or,
in the case of the Issuer, an Authorized Officer of the Owner Trustee, as the case may be, and delivered to the
Indenture Trustee, Note Insurer or each Rating Agency, as the case may be.
"Opinion of Counsel": A written opinion of counsel reasonably acceptable to the Indenture Trustee and,
in the case of opinions delivered to the Note Insurer, reasonably acceptable to it. Any expense related to
obtaining an Opinion of Counsel for an action requested by a party shall be borne by the party required to obtain
such opinion or seeking to effect the action that requires the delivery of such Opinion of Counsel, except in
such instances where such opinion is at the request of the Indenture Trustee, in which case such expense shall be
an expense of the Servicer.
"Original Note Balance": The aggregate principal balance of the Notes at the issue date thereof, equal
to $ .
"Other Insurance Policies": All insurance policies insuring any Mortgage Loan or Mortgaged Property, to
the extent the Issuer or the Indenture Trustee has any interest therein, including the PMI Policy.
"Outstanding": As of the date of determination, all Notes theretofore authenticated and delivered under
this Indenture except:
(i) Definitive Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for
cancellation;
(ii) Notes or portions thereof for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Indenture Trustee or any Paying Agent (other than the Issuer) 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 therefor, satisfactory to the
Indenture Trustee, has been made;
(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 (as defined by the Uniform Commercial Code of the applicable
jurisdiction); and
(iv) Notes alleged to have been destroyed, lost or stolen that have been paid as provided for in Section 2.07;
provided, however, that in determining whether the Holders of the requisite percentage
of the Note Balance of the Outstanding Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Notes owned by the Issuer, any other obligor
upon the Notes or any Affiliate of the Issuer, the Seller, the Servicer or the Depositor or
such other obligor 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. 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 or any Affiliate of the Issuer, the Seller,
the Servicer or the Depositor or such other obligor; provided, further, however, that Notes
that have been paid with the proceeds of the Insurance Policy shall be deemed to be Outstanding
for the purposes of this Indenture, such payment to be evidenced by written notice from the
Note Insurer to the Indenture Trustee, and the Note Insurer shall be deemed to the Holder
thereof to the extent of any payments thereon made by the Note Insurer.
"Overcollateralization Amount": As to any Payment Date, the amount, if any, by which (x) the Aggregate
Principal Balance of the Mortgage Loans as of the end of the related Due Period exceeds (y) the Note Balance for
such Payment Date, after taking into account Monthly Principal (disregarding any permitted reduction thereof in
such Monthly Principal due to an Overcollateralization Surplus made on such Payment Date) to be applied in
reduction of the Note Balance on such Payment Date. If the Aggregate Principal Balance of the Mortgage Loans is
less than the Note Balance for such Payment Date, determined as provided above, the Overcollateralization Amount
and Payment Date shall be zero.
"Overcollateralization Deficiency Amount": With respect to any Payment Date is the amount, if any, by
which the Required Overcollateralization Amount exceeds the Overcollateralization Amount.
"Overcollateralization Deficit": As to any Payment Date, the amount, if any, by which the Note Balance
on such Payment Date (after taking into account any payments to be paid on such Payment Date in reduction of the
Note Balance, including Excess Cash payments) exceeds the Aggregate Principal Balance of the Mortgage Loans as of
the end of the related Due Period. If the Aggregate Principal Balance of the Mortgage Loans as determined
pursuant to the preceding sentence is greater than the related Note Balance for such Payment Date determined as
provided above, the Overcollateralization Deficit for such Payment Date shall be zero.
"Overcollateralization Surplus": As to any Payment Date, the amount, if any, by which (x) the related
Overcollateralization Amount on such Payment Date exceeds (y) the related Required Overcollateralization Amount
on such Payment Date.
"Owner Trustee": , not in its individual capacity, but solely as owner trustee under the Trust
Agreement, and any successor owner trustee thereunder.
"Owner Trustee Fee": The fee payable to the Owner Trustee pursuant to the Trust Agreement.
"Paying Agent": The Indenture Trustee or any other depository institution or trust company that is
authorized by the Issuer pursuant to Section 3.03 to pay the principal of, or interest on, any Notes on behalf of
the Issuer, which agent, if not the Indenture Trustee, shall have signed an instrument agreeing to be bound by
the terms of this Indenture applicable to the Paying Agent.
"Payment Ahead": As defined in the Servicing Agreement.
"Payment Date": The day of each month or, if any such day is not a Business Day, the Business Day
immediately following such day, beginning .
"Payment Date Statement": The statement prepared pursuant to Section 2.08(d) with respect to collection
on or in respect of the Mortgage Loans and other assets of the Trust Estate and payments on or in respect of the
Notes, based upon the information contained in the Servicer Remittance Report prepared pursuant to the Servicing
Agreement and setting forth the following information with respect to each Payment Date (to the extent the
Servicer has made such information (other than the information described in clause (ii), (iii), (iv), (v) and
(xv) below) available to the Indenture Trustee):
(i) the amount of such payment to Noteholders allocable to (x) Monthly Principal (separately setting forth
Principal Prepayments) and (y) any principal payments made pursuant to Section 8.02(c)(vi) hereof;
(ii) the amount of such payment to Noteholders allocable to Note Interest;
(iii) the Note Balance, after giving effect to the payment of Monthly Principal and any principal payment made
pursuant to Section 8.02(c)(vi) hereof applied to reduce such Note Balance on such Payment Date;
(iv) the Aggregate Principal Balance of the Mortgage Loans as of the end of the related Due Period;
(v) the amount of Monthly Advances made with respect to such Payment Date and the aggregate amount of
unreimbursed Monthly Advances and Servicing Advances, if any;
(vi) the number and aggregate of the Principal Balances of Mortgage Loans (including the Principal Balances
of all Mortgage Loans in foreclosure) contractually delinquent (i) one month, (ii) two months and
(iii) three or more months, as of the end of the related Collection Period;
(vii) the number and aggregate of the Principal Balances of the Mortgage Loans in foreclosure or subject to
other similar proceedings, and the number and aggregate of the Principal Balance of Mortgage Loans and
in the aggregate, the Mortgagor of which is known by the Servicer to be in bankruptcy as of the end of
the related Collection Period and the book value of any real estate acquired through foreclosure, grant
of a deed in lieu of foreclosure or other similar proceedings during the related Collection Period;
(viii) the aggregate of the Principal Balances of the Mortgage Loans repurchased by the Seller or purchased by
the Servicer, separately setting forth the aggregate of the Principal Balances of Mortgage Loans and in
the aggregate delinquent for three consecutive monthly installments purchased by the Servicer at its
option pursuant to the Servicing Agreement;
(ix) the amount of any Insured Payments for such Payment Date;
(x) the aggregate amount of the Monthly Servicing Fee paid to or retained by the Servicer for the related
Collection Period;
(xi) the Overcollateralization Amount, the then applicable Required Overcollateralization Amount, the
Overcollateralization Surplus, if any, and the Overcollateralization Deficit, if any, with respect to
such Payment Date;
(xii) the aggregate Principal Balance of the three largest outstanding Mortgage Loans as of the related
Determination Date;
(xiii) the aggregate amount of Realized Losses incurred during the related Collection Period and the cumulative
amount of Realized Losses since the Cut-off Date;
(xiv) the amount of premium due to the PMI Insurer under the PMI Policy;
(xv) the Delinquency Percentage and the Rolling Loss Percentage (as defined in the Servicing Agreement)
relating to such Payment Date; and
(xvi) the number of Mortgage Loan modifications made by the Servicer during the Collection Period and the type
of modification made with respect to each such Mortgage Loan.
In the case of information furnished pursuant to subclauses (i) and (ii) above, the amounts shall be expressed as
a dollar amount per Individual Note.
"Percentage Interest": With respect to a Note, the undivided percentage interest (carried to eight
places rounded down) obtained by dividing the original principal balance of such Note by the Original Note
Balance and multiplying the result by 100.
"Permitted Investments": One or more of the following obligations, instruments and securities:
(a) direct general obligations of, or obligations fully guaranteed by, the United States of America, the
Federal Home Loan Mortgage Corporation, Federal National Mortgage Corporation, the Federal Home Loan
Banks or any agency or instrumentality of the United States of America rated " " or higher by
[Rating Agency], the obligations of which are backed by the full faith and credit of the United States
of America;
(b) (i) demand and time deposits in, certificates of deposit of, banker's acceptances issued by, or federal
funds sold by any depository institution or trust company (including the Indenture Trustee or its agent
acting in their respective commercial capacities) incorporated under the laws of the United States of
America or any state thereof and subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or contractual commitment providing for such
investment, such depository institution or trust company or its ultimate parent has a short-term
uninsured debt rating in one of the two highest available rating categories of [Rating Agency] and of
[Rating Agency] and provided that each such investment has an original maturity of no more than 365 days
and (ii) any other demand or time deposit or deposit which is fully insured by the FDIC;
(c) repurchase obligations with a term not to exceed 30 days with respect to any security described in
clause (a) above and entered into with a depository institution or trust company (acting as a principal)
rated " " or higher by [Rating Agency] and rated " " or higher by [Rating Agency];
provided, however, that collateral transferred pursuant to such repurchase obligation must be of the
type described in clause (a) above and must (i) be valued daily at current market price plus accrued
interest, (ii) pursuant to such valuation, be equal, at all times, to 105% of the cash transferred by
the Indenture Trustee in exchange for such collateral and (iii) be delivered to the Indenture Trustee
or, if the Indenture Trustee is supplying the collateral, an agent for the Indenture Trustee, in such a
manner as to accomplish perfection of a security interest in the collateral by possession of certified
securities.
(d) securities bearing interest or sold at a discount issued by any corporation incorporated under the laws
of the United States of America or any state thereof which has a long-term unsecured debt rating in the
highest available rating category of each of the Rating Agencies at the time of such investment;
(e) commercial paper having an original maturity of less than 365 days and issued by an institution having a
short-term unsecured debt rating in the highest available rating category of each of the Rating Agencies
at the time of such investment;
(f) a guaranteed investment contract approved by each of the Rating Agencies and the Note Insurer and issued
by an insurance company or other corporation having a long-term unsecured debt rating in the highest
available rating category of each of the Rating Agencies at the time of such investment;
(g) money market funds having ratings in the two highest available rating category of [Rating Agency] and
one of the two highest available rating categories of [Rating Agency] at the time of such investment
which invest only in other Permitted Investments (any such money market funds which provide for demand
withdrawals being conclusively deemed to satisfy any maturity requirements for Permitted Investments set
forth herein) including money market funds of the Indenture Trustee and any such funds that are managed
by the Indenture Trustee or its affiliates or which Indenture Trustee or any affiliate acts as advisor
as long as such money market funds satisfy the criteria of this subparagraph (g); and
(h) any investment approved in writing by the Note Insurer and written evidence that any such investment
will not result in a downgrading or withdrawal of the rating by each Rating Agency on the Notes.
The Indenture Trustee may purchase from or sell to itself or an affiliate, as principal or agent, the
Permitted Investments listed above. All Permitted Investments in a trust account under the Indenture shall be
made in the name of the Indenture Trustee for the benefit of the Noteholders and the Note Insurer.
"Person": Any individual, corporation, limited liability company, partnership, joint venture,
association joint-stock company, trust (including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
"PMI Insurer": , a monoline private insurance company organized and created under the laws of
the State of , or its successors in interest.
"PMI Mortgage Loans": The list of Mortgage Loans insured by the PMI Insurer attached hereto as
Exhibit D.
"PMI Policy": The Primary Mortgage Insurance Policy (No. ) with respect to the PMI Mortgage
Loans and all endorsements thereto dated the Closing Date, issued by the PMI Insurer.
"Predecessor Notes": 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 Section 2.07 in lieu of a lost, destroyed or stolen Note shall be deemed
to evidence the same debt as the lost, destroyed or stolen Note.
"Preference Claim": As defined in Section 8.03(g) of this Indenture.
"Prepayment Interest Shortfall": With respect to any Mortgage Loan as to which a prepayment in whole or
in part was received by the Servicer from the related Mortgagor during a Collection Period, an amount equal to
the difference between (1) 30 days' interest at the Mortgage Interest Rate on the Principal Balance of such
Mortgage Loan (immediately prior to such prepayment) and (2) the amount of interest actually collected by the
Servicer on such Mortgage Loan during the related Due Period.
"Prepayment Premium": With respect to any Collection Period, any prepayment premium, penalty or charge
payable by a Mortgagor in connection with any Principal Prepayment on a Mortgage Loan pursuant to the terms of
the related Mortgage Note.
"Principal Balance": As to any Mortgage Loan and any Determination Date, the actual outstanding
principal amount thereof as of the close of business on the Determination Date in the preceding month (or, in the
case of the first Payment Date, as of the Cut-off Date) less (i) all scheduled payments of principal received or
advanced (or to be advanced on the related Deposit Date) with respect to the Mortgage Loan and due during the
related Due Period and all other amounts collected, received or otherwise recovered in respect of principal on
the Mortgage Loan (including Principal Prepayments, but not including Payments Ahead that are not allocable to
principal for the related Due Period) during or in respect of the related Collection Period, Net Liquidation
Proceeds and Trust Insurance Proceeds allocable to principal recovered or collected in respect of such Mortgage
Loan during the related Collection Period, (ii) the portion of the Purchase Price allocable to principal to be
remitted by the Seller or the Servicer to the Indenture Trustee on or prior to the related Deposit Date in
connection with a repurchase of such Mortgage Loan pursuant to the Mortgage Loan Sale Agreement, the Servicing
Agreement or Section 8.05 hereof, to the extent such amount is actually remitted on or prior to such Deposit
Date, and (iii) the amount to be remitted by the Seller to the Indenture Trustee on the related Deposit Date in
connection with a substitution of a Qualified Replacement Mortgage Loan for such Mortgage Loan pursuant to the
Mortgage Loan Sale Agreement and Section 8.05 hereof, to the extent such amount is actually remitted on or prior
to such Deposit Date; provided, however, that Mortgage Loans that have become Liquidated Mortgage Loans since the
end of the preceding Determination Date (or, in the case of the first Determination Date, since the Cut-off Date)
will be deemed to have a Principal Balance of zero on the current Determination Date.
"Principal Prepayment": As to any Mortgage Loan and Collection Period, any payment by a Mortgagor or
other recovery in respect of principal on a Mortgage Loan (including Net Liquidation Proceeds and Trust Insurance
Proceeds) that, in the case of a payment by a Mortgagor, is received in advance of its scheduled due date and is
not a Payment Ahead.
"Proceeding": Any suit in equity, action at law or other judicial or administrative proceeding.
"Purchase Price": With respect to any Defective Mortgage Loan, an amount equal to (i) the sum of (A)
the Principal Balance of such Defective Mortgage Loan as of the beginning of the Due Period next preceding the
Deposit Date on which such repurchase or purchase is required to occur, (B) interest computed at the applicable
Mortgage Interest Rate on such Principal Balance from the date to which interest was last paid by the Mortgagor
to the last day of the Due Period immediately preceding the Deposit Date on which such repurchase occurs and (C)
any previously unreimbursed Monthly Advances with respect to principal and Servicing Advances made on or in
respect of such Defective Mortgage Loan, less (ii) any payments of principal and interest in respect of such
Defective Mortgage Loan made by or on behalf of the related Mortgagor during such Due Period. With respect to
any Qualified Replacement Mortgage Loan, the amount remitted by the Seller to the Indenture Trustee on or prior
to the Deposit Date relating to a Payment Date in connection with a substitution of such Qualified Replacement
Mortgage Loan for a Mortgage Loan pursuant to the Mortgage Loan Sale Agreement or Section 8.05 hereof.
"Qualified Replacement Mortgage Loan": A Mortgage Loan that is substituted for a Deleted Mortgage Loan
pursuant to Section 8.05 that must, at the end of the Due Period preceding the date of such substitution,
(i) have an outstanding principal balance (when taken together with any other Qualified Replacement Mortgage Loan
being substituted for such Deleted Mortgage Loan), not in excess of and not substantially less than the unpaid
principal balance of the Deleted Mortgage Loan at the end of the Due Period preceding the date of substitution,
(ii) be of the same type of Mortgage Interest Rate (i.e. fixed or adjustable) and have the Mortgage Interest Rate
not less than the Mortgage Interest Rate on the Deleted Mortgage Loan, and, with respect to Mortgage Loans which
have an adjustable Mortgage Rate, have maximum rates, minimum rates, margin indices, gross margins, and caps no
more than 1% greater than or less than those of the Deleted Mortgage Loan, (iii) have a remaining term to
maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan, (iv) have a
Loan-to-Value Ratio or Combined Loan-to-Value Ratio equal to or lower than the Loan-to-Value Ratio or Combined
Loan-to-Value Ratio of the Deleted Mortgage Loan, (v) have the same or better lien priority as the Deleted
Mortgage Loan, (vi) comply as of the date of substitution with each representation and warranty set forth in
Section 4(b) and Exhibit B of the Mortgage Loan Sale Agreement, (vii) have the same or better property type as
the Deleted Mortgage Loan, (viii) have the same or better occupancy status and (ix) be otherwise acceptable to
the Note Insurer. In the event that one or more mortgage loans are proposed to be substituted for one or more
Deleted Mortgage Loans, the foregoing tests may be met on a weighted average basis or other aggregate basis
acceptable to the Note Insurer, except that the requirements of clauses (v), (vi), (vii) and (viii) hereof must
be satisfied as to each Qualified Replacement Mortgage Loan.
"Rating Agencies": [Rating Agency] and [Rating Agency] (each, a "Rating Agency"). If any such agency
or a successor is no longer in existence, "Rating Agency" shall be such nationally recognized statistical credit
rating agency, or other comparable Person, designated by the Servicer, notice of which designation shall be given
to the Indenture Trustee.
"Realized Loss": As defined in the Servicing Agreement.
"Record Date": With respect to any Payment Date, the date on which the Persons entitled to receive any
payment of principal of or interest on any Notes (or notice of a payment in full of principal) due and payable on
such Payment Date are determined; such date shall be the last Business Day preceding such Payment Date or, with
respect to Definitive Notes, the last Business Day of the month preceding the month of such Payment Date. With
respect to a vote of Noteholders required or allowed hereunder, the Record Date shall be the later of (i) 30 days
prior to the first solicitation of consents or (ii) the date of the most recent list of Noteholders furnished to
the Indenture Trustee pursuant to Section 7.01(a) prior to such solicitation.
"Redemption Date": With respect to the Notes, the Payment Date, if any, on which the Notes are redeemed
pursuant to Article X hereof which date may occur on or after the Initial Redemption Date.
"Redemption Price": With respect to any Note to be redeemed in whole or in part, an amount equal to
100% of the Current Note Balance of the Note to be so redeemed, together with accrued and unpaid interest on such
amount at the Note Interest Rate.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
"Relief Act Interest Shortfall": With respect to any Payment Date, for any Mortgage Loan to which there
has been a reduction in the amount of interest collectible thereon for the most recently ended Due Period as a
result of the application of the Relief Act, the amount by which (i) interest collectible on such Mortgage Loan
during such Due Period is less than (ii) 30 days' at the Mortgage Interest Rate on the Principal Balance of such
Mortgage Loan before giving effect to the application of the Relief Act.
"Remittable Funds": As defined in the Servicing Agreement.
"REO Property": As defined in the Servicing Agreement.
"Representative": .
"Required Overcollateralization Amount": Means with respect to the Notes:
(a) for any Payment Date on which the Step Down Trigger is not occurring, the greater of: (i) % of
the Aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date and (ii) either (A) if the
Step Up Rolling Delinquency Test is met on such Payment Date but neither the Step Up Rolling Loss Test
nor the Step Up Cumulative Loss Test is met on such Payment Date, % of the Delinquency Amount for
such Payment Date or (B) if either the Step Up Rolling Loss Test or the Step Up Cumulative Loss Test is
met on such Payment Date, % of the Delinquency Amount for such Payment Date.
