Exhibit 4.3
Form of Indenture
HOME EQUITY LOAN TRUST 199_-__,
Issuer
AND
[__________________]
INDENTURE TRUSTEE
_____________________________________________
INDENTURE
Dated as of _________, 199_
_____________________________________________
HOME EQUITY LOAN NOTES
SERIES 199__-__
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions
Section 1.01. Definitions....................................................7
Section 1.02. Incorporation by Reference of Trust Indenture Act........... ..8
Section 1.03. Rules of Construction........................................ .8
ARTICLE II
Original Issuance of Notes
Section 2.01. Form...........................................................9
Section 2.02. Execution, Authentication and Delivery.........................9
Section 2.03. Opinions of Counsel...........................................10
ARTICLE III
Covenants
Section 3.01. Collection of Payments on Mortgage Loan Accounts..............11
Section 3.02. Maintenance of Office or Agency...............................11
Section 3.03. Money for Payments To Be Held in Trust; Paying Agent;
Certificate Paying Agent......................................11
Section 3.04. Existence.....................................................13
Section 3.05. Payment of Principal and Interest; Defaulted Interest.........13
Section 3.06. Protection of Trust Estate....................................16
Section 3.07. Opinions as to Trust Estate...................................16
Section 3.08. [Reserved]....................................................17
Section 3.09. Performance of Obligations; Servicing Agreement...............17
Section 3.10. Negative Covenants............................................19
Section 3.11. Annual Statement as to Compliance.............................19
Section 3.12. Recording of Assignments......................................19
Section 3.13. Representations and Warranties Concerning the
Mortgage Loans................................................19
Section 3.14. Indenture Trustee's Review of Related Documents...............20
Section 3.15. Trust Estate; Related Documents...............................20
Section 3.16. Amendments to Servicing Agreement.............................22
Section 3.17. Master Servicer as Agent and Bailee of Indenture Trustee......22
Section 3.18. Investment Company Act........................................22
Section 3.19. Issuer May Consolidate, etc., Only on Certain Terms...........22
Section 3.20. Successor or Transferee.......................................24
Section 3.21. No Other Business.............................................24
Section 3.22. No Borrowing..................................................24
Section 3.23. Guarantees, Loans, Advances and Other Liabilities.............24
Section 3.24. Capital Expenditures..........................................25
Section 3.25. [Reserved]....................................................25
Section 3.26. Restricted Payments...........................................25
Section 3.27. Notice of Events of Default...................................25
Section 3.28. Further Instruments and Acts..................................25
Section 3.29. Statements to Noteholders.....................................25
Section 3.30. [Reserved] [Grant of the Additional Loans.....................25
Section 3.31. Determination of Note Rate and Certificate Rate...............26
Section 3.32. Payments under the Credit Enhancement Instrument..............26
Section 3.33. Replacement Credit Enhancement Instrument.....................27
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01. The Notes[; Increase of Maximum Variable
Funding Balance; Additional Variable
Funding Notes]................................................29
Section 4.02. Registration of and Limitations on Transfer and
Exchange of Notes; Appointment of
Certificate Registrar.........................................31
Section 4.03. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Lost or Stolen Notes....................32
Section 4.04. Persons Deemed Owners.........................................33
Section 4.05. Cancellation..................................................33
Section 4.06. Book-Entry Notes..............................................34
Section 4.07. Notices to Depository.........................................34
Section 4.08. Definitive Notes..............................................35
Section 4.09. Tax Treatment.................................................35
Section 4.10. Satisfaction and Discharge of Indenture.......................35
Section 4.11. Application of Trust Money....................................36
Section 4.12. Subrogation and Cooperation...................................36
Section 4.13. Repayment of Moneys Held by Paying Agent......................37
ARTICLE V
Remedies
Section 5.01. Events of Default.............................................38
Section 5.02. Acceleration of Maturity; Rescission and Annulment............38
Section 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee..........................................39
Section 5.04. Remedies; Priorities..........................................41
Section 5.05. Optional Preservation of the Trust Estate.....................42
Section 5.06. Limitation of Suits...........................................43
Section 5.07. Unconditional Rights of Noteholders To Receive
Principal and Interest........................................43
Section 5.08. Restoration of Rights and Remedies............................44
Section 5.09. Rights and Remedies Cumulative................................44
Section 5.10. Delay or Omission Not a Waiver................................44
Section 5.11. Control by Noteholders........................................44
Section 5.12. Waiver of Past Defaults.......................................45
Section 5.13. Undertaking for Costs.........................................45
Section 5.14. Waiver of Stay or Extension Laws..............................45
Section 5.15. Sale of Trust Estate..........................................46
Section 5.16. Action on Notes...............................................47
Section 5.17. Performance and Enforcement of Certain Obligations............47
ARTICLE VI
The Indenture Trustee
Section 6.01. Duties of Indenture Trustee...................................49
Section 6.02. Rights of Indenture Trustee...................................50
Section 6.03. Individual Rights of Indenture Trustee........................50
Section 6.04. Indenture Trustee's Disclaimer................................50
Section 6.05. Notice of Event of Default....................................51
Section 6.06. Reports by Indenture Trustee to Holders.......................51
Section 6.07. Compensation and Indemnity....................................51
Section 6.08. Replacement of Indenture Trustee..............................52
Section 6.09. Successor Indenture Trustee by ▇▇▇▇▇▇.........................52
Section 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.............................................53
Section 6.11. Eligibility; Disqualification.................................54
Section 6.12. Preferential Collection of Claims Against Issuer..............54
Section 6.13. Representation and Warranty...................................54
Section 6.14. Directions to Indenture Trustee...............................54
Section 6.15. No Consent to Certain Acts of Depositor.......................55
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders................................................56
Section 7.02. Preservation of Information; Communications to Noteholders....56
Section 7.03. Reports by Issuer.............................................56
Section 7.04. Reports by Indenture Trustee..................................57
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01. Collection of Money...........................................58
Section 8.02. Trust Accounts................................................58
Section 8.03. Opinion of Counsel............................................59
Section 8.04. Termination Upon Distribution to Noteholders..................59
Section 8.05. Release of Trust Estate.......................................60
Section 8.06. Surrender of Notes Upon Final Payment.........................60
ARTICLE IX
Supplemental Indentures
Section 9.01. Supplemental Indentures Without Consent of Noteholders........61
Section 9.02. Supplemental Indentures With Consent of Noteholders...........62
Section 9.03. Execution of Supplemental Indentures..........................63
Section 9.04. Effect of Supplemental Indenture..............................63
Section 9.05. Conformity with Trust Indenture Act...........................64
Section 9.06. Reference in Notes to Supplemental Indentures.................64
ARTICLE X
[Reserved]
ARTICLE XI
Miscellaneous
Section 11.01. Compliance Certificates and Opinions, etc.....................66
Section 11.02. Form of Documents Delivered to Indenture Trustee..............67
Section 11.03. Acts of Noteholders...........................................68
Section 11.04. Notices, etc., to Indenture Trustee, Issuer,
Credit Enhancer and Rating Agencies...........................69
Section 11.05. Notices to Noteholders; ▇▇▇▇▇▇................................70
Section 11.06. Alternate Payment and Notice Provisions.......................70
Section 11.07. Conflict with Trust Indenture Act.............................70
Section 11.08. Effect of Headings............................................70
Section 11.09. Successors and Assigns........................................71
Section 11.10. Separability..................................................71
Section 11.11. Benefits of Indenture.........................................71
Section 11.12. Legal Holidays................................................71
Section 11.13. GOVERNING LAW.................................................71
Section 11.14. Counterparts..................................................71
Section 11.15. Recording of Indenture........................................71
Section 11.16. Issuer Obligation.............................................71
Section 11.17. No Petition...................................................72
Section 11.18. Inspection....................................................72
Section 11.19. Authority of the Administrator................................72
Signatures and Seals .........................................................81
Acknowledgments ..............................................................82
EXHIBITS
Exhibit A-1 - Form of Term Notes
Exhibit A-2 - Form of Variable Funding Notes
Exhibit B - Mortgage Loan Schedule
Exhibit C - Form of Opinion to be delivered pursuant
to Section 4.01(b)(ii)
Exhibit D - Form of Opinion to be delivered pursuant
to Section 4.01(b)(iii)
Exhibit E - Loan Agreement
Exhibit F - Investment Letter
This Indenture, dated as of ______, 199_, between HOME EQUITY LOAN TRUST
199_-_, a Delaware business trust, as Issuer (the "Issuer"), and
[________________], as Indenture Trustee (the "Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Issuer's Series
199__-__ Asset Backed Term Notes (the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
Indenture Trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created (a) the Mortgage Loans and all monies and proceeds due thereon after
the Cut-off Date, (b) the Servicing Agreement and the Mortgage Loan Purchase
Agreement, (c) all funds on deposit in the Funding Account, including all
income from the investment and reinvestment of funds therein, (d) all funds on
deposit from time to time in the Collection Account allocable to the Mortgage
Loans; (e) all funds on deposit from time to time in the Payment Account and
in all proceeds thereof; (f) the Policy; and (g) all present and future
claims, demands, causes and chooses in action in respect of any or all of the
foregoing and all payments on or under, and all proceeds of every kind and
nature whatsoever in respect of, any or all of the foregoing and all payments
on or under, and all proceeds of every kind and nature whatsoever in the
conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, checks, deposit accounts, rights to payment of any and every
kind, and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "Trust Estate" or the
"Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Holders of
the Notes, acknowledges such ▇▇▇▇▇, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
ARTICLE I
Definitions
Section 1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Definitions attached hereto as Appendix A which
is incorporated by reference herein. All other capitalized terms used herein
shall have the meanings specified herein.
Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms
used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
Section 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural
include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to time
amended, modified or supplemented and includes (in the case of agreements
or instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
Original Issuance of Notes
Section 2.01. Form. The Term Notes [and the Variable Funding Notes, in
each case] together with the Indenture Trustee's certificate of
authentication, shall be in substantially the forms set forth in Exhibit[s]
A-1 [and A-2, respectively,] with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note may be set forth
on the reverse thereof, with an appropriate reference thereto on the face of
the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing such Notes,
as evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibits A-1[, A-2] and A-3 are part
of the terms of this Indenture.