(b) for any Payment Date on which the Step Down Trigger is occurring the greatest of (i) the lesser of (A)
% of the Aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date and (B) the Stepped
Down Required Overcollateralized Percentage of the Aggregate Principal Balance of the Mortgage Loans as
of the Determination Date relating to such Payment Date, (ii) either (A) if the Step Up Rolling
Delinquency Test is met as such Payment Date but neither the Step Up Rolling Loss Test nor the Step Up
Cumulative Loss Test is met on such Payment Date, % of the Delinquency Amount for such Payment Date
or (B) if either the Step Up Rolling Loss Test or the Step Up Cumulative Loss Test is met on such
Payment Date, % of the Delinquency Amount for such Payment Date, (iii) % of the Aggregate Principal
Balance of the Mortgage Loans as of the Cut-Off Date and (iv) three times the Principal Balance of the
largest Mortgage Loan then outstanding.
(c) provided, however, for any Payment Date on which the Step Up Claims Denial Test is met, the Required
Overcollateralization Amount determined pursuant to clause (a) or (b) above, as applicable, shall be
increased by an amount equal to the product of % and the Aggregate Principal Balance of the Mortgage
Loans as of the Cut-Off Date.
The Note Insurer may, in its sole discretion, at the request of the holders of 50% or more of the
ownership interests of the Issuer, modify clause (a), (b) or (c) above.
"Required Payment Amount": With respect to the Notes and any Payment Date, the Note Interest (net of
any Relief Act Interest Shortfalls and Prepayment Interest Shortfalls) for such Payment Date plus the amount of
any Overcollateralization Deficit for such Payment Date.
"Responsible Officer": With respect to the Indenture Trustee, the chairman or vice-chairman of the
board of directors, the chairman or vice-chairman of the executive committee of the board of directors, the
president, any vice president, any assistant vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any trust officer or assistant trust officer, the controller,
any assistant controller or any other officer of the Indenture Trustee customarily performing functions similar
to those performed by any of the above designated officers and also, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the
particular subject.
"Rolling Delinquency Percentage": As defined in the Servicing Agreement.
"Rolling Loss Percentage": As defined in the Servicing Agreement.
"Sale": The meaning specified in Section 5.17.
"Seller": .
"Servicer": With respect to any Mortgage Loan, , a corporation, as Servicer under
the Servicing Agreement, and its permitted successors and assigns thereunder, including any successor servicers
appointed pursuant to Section 6.02 of the Servicing Agreement.
"Servicer Remittance Report": As defined in the Servicing Agreement.
"Servicing Advance": As defined in the Servicing Agreement.
"Servicing Agreement": The Servicing Agreement, dated as of , among the Issuer, the Servicer
and the Indenture Trustee, as indenture trustee, providing, among other things, for the servicing of the Mortgage
Loans, as such agreement may be amended or supplemented from time to time as permitted hereby and thereby. Such
term shall also include any servicing agreement entered into with a successor servicer.
"Servicing Fee Rate": % per annum.
["S&P": Standard & Poor's Rating Services, a Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its
successors in interest.]
"Step Down Cumulative Loss Test": The Step Down Cumulative Loss Test will be met with respect to a
Payment Date as follows: (i) for the through the Payment Dates, if the Cumulative Loss Percentage for
such Payment Date is % or less; (ii) for the through the Payment Dates, if the Cumulative Loss
Percentage for such Payment Date is % or less; (iii) for the through the Payment Dates, if the
Cumulative Loss Percentage for such Payment Date is % or less; and (iv) for any Payment Date after the
Payment Date, if the Cumulative Loss Percentage for such Payment Date is % or less.
"Step Down Rolling Delinquency Test": The Step Down Rolling Delinquency Test will be met with respect
to a Payment Date if the Rolling Delinquency Percentage for such Payment Date is % or less.
"Step Down Rolling Loss Test": The Step Down Rolling Loss Test will be met with respect to a Payment
Date if the Rolling Loss Percentage is less than %.
"Step Down Trigger": For any Payment Date after the Payment Date, the Step Down Trigger will have
occurred if each of the Step Down Cumulative Loss Test, the Step Down Rolling Delinquency Test and the Step Down
Rolling Loss Test is met. In no event will the Step Down Trigger be deemed to have occurred for the Payment
Date or any preceding Payment Date.
"Stepped Down Required Overcollateralized Percentage": For any Payment Date for which the Step Down
Trigger has occurred, a percentage equal to the greater of (x) % and (y) (i) the percentage equivalent of a
fraction, the numerator of which is the Overcolleralization Amount as of the immediately preceding Payment Date
and the denominator of which is the Aggregate Principal Balance of the Mortgage Loans and REO Properties as of
such Payment Date, minus (ii) the percentage equivalent of a fraction, the numerator of which is the product of
(A) the percentage calculated under clause (i) above minus % multiplied by (B) the number of consecutive
Payment Dates through and including the Payment Date for which the Stepped Down Required Overcollateralized
Percentage is being calculated, up to a maximum of six, for which the Step Down Trigger has occurred, and the
denominator of which is six.
"Step Up Claims Denial Test": The Step Up Claims Denial Test will be met if either of the following
events occurs (i) the PMI Insurer is downgraded below " " by [Rating Agency] or [Rating Agency], or (ii) the
cumulative claims denials for any 12-months preceding a Payment Date exceed % of the Aggregate Principal
Balance of the Mortgage Loans covered by the PMI Policy at the beginning of such 12-month period.
"Step Up Cumulative Loss Test": The Step Up Cumulative Loss Test will be met with respect to a Payment
Date as follows: (i) for the through the Payment Dates, if the Cumulative Loss Percentage for such
Payment Date is more than %; (ii) for the through the Payment Dates, if the Cumulative Loss
Percentage for such Payment Date is more than %; (iii) for the through the Payment Dates, if the
Cumulative Loss Percentage for such Payment Date is more than %; (iv) for the through the Payment
Dates, if the Cumulative Loss Percentage for such Payment Date is more than %; and (v) for the Payment
Date and any Payment Date thereafter, if the Cumulative Loss Percentage for such Payment Date is more than %.
"Step Up Rolling Delinquency Test": The Step Up Rolling Delinquency Test will be met with respect to a
Payment Date if the Rolling Delinquency Percentage for such Payment Date is more than %.
"Step Up Rolling Loss Test": The Step Up Rolling Loss Test will be met with respect to a Payment Date,
if the Rolling Loss Percentage is equal to or more than %.
"Transition Expenses": As defined in the Servicing Agreement.
"Trust Agreement": That certain Deposit Trust Agreement, dated as of 200 , among the
Depositor, the Owner Trustee, and the Servicer.
"Trust Estate": All money, instruments and other property subject or intended to be subject to the lien
of this Indenture for the benefit of the Noteholders and the Note Insurer as of any particular time (including,
without limitation, all property and interests Granted to the Indenture Trustee, including all proceeds thereof).
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939, as it may be amended from time to time.
"Trust Insurance Proceeds": As defined in the Servicing Agreement.
"Trust Paying Agent": The entity appointed to act as paying agent pursuant to the Trust Agreement with
respect to amounts on deposit from time to time in the Certificate Distribution Account and distributions thereof
to Certificateholders. The initial Trust Paying Agent is .
"U.S. Bankruptcy Code" shall mean the United States Bankruptcy Code, 11 U.S.C. Sections 101, et seq., as
amended or supplemented from time to time.
"Vice President": Any vice president, whether or not designated by a number or a word or words added
before or after the title "vice president".
ARTICLE II
THE NOTES
Section 2.01. Forms Generally.
The Notes shall be in substantially the form set forth on Exhibit A attached hereto. Each Note may have
such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which the Notes may be listed, or as may,
consistently herewith, be determined by the Issuer, as evidenced by its execution thereof. Any portion of the
text of any Note may be set forth on the reverse thereof with an appropriate reference on the face of the Note.
The Definitive Notes may be produced in any manner determined by the Issuer, as evidenced by its
execution thereof.
Section 2.02. Forms of Certificate of Authentication.
The form of the Authenticating Agent's certificate of authentication is as follows:
This is one of the Notes referred to in the within-mentioned Indenture.
[Authentication Agent], as Authenticating Agent
By:____________________________________________
Authorized Signatory
Section 2.03. General Provisions With Respect to Principal and Interest Payment.
The Notes shall be designated generally as the "Mortgage Backed Notes, Series 200 - " of the Issuer.
The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is
limited to $ , except for the Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or 9.06 of this Indenture. The
Notes shall consist of one class designated as Class , having a Note Interest Rate and Final Maturity
Date as follows:
Designation Original Note Balance Note Interest Rate Final Maturity Date
%
The Notes shall be issued in the form specified in Section 2.01.
Subject to the provisions of Section 3.01, Section 5.07, Section 5.09 and Section 8.02(d), the principal
of the Notes shall be payable in installments ending no later than the Final Maturity Date unless the unpaid
principal of such Notes become due and payable at an earlier date by declaration of acceleration or call for
redemption or otherwise.
All payments made with respect to any Note shall be applied first to the interest then due and payable
on such Note and then to the principal thereof. All computations of interest accrued on any Note shall be made
on the basis of a year of 360 days and twelve 30-day months.
Interest on the Notes shall accrue at the Note Interest Rate during each Interest Period on the Current
Note Balance of each Outstanding Note at the end of such Interest Period. Interest accrued during an Interest
Period shall be payable on the next following Payment Date.
All payments of principal of and interest on any Note shall be made in the manner specified in Section 2.
Notwithstanding any of the foregoing provisions with respect to payments of principal of and interest on
the Notes, if the Notes have become or been declared due and payable following an Event of Default and such
acceleration of maturity and its consequences have not been rescinded and annulled, then payments of principal of
and interest on the Notes shall be made in accordance with Section 5.07.
Section 2.04. Denominations.
The Notes shall be issuable only as registered Notes in the minimum denomination of $ and
integral multiples of $ in excess thereof, with the exception of one Note which may be issued in a lesser
amount.
Section 2.05. 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 such Authorized Officer of the Owner Trustee on the Notes may be manual or by facsimile.
Notes bearing the manual or facsimile signature of an individual who was at any time an Authorized
Officer of the Owner Trustee shall bind the Issuer, notwithstanding that such individual has ceased to be an
Authorized Officer of the Owner Trustee prior to the authentication and delivery of such Notes or was not an
Authorized Officer of the Owner Trustee at the date of such Notes.
At any time and from time to time after the execution and delivery of this Indenture, the Issuer may
deliver Notes executed on behalf of the Issuer to the Authenticating Agent for authentication; and the
Authenticating Agent shall authenticate and deliver such Notes as in this Indenture provided and not otherwise.
Each Note authenticated on the Closing Date shall be dated the Closing Date. All other Notes that are
authenticated after the Closing Date for any other purpose hereunder shall be dated the date of their
authentication.
No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose,
unless there appears on such Note a certificate of authentication substantially in the form provided for herein
executed by the Authenticating Agent by the manual signature of one of its authorized officers or employees, and
such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 2.06. 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 is hereby initially appointed "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. The Indenture Trustee shall remain the Note
Registrar throughout the term hereof. Upon any resignation of the Indenture Trustee, the Issuer shall promptly
appoint a successor, with the approval of the Note Insurer, or, in the absence of such appointment, the Issuer
shall assume the duties of Note Registrar.
Upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be
maintained as provided in Section 3.02, the Owner Trustee on behalf of the Issuer, shall execute, and the
Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees, one
or more new Notes of any authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of any authorized denominations, and
of a like aggregate initial principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, the Owner Trustee shall execute, and the
Authenticating Agent shall authenticate and deliver, the Notes that the Noteholder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations
of the 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, or
be accompanied by a written instrument of transfer in form satisfactory to the Note Registrar duly executed by
the Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Notes, but the Issuer
and the Note Registrar may require payment of a sum sufficient to cover any tax or other governmental charge as
may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 2.07 not involving any transfer or any exchange made by the Note Insurer.
The Note Registrar shall not register the transfer of a Note unless the Note Registrar has received a
representation letter from the transferee to the effect that either (i) the transferee is not, and is not
acquiring the Note on behalf of or with the assets of, an employee benefit plan or other retirement plan or
arrangement that is subject to Title I of the Employee Retirement Income Security Act or 1974, as amended, or
Section 4975 of the Code or (ii) the acquisition and holding of the Note by the transferee qualifies for
exemptive relief under a Department of Labor Prohibited Transaction Class Exemption. Each Beneficial Owner of a
Book-Entry Note shall be deemed to make one of the foregoing representations.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes.
If (1) any mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (2) there is delivered to the Note
Registrar such security or indemnity as may be required by the Note Registrar to save each of the Issuer, the
Note Insurer and the Note Registrar harmless, then, in the absence of notice to the Issuer or the Note Registrar
that such Note has been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Issuer shall
execute and upon its request the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Note, a new Note or Notes of the same tenor and aggregate initial
principal amount bearing a number not contemporaneously outstanding. If, after the delivery of such new Note, a
bona fide purchaser of the original Note in lieu of which such new Note was issued presents for payment such
original Note, the Issuer and the Note Registrar shall be entitled to recover such new Note from the person to
whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expenses
incurred by the Issuer or the Note Registrar in connection therewith. If any such mutilated, destroyed, lost or
stolen Note shall have become or shall be about to become due and payable, or shall have become subject to
redemption in full, instead of issuing a new Note, the Issuer may pay such Note without surrender thereof, except
that any mutilated Note shall be surrendered.
Upon the issuance of any new Note under this Section, the Issuer or the Note Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto
and any other reasonable expenses (including the fees and expenses of the Indenture Trustee or the Note
Registrar) connected therewith.
Every new Note issued pursuant to this Section in lieu of any destroyed, lost or stolen Note shall
constitute an original additional contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights
and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.08. Payments of Principal and Interest.
(a) Payments on Notes issued as Book-Entry Notes will be made by or on behalf of the Indenture Trustee to
the Clearing Agency or its nominee. Any installment of interest or principal payable on any Definitive Notes
that is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid to the
Person in whose name such Note (or one or more Predecessor Notes) is registered at the close of business on the
Record Date for such Payment Date by either (i) check mailed to such Person's address as it appears in the Note
Register on such Record Date, or (ii) by wire transfer of immediately available funds to the account of a
Noteholder, if such Noteholder (A) is the registered holder of Definitive Notes having an initial principal
amount of at least $1,000,000 and (B) has provided the Indenture Trustee with wiring instructions in writing by
five Business Days prior to the related Record Date or has provided the Indenture Trustee with such instructions
for any previous Payment Date, except for the final installment of principal payable with respect to such Note
(or the Redemption Price for any Note called for redemption, if such redemption will result in payment of the
then entire unpaid principal amount of such Note), which shall be payable as provided in subsection (b) below of
this Section 2.08. A fee may be charged by the Indenture Trustee to a Noteholder of Definitive Notes for any
payment made by wire transfer. Any installment of interest or principal not punctually paid or duly provided for
shall be payable as soon as funds are available to the Indenture Trustee for payment thereof, or if Section 5.07
applies, pursuant to Section 5.07.
(b) All reductions in the principal amount of a Note (or one or more Predecessor Notes) effected by payments
of installments of principal made on any Payment Date shall be binding upon all Holders of such Note and of any
Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not
such payment is noted on such Note. The final installment of principal of each Note (including the Redemption
Price of any Note called for optional redemption, if such optional redemption will result in payment of the
entire unpaid principal amount of such Note) shall be payable only upon presentation and surrender thereof on or
after the Payment Date therefor at the Indenture Trustee's presenting office located within the United States of
America pursuant to Section 3.02.
Whenever the Indenture Trustee expects that the entire remaining unpaid principal amount of any Note
will become due and payable on the next Payment Date other than pursuant to a redemption pursuant to Article X,
it shall, no later than two days prior to such Payment Date, telecopy or hand deliver to each Person in whose
name a Note to be so retired is registered at the close of business on such otherwise applicable Record Date a
notice to the effect that:
(i) the Indenture Trustee expects that funds sufficient to pay such final installment will be available in
the Note Account on such Payment Date; and
(ii) if such funds are available, (A) such final installment will be payable on such Payment Date, but only
upon presentation and surrender of such Note at the office or agency of the Note Registrar maintained
for such purpose pursuant to Section 3.02 (the address of which shall be set forth in such notice) and
(B) no interest shall accrue on such Note after such Payment Date.
A copy of such form of notice shall be sent to the Note Insurer by the Indenture Trustee.
Notices in connection with redemptions of Notes shall be mailed to Noteholders in accordance with
Section 10.02.
(c) Subject to the foregoing provisions of this Section, each Note delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to unpaid
principal and interest that were carried by such other Note. Any checks mailed pursuant to subsection (a) of
this Section 2.08 and returned undelivered shall be held in accordance with Section 3.03.
(d) Each Payment Date Statement, prepared by the Indenture Trustee based on the Servicer Remittance Report
delivered to the Indenture Trustee pursuant to the Servicing Agreement, shall be made available via the Indenture
Trustee's internet website and its fax-on-demand service to the Note Insurer, the Rating Agencies, the Owner
Trustee, the Underwriters (as defined in the Insurance Agreement) and each Noteholder as the statement required
pursuant to Section 8.06. Noteholders that are unable to use the above distribution options are entitled to have
a paper copy mailed to them via first class mail by calling the customer service desk at and
indicating such. Neither the Indenture Trustee nor the Paying Agent shall have any responsibility to recalculate,
verify or recompute information contained in any such tape, electronic data file or disk or any such Servicer
Remittance Report except to the extent necessary to satisfy all obligations under this Section 2.08(d) and under
Article III of the Servicing Agreement.
Within 90 days after the end of each calendar year, the Indenture Trustee will be required to furnish to
each person who at any time during the calendar year was a Noteholder, if requested in writing by such person, a
statement containing the information set forth in subclauses (i) and (ii) in the definition of "Payment Date
Statement," aggregated for such calendar year or the applicable portion thereof during which such person was a
Noteholder. Such obligation will be deemed to have been satisfied to the extent that substantially comparable
information is provided pursuant to any requirements of the Code as are from time to time in force.
Section 2.09. Persons Deemed Owner.
Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee,
any Paying Agent and any other agent of the Issuer, the Note Insurer or the Indenture Trustee may treat the
Person in whose name any Note is registered as the owner of such Note (a) on the applicable Record Date for the
purpose of receiving payments of the principal of and interest on such Note and (b) on any other date for all
other purposes whatsoever, and neither the Issuer, the Indenture Trustee, any Paying Agent nor any other agent of
the Issuer, the Note Insurer or the Indenture Trustee shall be affected by notice to the contrary.
Section 2.10. Cancellation.
All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if
surrendered to any Person other than the Note Registrar, be delivered to the Note Registrar and shall be promptly
canceled by it. The Issuer may at any time deliver to the Note Registrar for cancellation any Note 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 Note Registrar. 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 held by the Note Registrar shall be held by the Note Registrar in accordance with its standard
retention policy, unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it.
Section 2.11. Authentication and Delivery of Notes.
The Notes shall be executed by an Authorized Officer of the Owner Trustee on behalf of the Issuer and
delivered to the Authenticating Agent for authentication, and thereupon the same shall be authenticated and
delivered by the Authenticating Agent, upon Issuer Request and upon receipt by the Authenticating Agent of all of
the following:
(a) An Issuer Order authorizing the execution, authentication and delivery of the Notes and specifying the
Final Maturity Date, the principal amount and the Note Interest Rate (or the manner in which such Note Interest
Rate is to be determined) of such Notes to be authenticated and delivered.
(b) An Issuer Order authorizing the execution and delivery of this Indenture.
(c) One or more Opinions of Counsel addressed to the Authenticating Agent and the Note Insurer or upon which
the Authenticating Agent and the Note Insurer is expressly permitted to rely, complying with the requirements of
Section 11.01, reasonably satisfactory in form and substance to the Authenticating Agent and the Note Insurer.
In rendering the opinions set forth above, such counsel may rely upon officer's certificates of the
Issuer, the Owner Trustee, the Servicer and the Indenture Trustee, without independent confirmation or
verification with respect to factual matters relevant to such opinions. In rendering the opinions set forth
above, such counsel need express no opinion as to (A) the existence of, or the priority of the security interest
created by the Indenture against, any liens or other interests that arise by operation of law and that do not
require any filing or similar action in order to take priority over a perfected security interest or (B) the
priority of the security interest created by this Indenture with respect to any claim or lien in favor of the
United States or any agency or instrumentality thereof (including federal tax liens and liens arising under Title
IV of the Employee Retirement Income Security Act of 1974).
The acceptability to the Note Insurer of the Opinion of Counsel delivered to the Indenture Trustee and
the Note Insurer at the Closing Date shall be conclusively evidenced by the delivery on the Closing Date of the
Insurance Policy.
(d) Pursuant to the authorization of the Depositor, an Officers' Certificate of the Issuer complying with
the requirements of Section 11.01 and stating that:
(i) the Issuer is not in Default under this Indenture and the issuance of the Notes will not result in any
breach of any of the terms, conditions or provisions of, or constitute a default under, the Issuer's
Certificate of Trust or any indenture, mortgage, deed of trust or other agreement or instrument to which
the Issuer is a party or by which it is bound, or any order of any court or administrative agency
entered in any proceeding to which the Issuer is a party or by which it may be bound or to which it may
be subject, and that all conditions precedent provided in this Indenture relating to the authentication
and delivery of the Notes have been complied with;
(ii) the Issuer is the owner of each Mortgage Loan, free and clear of any lien, security interest or charge,
has not assigned any interest or participation in any such Mortgage Loan (or, if any such interest or
participation has been assigned, it has been released) and has the right to Grant each such Mortgage
Loan to the Indenture Trustee;
(iii) the information set forth in the Mortgage Loan Schedule attached as Schedule I to this Indenture is
correct;
(iv) the Issuer has Granted to the Indenture Trustee all of its right, title and interest in each Mortgage
Loan;
(v) as of the Closing Date, no lien in favor of the United States described in Section 6321 of the Code, or
lien in favor of the Pension Benefit Guaranty Corporation described in Section 4068(a) of the Employee
Retirement Income Security Act of 1974, as amended, has been filed as described in subsections 6323(f)
and 6323(g) of the Code upon any property belonging to the Issuer; and
(vi) attached thereto is a true and correct copy of letters signed by each Rating Agency confirming that the
Notes have been rated in the highest rating category of such Rating Agency.
(e) An executed counterpart of the Servicing Agreement.
(f) An executed counterpart of the Mortgage Loan Sale Agreement.
(g) An executed counterpart of the Mortgage Loan Contribution Agreement.
(h) An executed counterpart of the Trust Agreement.
Section 2.12. Book-Entry Note.
The Notes will be issued initially as one or more certificates in the name of the Cede & Co., as nominee
for the Clearing Agency maintaining book-entry records with respect to ownership and transfer of such Notes, and
held by the Clearing Agency or, pursuant to the Clearing Agency's instructions on behalf of the Clearing Agency,
deposited with the Indenture Trustee, and registration of the Notes may not be transferred by the Note Registrar
except upon Book-Entry Termination. In such case, the Note Registrar shall deal with the Clearing Agency as
representatives of the Beneficial Owners of such Notes for purposes of exercising the rights of Noteholders
hereunder. Each payment of principal of and interest on a Book-Entry Note shall be paid to the Clearing Agency,
which shall credit the amount of such payments to the accounts of its Clearing Agency Participants in accordance
with its normal procedures. Each Clearing Agency Participant shall be responsible for disbursing such payments
to the Beneficial Owners of the Book-Entry Notes that it represents and to each indirect participating brokerage
firm (a "brokerage firm" or "indirect participating firm") for which it acts as agent. Each brokerage firm shall
be responsible for disbursing funds to the Beneficial Owners of the Book-Entry Notes that it represents. All
such credits and disbursements are to be made by the Clearing Agency and the Clearing Agency Participants in
accordance with the provisions of the Notes. None of the Indenture Trustee, the Note Registrar, if any, the
Issuer, or any Paying Agent or the Note Insurer shall have any responsibility therefor except as otherwise
provided by applicable law. Requests and directions from, and votes of, such representatives shall not be deemed
to be inconsistent if they are made with respect to different Beneficial Owners.
Section 2.13. Termination of Book Entry System.
(a) The book-entry system through the Clearing Agency with respect to the Book-Entry Notes may be terminated
upon the happening of any of the following:
(i) The Clearing Agency advises the Indenture Trustee that the Clearing Agency is no longer willing or able
to discharge properly its responsibilities as nominee and depositary with respect to the Notes and the
Indenture Trustee is unable to locate a qualified successor clearing agency satisfactory to the Issuer;
(ii) The Issuer, in its sole discretion, elects to terminate the book-entry system by notice to the Clearing
Agency and the Indenture Trustee; or
(iii) After the occurrence of an Event of Default (at which time the Indenture Trustee shall use all
reasonable efforts to promptly notify each Beneficial Owner through the Clearing Agency of such Event of
Default), the Beneficial Owners of no less than 51% of the Note Balance of the Book-Entry Notes advise
the Indenture Trustee in writing, through the related Clearing Agency Participants and the Clearing
Agency, that the continuation of a book-entry system through the Clearing Agency to the exclusion of any
Definitive Notes being issued to any person other than the Clearing Agency or its nominee is no longer
in the best interests of the Beneficial Owners.
(b) Upon the occurrence of any event described in subsection (a) above, the Indenture Trustee shall use all
reasonable efforts to notify all Beneficial Owners, through the Clearing Agency, of the occurrence of such event
and of the availability of Definitive Notes to Beneficial Owners requesting the same, in an aggregate Current
Note Balance representing the interest of each, making such adjustments and allowances as it may find necessary
or appropriate as to accrued interest and previous calls for redemption. Definitive Notes shall be issued only
upon surrender to the Indenture Trustee of the global Note by the Clearing Agency, accompanied by registration
instructions for the Definitive Notes. Neither the Issuer nor the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon issuance of the Definitive Notes, all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall cease to be applicable and the provisions relating to Definitive Notes
shall be applicable.
ARTICLE III
COVENANTS
Section 3.01. Payment of Notes.
The Issuer will pay or cause to be duly and punctually paid the principal of, and interest on, the Notes
in accordance with the terms of the Notes and this Indenture. The Notes shall be non-recourse obligations of the
Issuer and shall be limited in right of payment to amounts available from the Trust Estate as provided in this
Indenture and the Issuer shall not otherwise be liable for payments on the Notes. No person shall be personally
liable for any amounts payable under the Notes. If any other provision of this Indenture conflicts or is deemed
to conflict with the provisions of this Section 3.01, the provisions of this Section 3.01 shall control.
Section 3.02. Maintenance of Office or Agency.
The Issuer will cause the Note Registrar to maintain its corporate trust office at a location 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 may also from time to time at its own expense designate one or more other offices or agencies
within the United States of America where the Notes may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations; provided, however, any designation of an office or agency
for payment of Notes shall be subject to Section 3.03. The Issuer will give prompt written notice to the
Indenture Trustee and the Note Insurer of any such designation or rescission and of any change in the location of
any such other office or agency.
Section 3.03. Money for Note Payments to Be Held In Trust.
All payments of amounts due and payable with respect to any Notes that are to be made from amounts
withdrawn from the Note Account pursuant to Section 8.02(c) or Section 5.07 shall be made on behalf of the Issuer
by the Paying Agent, and no amounts so withdrawn from the Note Account for payments of Notes shall be paid over
to the Issuer under any circumstances except as provided in this Section 3.03 or in Section 5.07 or Section 8.02.
With respect to Definitive Notes, if the Issuer shall have a Paying Agent that is not also the Note
Registrar, such Note Registrar shall furnish, no later than the fifth calendar day after each Record Date, a
list, in such form as such Paying Agent may reasonably require, of the names and addresses of the Holders of
Notes and of the number of Individual Notes held by each such Holder.
Whenever the Issuer shall have a Paying Agent other than the Indenture Trustee, it will, on or before
the Business Day next preceding each Payment Date direct the Indenture Trustee to deposit with such Paying Agent
an aggregate sum sufficient to pay the amounts then becoming due (to the extent funds are then available for such
purpose in the Note Account), such sum to be held in trust for the benefit of the Persons entitled thereto. Any
moneys deposited with a Paying Agent in excess of an amount sufficient to pay the amounts then becoming due on
the Notes with respect to which such deposit was made shall, upon Issuer Order, be paid over by such Paying Agent
to the Indenture Trustee for application in accordance with Article VIII.
Subject to the prior consent of the Note Insurer, any Paying Agent other than the Indenture Trustee may
be appointed by Issuer Order and at the expense of the Issuer. 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 or
trust company whose obligations would be Permitted Investments pursuant to clause (c) of the definition of the
term Permitted Investments. The Issuer will cause each Paying Agent other than the Indenture Trustee to execute
and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture
Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(1) allocate all sums received for payment to the Holders of Notes on each Payment Date among such Holders
in the proportion specified in the applicable Payment Date Statement, in each case to the extent
permitted by applicable law;
(2) 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;
(3) if such Paying Agent is not the Indenture Trustee, immediately resign as a Paying Agent and forthwith
pay to the Indenture Trustee all sums held by it in trust for the payment of the Notes if at any time
the Paying Agent ceases to meet the standards set forth above required to be met by a Paying Agent at
the time of its appointment;
(4) if such Paying Agent is not the Indenture Trustee, give the Indenture Trustee notice of any Default by
the Issuer (or any other obligor upon the Notes) in the making of any payment required to be made with
respect to any Notes for which it is acting as Paying Agent;
(5) if such Paying Agent is not the Indenture Trustee, at any time during the continuance of any such
Default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all
sums so held in trust by such Paying Agent; and
(6) comply with all requirements of the Code, and all regulations thereunder, with respect to withholding
from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith; provided, however, that with
respect to withholding and reporting requirements applicable to original issue discount (if any) on any
of the Notes, the Issuer has provided the calculations pertaining thereto to the Indenture Trustee and
the Paying Agent.
The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or any other purpose, by Issuer Order direct any Paying Agent, if other than the Indenture Trustee, to
pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which such sums were held by such Paying Agent; and upon such payment
by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due
with respect to any Note and remaining unclaimed for two and one-half years after such amount has become due and
payable to the Holder of such Note (or if earlier, three months before the date on which such amount would
escheat to a governmental entity under applicable law) shall be discharged from such trust and paid to the
Issuer; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer
for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease. The Indenture
Trustee may adopt and employ, at the expense of the Issuer, any reasonable means of notification of such
repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but
not claimed is determinable from the records of the Indenture Trustee or any Agent, at the last address of record
for each such Holder).
Section 3.04. Existence of Issuer.
(a) Subject to Sections 3.04(b) and (c) and Section 6.2(a)(ii) of the Deposit Trust Agreement, the Issuer
will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of
Delaware or under the laws of any other state or the United States of America, and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect
the validity and enforceability of this Indenture, the Notes, the Servicing Agreement, the Insurance Agreement
and the Mortgage Loan Contribution Agreement.
(b) Subject to Section 3.09(vii), the prior written consent of the Note Insurer, and written notice to the
Rating Agencies, any entity into which the Issuer may be merged or with which it may be consolidated, or any
entity resulting from any merger or consolidation to which the Issuer shall be a party, shall be the successor
Issuer under this Indenture without the execution or filing of any paper, instrument or further act to be done on
the part of the parties hereto, anything in any agreement relating to such merger or consolidation, by which any
such Issuer may seek to retain certain powers, rights and privileges therefore obtaining for any period of time
following such merger or consolidation to the contrary notwithstanding (other than Section 3.09(vii)).
(c) Upon any consolidation or merger of or other succession to the Issuer in accordance with this
Section 3.04, the Person formed by or surviving such consolidation or merger (if other than the Issuer) may
exercise every right and power of, and shall have all of the obligations of, the Issuer under this Indenture with
the same effect as if such Person had been named as the Issuer herein.
Section 3.05. Protection of Trust Estate.
(a) The 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 as may be necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust Estate;
(ii) maintain or preserve the lien of this Indenture or carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;
(iv) enforce any of the Mortgage Loans, the Servicing Agreement, the Mortgage Loan Sale Agreement or the
Mortgage Loan Contribution Agreement; or
(v) preserve and defend title to the Trust Estate and the rights of the Indenture Trustee, and of the
Noteholders, in the Mortgage Loans and the other property held as part of the Trust Estate against the
claims of all Persons and parties.
(b) The Indenture Trustee shall not remove any portion of the Trust Estate that consists of money or is
evidenced by an instrument, certificate or other writing from the jurisdiction in which it was held, or to which
it is intended to be removed, as described in the Opinion of Counsel delivered at the Closing Date pursuant to
Section 2.1l(c), or cause or permit ownership or the pledge of any portion of the Trust Estate that consists of
book-entry securities to be recorded on the books of a Person located in a different jurisdiction from the
jurisdiction in which such ownership or pledge was recorded at such time unless the Indenture Trustee shall have
first received an Opinion of Counsel to the effect that the lien and security interest created by this Indenture
with respect to such property will continue to be maintained after giving effect to such action or actions.
Section 3.06. Annual Opinions as to Collateral.
On or before December 31st in each calendar year, beginning in 200 , the Issuer shall furnish to the
Indenture Trustee and the Note Insurer 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 December 31st of the following calendar year.
Section 3.07. Performance of Obligations; Servicing Agreement.
(a) The Issuer shall punctually perform and observe all of its obligations under this Indenture and the
Servicing Agreement.
(b) The Issuer shall not take any action and will use its Best Efforts not to permit any action to be taken
by others that would release any Person from any of such Person's covenants or obligations under any of the
Mortgage Files or under any instrument included in the Trust Estate, or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any of the
documents or instruments contained in the Mortgage Files, except as expressly permitted in this Indenture, the
Servicing Agreement or such document included in the Mortgage File or other instrument or unless such action will
not adversely affect the interests of the Holders of the Notes.
(c) If the Issuer shall have knowledge of the occurrence of a default under the Servicing Agreement, the
Issuer shall promptly notify the Indenture Trustee, the Note Insurer and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect to such default.
(d) Upon any termination of the Servicer's rights and powers pursuant to the Servicing Agreement, the
Indenture Trustee shall promptly notify the Rating Agencies. As soon as any successor Servicer is appointed, the
Indenture Trustee shall notify the Rating Agencies, specifying in such notice the name and address of such
successor Servicer.
Section 3.08. Investment Company Act.
The Issuer shall at all times conduct its operations so as not to be subject to, or shall comply with,
the requirements of the Investment Company Act of 1940, as amended (or any successor statute), and the rules and
regulations thereunder.
Section 3.09. Negative Covenants.
The Issuer shall not:
(i) sell, transfer, exchange or otherwise dispose of any portion of the Trust Estate except as expressly
permitted by this Indenture or the Servicing Agreement;
(ii) claim any credit on, or make any deduction from, the principal of, or interest on, any of the Notes by
reason of the payment of any taxes levied or assessed upon any portion of the Trust Estate;
(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 the Notes pursuant to this Indenture or amend the Trust
Agreement, as in effect on the Closing Date, other than in accordance with Section 11.01;
(iv) incur, issue, assume or otherwise become liable for a indebtedness other than the Notes;
(v) incur, assume, guaranty or agree to indemnify any Person with respect to any indebtedness of any Person,
except for such indebtedness as may be incurred by the Issuer in connection with the issuance of the
Notes pursuant to this Indenture;
(vi) dissolve or liquidate in whole or in part (until the Notes are paid in full);
(vii) (1) permit the validity or effectiveness of this Indenture or any Grant to be impaired, or permit the
lien of this Indenture to be impaired, amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations under this Indenture, except as may
be expressly permitted hereby, (2) permit any lien, charge, security interest, mortgage or other
encumbrance (other than the lien of this Indenture or any Permitted Encumbrance) to be created on or
extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein
or the proceeds thereof, or (3) permit the lien of this Indenture not to constitute a valid perfected
first priority security interest in the Trust Estate; or
(viii) take any other action that should reasonably be expected to, or fail to take any action if such failure
should reasonably be expected to, cause the Issuer to be taxable as (a) an association pursuant to
Section 7701 of the Code or (b) a taxable mortgage pool pursuant to Section 7701(i) of the Code.
Section 3.10. Annual Statement as to Compliance.
On or before December 31, 200 , and each December 31 thereafter and upon receipt of instruction pursuant
to the terms of the Management Agreement, the Issuer shall deliver to the Indenture Trustee, the Note Insurer,
the Rating Agencies and the Underwriters a written statement prepared by the manager pursuant to the terms of the
Management Agreement, signed by an Authorized Officer of the Owner Trustee, stating that:
(1) a review of the fulfillment by the Issuer during such year of its obligations under this Indenture has
been made under such Authorized Officer's supervision; and
(2) 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 the fulfillment of any such covenant or condition, specifying each such Default known to such
Authorized Officer and the nature and status thereof.
Section 3.11. Restricted Payments.
The 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, distributions to the
Servicer, the Indenture Trustee, the Owner Trustee, the Note Insurer and the Certificateholders as contemplated
by, and to the extent funds are available for such purpose under this Indenture, the Servicing Agreement or the
Trust Agreement and the Issuer will not, directly or indirectly, make or cause to be made payments to or
distributions from either Note Account except in accordance with this Indenture.
Section 3.12. Treatment of Notes as Debt for Tax Purposes.
The Issuer shall treat the Notes as indebtedness for all federal and state tax purposes.
Section 3.13. Notice of Events of Default.
The Issuer shall give the Indenture Trustee, the Note Insurer, the Rating Agencies and the Underwriters
prompt written notice of each Event of Default hereunder, each default on the part of the Servicer of its
obligations under the Servicing Agreement and each default on the part of the Seller of its obligations under the
Mortgage Loan Sale Agreement.
Section 3.14. Further Instruments and Acts.
Upon request of the Indenture Trustee or the Note 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.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.
Whenever the following conditions shall have been satisfied:
(1) either
(A) 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 2.07, and (ii) Notes for
whose payment money has theretofore been deposited in trust and thereafter repaid to the
Issuer, as provided in Section 3.03) have been delivered to the Note Registrar for
cancellation; or
(B) all Notes not theretofore delivered to the Note Registrar for cancellation
(i) have become due and payable, or
(ii) will become due and payable at the Final Maturity Date within one year, or
(iii) are to be called for redemption within one year under irrevocable arrangements satisfactory to the
Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in
the name, and at the expense, of the Issuer or the Servicer,
and the Issuer or the Servicer, in the case of clauses (B)(i), (B)(ii) or
(B)(iii) above, has irrevocably deposited or caused to be deposited with the Indenture Trustee,
in trust for such purpose, an amount sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Indenture Trustee for cancellation, for principal
and interest to the Final Maturity Date or to the applicable Redemption Date, as the case may
be, and in the case of Notes that were not paid at the Final Maturity Date of their entire
unpaid principal amount, for all overdue principal and all interest payable on such Notes to
the next succeeding Payment Date therefor;
(2) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer (including,
without limitation, amounts due the Note Insurer hereunder); and
(3) the Issuer has delivered to the Indenture Trustee and the Note Insurer an Officers' Certificate and an
Opinion of Counsel satisfactory in form and substance to the Indenture Trustee and the Note Insurer each
stating that all conditions precedent herein providing for the satisfaction and discharge of this
Indenture have been complied with;
then, upon Issuer Request, this Indenture and the lien, rights and interests created
hereby and thereby shall cease to be of further effect, and the Indenture Trustee and each
co-trustee and separate trustee, if any, then acting as such hereunder shall, at the expense of
the Issuer (or of the Servicer in the case of a redemption by the Servicer), execute and
deliver all such instruments as may be necessary to acknowledge the satisfaction and discharge
of this Indenture and shall pay, or assign or transfer and deliver, to the Issuer or upon
Issuer Order all cash, securities and other property held by it as part of the Trust Estate
remaining after satisfaction of the conditions set forth in clauses (1) and (2) above.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Indenture
Trustee and the Paying Agent to the Issuer and the Holders of Notes under Section 3.03, the obligations of the
Indenture Trustee to the Holders of Notes under Section 4.02 and the provisions of Section 2.07 with respect to
lost, stolen, destroyed or mutilated Notes, registration of transfers of Notes and rights to receive payments of
principal of and interest on the Notes shall survive.