Section 2.02. Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and deliver
Term Notes for original issue in an aggregate initial principal amount of
$[______________] [and Variable Funding Notes for original issue in an
aggregate initial principal amount of $[_____________]]. [The Security Balance
of the Variable Funding Notes in the aggregate may not exceed the Maximum
Variable Funding Balance.] The aggregate principal amount of Notes outstanding
at any time may not exceed [the sum of] $[_____________] [and the Security
Balance of Additional Variable Funding Notes issued pursuant to the terms of
Section 4.01 hereof].
Each Note shall be dated the date of its authentication. The Notes shall
be issuable as registered Notes and the Term Notes shall be issuable in the
minimum initial Security Balances of $[________] and in integral multiples of
$[______] in excess thereof.
[Each Variable Funding Note shall be initially issued with a Security
Balance of $[______] or, if applicable, with a Security Balance in the amount
equal to the Additional Balance Differential for the Collection Period related
to the Payment Date following the date of issuance of such Variable Funding
Note pursuant to Section 4.01(c).]
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by
the Indenture Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
Section 2.03. Opinions of Counsel. On the Closing Date, the Indenture
Trustee shall have received: (i) an Opinion of Counsel, in form and substance
reasonably satisfactory to the Indenture Trustee and its counsel, with respect
to securities law matters; (ii) an Opinion of Counsel, in form and substance
reasonably satisfactory to the Indenture Trustee and its counsel, with respect
to the tax status of the arrangement created by the Indenture; and (iii) an
Opinion of Counsel to the Issuer, in form and substance reasonably
satisfactory to the Indenture Trustee and its counsel, with respect to the due
authorization, valid execution and delivery of this Indenture and with respect
to its binding effect on the Issuer.
ARTICLE III
Covenants
Section 3.01. Collection of Payments on Mortgage Loan Accounts. The
Indenture Trustee shall establish and maintain with itself a trust account
(the "Payment Account") in which the Indenture Trustee shall, subject to the
terms of this paragraph, deposit, on the same day as it is received from the
Master Servicer, each remittance received by the Indenture Trustee with
respect to the Mortgage Loans. The Indenture Trustee shall make all payments
of principal of and interest on the Notes, subject to Section 3.03 as provided
in Section 3.05 herein from moneys on deposit in the Payment Account.
Section 3.02. Maintenance of Office or Agency. The Issuer will maintain
in the Borough of Manhattan, The City of New York, an office or agency where,
subject to satisfaction of conditions set forth herein, Notes may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may
be served. The Issuer hereby initially appoints the Indenture Trustee to serve
as its agent for the foregoing purposes. If at any time the Issuer shall fail
to maintain any such office or agency or shall fail to furnish the Indenture
Trustee with the address thereof, such surrenders, notices and demands may be
made or served at the Corporate Trust Office, and the Issuer hereby appoints
the Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
Section 3.03. Money for Payments To Be Held in Trust; Paying Agent;
Certificate Paying Agent. (a) As provided in Section 3.01, all payments of
amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the Payment Account pursuant to Section 3.01 shall be
made on behalf of the Issuer by the Indenture Trustee or by the Paying Agent,
and no amounts so withdrawn from the Payment Account for payments of Notes
shall be paid over to the Issuer except as provided in this Section 3.03.
The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer
of which it has actual knowledge in the making of any payment required to
be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes
if at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Request
direct any Paying Agent to pay to the Indenture Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Indenture Trustee upon the
same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such
trust and be paid to the Issuer on Issuer Request; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Issuer
for payment thereof (but only to the extent of the amounts so paid to the
Issuer), and all liability of the Indenture Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuer cause to be
published once, in an Authorized Newspaper published in the English language,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Issuer. The Indenture Trustee shall also adopt and employ, at the
expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice
of such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
The Issuer hereby appoints [__________________] as Certificate Paying
Agent and Residual Ownership Interest Paying Agent to make payments to
Certificateholders and holders of the Residual Ownership Interest on behalf of
the Issuer in accordance with the provisions of the Certificates, Section 3.05
hereof and the provisions of the Trust Agreement, and $[_______________]
hereby accepts such appointment and further agrees that it will be bound by
the provisions of the Trust Agreement relating to the Certificate Paying Agent
and Residual Ownership Interest Paying Agent and will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Certificates and the Residual Ownership Interest 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 as
provided in the Trust Agreement and pay such sums to such Persons as
herein and therein provided;
(ii) give the Owner Trustee notice of any default by the Issuer of
which it has actual knowledge in the making of any payment required to be
made with respect to the Certificates;
(iii) at any time during the continuance of any such default, upon
the written request of the Owner Trustee forthwith pay to the Owner
Trustee on behalf of the Issuer all sums so held in Trust by such
Certificate Paying Agent;
(iv) immediately resign as Certificate Paying Agent and forthwith
pay to the Owner Trustee on behalf of the Issuer all sums held by it in
trust for the payment of Certificates and the Residual Ownership Interest
if at any time it ceases to meet the standards required to be met by the
Certificate Paying Agent or the Residual Ownership Interest Paying Agent
at the time of its appointment;
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Certificates or the
holders of the Residual Ownership Interest of any applicable withholding
taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith; and
(vi) deliver to the Owner Trustee a copy of the report to
Certificateholders and holders of Residual Ownership Interest prepared
with respect to each Payment Date by the Master Servicer pursuant to
Section 4.01 of the Servicing Agreement.
Section 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States
of America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.
Section 3.05. Payment of Principal and Interest; Defaulted Interest. (a)
On each Payment Date from amounts on deposit in the Payment Account after
making (x) any deposit to the Funding Account pursuant to Section 8.02(b) and
(y) any deposits to the Payment Account pursuant to Section 8.02(c)(ii) and
Section 8.02(c)(i)(2), the Indenture Trustee, on behalf of the Issuer shall
pay to the Noteholders and the Certificate Paying Agent, on behalf of the
Issuer shall pay to the Certificateholders and the Certificate Paying Agent,
on behalf of the Issuer shall pay to the holders of the Residual Ownership
Interest, and the Indenture Trustee, in its capacity as agent for the Issuer
shall pay to other Persons, the amounts to which they are entitled as set
forth below:
(i) The sum of (x) to the Noteholders the sum of (a) one month's
interest at the Note Rate on the Security Balances of Notes immediately
prior to such Payment Date and (b) any previously accrued and unpaid
interest for prior Payment Dates and (y) to the Certificateholders, the
Certificate Distribution Amount for such Payment Date;
(ii) [if such Payment Date is after the Funding Period, to the
Noteholders and the Certificateholders as the case may be,] as principal
on the Term Notes[, Variable Funding Notes,] and the Certificates, the
applicable Security Percentage of the Principal Collection Distribution
Amount [and if such Payment Date is the first Payment Date following the
end of the Funding Period (if ending due to an Amortization Event) or the
Payment Date on which the Funding Period ends, to the Noteholders and
Certificateholders as principal on the Term Notes, Variable Funding
Notes, and Certificates the applicable Security Percentage of the amount
deposited from the Funding Account in respect of Security Principal
Collections];
(iii) to the Noteholders and the Certificateholders, as the case may
be, as principal on the Term Notes[, Variable Funding Notes] and the
Certificates, pro rata, based on the Security Balances from the amount
remaining on deposit in the Payment Account, up to the applicable
Security Percentage of Liquidation Loss Amounts for the related
Collection Period;
(iv) to the Noteholders and the Certificateholders, as the case may
be, as principal on the Term Notes[, Variable Funding Notes] and the
Certificates, pro rata, based on the Security Balances from the amount
remaining on deposit in the Payment Account, up to the applicable
Security Percentage of Carryover Loss Amounts;
(v) to the Credit Enhancer, in the amount of the premium for the
Credit Enhancement Instrument [and for any Additional Credit Enhancement
Instrument];
(vi) to the Credit Enhancer, to reimburse it for prior draws made on
the Credit Enhancement Instrument [and on any Additional Credit
Enhancement Instrument] (with interest thereon as provided in the
Insurance Agreement);
(vii) to the Noteholders and the Certificateholders, as the case may
be, as principal on the Term Notes[, Variable Funding Notes] and the
Certificates, pro rata, based on the Security Balances from Security
Interest Collections, up to the Accelerated Principal Distribution Amount
for such Payment Date (such amount, if any, paid pursuant to this clause
(vii) being referred to herein as the "Accelerated Principal Payment
Amount");
(viii) to the Credit Enhancer, any other amounts owed to the Credit
Enhancer pursuant to the Insurance Agreement;
(ix) [Reserved];
(x) to reimburse the Administrator for expenditures made on behalf
of the Issuer with respect to the performance of its duties under the
Indenture; and
(xi) any remaining amounts to the holders of the Residual Ownership
Interest as described in Section 5.01 of the Trust Agreement;
provided, however, in the event that on a Payment Date a Credit Enhancer
Default shall have occurred and be continuing then the priorities of
distributions described above will be adjusted such that payments of the
Certificate Distribution Amount and all other amounts to be paid in respect of
principal on the Certificates will not be paid until the full amount of
interest and principal in accordance with clauses (i)(x) and (ii) through (iv)
above that are due on the Notes on such Payment Date have been paid and
provided, further, that on the Final Scheduled Payment Date or other final
Payment Date, the amount to be paid pursuant to clause (ii) above shall be
equal to the Security Balances of the Securities immediately prior to such
Payment Date.
The amounts paid to Noteholders shall be paid to each Class in accordance
with the Class Percentage as set forth in paragraph (b) below. Interest will
accrue on the Notes during an Interest Period on the basis of the actual
number of days in such Interest Period and a year assumed to consist of 360
days.
Any installment of interest or principal, if any, payable on any Note or
Certificate that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall, if such Holder holds Notes or Certificates
other than the Designated Certificate of an aggregate initial Principal
Balance of at least $[___________] be paid to each Holder of record on the
preceding Record Date, by wire transfer to an account specified in writing by
such Holder reasonably satisfactory to the Indenture Trustee as of the
preceding Record Date or in all other cases or if no such instructions have
been delivered to the Indenture Trustee, by check to such Noteholder mailed to
such Holder's address as it appears in the Note Register the amount required
to be distributed to such Holder on such Payment Date pursuant to such
Holder's Securities; provided, however, that the Indenture Trustee shall not
pay to such Holders any amount required to be withheld from a payment to such
Holder by the Code.
(b) The principal of each Note shall be due and payable in full on the
Final Scheduled Payment Date for such Note as provided in the related form of
Note set forth in Exhibits A-1 [and A-2]. All principal payments on each Class
of Notes shall be made to the Noteholders of such Class entitled thereto in
accordance with the Percentage Interests represented by such Notes. Upon
notice to the Indenture Trustee by the Issuer, the Indenture Trustee shall
notify the Person in whose name a Note is registered at the close of business
on the Record Date preceding the Final Scheduled Payment Date or other final
Payment Date. Such notice shall be mailed no later than five Business Days
prior to such Final Scheduled Payment Date or other final Payment Date and
shall specify that payment of the principal amount and any interest due with
respect to such Note at the Final Scheduled Payment Date or other final
Payment Date will be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and surrendered
for such final payment.
Section 3.06. Protection of Trust Estate. (a) The Issuer will from time
to time execute and deliver all such supplements and amendments hereto and all
such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce any of the Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against
the claims of all persons and parties.
(b) Except as otherwise provided in the Servicing Agreement or this
Indenture, the Indenture Trustee shall not remove any portion of the Trust
Estate that consists of money or is evidenced by an instrument, certificate or
other writing from the jurisdiction in which it was held at the date of the
most recent Opinion of Counsel delivered pursuant to Section 3.06 (or from the
jurisdiction in which it was held as described in the Opinion of Counsel
delivered at the Closing Date pursuant to Section 3.07(a), if no Opinion of
Counsel has yet been delivered pursuant to Section 3.07(b) unless the Trustee
shall have first received an Opinion of Counsel to the effect that the lien
and security interest created by this Indenture with respect to such property
will continue to be maintained after giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.06.
Section 3.07. Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee, the Owner Trustee and to the
Administrator an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the delivery of the
Mortgage Notes, the recording of the Assignments of Mortgage, the recording
and filing of this Indenture, any indentures supplemental hereto, and any
other requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to perfect
and make effective the lien and security interest of this Indenture and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and security interest
effective.
(b) On or before December 31 in each calendar year, beginning in 199_,
the Issuer shall furnish to the Indenture Trustee and to the Administrator an
Opinion of Counsel at the expense of the Issuer either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording of the Assignments of Mortgage, 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 31 in the following calendar year.
Section 3.08. [Reserved]
Section 3.09. Performance of Obligations; Servicing Agreement. (a) The
Issuer will punctually perform and observe all of its obligations and
agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Trust Estate. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document, including without limitation the
Servicing Agreement or any provision thereof without the consent of the
Indenture Trustee or the Holders of at least a majority of the Security
Balances of the Notes, the Master Servicer and the Credit Enhancer. Upon the
taking of any such action with respect to any Basic Document the Issuer shall
give written notice thereof to the Rating Agencies.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a
Person identified to the Indenture Trustee in an Officer's Certificate of the
Issuer shall be deemed to be action taken by the Issuer. Initially, the Issuer
has contracted with the Administrator to assist the Issuer in performing its
duties under this Indenture.
(c) The Issuer will not take any action or permit any action to be taken
by others which would release any Person from any of such Person's covenants
or obligations under any of the documents relating to the Mortgage Loans or
under any instrument included in the Trust Estate, or which would result in
the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any of the documents relating to the
Mortgage Loans or any such instrument, except such actions as the Master
Servicer is expressly permitted to take in the Servicing Agreement.
(d) If the Issuer shall have knowledge of the occurrence of an Event of
Servicing Termination, the Issuer shall promptly notify the Indenture Trustee
thereof, and shall specify in such notice the action, if any, the Issuer is
taking in respect of such Event of Servicing Termination. If such Event of
Servicing Termination arises from the failure of the Master Servicer to
perform any of its duties or obligations under the Servicing Agreement with
respect to the Mortgage Loans, the Issuer may remedy such failure, provided
that if such Event of Servicing Termination arises from the failure by the
Master Servicer to comply with requirements imposed upon it under Section 3.04
of the Servicing Agreement with respect to hazard insurance for the Mortgaged
Properties securing the Mortgage Loans, the Issuer shall promptly, as the case
may be, pay such premiums or obtain substitute insurance coverage meeting the
requirements of said Section 3.04. So long as any such Event of Servicing
Termination shall be continuing, the Indenture Trustee may exercise its
remedies set forth in Section 7.01 of the Servicing Agreement. Unless granted
or permitted by the Credit Enhancer or the Holders of Securities to the extent
provided above, the Issuer may not waive any such Event of Servicing
Termination or terminate the rights and powers of the Master Servicer under
the Servicing Agreement.
(e) Upon any termination of the Master Servicer's rights and powers
pursuant to Section 7.01 of the Servicing Agreement, all rights, powers,
duties and responsibilities of the Master Servicer with respect to the
Mortgage Loans shall vest in and be assumed by the Indenture Trustee, and the
Indenture Trustee shall be the successor in all respect to the Master Servicer
in its capacity as servicer with respect to the Mortgage Loans under the
Servicing Agreement. Upon any such termination, the Indenture Trustee is
hereby authorized, and the Indenture Trustee hereby agrees, to mail a notice
to each Mortgagor directing each such Mortgagor to mail all payments in
respect of the related Mortgage Loan to the Indenture Trustee or its agent at
the address specified in such notice. The Indenture Trustee may resign as the
Master Servicer by giving written notice of such resignation to the Issuer and
the Credit Enhancer and in such event will be released from such duties and
obligations, such release to be effective on the date a new servicer enters
into a servicing agreement with the Issuer as provided below. Upon delivery of
any such notice to the Issuer, the Issuer shall obtain a new servicer,
satisfactory in all respects to the Indenture Trustee and the Credit Enhancer,
which shall enter into a servicing agreement with the Issuer and the Indenture
Trustee, such agreement to be not less favorable to the Credit Enhancer in its
reasonable judgment, or the Noteholders if a Credit Enhancer Default shall
have occurred and be continuing, than the Servicing Agreement in any material
respect. If, within 30 days after the delivery of the notice referred to
above, the Issuer shall not have obtained such new servicer, the Indenture
Trustee may appoint, or may petition a court of competent jurisdiction to
appoint, a successor servicer acceptable to the Credit Enhancer to service the
Mortgage Loans. In connection with any such appointment, the Indenture Trustee
may make such arrangements for the compensation of such successor as it and
such successor shall agree, and the Issuer shall enter into an agreement with
such successor for the servicing of the Mortgage Loans, such agreement to be
substantially similar to the Servicing Agreement or otherwise acceptable to
the Credit Enhancer; provided that any such compensation of the successor
servicer unless otherwise agreed to by the Credit Enhancer, shall not be in
excess of the Servicing Fee payable to the Master Servicer under the Servicing
Agreement. If the Indenture Trustee shall succeed to the Master Servicer's
duties as servicer of the Mortgage Loans as provided herein, it shall do so in
its individual capacity and not in its capacity as Indenture Trustee.
(f) The Issuer shall at all times retain an Administrator (approved by
the Credit Enhancer under the Administration Agreement) and may enter into
contracts with other Persons for the performance of the Issuer's obligations
hereunder, and performance of such obligations by such Persons shall be deemed
to be performance of such obligations by the Issuer.
Section 3.10. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, sell, transfer,
exchange or otherwise dispose of the Trust Estate, unless directed to do
so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against
any present or former Noteholder by reason of the payment of the taxes
levied or assessed upon any part of the Trust Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to
the Notes under this Indenture except as may be expressly permitted
hereby, (B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden the Trust
Estate or any part thereof or any interest therein or the proceeds
thereof or (C) permit the lien of this Indenture not to constitute a
valid first priority security interest in the Trust Estate.
Section 3.11. Annual Statement as to Compliance. The Issuer will deliver
to the Indenture Trustee, within 120 days after the end of each fiscal year of
the Issuer (commencing with the fiscal year 199_), an Officer's Certificate
stating, as to the Authorized Officer signing such Officer's Certificate,
that:
(i) a review of the activities of the Issuer during such year and of
its performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a
default in its compliance with any such condition or covenant, specifying
each such default known to such Authorized Officer and the nature and
status thereof.
Section 3.12. Recording of Assignments. The Issuer shall exercise its
right under the Mortgage Loan Purchase Agreement with respect to the
obligation of the Seller to submit or cause to be submitted for recording all
Assignments of Mortgages on or prior to _________, 199_ with respect to the
Initial Loans and within [__] days following the related Deposit Date with
respect to any Additional Loans.
Section 3.13. Representations and Warranties Concerning the Mortgage
Loans. The Issuer has pledged to the Indenture Trustee all of its right under
the Mortgage Loan Purchase Agreement and the Indenture Trustee has the benefit
of the representations and warranties made by the Seller in Section [_____]
thereof, Section [____] thereof and Section [__] thereof concerning the
Mortgage Loans and the right to enforce any remedy against the Seller provided
in such Section [_____] or Section [_____] to the same extent as though such
representations and warranties were made directly to the Indenture Trustee.
Section 3.14. Indenture Trustee's Review of Related Documents. (a) The
Indenture Trustee agrees, for the benefit of the holders of the Notes, to
review, or the related Custodian shall review, unless the Indenture Trustee or
such Custodian made such review prior to the Closing Date, on or prior to
________, 199_ the Related Documents delivered to it on or prior to the
Closing Date and within 90 days of the related Deposit Date, the Related
Documents delivered to it in connection with any Additional Loan, in each case
in connection with the Grant of the Mortgage Loan listed on the Schedule of
Mortgage Loans as security for the Notes. Such review shall be limited to a
determination that all documents referred to in the definition of the term
Related Documents have been executed and are appropriately endorsed in the
manner called for in the Mortgage Loan Purchase Agreement and that the Related
Documents have been delivered with respect to each such Mortgage Loan (other
than the documents related to (i) any Mortgage Loan so listed which has been
subject to a Prepayment in full and termination of related Mortgage Loan, the
proceeds of which have been deposited in the Collection Account in lieu of
delivery of the applicable Related Documents, (ii) any Mortgage Loan with
respect to which the related Mortgaged Property was foreclosed, repossessed or
otherwise converted subsequent to the Cut-Off Date and prior to the Closing
Date or with respect to which foreclosure proceedings have been commenced and
for which the related Related Documents are required in connection with the
prosecution of such foreclosure proceedings and for which the Issuer has
delivered a trust receipt called for by Section 3.15(c) and (iii) any Mortgage
Loan as to which the original Assignment of Mortgage has been submitted for
recording), that all such documents have been executed, and that all such
documents relate to the Mortgage Loans listed on the Schedule of Mortgage
Loans. In performing such review, the Trustee may rely upon the purported
genuineness and due execution of any such document and on the purported
genuineness of any signature thereon.