Section 4.02. Application of Trust Money.
All money deposited with the Indenture Trustee pursuant to Sections 3.03 and 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either
directly or through any Paying Agent, as the Indenture Trustee may determine, to the Persons entitled thereto, of
the principal and interest for whose payment such money has been deposited with the Indenture Trustee.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default.
"Event of Default", wherever used herein, means, with respect to Notes issued hereunder, any one of the
following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(1) if the Issuer shall default in the payment on any Payment Date of any Required Payment Amount or fail to
pay the Notes in full on or before the Final Maturity Date (and in the case of any such default, such
default or failure shall continue for a period of 5 days unremedied);
(2) if the Issuer shall breach or default in the due observance of any one or more of the covenants set
forth in clauses (i) through (viii) of Section 3.09;
(3) if the Issuer shall breach, or default in the due observance or performance of, any other of its
covenants in this Indenture, and such Default shall continue for a period of 30 days after there shall
have been given, by registered or certified mail, to the Issuer and the Note Insurer by the Indenture
Trustee at the direction of the Note Insurer, or to the Issuer and the Indenture Trustee by the Holders
of Notes representing at least 25% of the Note Balance of the Outstanding Notes, with the prior written
consent of the Note Insurer, a written notice specifying such Default and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder;
(4) if any representation or warranty of the Issuer made in this Indenture or any certificate or other
writing, delivered by the Issuer pursuant hereto or in connection herewith shall prove to be incorrect
in any material respect as of the time when the same shall have been made and, within 30 days after
there shall have been given, by registered or certified mail, written notice thereof to the Issuer and
the Note Insurer by the Indenture Trustee at the direction of the Note Insurer, or to the Issuer and the
Indenture Trustee by the Holders of Notes representing at least 25% of the Note Balance of the
Outstanding Notes, with the prior written consent of the Note Insurer, the circumstance or condition in
respect of which such representation or warranty was incorrect shall not have been eliminated or
otherwise cured; provided, however, that in the event that there exists a remedy with respect to any
such breach that consists of a purchase obligation, repurchase obligation or right to substitute under
the Basic Documents, then such purchase obligation, repurchase obligation or right to substitute shall
be the sole remedy with respect to such breach and shall not constitute an Event of Default hereunder;
(5) the entry of a decree or order for relief by a court having jurisdiction in respect of the Issuer in an
involuntary case under the federal bankruptcy laws, as now or hereafter in effect, or any other present
or future federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the Issuer or of any substantial
part of its property, or ordering the winding up or liquidation of the affairs of the Issuer and the
continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days;
(6) the commencement by the Issuer of a voluntary case under the federal bankruptcy laws, as now or
hereafter in effect, or any other present or future federal or state bankruptcy, insolvency or similar
law, or the consent by the Issuer to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the Issuer or of any substantial
part of its property or the making by the Issuer of an 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 corporate
action by the Issuer in furtherance of any of the foregoing; or
(7) the occurrence of an "event of default" under the Insurance Agreement.
The payment by the Note Insurer of any Insured Payment in an amount sufficient to cover the related
Required Payment Amount pursuant to the Insurance Policy in respect of any Payment Date shall, at the option of
the Note Insurer, constitute an Event of Default with respect to the Notes.
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every such case, but in each case only with
the consent of the Note Insurer in the absence of a Note Insurer Default, the Indenture Trustee may, and on
request of the Holders of Notes representing not less than 50% of the Note Balance of the Outstanding Notes,
shall, 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 such Notes, in an amount equal to the
Note Balance of such Notes, together with accrued and unpaid interest thereon to the date of such acceleration,
shall become immediately due and payable, all subject to the prior written consent of the Note Insurer in the
absence of a Note Insurer Default.
At any time after such a declaration of acceleration of maturity of the Notes has been made and before a
judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this
Article provided the Note Insurer or the Holders of Notes representing more than 50% of the Note Balance of the
Outstanding Notes, with the prior written consent of the Note Insurer, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences if:
(1) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:
(A) 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
(B) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel; and
(2) all Events of Default, other than the nonpayment of the principal of Notes that have become due solely
by such acceleration, have been cured or waived as provided in Section 5.14.
No such rescission shall affect any subsequent Default or impair any right consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
Subject to the provisions of Section 3.01 and the following sentence, if an Event of Default occurs and
is continuing, the Indenture Trustee shall (at the direction of the Note Insurer) and may, with the prior written
consent of the Note Insurer, proceed to protect and enforce its rights and the rights of the Noteholders and the
Note Insurer by any Proceedings the Indenture Trustee deems appropriate to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of
any power granted herein, or enforce any other proper remedy. Any proceedings brought by the Indenture Trustee
on behalf of the Noteholders and the Note Insurer or any Noteholder against the Issuer shall be limited to the
preservation, enforcement and foreclosure of the liens, assignments, rights and security interests under the
Indenture and no attachment, execution or other unit or process shall be sought, issued or levied upon any
assets, properties or funds of the Issuer, other than the Trust Estate relative to the Notes in respect of which
such Event of Default has occurred. If there is a foreclosure of any such liens, assignments, rights and
security interests under this Indenture, by private power of sale or otherwise, no judgment for any deficiency
upon the indebtedness represented by the Notes may be sought or obtained by the Indenture Trustee or any
Noteholder against the Issuer. The Indenture Trustee shall be entitled to recover the costs and expenses
expended by it pursuant to this Article V including reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee, its agents and counsel.
Section 5.04. Remedies.
If an Event of Default shall have occurred and be continuing and the Notes have been declared due and
payable and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee, at
the direction of the Note Insurer (subject to Section 5.17, to the extent applicable) shall, for the benefit of
the Noteholders and the Note Insurer, do one or more of the following:
(a) institute Proceedings for the collection of all amounts then payable on the Notes, or under this
Indenture, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer moneys
adjudged due, subject in all cases to the provisions of Sections 3.01 and 5.03;
(b) in accordance with Section 5.17, sell the Trust Estate or any portion thereof or rights or interest
therein, at one or more public or private Sales called and conducted in any manner permitted by law;
(c) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with
respect to the Trust Estate;
(d) exercise any remedies of a secured party under the Uniform Commercial Code and take any other
appropriate action to protect and enforce the rights and remedies of the Indenture Trustee or the Holders of the
Notes and the Note Insurer hereunder; and
(e) refrain from selling the Trust Estate and apply all Remittable Funds pursuant to Section 5.07.
Section 5.05. Indenture Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, composition or other judicial Proceeding relative to the Issuer or any other obligor upon any of the
Notes or the property of the Issuer or of such other obligor or their creditors, the Indenture Trustee
(irrespective of whether the Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Indenture Trustee shall have made any demand on the Issuer for the
payment of any overdue principal or interest) shall, with the prior written consent of the Note Insurer, be
entitled and empowered, by intervention in such Proceeding or otherwise to:
(i) file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the
Notes and file such other papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel) and of the Noteholders and
the Note Insurer allowed in such Proceeding, and
(ii) collect and receive any moneys or other property payable or deliverable on any such claims and to
distribute the same; and any receiver, assignee, trustee, liquidator, or sequestrator (or other similar
official) in any such Proceeding is hereby authorized by each Noteholder and the Note Insurer to make
such payments to the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the
making of such payments directly to the Noteholders and the Note Insurer, to pay to the Indenture
Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee, its agents and counsel.
Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to
or accept or adopt on behalf of any Noteholder or the Note Insurer any plan of reorganization, arrangement,
adjustment or composition affecting any of the Notes or the rights of any Holder thereof, or the Note Insurer, or
to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder or the Note Insurer in any
such Proceeding.
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or any of the Notes may be prosecuted and enforced
by the Indenture Trustee without the possession of any of the Notes or the production thereof in any Proceeding
relating thereto, and any such Proceeding instituted by the Indenture Trustee, at the direction of the Note
Insurer, shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be
for the ratable benefit of the Holders of the Notes and the Note Insurer in respect of which such judgment has
been recovered after payment of amounts required to be paid pursuant to clause (i) Section 5.07.
Section 5.07. Application of Money Collected.
If the Notes have been declared due and payable following an Event of Default and such declaration and
its consequences have not been rescinded and annulled, any money collected by the Indenture Trustee pursuant to
this Article or otherwise and any other monies that may then be held or thereafter received by the Indenture
Trustee as security shall be applied in the following order, at the date or dates fixed by the Indenture Trustee
and, in case of the payment of the entire amount due on account of principal of, and interest on, the Notes, upon
presentation and surrender thereof:
(i) to the Servicer and Indenture Trustee, the unpaid Monthly Servicing Fee and Indenture Trustee's Fee due
under this Indenture;
(ii) to the Servicer any Monthly Advances and Servicing Advances previously made that are reimbursable to the
Servicer (other than those included in liquidation expenses for any Liquidated Mortgage Loan and
reimbursed from the related Liquidation Proceeds and from Insurance Proceeds) under the Servicing
Agreement;
(iii) to the PMI Insurer, the amount owing to the PMI Insurer for the premium payable in respect of the PMI
Mortgage Loans;
(iv) to the Note Insurer, the Note Insurer Premium due under the Insurance Agreement;
(v) to the Noteholders, the Note Interest due under this Indenture;
(vi) to the Noteholders, the amount of Monthly Principal for the Notes with respect to such date, in
reduction of the Note Balance until the Note Balance is reduced to zero;
(vii) to the Note Insurer, the amount owing to the Note Insurer under the Insurance Agreement for
reimbursement for prior draws made on the Insurance Policy in respect of the Notes and any other amounts
owing to the Note Insurer under the Insurance Agreement (including any unpaid Note Insurer Premium in
respect of the Notes);
(viii) to the Noteholders, the Overcollateralization Deficiency Amount, if any, due under this Indenture;
(ix) to the Indenture Trustee pursuant to the terms of the Servicing Agreement, Transition Expenses in excess
of $50,000, if any, and other costs and expenses, if not paid by the Servicer pursuant to the Servicing
Agreement or the Custodial Agreement; and
(x) to the payment of the Note Balance of the Outstanding Notes, up to the amount of their Current Note
Balances, without preference or priority of any kind.
Section 5.08. Limitation on Suits.
No Holder of a Note shall have any right to institute any Proceedings, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Indenture Trustee and the Note Insurer of a
continuing Event of Default;
(2) the Holders of Notes representing not less than 25% of the Note Balance of the Outstanding Notes shall
have made written request to the Indenture Trustee to institute Proceedings in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(3) such Holder or Holders have offered to the Indenture Trustee indemnity in full against the costs,
expenses and liabilities to be incurred in compliance with such request;
(4) the Indenture Trustee for 60 days after its receipt of such notice, request and offer of indemnity has
failed to institute any such Proceeding;
(5) no direction inconsistent with such written request has been given to the Indenture Trustee during such
60-day period by the Holders of Notes representing more than 50% of the Note Balance of the Outstanding
Notes; and
(6) the consent of the Note Insurer shall have been obtained; it being understood and intended that no one
or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes
or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right
under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all
the Holders of Notes.
In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from
two or more groups of Holders of Notes, each representing less than 50% of the Note Balances of the Outstanding
Notes, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken
notwithstanding any other provision herein to the contrary.
Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest.
Subject to the provisions in this Indenture (including Sections 3.01 and 5.03) limiting the right to
recover amounts due on a Note to recovery from amounts in the Trust Estate, the Holder of any Note shall have the
right, to the extent permitted by applicable law, which right is absolute and unconditional, to receive payment
of each installment of interest on such Note on the respective Payment Date for such installments of interest, to
receive payment of each installment of principal of such Note when due (or, in the case of any Note called for
redemption, on the date fixed for such redemption) and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
Section 5.10. Restoration of Rights and Remedies.
If the Indenture Trustee, the Note Insurer or any Noteholder has instituted any Proceeding to enforce
any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Indenture Trustee, the Note Insurer or to such Noteholder, then and in
every such case the Issuer, the Indenture Trustee, the Note Insurer and the Noteholders shall, subject to any
determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee, the Note Insurer and the Noteholders shall continue
as though no such Proceeding had been instituted.
Section 5.11. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Indenture Trustee, the Note Insurer or to
the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now
or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right
or remedy.
Section 5.12. Delay or Omission Not Waiver.
No delay or omission of the Indenture Trustee, the Note Insurer or of any Holder of any Note to exercise
any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or
by law to the Indenture Trustee, the Note Insurer or to the Noteholders may be exercised from time to time, and
as often as may be deemed expedient, by the Indenture Trustee, the Note Insurer or by the Noteholders with the
prior consent of the Note Insurer, as the case may be.
Section 5.13. Control by Noteholders.
The Holders of Notes representing more than 50% of the Note Balance of the Outstanding Notes on the
applicable Record Date shall, with the consent of the Note Insurer, have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Indenture Trustee or exercising any trust or
power conferred on the Indenture Trustee; provided that:
(1) such direction shall not be in conflict with any rule of law or with this Indenture;
(2) any direction to the Indenture Trustee to undertake a Sale of the Trust Estate shall be by the Holders
of Notes representing the percentage of the Note Balance of the Outstanding Notes specified in
Section 5.17(b)(1), unless Section 5.17(b)(2) is applicable; and
(3) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not
inconsistent with such direction; provided, however, that, subject to Section 6.01, the Indenture
Trustee need not take any action that it determines might involve it in liability or be unjustly
prejudicial to the Noteholders not consenting.
Section 5.14. Waiver of Past Defaults.
The Holders of Notes representing more than 50% of the Note Balance of the Outstanding Notes on the
applicable Record Date may on behalf of the Holders of all the Notes, and with the consent of the Note Insurer,
waive any past Default hereunder and its consequences, except a Default:
(1) in the payment of principal or any installment of interest on any Note; or
(2) in respect of a covenant or provision hereof that under Section 9.02 cannot be modified or amended
without the consent of the Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Section 5.15. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right
or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the
costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Indenture Trustee, to any suit instituted by any Noteholder, or group of Noteholders, holding
in the aggregate Notes representing more than 10% of the Note Balance of the Outstanding Notes, or to any suit
instituted by any Noteholder for the enforcement of the payment of any Required Payment Amount on any Note on or
after the related Payment Date or for the enforcement of the payment of principal of any Note on or after the
Final Maturity Date (or, in the case of any Note called for redemption, on or after the applicable Redemption
Date).
Section 5.16. Waiver of Stay or Extension Laws.
The 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 of
law wherever enacted, now or at any time hereafter in force, that may affect the covenants in, or the performance
of, this Indenture; and the 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 5.17. Sale of Trust Estate.
(a) The power to effect any sale (a "Sale") of any portion of the Trust Estate pursuant to Section 5.04
shall not be exhausted by any one or more Sales as to any portion of the Trust Estate remaining unsold, but shall
continue unimpaired until the entire Trust Estate shall have been sold or all amounts payable on the Notes and
under this Indenture with respect thereto shall have been paid. The Indenture Trustee may from time to time
postpone any public Sale by public announcement made at the time and place of such Sale.
(b) To the extent permitted by law, the Indenture Trustee shall not (unless directed by the Note Insurer) in
any private Sale sell or otherwise dispose of the Trust Estate, or any portion thereof, unless:
(1) the Holders of Notes representing not less than 50% of the Note Balance of the Notes then Outstanding
consent to or direct the Indenture Trustee to make such Sale; or
(2) the proceeds of such Sale would be not less than the entire amount that would be payable to the Holders
of the Notes, in full payment thereof in accordance with Section 5.07, on the Payment Date next
succeeding the date of such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private Sale shall
not be deemed a Sale or disposition thereof for purposes of this Section 5.17(b). In the absence of a Note
Insurer Default, no sale hereunder shall be effective without the consent of the Note Insurer.
(c) Unless the Holders of all Outstanding Notes have otherwise consented or directed the Indenture Trustee,
at any public Sale of all or any portion of the Trust Estate at which a minimum bid equal to or greater than the
amount described in paragraph (2) of subsection (b) of this Section 5.17 has not been established by the
Indenture Trustee and no Person bids an amount equal to or greater than such amount, the Indenture Trustee,
acting in its capacity as Indenture Trustee on behalf of the Noteholders, shall prevent such sale and bid an
amount (which shall include the Indenture Trustee's right, in its capacity as Indenture Trustee, to credit bid)
at least $1.00 more than the highest other bid in order to preserve the Trust Estate on behalf of the Noteholders.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(1) any Holder or Holders of Notes may bid for and purchase the property offered for Sale, and upon
compliance with the terms of sale may hold, retain and possess and dispose of such property, without
further accountability, and may, in paying the purchase money therefor, deliver any Outstanding Notes or
claims for interest thereon in lieu of cash up to the amount that shall, upon distribution of the net
proceeds of such Sale, be payable thereon, and such Notes, in case the amounts so payable thereon shall
be less than the amount due thereon, shall be returned to the Holders thereof after being appropriately
stamped to show such partial payment;
(2) the Indenture Trustee may bid for and acquire the property offered for Sale in connection with any
public Sale thereof, and, in lieu of paying cash therefor, may make settlement for the purchase price by
crediting the gross Sale price against the sum of (A) the amount that would be payable to the Holders of
the Notes as a result of such Sale in accordance with Section 5.07 on the Payment Date next succeeding
the date of such Sale and (B) the expenses of the Sale and of any Proceedings in connection therewith
which are reimbursable to it, without being required to produce the Notes in order to complete any such
Sale or in order for the net Sale price to be credited against such Notes, and any property so acquired
by the Indenture Trustee shall be held and dealt with by it in accordance with the provisions of this
Indenture;
(3) the Indenture Trustee shall execute and deliver an appropriate instrument of conveyance transferring its
interest in any portion of the Trust Estate in connection with a Sale thereof;
(4) the Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the Issuer to
transfer and convey its interest in any portion of the Trust Estate in connection with a Sale thereof,
and to take all action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the application of any moneys.
Section 5.18. Action on Notes.
The Indenture Trustee's right to seek and recover judgment under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the
lien of this Indenture nor any rights or remedies of the Indenture Trustee, the Note Insurer or the Holders of
Notes shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate.
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the Issuer.
The Trust Estate Granted to the Indenture Trustee as security for the Notes serves as security only for
the Notes. Holders of the Notes shall have no recourse against the trust estate granted as security for any
other series of Notes issued by the Issuer, and no judgment against the Issuer for any amount due with respect to
the Notes may be enforced against either the trust estate securing any other series or any other assets of the
Issuer, nor may any prejudgment lien or other attachment be sought against any such other trust estate or any
other assets of the Issuer.
Section 5.20. Application of the Trust Indenture Act.
Pursuant to Section 316(a) of the TIA, all provisions automatically provided for in Section 316(a) are
hereby expressly excluded.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Indenture Trustee need perform only those duties that are specifically set forth in this Indenture
and no others and no implied covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(2) In the absence of bad faith on its part, the Indenture Trustee may request and conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture. The
Indenture Trustee shall, however, examine such certificates and opinions to determine whether they
conform on their face to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of subsection (b) of this Section 6.01;
(2) 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
(3) 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 5.13 or 5.17 or exercising any
trust or power conferred upon the Indenture Trustee under this Indenture.