(b) If any Related Document is defective in any material respect which
may materially and adversely affect the value of the related Mortgage Loan,
the interest of the Indenture Trustee or the Noteholders in such Mortgage
Loan, or if any document required to be delivered to the Indenture Trustee has
not been delivered, the Indenture Trustee or the related Custodian on behalf
of the Indenture Trustee shall notify the Issuer, the Seller, the Credit
Enhancer and the Master Servicer immediately after obtaining knowledge thereof
and the Indenture Trustee, as assignee of the Issuer's rights under the
Mortgage Loan Purchase Agreement, shall exercise its remedies in respect of
any such defect against the Seller as provided in the Mortgage Loan Purchase
Agreement.
Section 3.15. Trust Estate; Related Documents. (a) When required by the
provisions of this Indenture, the Indenture Trustee shall execute instruments
to release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances which are
not inconsistent with the provisions of this Indenture. No party relying upon
an instrument executed by the Indenture Trustee as provided in this Article
III 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.
(b) In order to facilitate the servicing of the Mortgage Loans, the
Master Servicer is hereby authorized in the name and on behalf of the
Indenture Trustee and the Issuer, to execute assumption agreements,
substitution agreements, and instruments of satisfaction or cancellation or of
partial or full release or discharge, or any other document contemplated by
the Servicing Agreement and other comparable instruments with respect to the
Mortgage Loans and with respect to the Mortgaged Properties subject to the
Mortgages (and the Indenture Trustee and the Owner Trustee shall promptly
execute any such documents on request of the Master Servicer), subject to the
obligations of the Master Servicer under the Servicing Agreement. If from time
to time the Master Servicer shall deliver to the Indenture Trustee or the
related Custodian copies of any written assurance, assumption agreement or
substitution agreement or other similar agreement pursuant to Section 3.05 of
the Servicing Agreement, the Indenture Trustee or the related Custodian shall
check that each of such documents purports to be an original executed copy (or
a copy of the original executed document if the original executed copy has
been submitted for recording and has not yet been returned) and, if so, shall
file such documents, and upon receipt of the original executed copy from the
applicable recording office or receipt of a copy thereof certified by the
applicable recording office shall file such originals or certified copies with
the Related Documents. If any such documents submitted by the Master Servicer
do not meet the above qualifications, such documents shall promptly be
returned by the Indenture Trustee or the related Custodian to the Master
Servicer, with a direction to the Master Servicer to forward the correct
documentation.
(c) Upon Issuer Request accompanied by an Officers' Certificate of the
Master Servicer pursuant to Section 3.07 of the Servicing Agreement to the
effect that a Mortgage Loan has been the subject of a final payment or a
prepayment in full and the related Mortgage Loan has been terminated or that
substantially all Liquidation Proceeds which have been determined by the
Master Servicer in its reasonable judgment to be finally recoverable have been
recovered, and upon deposit to the Collection Account of such final monthly
payment, prepayment in full together with accrued and unpaid interest to the
date of such payment with respect to such Mortgage Loan or, if applicable,
Liquidation Proceeds, the Indenture Trustee and the Issuer shall promptly
release the Related Documents to the Master Servicer upon the order of the
Issuer, along with such documents as the Master Servicer or the Mortgagor may
request as contemplated by the Servicing Agreement to evidence satisfaction
and discharge of such Mortgage Loan. If from time to time and as appropriate
for the servicing or foreclosure of any Mortgage Loan, the Master Servicer
requests the Indenture Trustee or the related Custodian to release the Related
Documents and delivers to the Indenture Trustee or the related Custodian a
trust receipt reasonably satisfactory to the Indenture Trustee or the related
Custodian and signed by a Responsible Officer of the Master Servicer, the
Issuer and the Indenture Trustee or the related Custodian shall release the
Related Documents to the Master Servicer. If such Mortgage Loans shall be
liquidated and the Indenture Trustee or the related Custodian receives a
certificate from the Master Servicer as provided above, then, upon request of
the Issuer, the Indenture Trustee or the related Custodian shall release the
trust receipt to the Master Servicer upon the order of the Issuer.
(d) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and no amounts due to the Credit Enhancer, 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 4.11), subject, however, to the rights of
the Indenture Trustee under Section 6.07.
Section 3.16. Amendments to Servicing Agreement. The Indenture Trustee
may enter into any amendment or supplement to the Servicing Agreement only in
accordance with Section 8.01 of the Servicing Agreement. The Indenture Trustee
may, in its discretion, decline to enter into or consent to any such
supplement or amendment if its own rights, duties or immunities shall be
adversely affected.
Section 3.17. Master Servicer as Agent and Bailee of Indenture Trustee.
Solely for purposes of perfection under Section 9-305 of the Uniform
Commercial Code or other similar applicable law, rule or regulation of the
state in which such property is held by the Master Servicer, the Indenture
Trustee hereby acknowledges that the Master Servicer is acting as agent and
bailee of the Indenture Trustee in holding amounts on deposit in the
Collection Account pursuant to Section 3.02 of the Servicing Agreement, as
well as its agent and bailee in holding any Related Documents released to the
Master Servicer pursuant to Section 3.15(c), and any other items constituting
a part of the Trust Estate which from time to time come into the possession of
the Master Servicer. It is intended that, by the Master Servicer's acceptance
of such agency pursuant to Section 3.02 of the Servicing Agreement, the
Trustee, as a secured party, will be deemed to have possession of such Related
Documents, such moneys and such other items for purposes of Section 9-305 of
the Uniform Commercial Code of the state in which such property is held by the
Master Servicer.
Section 3.18. Investment Company Act. The Issuer shall not become an
"investment company" or under the "control" of an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
provided, however, that the Issuer shall be in compliance with this Section
3.18 if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions
imposed in such order.
Section 3.19. Issuer May Consolidate, etc., Only on Certain Terms. (a)
The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any state or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in
form reasonably satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes and
Certificates and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Event
of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that such
transaction shall not cause the rating of the Notes or the Certificates
to be reduced, suspended or withdrawn or to be considered by either
Rating Agency to be below investment grade without taking into account
the Credit Enhancement Instrument;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect
that such transaction will not have any material adverse tax consequence
to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any state, (B) expressly assumes, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of
and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agrees by
means of such supplemental indenture that all right, title and interest
so conveyed or transferred shall be subject and subordinate to the rights
of Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense
arising under or related to this Indenture and the Notes and (E)
expressly agrees by means of such supplemental indenture that such Person
(or if a group of Persons, then one specified Person) shall make all
filings with the Commission (and any other appropriate Person) required
by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that such
transaction shall not cause the rating of the Notes or the Certificates
to be reduced, suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect
that such transaction will not have any material adverse tax consequence
to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
Section 3.20. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.19(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had
been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.19(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the
part of the Issuer with respect to the Notes immediately upon the delivery of
written notice to the Indenture Trustee that the Issuer is to be so released.
Section 3.21. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Mortgage Loans in the manner contemplated by this Indenture and the Basic
Documents and all activities incidental thereto.
Section 3.22. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.23. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture, the Issuer shall not make any loan or
advance or credit to, or guarantee (directly or indirectly or by an instrument
having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire
(or agree contingently to do so) any stock, obligations, assets or securities
of, or any other interest in, or make any capital contribution to, any other
Person.
Section 3.24. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.25. [Reserved]
Section 3.26. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii)
set aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Issuer may make, or cause to be made, (w) distributions to
the Owner Trustee and the Certificateholders as contemplated by, and to the
extent funds are available for such purpose under the Trust Agreement, (x)
payment to the Master Servicer pursuant to the terms of the Servicing
Agreement and (y) payments to the Indenture Trustee pursuant to Section
1(a)(ii) of the Administration Agreement and (z) make distributions to the
holders of the Residual Ownership Interest as contemplated by the Trust
Agreement. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.
Section 3.27. Notice of Events of Default. The Issuer shall give the
Indenture Trustee the Credit Enhancer and the Rating Agencies prompt written
notice of each Event of Default hereunder and under the Trust Agreement.
Section 3.28. Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
Section 3.29. Statements to Noteholders. The Indenture Trustee and the
Certificate Registrar shall forward by mail to each Noteholder and
Certificateholder, respectively, the Statement delivered to it pursuant to
Section 4.01 of the Servicing Agreement.
Section 3.30. [Reserved] [Grant of the Additional Loans. (a) In
consideration of the delivery on each Deposit Date to or upon the order of the
Issuer of all or a portion of the amount in respect of Security Principal
Collections on deposit in the Funding Account, the Issuer shall, to the extent
of the availability thereof, on such Deposit Date during the Funding Period
Grant to the Indenture Trustee all of its right, title and interest in the
Additional Loans and simultaneously with the Grant of the Additional Loans the
Issuer will deliver the related Related Documents to the Indenture Trustee or
the related Custodian.
(b) The obligation of the Indenture Trustee to accept the Grant of the
Additional Loans and the other property and rights related thereto described
in paragraph (a) above is subject to the satisfaction of each of the following
conditions on or prior to each Deposit Date:
(i) the Indenture Trustee shall not have received written notice
from any Rating Agency or the Credit Enhancer to the effect that such
transfer of Additional Loans would adversely affect the then current
rating of the Notes or cause the rating assigned to the Securities to be
below investment grade without taking into account the Credit Enhancement
Instrument;
(ii) the Indenture Trustee shall have received a revised Mortgage
Loan Schedule, listing the Additional Loans;
(iii) the Master Servicer shall confirm to the Indenture Trustee
that it has deposited in the Collection Account all Principal Collections
and Interest Collections in respect of such Additional Loans on or after
the related Deposit Date for the Additional Loans;
(iv) the Indenture Trustee shall have received a duly completed and
executed Transfer Certificate in the form of Exhibit 1 to the Mortgage
Loan Purchase Agreement;
(v) the Seller at its expense and the Issuer at its expense, as
appropriate, shall have provided the Rating Agencies and the Credit
Enhancer with an opinion of counsel relating to the sale of the
Additional Loans to the Issuer and the Grant of the Additional Loans to
the Indenture Trustee which opinion shall be in the form of Exhibit 2 to
the Mortgage Loan Purchase Agreement; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel confirming the
satisfaction of each condition precedent specified in this paragraph (b).
(c) The obligation of the Indenture Trustee to accept the Grant of an
Additional Loan on the related Deposit Date is subject to each Additional Loan
and the Additional Loans in the aggregate, as the case may be, satisfying the
conditions set forth in the Mortgage Loan Purchase Agreement.]
Section 3.31. Determination of Note Rate and Certificate Rate. On the
second LIBOR Business Day immediately preceding (i) the Closing Date in the
case of the first Interest Period and (ii) the first day of each succeeding
Interest Period, the Indenture Trustee shall determine LIBOR and the Note Rate
and the Certificate Rate for such Interest Period and shall inform the Issuer,
the Master Servicer and the Depositor at their respective facsimile numbers
given to the Indenture Trustee in writing thereof.
Section 3.32. Payments under the Credit Enhancement Instrument. (a) On
any Payment Date, other than a Dissolution Payment Date, the Indenture Trustee
on behalf of the Noteholders, and in its capacity as Certificate Paying Agent
on behalf of the Certificateholders shall make a draw on the Credit
Enhancement Instrument in an amount if any equal to the sum of (x) the amount
by which the sum of (i) interest accrued at the Note Rate on the Security
Balance of the Notes plus (ii) the Certificate Distribution Amount exceeds the
amount on deposit in the Payment Account available to be distributed therefor
on such Payment Date and (y) the Guaranteed Principal Payment Amount (the
"Credit Enhancement Draw Amount").
(b) The Indenture Trustee shall submit, if a Credit Enhancement Draw
Amount is specified in any Statement to Holders prepared by the Master
Servicer pursuant to Section 4.01 of the Servicing Agreement, the Notice for
Payment (as defined in the Credit Enhancement Instrument) in the amount of the
Credit Enhancement Draw Amount to the Credit Enhancer no later than 2:00 P.M.,
New York City time, on the second Business Day prior to the applicable Payment
Date. Upon receipt of such Credit Enhancement Draw Amount in accordance with
the terms of the Credit Enhancement Instrument, the Indenture Trustee shall
deposit such Credit Enhancement Draw Amount in the Payment Account for
distribution to Holders pursuant to Section 3.05.
In addition, a draw may be made under the Credit Enhancement Instrument
in respect of any Avoided Payment (as defined in and pursuant to the terms and
conditions of the Credit Enhancement Instrument) and the Indenture Trustee
shall submit a Notice for Payment with respect thereto together with the other
documents required to be delivered to the Credit Enhancer pursuant to the
Credit Enhancement Instrument in connection with a draw in respect of any
Avoided Payment.
(c) In the event that any Additional Credit Enhancement Instruments are
issued pursuant to Section 4.01 and Section 2.02(B) of the Insurance
Agreement, the Indenture Trustee shall be authorized to make draws thereon
subject to the terms and conditions therein.
Section 3.33. Replacement Credit Enhancement Instrument. In the event of
a Credit Enhancer Default or if the claims paying ability rating of the Credit
Enhancer is downgraded and such downgrade results in a downgrading of the then
current rating of the Securities (in each case, a "Replacement Event"), the
Issuer, at its expense, in accordance with and upon satisfaction of the
conditions set forth in the Credit Enhancement Instrument, including, without
limitation, payment in full of all amounts owed to the Credit Enhancer, may,
but shall not be required to, substitute a new surety bond or surety bonds for
the existing Credit Enhancement Instrument or may arrange for any other form
of credit enhancement; provided, however,that in each case the Notes and the
Certificates shall be rated no lower than the rating assigned by each Rating
Agency to the Notes and the Certificates immediately prior to such Replacement
Event and the timing and mechanism for drawing on such new credit enhancement
shall be reasonably acceptable to the Indenture Trustee and provided further
that the premiums under the proposed credit enhancement shall not exceed such
premiums under the existing Credit Enhancement Instrument. It shall be a
condition to substitution of any new credit enhancement that there be
delivered to the Indenture Trustee (i) an Opinion of Counsel, acceptable in
form to the Indenture Trustee, from counsel to the provider of such new credit
enhancement with respect to the enforceability thereof and such other matters
as the Indenture Trustee may require and (ii) an Opinion of Counsel to the
effect that such substitution would not (a) adversely affect in any material
respect the tax status of the Notes and the Certificates or (b) cause the
Issuer to be subject to a tax at the entity level or to be classified as a
taxable mortgage pool within the meaning of Section 7701(i) of the Code. Upon
receipt of the items referred to above and payment of all amounts owing to the
Credit Enhancer and the taking of physical possession of the new credit
enhancement, the Indenture Trustee shall, within five Business Days following
receipt of such items and such taking of physical possession, deliver the
replaced Credit Enhancement Instrument to the Credit Enhancer. In the event of
any such replacement the Issuer shall give written notice thereof to the
Rating Agencies.
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01. The Notes[; Increase of Maximum Variable Funding Balance;
Additional Variable Funding Notes]. (a) The Term Notes shall be registered in
the name of a nominee designated by the Depository. Beneficial Owners will
hold interests in the Term Notes through the book-entry facilities of the
Depository in minimum initial Principal Balances of $[________] and integral
multiples of $[_________] in excess thereof. [The Capped Funding Notes will be
issuable in minimum initial Principal Balances of $[_______] and integral
multiples of $[________] in excess thereof, together with any additional
amount necessary to cover the aggregate initial Principal Balance of the
Capped Funding Notes surrendered at the time of the initial denominational
exchange thereof (with such initial Principal Balance in each case being
deemed to be the Principal Balance of the Capped Funding Notes at the time of
such initial denominational exchange thereof).]
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Term Notes for the
purposes of exercising the rights of Holders of Term Notes hereunder. Except
as provided in the next succeeding paragraph of this Section 4.01, the rights
of Beneficial Owners with respect to the Term Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive certificates for the
Term Notes as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Holder of the Term Notes shall not be
deemed inconsistent if they are made with respect to different Beneficial
Owners. The Indenture Trustee may establish a reasonable record date in
connection with solicitations of consents from or voting by Noteholders and
give notice to the Depository of such record date. Without the consent of the
Issuer and the Indenture Trustee, no Term Note may be transferred by the
Depository except to a successor Depository that agrees to hold such Note for
the account of the Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint
a successor Depository. If no successor Depository has been appointed within
30 days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Notes it
beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer
by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Note Registrar and delivered by the Indenture
Trustee to or upon the order of the Issuer.
[(b) So long as no Amortization Event has occurred the Maximum Variable
Funding Balance on the Closing Date may be increased from time to time by an
aggregate amount not to exceed $[______________] and Additional Variable
Funding Notes may be issued upon satisfaction of the following conditions:
(i) the Indenture Trustee shall have received an Additional Credit
Enhancement Instrument pursuant to the terms and conditions of the
Insurance Agreement, including without limitation Section 2.02(B)
thereof;
(ii) the Indenture Trustee shall have received an Opinion of Counsel
to the Credit Enhancer in the form attached hereto as Exhibit C;
(iii) the Indenture Trustee shall have received an Opinion of
Counsel in the form attached hereto as Exhibit D;
(iv) the Indenture Trustee shall have received the documents
specified in Section 11.01(a) (other than clause (iii) thereof).
The Security Balance of such Additional Variable Funding Notes in the
aggregate will reflect the sum of (i) the related Excess Additional Balance
Differential and (ii) the Additional Balance Differential for each Collection
Period from the Collection Period during which the Additional Variable Funding
Notes are issued until the new Maximum Variable Funding Balance is reached.
Notwithstanding the foregoing, the Security Balance of each specific
Additional Variable Funding Note will be limited to the Maximum Individual
Variable Funding Balance as provided in subsection (c) below.
The Additional Variable Funding Notes issued in connection with the first
increase in the Maximum Variable Funding Balance pursuant to this subsection
will bear the designation "A" (in addition to the numerical designation
pursuant to subsection (c) below) and any subsequent Additional Variable
Funding Notes issued in connection with any subsequent increases in the
Maximum Variable Funding Balance will bear alphabetical designations in the
order of their issuance.
Any Additional Variable Funding Notes shall be in the form of Exhibit A-2
hereof and for all purposes shall be Notes issued pursuant to this Indenture
and all references to Variable Funding Notes herein shall include Additional
Variable Funding Notes issued pursuant to this Section 4.01(b).
Upon the issuance of any Additional Variable Funding Notes the Issuer
will deliver written notice thereof to the Rating Agencies.
(b) Subject to the Maximum Variable Funding Balance at such time as the
Security Balance of any Variable Funding Note reaches the Maximum Individual
Variable Funding Balance no subsequent amounts in respect of the Additional
Balance Differential shall be added to the Security Balance of such Variable
Funding Note and instead a new Variable Funding Note shall be issued and
executed on behalf of the Issuer by the Owner Trustee, not in its individual
capacity but solely as Owner Trustee, authenticated by the Note Registrar and
delivered by the Indenture Trustee to or upon the order of the Issuer. All
subsequent amounts in respect of the Additional Balance Differential shall be
added to the Security Balance of such new Variable Funding Note (subject to
the Maximum Variable Funding Balance) until the Security Balance thereof
reaches the Maximum Individual Variable Funding Balance.
The Variable Funding Note issued on the Closing Date shall bear the
Designation "1" and each new Variable Funding Note will bear sequential
numerical designations in the order of their issuance. On each Payment Date on
or after the Accelerated Amortization Date a new Variable Funding Note will be
issued on each Payment Date in a principal amount equal to the lesser of (a)
the Maximum Individual Variable Funding Balance and (b) the Additional Balance
Differential for such Payment Date, but in no event will the Principal Balance
of the Variable Funding Notes exceed the Maximum Variable Funding Balance
without satisfying the conditions of Section 4.01 hereof.]
Section 4.02. Registration of and Limitations on Transfer and Exchange of
Notes; Appointment of Certificate Registrar. The Note Registrar shall cause to
be kept at its Corporate Trust Office a Note Register in which, subject to
such reasonable regulations as it may prescribe, the Note Registrar shall
provide for the registration of Notes and of transfers and exchanges of Notes
as herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office, the Indenture Trustee shall execute and the Note Registrar shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes in authorized initial Security Balances
evidencing the same aggregate Percentage Interests.