(d) Except with respect to duties of the Indenture Trustee prescribed by the TIA, as to which this
Section 6.01(d) shall not apply, for all purposes under this Indenture, the Indenture Trustee shall not be deemed
to have notice or knowledge of any Event of Default described in Section 5.01(2), 5.01(5) or 5.01(6) or any
Default described in Section 5.01(3) or 5.01(4) or of any event described in Section 3.05 unless a Responsible
Officer assigned to and working in the Indenture Trustee's corporate trust department has actual knowledge
thereof or unless written notice of any event that is in fact such an Event of Default or Default is received by
the Indenture Trustee at the Corporate Trust Office, and such notice references the Notes generally, the Issuer,
the Trust Estate or this Indenture.
(e) No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to it under the Servicing Agreement
or otherwise.
(f) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to the
provisions of this Section.
(g) Notwithstanding any extinguishment of all right, title and interest of the Issuer in and to the Trust
Estate following an Event of Default and a consequent declaration of acceleration of the Maturity of the Notes,
whether such extinguishment occurs through a Sale of the Trust Estate to another Person, the acquisition of the
Trust Estate by the Indenture Trustee or otherwise, the rights, powers and duties of the Indenture Trustee with
respect to the Trust Estate (or the proceeds thereof) and the Noteholders and the Note Insurer and the rights of
Noteholders and the Note Insurer shall continue to be governed by the terms of this Indenture.
(h) The Indenture Trustee or any Custodian appointed pursuant to Section 8.13 shall at all times retain
possession of the Mortgage Files in the State of or the State of , except for
those Mortgage Files or portions thereof released to the Servicer or the Note Insurer pursuant to this Indenture
or the Servicing Agreement.
Section 6.02. Notice of Default.
Immediately after the occurrence of any Default known to the Indenture Trustee, the Indenture Trustee
shall transmit by mail to the Note Insurer and the Underwriters notice of each such Default and, within 90 days
after the occurrence of any Default known to the Indenture Trustee, the Indenture Trustee shall transmit by mail
to all Holders of Notes notice of each such Default, unless such Default shall have been cured or waived;
provided, however, that in no event shall the Indenture Trustee provide notice, or fail to provide notice of a
Default known to the Indenture Trustee in a manner contrary to the requirements of the Trust Indenture Act.
Concurrently with the mailing of any such notice to the Holders of the Notes, the Indenture Trustee shall
transmit by mail a copy of such notice to the Rating Agencies.
Section 6.03. Rights of Indenture Trustee.
(a) Except as otherwise provided in Section 6.01, the Indenture Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by the proper Person. The Indenture Trustee need not
investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may require an Officer's Certificate or an
Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in reliance on any such Officer's
Certificate or Opinion of Counsel.
(c) With the consent of the Note Insurer, which consent shall not be unreasonably withheld, the Indenture
Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith that it
believes to be authorized or within its rights or powers.
Section 6.04. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the certificates of authentication on the Notes,
shall be taken as the statements of the Issuer, and the Indenture Trustee and the Authenticating Agent assume no
responsibility for their correctness. The Indenture Trustee makes no representations with respect to the Trust
Estate or as to the validity or sufficiency of this Indenture or of the Notes. The Indenture Trustee shall not
be accountable for the use or application by the Issuer of the Notes or the proceeds thereof or any money paid to
the Issuer or upon Issuer Order pursuant to the provisions hereof.
Section 6.05. May Hold Notes.
The Indenture Trustee, any Agent, or any other agent of the Issuer, in its individual or any other
capacity, may become the owner or pledgee of Notes and, subject to Sections 6.07 and 6.13, may otherwise deal
with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Indenture
Trustee, Agent or such other agent.
Section 6.06. Money Held in Trust.
Money held by the Indenture Trustee in trust hereunder need not be segregated from other funds except to
the extent required by this Indenture or by law. The Indenture Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed with the Issuer and except to the extent of
income or other gain on investments that are obligations of the Indenture Trustee, in its commercial capacity,
and income or other gain actually received by the Indenture Trustee on investments, which are obligations of
others.
Section 6.07. Eligibility, Disqualification.
Irrespective of whether this Indenture is qualified under the TIA, this Indenture shall always have a
Indenture Trustee who satisfies the requirements of TIA Sections 310(a)(1) and 310(a)(5). The Indenture Trustee
shall always have a combined capital and surplus as stated in Section 6.08. The Indenture Trustee shall be
subject to TIA Section 310(b).
Section 6.08. Indenture Trustee's Capital and Surplus.
The Indenture Trustee shall at all times have a combined capital and surplus of at least $50,000,000 or
shall be a member of a bank holding company system, the aggregate combined capital and surplus of which is at
least $100,000,000 and shall at all times be rated " " or better by [Rating Agency] and " " or better by
[Rating Agency]; provided, however, that the Indenture Trustee's separate capital and surplus shall at all times
be at least the amount required by TIA Section 310(a)(2). If the Indenture Trustee publishes annual reports of
condition of the type described in TIA Section 310(a)(1), its combined capital and surplus for purposes of this
Section 6.08 shall be as set forth in the latest such report. If at any time the Indenture Trustee shall cease
to be eligible in accordance with the provisions of this Section 6.08 and TIA Section 310(a)(2), it shall resign
immediately in the manner and with the effect hereinafter specified in this Article.
Section 6.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee
pursuant to this Article shall become effective until the acceptance of appointment by the successor Indenture
Trustee under Section 6.10.
(b) The Indenture Trustee may resign at any time by giving written notice thereof to the Issuer, the Note
Insurer and each Rating Agency, in which event the Issuer will, with the consent of the Note Insurer (and if the
Issuer fails to do so within 30 days, the Note Issuer may) appoint a successor Indenture Trustee. If an
instrument of acceptance by a successor Indenture Trustee shall not have been delivered to the Indenture Trustee
within 30 days after the giving of such notice of resignation, the resigning Indenture Trustee may petition any
court of competent jurisdiction for the appointment of a successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time by the Note Insurer or, with the consent of the Note
Insurer, by Act of the Holders representing at least 51% of the Note Balance of the Outstanding Notes, by written
notice delivered to the Indenture Trustee and to the Issuer.
(d) If at any time:
(1) the Indenture Trustee shall have a conflicting interest prohibited by Section 6.07 and shall fail to
resign or eliminate such conflicting interest in accordance with Section 6.07 after written request
therefor by the Issuer or by any Noteholder; or
(2) the Indenture Trustee shall cease to be eligible under Section 6.08 or shall become incapable of acting
or shall be adjudged a bankrupt or insolvent, or a receiver of the Indenture Trustee or of its property
shall be appointed, or any public officer shall take charge or control of the Indenture Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, (i) the Issuer by an Issuer Order, with the consent of the Note
Insurer, may remove the Indenture Trustee, and the Issuer shall join with the Indenture Trustee in the execution,
delivery and performance of all instruments and agreements necessary or proper to appoint a successor Indenture
Trustee acceptable to the Note Insurer and to vest in such successor Indenture Trustee any property, title, right
or power deemed necessary or desirable, subject to the other provisions of this Indenture; provided, however, if
the Issuer and the Note Insurer do not join in such appointment within fifteen (15) days after the receipt by it
of a request to do so, or in case an Event of Default has occurred and is continuing, the Indenture Trustee may
petition a court of competent jurisdiction to make such appointment, or (ii) subject to Section 5.15, and, in the
case of a conflicting interest as described in clause (1) above, unless the Indenture Trustee's duty to resign
has been stayed as provided in TIA Section 310(b), the Note Insurer or any Noteholder who has been a bona fide
Holder of a Note for at least six months may, on behalf of himself and all others similarly situated, with the
consent of the Note Insurer, petition any court of competent jurisdiction for the removal of the Indenture
Trustee and the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall
occur in the office of the Indenture Trustee for any cause, the Issuer (and if the Issuer fails to do so within
30 days, the Note Issuer may), by an Issuer Order shall promptly appoint a successor Indenture Trustee acceptable
to the Note Insurer. If within one year after such resignation, removal or incapability or the occurrence of
such vacancy a successor Indenture Trustee shall be appointed by the Note Insurer or, with the consent of the
Note Insurer, by Act of the Holders of Notes representing more than 50% of the Note Balance of the Outstanding
Notes delivered to the Issuer and the retiring Indenture Trustee, the successor Indenture Trustee so appointed
shall, forthwith upon its acceptance of such appointment, become the successor Indenture Trustee and supersede
the successor Indenture Trustee appointed by the Issuer. If no successor Indenture Trustee shall have been so
appointed by the Issuer, the Note Insurer or Noteholders and shall have accepted appointment in the manner
hereinafter provided, any Noteholder who has been a bona fide Holder of a Note for at least six months may, on
behalf of himself and all others similarly situated, with the consent of the Note Insurer, petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.
(f) The Issuer shall give notice of each resignation and each removal of the Indenture Trustee and each
appointment of a successor Indenture Trustee to the Holders of Notes and the Note Insurer. Each notice shall
include the name of the successor Indenture Trustee and the address of its Corporate Trust Office.
Section 6.10. Acceptance of Appointment by Successor.
Every successor Indenture Trustee appointed hereunder shall execute, acknowledge and deliver to the
Issuer, the Note Insurer and the retiring Indenture Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Indenture Trustee shall become effective and such successor
Indenture Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Indenture Trustee. Notwithstanding the foregoing, on request of the Issuer or
the successor Indenture Trustee, such retiring Indenture Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Indenture Trustee all the rights, powers and trusts of the
retiring Indenture Trustee, and shall duly assign, transfer and deliver to such successor Indenture Trustee all
property and money held by such retiring Indenture Trustee hereunder. Upon request of any such successor
Indenture Trustee, the Issuer shall execute and deliver any and all instruments for more fully and certainly
vesting in and confirming to such successor Indenture Trustee all such rights, powers and trusts.
No successor Indenture Trustee shall accept its appointment unless at the time of such acceptance such
successor Indenture Trustee shall be qualified and eligible under this Article.
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee.
Any corporation into which the Indenture Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Indenture
Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust
business of the Indenture Trustee, shall be the successor of the Indenture Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any
paper or any further act on the part of any of the parties hereto. In case any Notes have been authenticated,
but not delivered, by the Indenture Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Indenture Trustee may adopt such authentication and deliver the Notes so authenticated
with the same effect as if such successor Indenture Trustee had authenticated such Notes.
Section 6.12. Preferential Collection of Claims Against Issuer.
The Indenture Trustee (and any co-trustee or separate trustee) shall be subject to TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 31l(b), and an Indenture Trustee (and any co-trustee or
separate trustee) who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated.
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees.
At any time or times, for the purpose of meeting the legal requirements of the TIA or of any
jurisdiction in which any of the Trust Estate may at the time be located, the Indenture Trustee shall have power
to appoint, and, upon the written request of the Indenture Trustee, of the Note Insurer or of the Holders of
Notes representing more than 50% of the Note Balance of the Outstanding Notes with respect to which a co-trustee
or separate trustee is being appointed with the consent of the Note Insurer, the Issuer shall for such purpose
jointly with the Indenture Trustee in the execution, delivery and performance of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by the Indenture Trustee either to act as
co-trustee, jointly with the Indenture Trustee, of all or any part of the Trust Estate, or to act as separate
trustee of any such property, in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this Section. If the Issuer does not join in
such appointment within 15 days after the receipt by it of a request to do so, or in case an Event of Default has
occurred and is continuing, the Indenture Trustee alone shall have power to make such appointment. All fees and
expenses of any co-trustee or separate trustee shall be payable by the Issuer.
Should any written instrument from the Issuer be required by any co-trustee or separate trustee so
appointed for more fully confirming to such co-trustee or separate trustee such property, title, right or power,
any and all such instruments shall, on request, be executed, acknowledged and delivered by the Issuer.
Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be
appointed subject to the following terms:
(1) The Notes shall be authenticated and delivered and all rights, powers, duties and obligations hereunder
in respect of the custody of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Indenture Trustee hereunder, shall be exercised, solely by the Indenture
Trustee.
(2) The rights, powers, duties and obligations hereby conferred or imposed upon the Indenture Trustee in
respect of any property covered by such appointment shall be conferred or imposed upon and exercised or
performed by the Indenture Trustee or by the Indenture Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except
to the extent that under any law of any jurisdiction in which any particular act is to be performed, the
Indenture Trustee shall be incompetent or unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee.
(3) The Indenture Trustee at any time, by an instrument in writing, executed by it, with the concurrence of
the Issuer evidenced by an Issuer Order, may accept the resignation of or remove any co-trustee or
separate trustee appointed under this Section, and, in case an Event of Default has occurred and is
continuing, the Indenture Trustee shall have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the Issuer upon the written request of the
Indenture Trustee, the Issuer shall join with the Indenture Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to effectuate such resignation or
removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in
the manner provided in this Section.
(4) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission
of the Indenture Trustee, or any other such trustee hereunder.
(5) Any Act of Noteholders delivered to the Indenture Trustee shall be deemed to have been delivered to each
such co-trustee and separate trustee.
Section 6.14. Authenticating Agents.
The Issuer shall appoint an Authenticating Agent with power to act on its behalf and subject to its
direction in the authentication and delivery of the Notes designated for such authentication by the Issuer and
containing provisions therein for such authentication (or with respect to which the Issuer has made other
arrangements, satisfactory to the Indenture Trustee and such Authenticating Agent, for notation on the Notes of
the authority of an Authenticating Agent appointed after the initial authentication and delivery of such Notes)
in connection with transfers and exchanges under Section 2.06, as fully to all intents and purposes as though the
Authenticating Agent had been expressly authorized by that Section to authenticate and deliver Notes. For all
purposes of this Indenture (other than in connection with the authentication and delivery of Notes pursuant to
Sections 2.05 and 2.11 in connection with their initial issuance), the authentication and delivery of Notes by
the Authenticating Agent pursuant to this Section shall be deemed to be the authentication and delivery of Notes
"by the Indenture Trustee." Such Authenticating Agent shall at all times be a Person that both meets the
requirements of Section 6.07 for the Indenture Trustee hereunder and has an office for presentation of Notes in
the United States of America. The Indenture Trustee shall initially be the Authenticating Agent and shall be the
Note Registrar as provided in Section 2.06. The office from which the Indenture Trustee shall perform its duties
as Note Registrar and Authenticating Agent shall be the Corporate Trust Office. Any Authenticating Agent
appointed pursuant to the terms of this Section 6.14 or pursuant to the terms of any supplemental indenture shall
deliver to the Indenture Trustee as a condition precedent to the effectiveness of such appointment an instrument
accepting the trusts, duties and responsibilities of Authenticating Agent and of Note Registrar or co-Note
Registrar and indemnifying the Indenture Trustee for and holding the Indenture Trustee harmless against, any
loss, liability or expense (including reasonable attorneys' fees) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance, administration of the trust or exercise of authority
by such Authenticating Agent, Note Registrar or co-Note Registrar.
Any corporation into which any Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to the corporate trust business of any
Authenticating Agent, shall be the successor of the Authenticating Agent hereunder, if such successor corporation
is otherwise eligible under this Section, without the execution or filing of any further act on the part of the
parties hereto or the Authenticating Agent or such successor corporation.
Any Authenticating Agent may at any time resign by giving written notice of resignation to the Issuer.
The Issuer may at any time terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and the Issuer. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this
Section, the Issuer shall promptly appoint a successor Authenticating Agent, shall give written notice of such
appointment to the Indenture Trustee, and shall mail notice of such appointment to all Holders of Notes.
The Indenture Trustee agrees, subject to Section 6.01(e), to pay to any Authenticating Agent from time
to time reasonable compensation for its services and the Indenture Trustee shall be entitled to be reimbursed for
such payments pursuant to Section 6.04 of the Servicing Agreement. The provisions of Sections 2.09, 6.04 and
6.05 shall be applicable to any Authenticating Agent.
Section 6.15. Review of Mortgage Files.
(a) Initial Certification. The Indenture Trustee shall, for the benefit of the Noteholders and the Note
Insurer, cause the Custodian to review each Mortgage File prior to the Closing Date to ascertain that all
documents required to be included in the Mortgage File are included therein, and shall cause the Custodian to
deliver to the Seller, the Representative, the Depositor, the Note Insurer, the Indenture Trustee and the
Servicer on the Closing Date an Initial Certification in the form attached as Exhibit E-1 to the Custodial
Agreement with respect to each Mortgage Loan to the effect that, except as specifically noted on a schedule of
exceptions thereto, (A) all documents required to be contained in the Mortgage File are in its possession,
(B) such documents have been reviewed by it and appear regular on their face and relate to such Mortgage Loan, and
(C) based on its examination and only as to the foregoing documents, the information set forth on the related
Mortgage Loan Schedule accurately reflects information set forth in the Mortgage File.
It is understood that before making the Initial Certification, the Indenture Trustee shall cause the
Custodian to examine the related Mortgage Loan Documents to confirm that:
(1) each Mortgage Note and Mortgage bears an original signature or signatures purporting to be that of the
Person or Persons named as the maker and mortgagor/trustor or, if photocopies are permitted, that such
copies bear a reproduction of such signature or signatures;
(2) except for the endorsement in blank, neither the Mortgage nor any Assignment, on the face or the reverse
side(s) thereof, contains evidence of any unsatisfied claims, liens, security interests, encumbrances or
restrictions on transfer;
(3) the principal amount of the indebtedness secured by the related Mortgage is identical to the original
principal amount of the related Mortgage Note;
(4) the Assignment of the related Mortgage from the Seller to the Indenture Trustee is in the form required
pursuant to clause (e) of the definition of "Mortgage Loan Documents" in the Mortgage Loan Sale
Agreement, and bears an original signature of the Seller and any other necessary party (or signatures
purporting to be that of the Seller and any such other party) or, if photocopies are permitted, that
such copies bear a reproduction of such signature or signatures;
(5) if intervening Assignments are included in the Mortgage File, each such intervening Assignment bears an
original signature of the related mortgagee and/or the assignee (and any other necessary party) (or
signatures purporting to be that of each such party) or, if photocopies are permitted, that such copies
bear a reproduction of such signature or signatures;
(6) if either a title insurance policy, a preliminary title report or a written commitment to issue a title
insurance policy is delivered, the address of the real property set forth in such policy, report or
written commitment is identical to the real property address contained in the related Mortgage; and
(7) if any of a title insurance policy, certificate of title insurance or a written commitment to issue a
title insurance policy is delivered, such policy, certificate or written commitment is for an amount not
less than the original principal amount of the related Mortgage Note and such title insurance policy
insures that the related Mortgage creates a first or second lien, senior in priority to all other deeds
of trust, mortgages, deeds to secure debt, financing statements and security agreements and to any
mechanics' liens, judgment liens or writs of attachment other than the related senior lien, if
applicable, (or if the title insurance policy or certificate of title insurance has not been issued, the
written commitment for such insurance obligates the insurer to issue such policy for an amount not less
than the original principal amount of the related Mortgage Note).
(b) Final Certification. On or before one year following the Closing Date, the Indenture Trustee shall
cause the Custodian to deliver to the Seller, the Representative, the Depositor, the Note Insurer, the Indenture
Trustee and the Servicer a Final Certification in the form attached as Exhibit E-2 to the Custodial Agreement
evidencing the completeness of the Mortgage File for each Mortgage Loan, except as specifically noted on a
schedule of exceptions thereto.