[No Variable Funding Note, other than any Capped Funding Notes, may be
transferred. Subject to the provisions set forth below Capped Funding Notes
may be transferred, provided that with respect to the initial transfer thereof
by the Seller prior written notification of such transfer shall have been
given to the Rating Agencies and to the Credit Enhancer by the Seller along
with an Opinion of Counsel to the effect that such transfer will not
constitute a fraudulent conveyance under the laws of the relevant
jurisdiction.
No transfer of a Capped Funding Note shall be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance
with said Act and laws. In the event of any such transfer, (i) unless such
transfer is made in reliance upon Rule 144A under the 1933 Act, the Indenture
Trustee or the Issuer may, require a written Opinion of Counsel (which may be
in-house counsel) acceptable to and in form and substance reasonably
satisfactory to the Indenture Trustee and the Issuer that such transfer may be
made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from said Act and laws or is being made pursuant to said Act
and laws, which Opinion of Counsel shall not be an expense of the Indenture
Trustee or the Issuer and (ii) the Indenture Trustee shall require the
transferee to execute an investment letter (in substantially the form attached
hereto as Exhibit F) acceptable to and in form and substance reasonably
satisfactory to the Issuer and the Indenture Trustee certifying to the Issuer
and the Indenture Trustee the facts surrounding such transfer, which
investment letter shall not be an expense of the Indenture Trustee or the
Issuer. The Holder of a Variable Funding Note desiring to effect such transfer
shall, and does hereby agree to, indemnify the Indenture Trustee the Credit
Enhancer and the Issuer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state
laws. Notwithstanding the foregoing, the restriction of transfer specified in
this paragraph is not applicable to any Capped Funding Notes that have been
registered under the Securities Act of 1933 pursuant to Section 2.5 of the
Mortgage Loan Purchase Agreement.]
Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged for other Notes of like tenor or, in each case in authorized initial
Principal Balances evidencing the same aggregate Percentage Interests upon
surrender of the Notes to be exchanged at the Corporate Trust Office of the
Note Registrar. [With respect to any surrender of Capped Funding Notes for
exchange the new Notes delivered in exchange therefor will bear the
designation "Capped" in addition to any other applicable designations.]
Whenever any Notes are so surrendered for exchange, the Indenture Trustee
shall execute and the Note Registrar shall authenticate and deliver the Notes
which the Noteholder making the exchange is entitled to receive. Each Note
presented or surrendered for registration of transfer or exchange shall (if so
required by the Note Registrar) be duly endorsed by, or be accompanied by a
written instrument of transfer in form reasonably satisfactory to the Note
Registrar duly executed by, the Holder thereof or his attorney duly authorized
in writing. Notes delivered upon any such transfer or exchange will evidence
the same obligations, and will be entitled to the same rights and privileges,
as the Notes surrendered.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall be
cancelled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
The Issuer hereby appoints [___________________] as Certificate Registrar
to keep at its Corporate Trust Office a Certificate Register pursuant to
Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for
the registration of Certificates Residual Ownership Interests and of transfers
and exchanges thereof pursuant to Section 3.05 of the Trust Agreement.
[___________________] ▇▇▇▇▇▇ accepts such appointment.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute, and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note of the same
Class; provided, however, that if any such destroyed, lost or stolen Note, but
not a mutilated Note, shall have become or within seven days shall be due and
payable, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement
Note (or such payment) from the Person to whom it was delivered or any Person
taking such replacement Note from such Person to whom such replacement Note
was delivered or any assignee of such Person, except a bona fide purchaser,
and shall be entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expense incurred by the
Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not
the mutilated, destroyed, lost or stolen Note shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the day of determination) as the owner of
such Note for the purpose of receiving payments of principal of and interest,
if any, on such Note and for all other purposes whatsoever, whether or not
such Note be overdue, and neither the Issuer, the Indenture Trustee nor any
agent of the Issuer or the Indenture Trustee shall be affected by notice to
the contrary.
Section 4.05. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at
any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Indenture Trustee. No Notes shall be authenticated
in lieu of or in exchange for any Notes cancelled as provided in this Section
4.05, except as expressly permitted by this Indenture. All cancelled Notes may
be held or disposed of by the Indenture Trustee in accordance with its
standard retention or disposal policy as in effect at the time unless the
Issuer shall direct by an Issuer Request that they be destroyed or returned to
it; provided, that such Issuer Request is timely and the Notes have not been
previously disposed of by the Indenture Trustee.
Section 4.06. Book-Entry Notes. The Term Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial
Depository, by, or on behalf of, the Issuer. Such Term Notes shall initially
be registered on the Note Register in the name of Cede & Co., the nominee of
the initial Depository, and no Beneficial Owner will receive a definitive Note
representing such Beneficial Owner's interest in such Note, except as provided
in Section 4.08. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Beneficial Owners pursuant to Section
4.08:
(i) the provisions of this Section 4.06 shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Depository for all purposes of this Indenture (including
the payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole holder of the Term
Notes, and shall have no obligation to the Owners of Term Notes;
(iii) to the extent that the provisions of this Section 4.06
conflict with any other provisions of this Indenture, the provisions of
this Section 4.06 shall control;
(iv) the rights of Beneficial Owners shall be exercised only through
the Depository and shall be limited to those established by law and
agreements between such Owners of Term Notes and the Depository and/or
the Depository Participants pursuant to the Note Depository Agreement.
Unless and until Definitive Term Notes are issued pursuant to Section
4.08, the initial Depository will make book-entry transfers among the
Depository Participants and receive and transmit payments of principal of
and interest on the Notes to such Depository Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Term Notes evidencing
a specified percentage of the Security Balances of the Term Notes, the
Depository shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Beneficial
Owners and/or Depository Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Term Notes and has delivered such instructions to the Indenture Trustee.
Section 4.07. Notices to Depository. Whenever a notice or other
communication to the Term Note Holders is required under this Indenture,
unless and until Definitive Term Notes shall have been issued to Beneficial
Owners pursuant to Section 4.08, the Indenture Trustee shall give all such
notices and communications specified herein to be given to Holders of the Term
Notes to the Depository, and shall have no obligation to the Beneficial
Owners.
Section 4.08. Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Depository is no longer willing or able
to properly discharge its responsibilities with respect to the Term Notes and
the Administrator is unable to locate a qualified successor, (ii) the
Administrator at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Depository or (iii)
after the occurrence of an Event of Default, Owners of Term Notes representing
beneficial interests aggregating at least a majority of the Security Balances
of the Term Notes advise the Depository in writing that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Beneficial Owners, then the Depository shall notify all Beneficial Owners
and the Indenture Trustee of the occurrence of any such event and of the
availability of Definitive Term Notes to Beneficial Owners requesting the
same. Upon surrender to the Indenture Trustee of the typewritten Term Notes
representing the Book-Entry Notes by the Depository, accompanied by
registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Term Notes in accordance with the
instructions of the Depository. None of the Issuer, the Note Registrar or the
Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Notes, the Indenture
Trustee shall recognize the Holders of the Definitive Notes as Noteholders.
Section 4.09. Tax Treatment. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will
qualify as indebtedness of the Issuer. The Issuer, by entering into this
Indenture, and each Noteholder, by its acceptance of its Note (and each
Beneficial Owner by its acceptance of an interest in the applicable Book-Entry
Note), agree to treat the Notes for federal, state and local income, single
business and franchise tax purposes as indebtedness of the Issuer.
Section 4.10. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections
3.03, 3.04, 3.06, 3.10, 3.19, 3.21 and 3.22, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.07 and the obligations of the Indenture
Trustee under Section 4.11) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section 4.03
and (ii) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.03) have been delivered to
the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
a. have become due and payable, or
b. will become due and payable at the Final Scheduled
Payment Date within one year,
and the Issuer, in the case of a. or b. above, has irrevocably deposited
or caused to be irrevocably deposited with the Indenture Trustee cash or
direct obligations of or obligations guaranteed by the United States of
America (which will mature prior to the date such amounts are payable),
in trust for such purpose, in an amount sufficient to pay and discharge
the entire indebtedness on such Notes and Certificates then outstanding
not theretofore delivered to the Indenture Trustee for cancellation when
due on the Final Scheduled Payment Date;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder and under the Insurance Agreement by the Issuer;
and
(C) the Issuer has delivered to the Indenture Trustee and the
Credit Enhancer an Officer's Certificate, an Opinion of Counsel and
(if required by the TIA or the Indenture Trustee) an Independent
Certificate from a firm of certified public accountants, each
meeting the applicable requirements of Section 11.01 and, subject to
Section 11.01 each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with and, if the Opinion of Counsel
relates to a deposit made in connection with Section 4.10(A)(2)b.
above, such opinion shall further be to the effect that such deposit
will not have any material adverse tax consequences to the Issuer,
any Noteholders or any Certificateholders.
Section 4.11. Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the
Holders of Securities, of all sums due and to become due thereon for principal
and interest; but such moneys need not be segregated from other funds except
to the extent required herein or required by law.
Section 4.12. Subrogation and Cooperation. (a) The Issuer and the
Indenture Trustee acknowledge that (i) to the extent the Credit Enhancer makes
payments under the Credit Enhancement Instrument on account of principal of or
interest on the Notes or the Certificates, the Credit Enhancer will be fully
subrogated to the rights of such Holders to receive such principal and
interest from the Issuer, and (ii) the Credit Enhancer shall be paid such
principal and interest but only from the sources and in the manner provided
herein and in the Insurance Agreement for the payment of such principal and
interest.
The Indenture Trustee shall cooperate in all respects with any reasonable
request by the Credit Enhancer for action to preserve or enforce the Credit
Enhancer's rights or interest under this Indenture or the Insurance Agreement
without limiting the rights of the Noteholders as otherwise set forth in the
Indenture, including, without limitation, upon the occurrence and continuance
of a default under the Insurance Agreement, a request to take any one or more
of the following actions:
(i) institute Proceedings for the collection of all amounts then
payable on the Notes, or under this Indenture in respect to Notes and all
amounts payable under the Insurance Agreement enforce any judgment
obtained and collect from the Issuer moneys adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private Sales called and
conducted in any manner permitted by law;
(iii) file or record all Assignments that have not previously been
recorded;
(iv) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and
enforce the rights and remedies of the Credit Enhancer hereunder.
Section 4.13. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all moneys then held by any Administrator other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.05 and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
ARTICLE V
Remedies
Section 5.01. Events of Default. "Event of Default," wherever used
herein, shall have the meaning provided in Appendix A; provided, however, that
no Event of Default will occur under clause (i) or clause (ii) of the
definition of "Event of Default" if the Issuer fails to make payments of
principal of and interest on the Notes so long as the Credit Enhancer makes
payments sufficient therefore under the Credit Enhancement Instrument.