(c) In giving each of the Initial Certification and the Final Certification, neither the Indenture Trustee
nor the Custodian shall be under any duty or obligation (1) to inspect, review or examine any such documents,
instruments, securities or other papers to determine that they or the signatures thereto are genuine,
enforceable, or appropriate for the represented purpose or that they have actually been recorded or that they are
other than what they purport to be on their face or (2) to determine whether any Mortgage File should include a
flood insurance policy, any rider, addenda, surety or guaranty agreement, power of attorney, buy down agreement,
assumption agreement, modification agreement, written assurance or substitution agreement.
(d) Recordation Report. In the event that the Mortgage Loans are required to be recorded in accordance with
the provisions of the Mortgage Loan Sale Agreement, no later than the fifth Business Day of each third month,
commencing in 200 , the Indenture Trustee shall cause the Custodian to deliver to the Servicer
and the Note Insurer a recordation report dated as of the first day of such month, identifying those Mortgage
Loans for which it has not yet received (1) an original recorded Mortgage or a copy thereof certified to be true
and correct by the public recording office in possession of such Mortgage or (2) an original recorded Assignment
of the Mortgage to the Indenture Trustee and any required intervening Assignments or a copy thereof certified to
be a true and correct copy by the public recording office in possession of such Assignment.
Section 6.16. Indenture Trustee Fees and Expenses.
The Indenture Trustee shall be entitled to receive the Indenture Trustee Fee on each Payment Date as
provided herein. The Indenture Trustee also shall be entitled, pursuant to the provisions of Section 6.04 of the
Servicing Agreement, to (i) payment of or reimbursement for expenses, disbursements and advances incurred or made
by the Indenture Trustee in accordance with any of the provisions of this Agreement (including, but not limited
to, the reasonable compensation and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) as provided in the Servicing Agreement, and (ii) indemnification against losses,
liability and expenses, including reasonable attorney's fees, incurred, arising out of or in connection with this
Agreement and the Notes as provided in the Servicing Agreement.
Section 6.17. Tax Reporting.
The Indenture Trustee shall provide on an annual basis, or as otherwise required by the Owner Trustee,
all information relating to payments on the Notes as is reasonably required by the Owner Trustee pursuant to its
obligations under Section 2(b)(i) of the Management Agreement and Section 2.11(k) of the Deposit Trust Agreement.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders.
(a) The Issuer shall furnish or cause to be furnished to the Indenture Trustee (i) semiannually, not less
than 45 days nor more than 60 days after the Payment Date occurring closest to six months after the Closing Date
and each Payment Date occurring at six-month intervals thereafter, all information in the possession or control
of the Issuer, in such form as the Indenture Trustee may reasonably require, as to names and addresses of the
Holders of Notes, and (ii) at such other times, as the Indenture Trustee may request in writing, within 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.
(b) In addition to furnishing to the Indenture Trustee the Noteholder lists, if any, required under
subsection (a), the Issuer shall also furnish all Noteholder lists, if any, required under Section 3.03 at the
times required by Section 3.03.
Section 7.02. Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and
addresses of the Holders of Notes contained in the most recent list, if any, furnished to the Indenture Trustee
as provided in Section 7.01 and the names and addresses of the Holders of Notes received by the Indenture Trustee
in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in
Section 7.01 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 7.03. Reports by Indenture Trustee.
(a) Within 60 days after December 31 of each year (the "reporting date"), commencing with the year after the
issuance of the Notes, (i) the Indenture Trustee shall, if required by TIA Section 313(a), mail to all Holders a
brief report dated as of such reporting date that complies with TIA Section 313(a); (ii) the Indenture Trustee
shall, to the extent not set forth in the Payment Date Statement pursuant to Section 2.08(d), also mail to
Holders of Notes and the Note Insurer with respect to which it has made advances, any reports with respect to
such advances that are required by TIA Section 313(b)(2); and, the Indenture Trustee shall also mail to Holders
of Notes and the Note Insurer any reports required by TIA Section 313(b)(1). For purposes of the information
required to be included in any such reports pursuant to TIA Sections 313(a)(2), 313(b)(1) (if applicable), or
313(b)(2), the principal amount of indenture securities outstanding on the date as of which such information is
provided shall be the Note Balance of the then Outstanding Notes covered by the report.
(b) A copy of each report required under this Section 7.03 shall, at the time of such transmission to
Holders of Notes and the Note Insurer be filed by the Indenture Trustee with the Commission and with each
securities exchange upon which the Notes are listed. The Issuer will notify the Indenture Trustee when the Notes
are listed on any securities exchange.
Section 7.04. Reports by Issuer.
The Issuer (a) shall deliver to 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 by rules and regulations
prescribe) that the Issuer is required to file with the Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and (b) shall also comply with the other provisions of TIA
Section 314(a).
Section 7.05. Exchange Act Reporting. In connection with the preparation and filing of periodic reports by
the Servicer pursuant to Section 4.01 of the Servicing Agreement, the Indenture Trustee shall timely provide to
the Servicer (I) a list of Holders as shown on the Note Register or Certificate Register as of the end of each
calendar year, (II) copies of all pleadings, other legal process and any other documents relating to any claims,
charges or complaints involving the Indenture Trustee, as indenture trustee hereunder, or the Trust Estate that
are received by the Indenture Trustee, (III) notice of all matters that, to the actual knowledge of a Responsible
Officer of the Indenture Trustee, have been submitted to a vote of the Holders, other than those matters that
have been submitted to a vote of the Holders at the request of the Depositor or the Servicer, and (IV) notice of
any failure of the Indenture Trustee to make any payment to the Holders as required pursuant to this Indenture.
Neither the Servicer nor the Indenture Trustee shall have any liability with respect to the Servicer's failure to
properly prepare or file such periodic reports resulting from or relating to the Servicer's inability or failure
to obtain any information not resulting from the Servicer's own negligence or willful misconduct.
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Collection of Moneys.
Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of,
and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other
intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this
Indenture. The Indenture Trustee shall hold all such money and property received by it as part of the Trust
Estate and shall apply it as provided in this Indenture.
If the Indenture Trustee shall not have received the Remittable Funds by close of business on any
related Deposit Date, the Indenture Trustee shall, unless the Issuer or the Servicer shall have made provisions
satisfactory to the Indenture Trustee for delivery to the Indenture Trustee of an amount equal to such Remittable
Funds, deliver a notice, with a copy to the Note Insurer, to the Issuer and the Servicer of their failure to
remit such Remittable Funds and that such failure, if not remedied by the close of business on the Business Day
after the date upon which such notice is delivered to the Servicer, shall constitute an event of default under
the Servicing Agreement. If the Indenture Trustee shall subsequently receive any such Remittable Funds by 2:00
p.m. Eastern Time on such Business Day, such Event of Default shall not be deemed to have occurred.
Notwithstanding any other provision hereof, the Indenture Trustee shall deliver to the Issuer or the Servicer, or
their respective designee or assignee, any Remittable Funds received with respect to a Mortgage Loan after the
related Deposit Date to the extent that the Issuer or the Servicer, respectively, previously made payment or
provision for payment with respect to such Remittable Funds in accordance with this Section 8.01, and any such
Remittable Funds shall not be deemed part of the Trust Estate.
Except as otherwise expressly provided in this Indenture and the Servicing Agreement, if, following
delivery by the Indenture Trustee of the notice described above, the Servicer shall fail to remit the Remittable
Funds on any Deposit Date, the Indenture Trustee shall deliver a second notice to the Servicer, the Issuer and
the Note Insurer by 2:00 p.m. Eastern Time on the third Business Day prior to the related Payment Date indicating
that an event of default occurred and is continuing under the Servicing Agreement. Thereupon, the Indenture
Trustee shall take such actions as are required of the Indenture Trustee under Article VI of the Servicing
Agreement. In addition, if a default occurs in any other performance required under the Servicing Agreement, the
Indenture Trustee may, and upon the request of the Note Insurer or, with the consent of the Note Insurer, the
Holders of Notes representing more than 50% of the Note Balance of the Outstanding Notes shall, take such action
as may be appropriate to enforce such payment or performance including the institution and prosecution of
appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and to proceed thereafter as provided in Article V.
Section 8.02. Note Account; Distributions.
(a) The Issuer hereby directs the Indenture Trustee to establish, at the Corporate Trust Office, one or more
separate trust accounts that shall collectively be the "Note Account" on or before the Closing Date. The
Indenture Trustee shall promptly deposit in the Note Account (i) all Remittable Funds received by it from the
Servicer pursuant to the Servicing Agreement, (ii) any other funds from any deposits to be made by the Servicer
pursuant to the Servicing Agreement, (iii) any amount required to be deposited in the Note Account pursuant to
Section 8.01, (iv) all amounts received pursuant to Section 8.03, and (v) all other amounts received for deposit
in the Note Account, including the payment of any Purchase Price for a Mortgage Loan received by the Indenture
Trustee. All amounts that are deposited from time to time in a Note Account are subject to withdrawal by the
Indenture Trustee for the purposes set forth in subsections (c) and (d) of this Section 8.02. All funds
withdrawn from the Note Account pursuant to subsection (c) of this Section 8.02 for the purpose of making
payments to the Holders of Notes shall be applied in accordance with Section 3.03.
(b) So long as no Default or Event of Default shall have occurred and be continuing, amounts held in the
Note Accounts shall be invested in Permitted Investments, which Permitted Investments shall mature no later than
the Business Day preceding the immediately following Payment Date.
All income or other gains, if any, from investment of moneys deposited in the Note Accounts shall be for
the benefit of the Servicer and on each Payment Date, any such amounts may be released from the Note Accounts and
paid to the Servicer as part of its compensation for acting as Servicer. Any loss resulting from such investment
of moneys deposited in a Note Account shall be reimbursed immediately as incurred to the Note Account by the
Servicer. Subject to Section 6.01 and the preceding sentence, neither the Indenture Trustee nor the Servicer
shall in any way be held liable by reason of any insufficiency in the Note Accounts.
(c) On each Payment Date, the Indenture Trustee shall withdraw amounts on deposit in the Note Account and
pay on a pari passu basis the Indenture Trustee Fee, Transition Expenses, if any not paid by the Servicer
pursuant to the Servicing Agreement (not to exceed $50,000 in the aggregate), any gains or income from
investments on the Note Account to the Servicer and, provided notice is given to the Indenture Trustee no later
than the 4th Business Day prior to the Payment Date and to the extent such amounts have not been withdrawn
pursuant to Sections 2.02 and 4.01 of the Servicing Agreement, amounts required to pay the Servicer any unpaid
Servicing Fees then due and to reimburse the Servicer for Monthly Advances and Servicing Advances previously made
by, and not previously reimbursed to or retained by, the Servicer, which are so reimbursable to the Servicer
pursuant to the Servicing Agreement (as reported in writing by the Servicer to the Indenture Trustee). After
payment of such amounts, unless the Notes have been declared due and payable pursuant to Section 5.02 and moneys
collected by the Indenture Trustee are being applied in accordance with Section 5.07, Available Funds on deposit
in the Note Account on any Payment Date or Redemption Date shall be withdrawn from such Note Account, in the
amounts required, for application on such Payment Date as follows:
(i) first, to the PMI Insurer, the amount owing for such Payment Date to the PMI Insurer for the premium
payable in respect of the PMI Mortgage Loans;
(ii) second, to the Note Insurer, the Note Insurer Premium for such Payment Date in respect of the Notes;
(iii) third, to the Noteholders, the Note Interest with respect to such Payment Date;
(iv) fourth, to the Noteholders, the amount of Monthly Principal for the Notes with respect to such Payment
Date, in reduction of the Note Balance until the Note Balance is reduced to zero;
(v) fifth, to the Note Insurer, the amount owing to the Note Insurer under the Insurance Agreement for
reimbursement for prior draws made on the Insurance Policy in respect of the Notes and any other amounts
owing to the Note Insurer under the Insurance Agreement (including any unpaid Note Insurer Premium in
respect of the Notes);
(vi) sixth, to the Noteholders, the Overcollateralization Deficiency Amount, if any, on such Payment Date
(after giving effect to application of Monthly Principal for such Payment Date), in reduction of the
Note Balance until the Note Balance is reduced to zero; and
(vii) seventh, to the Indenture Trustee pursuant to the terms of the Servicing Agreement, Transition Expenses
in excess of $50,000, if any, and other costs and expenses, if not paid by the Servicer pursuant to the
Servicing Agreement or the Custody Agreement.
(d) On or after each Payment Date, so long as the Indenture Trustee shall have prepared a Payment Date
Statement in respect of such Payment Date and (1) shall have made, or, in accordance with Section 3.03, set aside
from amounts in the Note Account an amount sufficient to make, the payments required to be made as set forth in
Section 8.02(c) as indicated in such Payment Date Statement, and (2) shall have set aside any amounts that have
been deposited in the Note Account prior to such time that represent amounts that are to be used to make payments
on the Notes on the next succeeding Payment Date, the cash balance, if any, then remaining in such Note Account
shall be withdrawn from such Note Account by the Indenture Trustee and, so long as no Default or Event of Default
shall have occurred and be continuing, shall be released from the lien of this Indenture and paid by the
Indenture Trustee to the Issuer.
(e) Any payments made by the Indenture Trustee to the Issuer pursuant to this Section 8.02 shall be remitted
to the Certificate Distribution Account established and maintained pursuant to the Trust Agreement.
(f) In the event the Indenture Trustee is required to establish a Collection Account pursuant to the
Servicing Agreement, the Indenture Trustee shall establish and maintain such account in the manner required under
the Servicing Agreement. The Indenture Trustee shall reinvest amounts in the Collection Account at the direction
of the Servicer in Permitted Investments. All income or other gains, if any, from investment of moneys deposited
in the Collection Account shall be for the benefit of the Servicer, and the Indenture Trustee shall release any
such amounts from the Collection Account to the Servicer on each Deposit Date.
Section 8.03. Claims Upon the Insurance Policy; Insurance Policy Payments Account.
(a) If, by the close of business on the third Business Day prior to a Payment Date, the Indenture Trustee
determines that a Deficiency Amount for any Payment Date is greater than zero or that a claim may be made under
the Insurance Policy in respect to any amount paid to Noteholders which is recoverable in bankruptcy as a
preference, then the Indenture Trustee shall give notice to the Note Insurer by telephone or telecopy of the
amount of such Deficiency Amount or preference. Such notice of such Deficiency Amount shall be confirmed in
writing in the form set forth as Exhibit A to the Endorsement of the Insurance Policy, to the Note Insurer and
the Fiscal Agent (as defined in the Insurance Policy), if any, at or before 12:00 noon New York time on the third
Business Day prior to such Payment Date. Following Receipt (as defined in the Insurance Policy) by the Note
Insurer of such notice in such form, the Note Insurer will pay any amount payable under the Insurance Policy on
the later to occur of (i) 12:00 noon New York time on the third Business Day following such receipt and
(ii) 12:00 noon New York time on the Payment Date to which such deficiency relates, as provided in the Endorsement
to the Insurance Policy.
(b) The Indenture Trustee shall establish a separate special purpose trust account for the benefit of
Holders of the Notes and the Note Insurer referred to herein as the "Insurance Policy Payments Account" over
which the Indenture Trustee shall have exclusive control and sole right of withdrawal. The Indenture Trustee
shall deposit any amount paid under the Insurance Policy in the Insurance Policy Payments Account and distribute
such amount only for purposes of payment to Holders of Notes of the Insured Payment for which a claim was made,
and such amount may not be applied to satisfy any costs, expenses or liabilities of the Servicer, the Indenture
Trustee or the Trust Estate. Amounts paid under the Insurance Policy shall be transferred to the Note Account in
accordance with the next succeeding paragraph and disbursed by the Indenture Trustee to Holders of Notes in
accordance with Section 8.02(c). It shall not be necessary for such payments to be made by checks or wire
transfers separate from the checks or wire transfers used to pay the Insured Payment with other funds available
to make such payment. However, the amount of any payment of principal of or interest on the Notes to be paid
from funds transferred from the Insurance Policy Payments Account shall be noted as provided in paragraph (c)
below in the Note Register and in the statement to be furnished to Holders of the Notes pursuant to
Section 7.02. Funds held in the Insurance Policy Payments Account shall not be invested. Proceeds of the
Insurance Policy shall not be considered payment by the Issuer with respect to such Notes, and the Note Insurer
shall become the owner of such unpaid amounts due from the Issuer in respect of such Insured Payments as the
deemed assignee and subrogee of such Noteholders and shall be entitled to received the reimbursement in respect
thereof. The Indenture Trustee hereby agrees on behalf of each Noteholder for the benefit of the Note Insurer
that it recognizes that to the extent the Note Insurer makes Insured Payments for the benefit of the Noteholders,
the Note Insurer will be entitled to receive the related reimbursement in accordance with the priority of
distributions referenced in Section 8.02(c) hereof.
(c) Each Noteholder, by its purchase of Notes, and the Indenture Trustee hereby agree that, unless a Note
Insurer Default exists and is continuing, the Note Insurer shall have the right to direct all matters relating to
the Notes in any proceeding in a bankruptcy of the Issuer, including, without limitation, any proceeding relating
to a Preference Claim and the posting of any surety or Note pending any such appeal.
(d) Unless a Note Insurer Default exists and is continuing, the Indenture Trustee shall cooperate in all
respects with any reasonable request by the Note Insurer for action to preserve or enforce the Note Insurer's
rights or interests hereunder without limiting the rights or affecting the interests of the Noteholders as
otherwise set forth herein.
(e) The Indenture Trustee shall surrender the Insurance Policy to the Note Insurer for cancellation upon the
expiration of the term of the Insurance Policy as provided in the Insurance Agreement.
On any Payment Date with respect to which a claim has been made under the Insurance Policy, the amount
of any funds received by the Indenture Trustee as a result of any claim under the Insurance Policy, to the extent
required to make the Insured Payment on such Payment Date, shall be withdrawn from the Insurance Policy Payments
Account and deposited in the Distribution Account and applied by the Indenture Trustee, together with the other
funds to be withdrawn from the Note Account pursuant to Section 8.02(c) directly to the payment in full of the
Insured Payment due on the Notes. Funds received by the Indenture Trustee as a result of any claim under the
Insurance Policy shall be deposited by the Indenture Trustee in the Insurance Policy Payments Account and used
solely for payment to the Holders of the Notes and may not be applied to satisfy any costs, expenses or
liabilities of the Servicer, the Indenture Trustee, or the Trust Estate. Any funds remaining in the Insurance
Policy Payments Account on the first Business Day following a Payment Date shall be remitted to the Note Insurer,
pursuant to the instructions of the Note Insurer, by the end of such Business Day.
(f) The Indenture Trustee shall keep a complete and accurate record of the amount of interest and principal
paid in respect of any Note from moneys received under the Insurance Policy. The Note Insurer shall have the
right to inspect such records at reasonable times during normal business hours upon one Business Day's prior
notice to the Indenture Trustee.
(g) The Indenture Trustee shall promptly notify the Note Insurer and Fiscal Agent of any proceeding or the
institution of any action, of which a Responsible Officer of the Indenture Trustee has actual knowledge seeking
the avoidance as a preferential transfer under applicable bankruptcy, insolvency, receivership or similar law (a
"Preference Claim") of any Insured Payment made with respect to the Notes. Each Holder of the Notes, by its
purchase of such Certificates, the Servicer, and the Indenture Trustee hereby agree that the Note Insurer (so
long as no Note Insurer Default has occurred and is continuing) may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such Preference Claim, including,
without limitation, (i) the direction of any appeal of any order relating to such Preference Claim and (ii) the
posting of any surety, supersedeas or performance bond pending any such appeal. In addition and without
limitation of the foregoing, the Note Insurer shall be subrogated to the rights of the Servicer, the Indenture
Trustee, and each Holder of the Notes in the conduct of any such Preference Claim, including, without limitation,
all rights of any party to an adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
Section 8.04. General Provisions Regarding the Note Accounts and Mortgage Loans.
(a) Each Note Account shall relate solely to the Notes and to the Mortgage Loans, Permitted Investments and
other property securing the Notes. Funds and other property in the Note Account shall not be commingled with any
other moneys or property of the Issuer or any Affiliate thereof except as otherwise expressly provided for
herein. Notwithstanding the foregoing, the Indenture Trustee may hold any funds or other property received or
held by it as part of the Note Account in collective accounts maintained by it in the normal course of its
business and containing funds or property held by it for other Persons (which may include the Issuer or an
Affiliate), provided that such accounts are under the sole control of the Indenture Trustee and the Indenture
Trustee maintains adequate records indicating the ownership of all such funds or property and the portions
thereof held for credit to a Note Account.
(b) If any amounts are needed for payment from the Note Account and sufficient uninvested funds are not
available therein to make such payment, the Indenture Trustee shall cause to be sold or otherwise converted to
cash a sufficient amount of the investments in such Note Account.
(c) The Indenture Trustee shall, at all times while any Notes are Outstanding, maintain in its possession,
or in the possession of an agent whose actions with respect to such items are under the sole control of the
Indenture Trustee, all certificates or other instruments, if any, evidencing any investment of funds in the Note
Account. The Indenture Trustee shall relinquish possession of such items, or direct its agent to do so, only for
purposes of collecting the final payment receivable on such investment or certificate or, in connection with the
sale of any investment held in the Note Account, against delivery of the amount receivable in connection with any
sale.
(d) The Indenture Trustee shall not invest any part of the Trust Estate in Permitted Investments that
constitute uncertificated securities (as defined in Section 8-102 of the Uniform Commercial Code, as enacted in
the relevant jurisdiction) or in any other book-entry securities unless it has received an Opinion of Counsel
reasonably satisfactory in form and substance to the Indenture Trustee setting forth, with respect to each type
of security for which authority to invest is being sought, the procedures that must be followed to maintain the
lien and security interest created by this Indenture with respect to the Trust Estate.
Section 8.05. Releases of Defective Mortgage Loans.
Upon notice or discovery that any of the representations or warranties of the Seller set forth in
Section 4(b) and Exhibit B of the Mortgage Loan Sale Agreement was materially incorrect or otherwise misleading
with respect to any Mortgage Loan as of the time made, the Indenture Trustee shall direct the Seller to either
(i) within 60 days after the Seller receives actual knowledge of such incorrectness, eliminate or otherwise cure
the circumstance or condition in respect of which such representation or warranty was incorrect as of the time
made, (ii) withdraw such Defective Mortgage Loan from the lien of this Indenture following the expiration of such
60-day period by depositing to the Note Account an amount equal to the Purchase Price for such Mortgage Loan or
(iii) substitute a Qualified Replacement Mortgage Loan for such Defective Mortgage Loan and deposit any Purchase
Price required to be paid in connection with such substitution pursuant to Section 7 of the Mortgage Loan Sale
Agreement, all as provided in Section 7 of the Mortgage Loan Sale Agreement. Upon any purchase of or
substitution for a Defective Mortgage Loan by the Seller in accordance with Section 7 of the Mortgage Sale
Agreement, the Indenture Trustee shall deliver the Mortgage File relating to such Defective Mortgage Loan to the
Seller, and the Issuer and the Indenture Trustee shall execute such instruments of transfer as are necessary to
convey title to such Defective Mortgage Loan to the Seller from the lien of this Indenture.
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to Certain Information.
On each Payment Date, the Indenture Trustee shall make available the written report required by
Section 2.08(d) to Noteholders of record as of the related Record Date (including the Clearing Agency, if any) via
the Indenture Trustee's internet website and its fax-on-demand service. The Indenture Trustee's internet website
shall be initially located at " ". Assistance in using the website or the fax-on-demand
service can be obtained by calling the Indenture Trustee's customer service desk at .
Noteholders that are unable to use the above distribution options are entitled to have a paper copy mailed to
them via first class mail by calling the customer service desk and indicating such.
The Indenture Trustee shall make available at its Corporate Trust Office, during normal business hours,
for review by any Noteholder or any person identified to the Indenture Trustee as a prospective Noteholder,
originals or copies of the following items: (a) the Indenture and any amendments thereto, (b) all Payment Date
Statements delivered to the Issuer since the Closing Date, (c) any Officers' Certificates delivered to the
Indenture Trustee since the Closing Date as described in the Indenture and (d) any Accountants' reports delivered
to the Indenture Trustee since the Closing Date as required under the Servicing Agreement. Copies of any and all
of the foregoing items will be available from the Indenture Trustee upon request; however, the Indenture Trustee
will be permitted to require payment of a sum sufficient to cover the reasonable costs and expenses of providing
such copies and shall not be required to provide such copies without reasonable assurances that such sum will be
paid.
Section 8.07. Trust Estate Mortgage Files.
(a) The Indenture Trustee shall release Mortgage Files or portions thereof to the Servicer on the terms
specified in the Servicing Agreement.
(b) The Indenture Trustee shall, at such time as there are no Notes outstanding, release all of the Trust
Estate to the Issuer (other than any cash held for the payment of the Notes pursuant to Section 3.03 or 4.02).
Section 8.08. Amendment to Servicing Agreement.
The Indenture Trustee may, without the consent of any Holder, enter into or consent to any amendment or
supplement to the Servicing Agreement for the purpose of increasing the obligations or duties of any party other
than the Indenture Trustee or the Holders of the Notes. The Indenture Trustee may, in its discretion, decline to
enter into or consent to any such supplement or amendment: (i) unless the Indenture Trustee receives an Opinion
of Counsel that the position of the Holders would not be materially adversely affected or written confirmation
from the Rating Agencies that the then-current implied ratings on the Notes (without taking into account the
Insurance Policy) would not be adversely affected by such supplement or amendment or (ii) if its own rights,
duties or immunities would be adversely affected.
Section 8.09. Delivery of the Mortgage Files Pursuant to Servicing Agreement.
As is appropriate for the servicing or foreclosure of any Mortgage Loan, the Indenture Trustee shall
cause the Custodian to deliver to the Servicer of such Mortgage the Mortgage Files for such Mortgage Loan upon
receipt by the Indenture Trustee and the Custodian on or prior to the date such release is to be made of:
(a) such Officers' Certificates, if any, as are required by the Servicing Agreement; and
(b) a "Request for Release" in the form prescribed by the Servicing Agreement, executed by the Servicer,
providing that the Servicer will hold or retain the Mortgage Files in trust for the benefit of the Indenture
Trustee, the Note Insurer and the Holders of Notes.
Section 8.10. Servicer as Agent.
In order to facilitate the servicing of the Mortgage Loans by the Servicer of such Mortgage Loans, the
Servicer of the Mortgage Loans has been appointed by the Issuer to retain, in accordance with the provisions of
the Servicing Agreement and this Indenture, all Remittable Funds on such Mortgage Loans prior to their deposit
into the Note Account on or prior to the related Deposit Date.
Section 8.11. Termination of Servicer.
In the event of an event of default specified in Section 6.01 of the Servicing Agreement, the Indenture
Trustee may, with the consent of the Note Insurer, and shall, upon the direction of the Note Insurer (or as
otherwise provided in the Servicing Agreement), terminate the Servicer as provided in Section 6.01 and
Section 6.02 of the Servicing Agreement. If the Indenture Trustee terminates the Servicer, the Indenture Trustee
shall, pursuant to Sections 6.01 and 6.02 of the Servicing Agreement, assume the duties of the Servicer or
appoint a successor servicer acceptable to the Issuer, the Note Insurer and the Rating Agencies and meeting the
requirements set forth in the Servicing Agreement.
Section 8.12. Opinion of Counsel.
The Indenture Trustee shall be entitled to receive at least five Business Days' notice of any action to
be taken pursuant to Sections 8.07(a) (other than in connection with releases of Mortgage Loans that were the
subject of a Full Prepayment of the type described in clause (i) of the definition of the term "Full Prepayment")
and 8.08, accompanied by copies of any instruments involved, and the Indenture Trustee shall be entitled to
receive an Opinion of Counsel, in form and substance reasonably satisfactory to the Indenture Trustee, stating
the legal effect of any such action, outlining the steps required to complete the same, and concluding that all
conditions precedent to the taking of such action have been complied with. Counsel rendering any such opinion
may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument
delivered to the Indenture Trustee in connection with any such action.
Section 8.13. Appointment of Custodians.
The Indenture Trustee may, at the written direction of the Issuer and at no additional cost to the
Issuer or to the Indenture Trustee, with the consent of the Note Insurer, appoint one or more Custodians to hold
all or a portion of the Mortgage Files as agent for the Indenture Trustee. Each Custodian shall (i) be a
financial institution supervised and regulated by the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, the Office of Thrift Supervision, or the Federal Deposit Insurance Corporation; (ii) have
combined capital and surplus of at least $10,000,000; (iii) be equipped with secure, fireproof storage
facilities, and have adequate controls on access to assure the safety and security of the Mortgage Files;
(iv) utilize in its custodial function employees who are knowledgeable in the handling of mortgage documents and
of the functions of a mortgage document custodian; and (v) satisfy any other reasonable requirements that the
Issuer may from time to time deem necessary to protect the interests of Noteholders and the Note Insurer in the
Mortgage Files. Each Custodian shall be subject to the same obligations and standard of care as would be imposed
on the Indenture Trustee hereunder assuming the Indenture Trustee retained the Mortgage Files directly. The
appointment of one or more Custodians shall not relieve the Indenture Trustee from any of its obligations
hereunder. If the Servicer is appointed as a Custodian in accordance with this Section 8.14, it shall fulfill
its servicing and custodial duties and obligations through separate departments and, if it maintains a trust
department, shall fulfill its custodial duties and obligations through such trust department.
Section 8.14. Rights of the Note Insurer to Exercise Rights of Noteholders.
By accepting its Notes, each Noteholder agrees that unless a Note Insurer Default exists, the Note
Insurer shall have the right to exercise all rights of the Noteholders under this Agreement without any further
consent of the Noteholders, including, without limitation:
(i) the right to require the Servicer to effect foreclosures upon Mortgage Loans upon failure of the
Servicer to do so;
(ii) the right to require the Seller to repurchase or substitute for Defective Mortgage Loans pursuant to
Section 8.05;
(iii) the right to direct the actions of the Indenture Trustee during the continuance of an Event of Default;
and
(iv) the right to vote on proposed amendments to this Indenture.
In addition, each Noteholder agrees that, unless a Note Insurer Default exists, the rights specifically
set forth above may be exercised by the Noteholders only with the prior written consent of the Note Insurer.
Except as otherwise provided in Section 8.03 and notwithstanding any provision in this Indenture to the
contrary, so long as a Note Insurer Default has occurred and is continuing, the Note Insurer shall have no rights
to exercise any voting rights of the Noteholders hereunder, nor shall the Indenture Trustee be required to obtain
the consent of, or act at the direction of, the Note Insurer.
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note Insurer.
The Indenture Trustee shall hold the Trust Estate and the Mortgage Files for the benefit of the
Noteholders and the Note Insurer and all references in this Agreement and in the Notes to the benefit of Holders
of the Notes shall be deemed to include the Note Insurer (provided there does not exist a Note Insurer Default).
All notices, statements, reports, certificates or opinions required by this Agreement to be sent to any
other party hereto or to the Noteholders shall also be sent to the Note Insurer.
Section 8.16. [Reserved.]
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
With the consent of the Note Insurer and without the consent of the Holders of any Notes, the Issuer and
the Indenture Trustee, at any time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Indenture Trustee, for any of the following purposes:
(1) 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;
(2) to add to the conditions, limitations and restrictions on the authorized amount, terms and purposes of
the issuance, authentication and delivery of any Notes, as herein set forth, additional conditions,
limitations and restrictions thereafter to be observed;
(3) to evidence the succession of another Person to the Issuer to the extent permitted herein, and the
assumption by any such successor of the covenants of the Issuer herein and in the Notes contained;
(4) to add to the covenants of the Issuer, for the benefit of the Holders of all Notes and the Note Insurer
or to surrender any right or power herein conferred upon the Issuer;
(5) to cure any ambiguity, to correct or supplement any provision herein that may be defective or
inconsistent with any other provision herein, or to amend any other provisions with respect to matters
or questions arising under this Indenture, which shall not be inconsistent with the provisions of this
Indenture, provided that such action shall not adversely affect in any material respect the interests of
the Holders of the Notes or the Holders of the Certificates; and provided, further, that the amendment
shall not be deemed to adversely affect in any material respect the interests of the Holders of the
Notes and the Note Insurer if the Person requesting the amendment obtains letters from the Rating
Agencies that the amendment would not result in the downgrading or withdrawal of the implied ratings
then assigned to the Notes (without taking into account the Insurance Policy); or
(6) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to
effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter
enacted, and to add to this Indenture such other provisions as may be expressly required by the TIA.
Section 9.02. Supplemental Indentures With Consent of Noteholders.
With the consent of the Note Insurer and with the consent of Holders of Notes representing not less than
a majority of the Note Balance of all Outstanding Notes by Act of said Holders delivered to the Issuer and the
Indenture Trustee, the Issuer and the Indenture Trustee may enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Note affected thereby:
(1) change any Payment Date or the Final Maturity Date of the Notes or reduce the principal amount thereof,
the Note Interest Rate thereon or the Redemption Price with respect thereto, change the earliest date on
which any Note may be redeemed at the option of the Issuer, change any place of payment where, or the
coin or currency in which, any Note or any interest thereon is payable, or impair the right to institute
suit for the enforcement of the payment of any installment of interest due on any Note on or after the
Final Maturity Date thereof or for the enforcement of the payment of the entire remaining unpaid
principal amount of any Note on or after the Final Maturity Date (or, in the case of redemption, on or
after the applicable Redemption Date);
(2) reduce the percentage of the Note Balance of the Outstanding Notes, the consent of the Holders of which
is required for any such supplemental indenture, or the consent of the Holders of which is required for
any waiver of compliance with provisions of this Indenture or Defaults hereunder and their consequences
provided for in this Indenture;
(3) modify any of the provisions of this Section, Section 5.13 or Section 5.17(b), except to increase any
percentage specified therein or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding Note affected thereby;
(4) modify or alter the provisions of the proviso to the definition of the term "Outstanding";
(5) permit the creation of any lien other than the lien of this Indenture with respect to any part of the
Trust Estate (except for Permitted Encumbrances) or terminate the lien of this Indenture on any property
at any time subject hereto or deprive the Holder of any Note of the security afforded by the lien of
this Indenture;
(6) modify any of the provisions of this Indenture in such manner as to affect the calculation of the
Required Payment Amount for any Payment Date (including the calculation of any of the individual
components of such Required Payment Amount) or to affect rights of the Holders of the Notes to the
benefits of any provisions for the mandatory redemption of Notes contained herein; or
(7) incur any indebtedness, other than the Notes, that would cause the Issuer or the Trust Estate to be
treated as a "taxable mortgage pool" within the meaning of Code Section 7701(i).
The Indenture Trustee may in its discretion determine whether or not any Notes would be affected by any
supplemental indenture and any such determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture Trustee shall not be liable for
any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section to approve the particular form
of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture
pursuant to this Section, the Indenture Trustee shall mail to the Holders of the Notes to which such supplemental
indenture relates a notice setting forth in general terms the substance of such supplemental indenture. Any
failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by
this Article or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be
entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.
The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects
the Indenture Trustee's own rights, duties or immunities under this Indenture or otherwise. The Issuer shall
cause executed copies of any Supplemental Indentures to be delivered to the Rating Agencies and the Note Insurer.
Section 9.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Notes to which such supplemental indenture relates that have theretofore been or thereafter are
authenticated and delivered hereunder shall be bound thereby.
Section 9.05. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the
TIA as then in effect so long as this Indenture shall then be qualified under the TIA.
Section 9.06. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this
Article 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 shall so determine, new
Notes so modified as to conform, in the opinion of 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.
Section 9.07. Amendments to Governing Documents.
The Indenture Trustee shall, subject to Sections 9.01 and 9.02 hereof, upon Issuer Request, consent to
any proposed amendment to the Issuer's governing documents, or an amendment to or waiver of any provision of any
other document relating to the Issuer's governing documents, such consent to be given without the necessity of
obtaining the consent of the Holders of any Notes upon receipt by the Indenture Trustee of:
(i) an Officers' Certificate, to which such proposed amendment or waiver shall be attached, stating that
such attached copy is a true copy of the proposed amendment or waiver and that all conditions precedent
to such consent specified in this Section 9.07 have been satisfied; and
(ii) written confirmation from the Rating Agencies that the implementation of the proposed amendment or
waiver will not adversely affect their implied ratings of the Notes (without taking into account the
Insurance Policy).
Notwithstanding the foregoing, the Indenture Trustee may decline to consent to a proposed waiver or
amendment that adversely affects its own rights, duties or immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require that any Person obtain the consent of the
Indenture Trustee to any amendment or waiver or any provision of any document where the making of such amendment
or the giving of such waiver without obtaining the consent of the Indenture Trustee is not prohibited by this
Indenture or by the terms of the document that is the subject of the proposed amendment or waiver.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption.
(a) All the Notes may be redeemed in whole, but not in part, on or after the Initial Redemption Date at the
Redemption Price at the option of the holders of a majority of the ownership interest of the Issuer (the
"Residual Majority"), or at the option of the Servicer if the Residual Majority shall not have exercised its
option to direct the Servicer to redeem the Notes on such Redemption Date or, if such option is not exercised by
the Servicer, at the option of the Note Insurer; provided, however, that funds in an amount equal to the
Redemption Price, plus any amounts owed to the Note Insurer under the Insurance Agreement, any unreimbursed
Nonrecoverable Advances and any unreimbursed amounts due and owing to the Indenture Trustee hereunder, must have
been deposited with the Indenture Trustee prior to the Indenture Trustee's giving notice of such redemption
pursuant to Section 10.02 or the Issuer shall have complied with the requirements for satisfaction and discharge
of the Notes specified in Section 4.01. Notice of the election to redeem the Notes shall be furnished to the
Indenture Trustee not later than thirty (30) days prior to the Payment Date selected for such redemption,
whereupon all such Notes shall be due and payable on such Payment Date upon the furnishing of a notice pursuant
to Section 10.02 to each Holder of such Notes and the Note Insurer. Any expenses associated with the compliance
of the provisions hereof in connection with a redemption of the Notes shall be paid by the Note Insurer or the
Servicer, depending upon which party redeems the Notes. In no event shall the Note Insurer redeem the Notes
unless the proceeds received from the Note Insurer would be not less than the greater of (x) the entire amount
that would be payable to the Holders of the Notes, in full payment thereof on the Payment Date next succeeding
the date of such Sale and (y) the fair market value of the Mortgage Loans as of the related Payment Date. Upon
the redemption of the Notes, Mortgage Loans in the Trust Estate shall be released and delivered to the Issuer.
(b) Upon receipt of the notice from the Servicer or the Note Insurer of its election to redeem the Notes
pursuant to Section 10.01(a), the Indenture Trustee shall prepare and deliver to the Issuer, the Servicer and the
Note Insurer, no later than the related Redemption Date, a Payment Date Statement stating therein that it has
determined that the conditions to redemption at the option of the Servicer or Note Insurer have been satisfied
and setting forth the amount, if any, to be withdrawn from each Note Account and paid to the Servicer as
reimbursement for Nonrecoverable Advances and such other information as may be required to accomplish such
redemption.
Section 10.02. Form of Redemption Notice.
Notice of redemption shall be given by the Indenture Trustee in the name of and at the expense of the
Issuer by first class mail, postage prepaid, mailed not less than ten days prior to the Redemption Date to each
Holder of Notes to be redeemed, such Holders being determined as of the Record Date for such Payment Date, and to
the Note Insurer.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price at which the Notes of such Series will be redeemed; and
(3) the fact of payment in full on such Notes, the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided
in Section 3.02), and that no interest shall accrue on such Note for any period after the date fixed for
redemption.