The Issuer shall deliver to the Indenture Trustee and the Credit
Enhancer, within five days after the occurrence of an Event of Default,
written notice in the form of an Officer's Certificate of any event which with
the giving of notice and the lapse of time would become an Event of Default
under clause (iii) of the definition of "Event of Default", its status and
what action the Issuer is taking or proposes to take with respect thereto.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee or the Holders of Notes representing not less than a
majority of the Security Balances of all Notes may declare the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
unpaid principal amount of such Class of Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable. Unless the prior written consent of the Credit
Enhancer shall have been obtained by the Indenture Trustee, the Payment Date
upon which such accelerated payment is due and payable shall not be a Payment
Date under the Credit Enhancement Instrument and the Indenture Trustee shall
not be authorized under Section 3.32 to make a draw therefor.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided,
the Holders of Notes representing a majority of the Security Balances of all
Notes, by written notice to the Issuer and the Indenture Trustee, may rescind
and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on the Notes and
all other amounts that would then be due hereunder or upon the Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel;
and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in
the payment of the principal of or any installment of the principal of any
Note when the same becomes due and payable, the Issuer will, upon demand of
the Indenture Trustee, pay to it, for the benefit of the Holders of Notes and
of the Credit Enhancer, the whole amount then due and payable on the Notes for
principal and interest, with interest upon the overdue principal, and in
addition thereto such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and
counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 11.17 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided
by law out of the property of the Issuer or other obligor the Notes, wherever
situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee subject to the provisions of Section 11.17 hereof may, as more
particularly provided in Section 5.04, in its discretion, proceed to protect
and enforce its rights and the rights of the Noteholders and the Credit
Enhancer, by such appropriate Proceedings as the Indenture Trustee shall deem
most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy or legal or equitable right vested in the Indenture Trustee by this
Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest
in the Trust Estate, Proceedings under Title 11 of the United States Code or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective
of whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered, by intervention
in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Noteholders,
to pay to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Term Notes or the Variable
Funding Notes, as applicable.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary
to make any Noteholder a party to any such Proceedings.
Section 5.04. Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing, the Indenture Trustee subject to the provisions of
Section 11.17 hereof may do one or more of the following (subject to Section
5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
or under this Indenture with respect thereto, whether by declaration or
otherwise, and all amounts payable under the Insurance Agreement, enforce
any judgment obtained, and collect from the Issuer and any other obligor
upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee, the Holders of the Notes and the
Credit Enhancer; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than a default
in the payment of any principal or interest on the Notes for thirty (30) days
or more, unless (A) the Holders of 100% of the Security Balances of the
Securities and the Credit Enhancer, which consent will not be unreasonably
withheld consent thereto, (B) the proceeds of such sale or liquidation
distributable to Holders are sufficient to discharge in full all amounts then
due and unpaid upon the Securities for principal and interest and to reimburse
the Credit Enhancer for any amounts drawn under the Credit Enhancement
Instrument and any other amounts due the Credit Enhancer under the Insurance
Agreement or (C) the Indenture Trustee determines that the Mortgage Loans will
not continue to provide sufficient funds for the payment of principal of and
interest on either the Notes or the Certificates, as they would have become
due if the Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of the Credit Enhancer, which consent will not be
unreasonably withheld, and of the Holders of not less than 66-2/3% of the
Security Balances of the Securities. In determining such sufficiency or
insufficiency with respect to clause (B) and (C), the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of
such proposed action and as to the sufficiency of the Trust Estate for such
purpose. Notwithstanding the foregoing, so long as an Event of Servicer
Termination has not occurred, any Sale of the Trust Estate shall be made
subject to the continued Servicing of the Mortgage Loans by the Master
Servicer as provided in the Servicing Agreement.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to each Class of Noteholders for amounts due and unpaid on the
related Class of Notes for interest and to each Noteholder of such Class
in each case, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Class of Notes for
interest from amounts available in the Trust Estate for such Noteholders;
THIRD: to Holders of each Class of Notes for amounts due and unpaid on
the related Class of Notes for principal, from amounts available in the
Trust Estate for such Noteholders, and to each Noteholder of such Class
in each case ratably, without preference or priority of any kind,
according to the amounts due and payable on such Class of Notes for
principal, until the Security Balances of each Class of Notes is reduced
to zero;
FOURTH: to the Issuer for amounts required to be distributed to the
Certificateholders in respect of interest and principal pursuant to the
Trust Agreement;
FIFTH: [Reserved] [To the payment of all amounts due and owing to the
Credit Enhancer under the Insurance Agreement];
SIXTH: to the Issuer for amounts due under Article VIII of the Trust
Agreement; and
SEVENTH: to the payment of the remainder, if any to the Issuer or any
other person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Issuer shall mail to each Noteholder and the Indenture
Trustee a notice that states the record date, the payment date and the amount
to be paid.
Section 5.05. Optional Preservation of the Trust Estate. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded
and annulled, the Indenture Trustee may, but need not, elect to maintain
possession of the Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Securities and other obligations of the
Issuer including payment to the Credit Enhancer, and the Indenture Trustee
shall take such desire into account when determining whether or not to
maintain possession of the Trust Estate. In determining whether to maintain
possession of the Trust Estate, the Indenture Trustee may, but need not,
obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.
Section 5.06. Limitation of Suits. No Holder of any Note shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless and subject to the provisions of Section 11.17
hereof:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Security Balances of
the Notes have made written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders
of a majority of the Security Balances of the Notes.
It is understood and intended that no one or more Holders of Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Security Balances of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this
Indenture.
Section 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional,
to receive payment of the principal of and interest, if any, on such Note on
or after the respective due dates thereof expressed in such Note or in this
Indenture and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
Section 5.11. Control by Noteholders. The Holders of a majority of the
Security Balances of Notes shall have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Indenture
Trustee with respect to the Notes or exercising any trust or power conferred
on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Trust Estate shall be by
Holders of Notes representing not less than 100% of the Security Balances
of Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee by
Holders of Notes representing less than 100% of the Security Balances of
Notes to sell or liquidate the Trust Estate shall be of no force and
effect; and
(iv) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section,
subject to Section 6.01, the Indenture Trustee need not take any action that
it determines might involve it in liability or might materially adversely
affect the rights of any Noteholders not consenting to such action.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Security Balances of the
Notes may waive any past Event of Default and its consequences except an Event
of Default (a) with respect to payment of principal of or interest on any of
the Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Note or (c) the
waiver of which would materially and adversely affect the interests of the
Credit Enhancer or modify its obligation under the Credit Enhancement
Instrument. In the case of any such waiver, the Issuer, the Indenture Trustee
and the Holders of the Notes shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Section 5.13. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such ▇▇▇▇▇▇'s acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Security Balances of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on
or after the respective due dates expressed in such Note and in this
Indenture.
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Indenture Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 5.15. Sale of Trust Estate. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 is expressly subject to the provisions of Section 5.05 and this
Section 5.15. The power to effect any such Sale shall not be exhausted by any
one or more Sales as to any portion of the Trust Estate remaining unsold, but
shall continue unimpaired until the entire Trust Estate shall have been sold
or all amounts payable on the Notes and under this Indenture and under the
Insurance Agreement shall have been paid. The Indenture Trustee may from time
to time postpone any public Sale by public announcement made at the time and
place of such Sale. The Indenture Trustee hereby expressly waives its right to
any amount fixed by law as compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless
(i) the Holders of all Securities and the Credit Enhancer consent to
or direct the Indenture Trustee to make, such Sale, or
(ii) the proceeds of such Sale would be not less than the entire
amount which would be payable to the Noteholders under the Notes,
Certificateholders under the Certificates and the Credit Enhancer in
respect of amounts drawn under the Credit Enhancement Instrument and any
other amounts due the Credit Enhancer under the Insurance Agreement, in
full payment thereof in accordance with Section 5.02, on the Payment Date
next succeeding the date of such Sale, or
(iii) The Indenture Trustee determines, in its sole discretion, that
the conditions for retention of the Trust Estate set forth in Section
5.05 cannot be satisfied (in making any such determination, the Indenture
Trustee may rely upon an opinion of an Independent investment banking
firm obtained and delivered as provided in Section 5.05, and the Credit
Enhancer consents to such Sale, which consent will not be unreasonably
withheld and the Holders representing at least 66-2/3% of the Security
Balances of the Securities consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust
Estate at a private Sale shall not be deemed a Sale or other disposition
thereof for purposes of this Section 5.15(b).
(c) Unless the Holders and the Credit Enhancer have otherwise consented
or directed the Indenture Trustee, at any public Sale of all or any portion of
the Trust Estate at which a minimum bid equal to or greater than the amount
described in paragraph (2) of subsection (b) of this Section 5.15 has not been
established by the Indenture Trustee and no Person bids an amount equal to or
greater than such amount, the Indenture Trustee shall bid an amount at least
$1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust Estate
(i) any Holder or Holders of Notes may bid for and with the consent
of the Credit Enhancer purchase the property offered for sale, and upon
compliance with the terms of sale may hold, retain and possess and
dispose of such property, without further accountability, and may, in
paying the purchase money therefor, deliver any Notes or claims for
interest thereon in lieu of cash up to the amount which shall, upon
distribution of the net proceeds of such sale, be payable thereon, and
such Notes, in case the amounts so payable thereon shall be less than the
amount due thereon, shall be returned to the Holders thereof after being
appropriately stamped to show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the property
offered for Sale in connection with any Sale thereof, and, subject to any
requirements of, and to the extent permitted by, applicable law in
connection therewith, may purchase all or any portion of the Trust Estate
in a private sale, and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting the gross Sale price
against the sum of (A) the amount which would be distributable to the
Holders of the Notes and Holders of Certificates and amounts owing to the
Credit Enhancer as a result of such Sale in accordance with Section
5.04(b) on the Payment Date next succeeding the date of such Sale and (B)
the expenses of the Sale and of any Proceedings in connection therewith
which are reimbursable to it, without being required to produce the Notes
in order to complete any such Sale or in order for the net Sale price to
be credited against such Notes, and any property so acquired by the
Indenture Trustee shall be held and dealt with by it in accordance with
the provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the
Trust Estate in connection with a Sale thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the 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
(v) no purchaser or transferee at such a Sale shall be bound to ascertain
the Indenture Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
Section 5.16. Action on Notes. The Indenture Trustee's right to
seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Trust Estate or upon any of the assets of the Issuer. Any money or
property collected by the Indenture Trustee shall be applied in accordance
with Section 5.04(b).