Failure to give notice of redemption, or any defect therein, to any Holder of any Note selected for
redemption shall not impair or affect the validity of the redemption of any other Note.
Section 10.03. Notes Payable on Optional Redemption.
Notice of redemption having been given as provided in Section 10.02, the Notes to be redeemed shall, on
the applicable Redemption Date, become due and payable at the Redemption Price and (unless the Issuer shall
default in the payment of the Redemption Price) no interest shall accrue on such Redemption Price for any period
after such Redemption Date; provided, however, that if such Redemption Price is not paid on the Redemption Date,
the Note Balance shall, until paid, bear interest from the Redemption Date at the Note Interest Rate.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions.
(a) Upon any application or request by the Issuer to the Indenture Trustee to take any action under any
provision of this Indenture, the Issuer shall furnish to the Indenture Trustee and the Note Insurer an Officers'
Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel (with a copy to the Note Insurer), if requested
by the Indenture Trustee, stating that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
(b) Every certificate, opinion or letter with respect to compliance with a condition or covenant provided
for in this Indenture, including one furnished pursuant to specific requirements of this Indenture relating to a
particular application or request (other than certificates provided pursuant to TIA Section 314(a)(4)) shall
include and shall be deemed to include (regardless of whether specifically stated therein) the following:
(1) a statement that each individual signing such certificate, opinion or letter has 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, opinion or letter are based;
(3) a statement that, in the opinion of each such individual, he has made such examination or investigation
as is necessary to enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been
complied with.
Section 11.02. Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only
one such Person, or that they be so certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of the Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations with respect to the matters upon
which his certificate or opinion is based are erroneous. Any Opinion of Counsel may be based on the written
opinion of other counsel, in which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel's opinion and shall include a statement to the effect that such counsel believes that such counsel and
the Indenture Trust may reasonably rely upon the opinion of such other counsel.
Where any Person is required to make, give or execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
Wherever in this Indenture, in connection with any application or certificate or report to the Indenture
Trustee, it is provided that the 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
Section 6.01(b)(2).
Whenever in this Indenture it is provided that the absence of the occurrence and continuation of a
Default or Event of Default is a condition precedent to the taking of any action by the Indenture Trustee at the
request or direction of the Issuer, then, notwithstanding that the satisfaction of such condition is a condition
precedent to the Issuer's right to make such request or direction, the Indenture Trustee shall be protected in
acting in accordance with such request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default as provided in Section 6.01(d).
Section 11.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this
Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the
affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Whenever such execution is by an officer of a corporation or a member
of a partnership on behalf of such corporation or partnership, such certificate or affidavit shall also
constitute sufficient proof of his authority.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of
any Notes shall bind the Holder of every Note issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee
or the Issuer in reliance thereon, whether or not notation of such action is made upon such Notes.
Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer and Issuer.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other
documents provided or permitted by this Indenture to be made upon, given or furnished to, or filed with:
(1) 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 and received by the Indenture Trustee at its
Corporate Trust Office and at [address]; or
(2) the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder
(except as provided in Section 5.01(3) and (4)) if in writing and mailed, first-class postage prepaid,
to the Issuer addressed to it at [Issuer Name] - ), in care of
, [address], Attention: Corporate Trust Administration, or at any other address
previously furnished in writing to the Indenture Trustee by the Issuer; or
(3) the Note Insurer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose
hereunder if in writing and mailed, first-class, postage prepaid, to
addressed to it at [address], Attention: Structured Finance Group ( [Issuer
Name] - , Mortgage Backed Notes, Series 200 - ), or at any other address previously furnished in writing
to the Indenture Trustee by the Note Insurer; or
(4) the Depositor by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose
hereunder if in writing and mailed, first-class, postage paid, to Wachovia Asset Funding Trust, LLC,
[address], Attention: , or at any other address previously furnished in
writing to the Indenture Trustee by the Depositor; or
(5) the Seller or the Servicer by the Indenture Trustee or by any Noteholder shall be sufficient for every
purpose hereunder if in writing and mailed, first-class, postage paid, to , [address], Attention:
General Counsel or at any other address previously furnished in writing to the Indenture Trustee by the
Seller or the Servicer; or
(6) the Underwriters by any party or by any Noteholder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage prepaid, to (a) [address], Attn: and (b) [address],
Attn: .
Notices required to be given to the Rating Agencies by the Issuer or the Indenture Trustee shall be in
writing, personally delivered or mailed first-class postage pre-paid, to (i) in the case of [Rating Agency], at
the following address: [address], Attention: , (ii) in the case of [Rating Agency], at the
following address: [address], Attention: ; or as to each of the foregoing, at such other address as
shall be designed by written notice to the other parties.
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.
Where this Indenture provides for notice to Noteholders of any event or the mailing of any report to
Noteholders, such notice or report shall be sufficiently given (unless otherwise herein expressly provided) if
mailed, first-class postage prepaid, to each Noteholder affected by such event or to whom such report is required
to be mailed, at the address of such Noteholder as it appears on the Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such notice or the mailing of such
report. In any case where a notice or report to Noteholders is mailed in the manner provided above, neither the
failure to mail such notice or report, nor any defect in any notice or report so mailed, to any particular
Noteholder shall affect the sufficiency of such notice or report with respect to other Noteholders, and any
notice or report that is mailed in the manner herein provided shall be conclusively presumed to have been duly
given or provided.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by any
Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent
of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or
similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required
to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.
Section 11.06. Rules by Indenture Trustee.
The Indenture Trustee may make reasonable rules for any meeting of Noteholders.
Section 11.07. Conflict With Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the TIA, such required provision shall control.
Section 11.08. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 11.09. Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer shall bind its successors and assigns,
whether so expressed or not.
Section 11.10. Separability.
In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 11.11. Benefits of Indenture.
Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, any separate trustee or Co-trustee appointed under
Section 6.14, the Note Insurer and the Noteholders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
Section 11.12. Legal Holidays.
In any case where the date of any Payment Date, Redemption Date or any other date on which principal of
or interest on any Note is proposed to be paid shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the nominal date of any such Payment Date,
Redemption Date or other date for the payment of principal of or interest on any Note and no interest shall
accrue for the period from and after any such nominal date, provided such payment is made in full on such next
succeeding Business Day.
Section 11.13. Governing Law.
IN VIEW OF THE FACT THAT NOTEHOLDERS ARE EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES
AND THE DESIRE TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAW OF A STATE HAVING A WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO
TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
Section 11.14. Counterparts.
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed
to be an original, but all such counterparts shall together constitute but one and the same instrument.
Section 11.15. Recording of Indenture.
This Indenture is subject to recording in any appropriate public recording offices, such recording to be
effected by the Issuer and at its expense in compliance with any Opinion of Counsel delivered pursuant to
Section 2.11(c) or 3.06.
Section 11.16. Issuer Obligation.
No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the
Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacity) and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all
purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement.
Section 11.17. No Petition.
The Indenture Trustee, by entering into this Indenture, and each Noteholder and Beneficial Owner, by
accepting a Note, hereby covenant and agree that they will not at any time institute against or the
Issuer, or join in any institution against or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the
Basic Documents. In addition, the Indenture Trustee will on behalf of the holders of the Notes, (a) file a
written objection to any motion or other proceeding seeking the substantive consolidation of the Seller with,
or the Issuer, (b) file an appropriate memorandum of points and authorities or other brief in support
of such objection, or (c) endeavor to establish at the hearing on such objection that the substantive
consolidation of such entity would be materially prejudicial to the Noteholders.
This Section 11.17 will survive for one year and one day following the termination of this Indenture.
Section 11.18. Inspection.
The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture
Trustee and the Note Insurer, during the Issuer's normal business hours, to examine all of 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 Accountants selected by the Indenture Trustee or the Note Insurer, as the case may be, and
to discuss its affairs, finances and accounts with its officers, employees and Independent Accountants (and by
this provision the Issuer hereby authorizes its Accountants to discuss with such representatives such affairs,
finances and accounts), all at such reasonable times and as often as may be reasonably requested. Any expense
incident to the exercise by the Indenture Trustee of any right under this Section 11.18 shall be borne by the
Issuer.
Section 11.19. Usury.
The amount of interest payable or paid on any Note under the terms of this Indenture shall be limited to
an amount that shall not exceed the maximum nonusurious rate of interest allowed by the applicable laws of the
United States or the State of New York (whichever shall permit the higher rate), that could lawfully be
contracted for, charged or received (the "Highest Lawful Rate"). In the event any payment of interest on any
Note exceeds the Highest Lawful Rate, the Issuer stipulates that such excess amount will be deemed to have been
paid as a result of an error on the part of both the Indenture Trustee, acting on behalf of the Holder of such
Note, and the Issuer, and the Holder receiving such excess payment shall promptly, upon discovery of such error
or upon notice thereof from the Issuer or the Indenture Trustee, refund the amount of such excess or, at the
option of the Indenture Trustee, apply the excess to the payment of principal of such Note, if any, remaining
unpaid. In addition, all sums paid or agreed to be paid to the Indenture Trustee for the benefit of Holders of
Notes for the use, forbearance or detention of money shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such Notes.
Section 11.20. Third Party Beneficiary.
The Note Insurer is intended as a third party beneficiary of this Indenture shall be binding upon and
inure to the benefit of the Note Insurer; provided that, notwithstanding the foregoing, for so long as a Note
Insurer Default is continuing with respect to its obligations under the Insurance Policy, the Noteholders shall
succeed to the Note Insurer's rights hereunder. Without limiting the generality of the foregoing, all covenants
and agreements in this Indenture that expressly confer rights upon the Note Insurer shall be for the benefit of
and run directly to the Note Insurer, and the Note Insurer shall be entitled to rely on and enforce such
covenants to the same extent as if it were a party to this Indenture.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee and the have caused this Indenture to be duly
executed by their respective officers thereunto duly authorized, all as of the day and year first above written.
[TRUST NAME]
By: [OWNER TRUSTEE],
not in its individual capacity,
but solely as Owner Trustee
By:______________________________________________
Authorized Signatory
[INDENTURE TRUSTEE],
as Indenture Trustee
By:______________________________________________
Name:
Title:
SCHEDULE I MORTGAGE LOAN SCHEDULE
EXHIBIT A FORM OF NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS
AVAILABLE FROM THE TRUST ESTATE AND THE INSURANCE POLICY AS PROVIDED IN THE INDENTURE REFERRED TO BELOW.
THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Date of Indenture: As of Original Note Balance: $___________
First Payment Date: CUSIP No.: ___________
Denomination: $____________ Note No.: __
[ ]
NOTES, SERIES 200 - , CLASS
[Issuer Name] - , a statutory trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value received, hereby promises to pay to
Cede & Co., or registered assigns, the principal sum of $___________ payable on each Payment Date in an amount
equal to the result obtained by multiplying (i) a fraction the numerator of which is $___________ and the
denominator of which is $_____________ (this Note's "Percentage Interest") by (ii) the aggregate amount, if any,
payable from the Note Account in respect of principal on the Notes pursuant to the Indenture dated as of
, between the Issuer and , a national banking association, as
Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the earlier of (i) the Payment Date occurring in [DATE] (the "Final Maturity
Date"), (ii) the Redemption Date, if any, pursuant to Article X of the Indenture or (iii) the date on which an
Event of Default shall have occurred and be continuing, if the Notes have been declared to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. Capitalized terms used but not defined herein
are defined in Article I of the Indenture.
Pursuant to the terms of the Indenture, payments will be made on the 25th day of each month or, if such
day is not a Business Day, on the Business Day immediately following such 25th day (each a "Payment Date"),
commencing on the first Payment Date specified above, to the Person in whose name this Note is registered at the
close of business on the applicable Record Date, in an amount equal to the product of (a) the Percentage Interest
evidenced by this Note and (b) the sum of the amounts to be paid on Notes with respect to such Payment Date, all
as more specifically set forth in the Indenture.
Notwithstanding the foregoing, in the case of Definitive Notes, upon written request at least five days
prior to the related Record Date with appropriate instructions by the Holder of this Note (holding an aggregate
initial Note Balance of at least $1,000,000), any payment of principal or interest, other than the final
installment of principal or interest, shall be made by wire transfer to an account in the United States
designated by such Holder reasonably satisfactory to the Indenture Trustee.
Payments of principal and interest on the Notes will be made on each Payment Date to Noteholders of
record as of the related Record Date. On each Payment Date, Noteholders will be entitled to receive interest
payments in an aggregate amount equal to the related Note Interest for such Payment Date, together with principal
payments in an aggregate amount equal to the Monthly Principal plus, until the Overcollateralization Amount is
equal to the Required Overcollateralization Amount, Excess Cash, if any, for such Payment Date. The "Note
Balance" of a Note as of any date of determination is equal to the initial principal balance thereof as of the
Closing Date, reduced by the aggregate of all amounts previously paid with respect to such Note on account of
principal.
The principal of and interest on this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided
above and then to the unpaid principal of this Note.
This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Mortgage Backed
Notes, Series 200 - , Class , issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Notes. To the extent that any provision of this Note
contradicts or is inconsistent with the provisions of the Indenture, the provisions of the Indenture shall
control and supersede such contradictory or inconsistent provision herein. The Notes are subject to all terms of
the Indenture.
The Notes are and will be equally and ratably secured by the Mortgage Loans and the other collateral
related thereto pledged as security therefor as provided in the Indenture.
As described above, the entire unpaid principal amount of this Note shall be due and payable on the
earlier of the Final Maturity Date and the Redemption Date, if any, pursuant to Article X of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable on the
date on which an Event of Default shall have occurred and be continuing if the Indenture Trustee, at the
direction or upon the prior written consent of Financial Security Assurance Inc. (the "Note Insurer") in the
absence of a Note Insurer Default, or the Holders of the Notes representing not less than 50% of the Note Balance
of the Outstanding Notes (with the prior written consent of the Note Insurer in the absence of a Note Insurer
Default), shall have declared the Notes to be immediately due and payable in the manner provided in Section 5.02
of the Indenture. All principal payments on the Notes shall be made pro rata to the Noteholders entitled thereto.
The Note Insurer in consideration of the payment of the premium and subject to the terms of the Note
Guaranty Insurance Policy (the "Insurance Policy") thereby has unconditionally and irrevocably guaranteed the
payment of the Insured Payments.
Pursuant to the Indenture, unless a Note Insurer Default exists (i) the Note Insurer shall be deemed to
be the holder of the Notes for certain purposes specified in the Indenture and will be entitled to exercise all
rights of the Noteholders thereunder, including the rights of Noteholders relating to the occurrence of, and the
remedies with respect to, an Event of Default, without the consent of such Noteholders, and (ii) the Indenture
Trustee may take actions which would otherwise be at its option or within its discretion, including actions
relating to the occurrence of, and the remedies with respect to, an Event of Default, only at the direction of
the Note Insurer. In addition, on each Payment Date, after the Noteholders have been paid all amounts to which
they are entitled, the Note Insurer will be entitled to be reimbursed for any unreimbursed draws under the
Insurance Policy, paid Note Insurer Premium (each with interest thereon at the "Late Payment Rate" specified in
the Insurance Agreement) and any other amounts owed under the Insurance Policy.
The Issuer shall not be liable upon the indebtedness evidenced by the Notes except to the extent of
amounts available from the Trust Estate which constitutes security for the payment of the Notes. The assets
included in the Trust Estate and payments under the Insurance Policy will be sole source of payments on the
Notes, and each Holder hereof, by its acceptance of this Note, agrees that (i) such Note will be limited in right
of payment to amounts available from the Trust Estate and the Insurance Policy as provided in the Indenture and
(ii) such Holder shall have no recourse to the Issuer, the Owner Trustee, the Indenture Trustee, the Depositor,
the Seller, the Servicer or any of their respective affiliates, or to the assets of any of the foregoing
entities, except the assets of the Issuer pledged to secure the Notes pursuant to the Indenture.
Payments of interest on this Note due and payable on each Payment Date, together with the installment of
principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the
close of business on each Record Date, except that with respect to Notes registered on the Record Date in the
name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be
mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Note be submitted for notation of payment. Notwithstanding
the foregoing, in the case of Definitive Notes, upon written request at least five days prior to the related
Record Date with appropriate instructions by the Holder of this Note (holding an aggregate initial Note Balance
of at least $1,000,000), any payment of principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States designated by such Holder reasonably
satisfactory to the Indenture Trustee. Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of
this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Holder hereof as of the
Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date,
and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the Indenture Trustee's agent appointed
for such purposes.
As provided in the Indenture, the Notes may be redeemed in whole, but not in part, at the option of the
Issuer, on any Payment Date on and after the date on which the Note Balance is less than 10% of the Original Note
Balance.
As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this
Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of
authorized denominations and in the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.
The Note Registrar shall not register the transfer of this Note unless the Note Registrar has received a
representation letter from the transferee to the effect that either (i) the transferee is not, and is not
acquiring the Note on behalf of or with the assets of, an employee benefit plan or other retirement plan or
arrangement that is subject to Title I of the Employee Retirement Income Security Act or 1974, as amended, or
Section 4975 of the Code or (ii) the acquisition and holding of this Note by the transferee qualifies for
exemptive relief under a Department of Labor Prohibited Transaction Class Exemption. Each Beneficial Owner, by
acceptance of a beneficial interest herein, shall be deemed to make one of the foregoing representations.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of a Beneficial Owner, a
beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with
respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in 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 and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of a Beneficial Owner, a
beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such
Noteholder or Beneficial Owner will not at any time institute against the or the Issuer, or join in
any institution against the or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in
connection with any obligations relating to the Notes, the Indenture, the Mortgage Loan Sale Agreement, the
Mortgage Loan Contribution Agreement, the Servicing Agreement, the Management Agreement, the Insurance Agreement
and the Indemnification Agreement (the "Basic Documents").
The Issuer has entered into the Indenture and this Note is issued with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each Beneficial Owner by
acceptance of a beneficial interest in a Note), agrees to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture
Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of
the day of determination or as of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee
or any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Note Insurer and the Holders of Notes representing a
majority of the Note Balance of all Outstanding Notes. The Indenture also contains provisions permitting the
(i) Note Insurer or (ii) if a Note Insurer Default exists, the Holders of Notes representing specified percentages
of the Note Balance of Outstanding Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Note Insurer or by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or
not notation of such consent or waiver is made upon this Note. The Indenture also permits the amendment thereof,
in certain limited circumstances, or the waiver of certain terms and conditions set forth in the Indenture,
without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer under the Indenture.
Initially, the Notes will be represented by one Note registered in the name of CEDE & Co. as nominees of
the Clearing Agency. The Notes will be delivered as provided in the Indenture and subject to certain limitations
therein set forth. The Notes are exchangeable for a like aggregate initial Note Balance of Notes of different
authorized denominations, as requested by the Holder surrendering the same.
THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein prescribed.
Unless the certificate of authentication hereon has been executed by the Authenticating Agent whose name
appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Instrument to be signed, manually or in facsimile, by its
Authorized Officer, as of the date set forth below.
DATE: __________ __, ____
[ ]
By: [OWNER TRUSTEE], not in its individual capacity but solely as
Owner Trustee under the Trust Agreement
By:__________________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes designated above and referred to in the within-mentioned Indenture.
Date: __________ __, ____
[AUTHENTICATING AGENT],
Authenticating Agent
By:__________________________________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
________________________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints ______
_______________________________________________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________________*/
Signature Guaranteed:
__________________________*/
*/ NOTICE: The signature to this assignment must correspond with the name of the registered owner as it
appears on the face of the within Note in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in STAMP or such other "signature
guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT B INSURANCE POLICY
EXHIBIT C FORM OF NOTICE OF CLAIM
EXHIBIT D PMI MORTGAGE LOANS