Section 5.17. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and
observance by the Seller and the Master Servicer, as applicable, of each of
their obligations to the Issuer under or in connection with the Mortgage Loan
Purchase Agreement and the Servicing Agreement, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Mortgage Loan Purchase Agreement and the Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Seller or
the Master Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Master Servicer of each of their obligations under the Mortgage Loan Purchase
Agreement and the Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, thE Indenture
Trustee subject to the rights of the Credit Enhancer under the Servicing
Agreement may, and at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of
66-2/3% of the Security Balances of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller or
the Master Servicer under or in connection with the Mortgage Loan Purchase
Agreement and the Servicing Agreement, including the right or power to take
any action to compel or secure performance or observance by the Seller or the
Master Servicer, as the case may be, of each of their obligations to the
Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Mortgage Loan Purchase Agreement and
the Servicing Agreement, as the case may be, and any right of the Issuer to
take such action shall not be suspended.
ARTICLE VI
The Indenture Trustee
Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(d) (i) this paragraph does not limit the effect of paragraph of this
Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it (A) pursuant to Section 5.11 or (B) from the
Credit Enhancer, which it is entitled to give under any of the Basic
Documents.
(e) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section 6.01.
(f) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(g) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture.
(h) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(i) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
Section 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with
the same rights it would have if it were not Indenture Trustee. Any
Administrator, Note Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Indenture Trustee must comply with Sections
6.11 and 6.12.
Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
Section 6.05. Notice of Event of Default. If an Event of Default occurs
and is continuing and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall give notice thereof to the Credit
Enhancer. The Trustee shall mail to each Noteholder notice of the Event of
Default within 90 days after it occurs. Except in the case of an Event of
Default in payment of principal of or interest on any Note, the Indenture
Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is
in the interests of Noteholders.
Section 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required
to enable such holder to prepare its federal and state income tax returns. In
addition, upon the Issuer's written request, the Indenture Trustee shall
promptly furnish information reasonably requested by the Issuer that is
reasonably available to the Indenture Trustee to enable the Issuer to perform
its federal and state income tax reporting obligations.
Section 6.07. Compensation and Indemnity. The Issuer shall or shall cause
the Administrator to pay to the Indenture Trustee on each Payment Date
reasonable compensation for its services. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall or shall cause the Administrator to reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts. The Issuer shall or shall cause the
Administrator to indemnify the Indenture Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Indenture Trustee shall notify the Issuer and the Administrator
promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer and the Administrator shall not
relieve the Issuer or the Administrator of its obligations hereunder. The
Issuer shall or shall cause the Administrator to defend any such claim, and
the Indenture Trustee may have separate counsel and the Issuer shall or shall
cause the Administrator to pay the fees and expenses of such counsel. Neither
the Issuer nor the Administrator need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Indenture Trustee
through the Indenture Trustee's own willful misconduct, negligence or bad
faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of an Event of Default
specified in Section 5.01(iv) or (v) with respect to the Issuer, the expenses
are intended to constitute expenses of administration under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may
resign at any time by so notifying the Issuer and the Credit Enhancer. The
Holders of a majority of Security Balances of the Notes may remove the
Indenture Trustee by so notifying the Indenture Trustee and the Credit
Enhancer and may appoint a successor Indenture Trustee. The Issuer shall
remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of Security
Balances of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Administrator's obligations under Section 6.07
shall continue for the benefit of the retiring Indenture Trustee.
Section 6.09. Successor Indenture Trustee by ▇▇▇▇▇▇. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
the Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part hereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Indenture Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Indenture Trustee or separately, as may be provided therein, subject to
all the provisions of this Indenture, specifically including every provision
of this Indenture relating to the conduct of, affecting the liability of, or
affording protection to, the Indenture Trustee. Every such instrument shall be
filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification. The Indenture Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of [____] or better by [______]. The
Indenture Trustee shall comply with TIA ss. 310(b), including the optional
provision permitted by the second sentence of TIA ss. 310(b)(9); provided,
however, that there shall be excluded from the operation of TIA ss. 310(b)(1)
any indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13. Representation and Warranty. The Indenture Trustee
represents and warrants to the Issuer, for the benefit of the Noteholders,
that this Indenture has been executed and delivered by one of its Responsible
Officers who is duly authorized to execute and deliver such document in such
capacity on its behalf.
Section 6.14. Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept assignment of the Mortgage Loans and hold the assets of the
Trust in trust for the Noteholders;
(b) to issue, execute and deliver the Notes substantially in the form
prescribed by Exhibit A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
Section 6.15. No Consent to Certain Acts of Depositor. The Indenture
Trustee shall not consent to any action proposed to be taken by the Depositor
pursuant to Article [_______________] of the Depositor's Certificate of
Incorporation.
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date, (b) at such other
times as the Indenture Trustee and the Credit Enhancer may request in writing,
within 30 days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; provided, however, that so long as the Indenture
Trustee is the Note Registrar, no such list shall be required to be furnished.
Section 7.02. Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA ss. 312(c).
Section 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) that the Issuer may be required
to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee, and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA ss. 313(c))
such summaries of any information, documents and reports required to be
filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) and by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.
Section 7.04. Reports by Indenture Trustee. If required by TIA ss.
313(a), within 60 days after each January 1 beginning with ___________, 199_,
the Indenture Trustee shall mail to each Noteholder as required by TIA ss.
313(c) and to the Credit Enhancer a brief report dated as of such date that
complies with TIA ss. 313(a). The Indenture Trustee also shall comply with TIA
ss. 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange, if
any, on which the Term Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Term Notes are listed on any stock exchange.
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01. Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this
Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Trust Estate, the Indenture Trustee may take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided
in Article V.
Section 8.02. Trust Accounts. (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain, in the
name of the Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders and the Credit Enhancer, the Payment Account as provided in
Section 3.01 of this Indenture.
(b) All moneys deposited from time to time in the Payment Account
pursuant to the Servicing Agreement and all deposits therein pursuant to this
Indenture are for the benefit of the Noteholders, the Certificateholders and
the holders of the Residual Ownership Interest and all investments made with
such moneys including all income or other gain from such investments are for
the benefit of the Master Servicer as provided by the Servicing Agreement.
On each Payment Date during the Funding Period the Indenture Trustee
shall withdraw Net Principal Collections from the Payment Account and deposit
Net Principal Collections to the Funding Account.
On each Payment Date, the Indenture Trustee shall distribute all amounts
on deposit in the Payment Account (after giving effect to the withdrawal
referred to in the preceding paragraph) to Noteholders in respect of the Notes
and in its capacity as Certificate Paying Agent to Certificateholders in the
order of priority set forth in Section 3.05 (except as otherwise provided in
Section 5.04(b)).
The Master Servicer may direct the Indenture Trustee to invest any funds
in the Payment Account in Eligible Investments maturing no later than the
Business Day preceding each Payment Date and shall not be sold or disposed of
prior to the maturity. Unless otherwise instructed by the Master Servicer, the
Indenture Trustee shall invest all funds in the Payment Account in its
[__________] Short Term Investment Fund so long as it is an Eligible
Investment.
[(c) On or before the Closing Date the Issuer shall open, at the
Corporate Trust Office, an account which shall be the "Funding Account". The
Master Servicer may direct the Indenture Trustee to invest any funds in the
Funding Account in Eligible Investments maturing no later than the Business
Day preceding each Payment Date and shall not be sold or disposed of prior to
the maturity. Unless otherwise instructed by the Master Servicer, the
Indenture Trustee shall invest all funds in the Payment Account in its
Corporate Trust Short Term Investment Fund so long as it is an Eligible
Investment. During the Funding Period, any amounts received by the Indenture
Trustee in respect of Net Principal Collections for deposit in the Funding
Account, together with any Eligible Investments in which such moneys are or
will be invested or reinvested during the term of the Notes, shall be held by
the Indenture Trustee in the Funding Account as part of the Trust Estate,
subject to disbursement and withdrawal as herein provided.
(i) Amounts on deposit in the Funding Account in respect of Net
Principal Collections may be withdrawn on each Deposit Date and (1) paid
to the Issuer in payment for Additional Loans by the deposit of such
amount to the Collection Account and (2) at the end of the Funding Period
any amounts remaining in the Funding Account after the withdrawal called
for by clause (1) shall be deposited in the Payment Account to be
included in the payment of principal on the Payment Date that is the last
day of the Funding Period.
(ii) Amounts on deposit in the Funding Account in respect of
investment earnings shall be withdrawn on each Payment Date and deposited
in the Payment Account and included in the amounts paid to Noteholders
and Certificateholders.
(c) (i) Any investment in the institution with which the Funding Account
is maintained may mature on such Payment Date and (ii) any other investment
may mature on such Payment Date if the Indenture Trustee shall advance funds
on such Payment Date to the Funding Account in the amount payable on such
investment on such Payment Date, pending receipt thereof to the extent
necessary to make distributions on the Notes and the Certificates) and shall
not be sold or disposed of prior to maturity.]
Section 8.03. Opinion of Counsel. The Indenture Trustee shall receive at
least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.05(a), accompanied by copies of any instruments to be
executed, and the Indenture Trustee shall also require, as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
will not materially and adversely impair the security for the Notes or the
rights of the Noteholders in contravention of the provisions of this
Indenture; provided, however, that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Trust Estate.
Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
Section 8.04. Termination Upon Distribution to Noteholders. This
Indenture and the respective obligations and responsibilities of the Issuer
and the Indenture Trustee created hereby shall terminate upon the distribution
to Noteholders, Certificateholders, holders of the Residual Ownership Interest
and the Indenture Trustee of all amounts required to be distributed pursuant
to Article III; provided, however, that in no event shall the trust created
hereby continue beyond the expiration of 21 years from the death of the
survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the
United States to the Court of St. ▇▇▇▇▇, living on the date hereof.
Section 8.05. Release of Trust Estate. (a) Subject to the payment of its
fees and expenses, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property
from the lien of this Indenture, or convey the Indenture Trustee's interest in
the same, in a manner and under circumstances that are not inconsistent with
the provisions of this Indenture. No party relying upon an instrument executed
by the Indenture Trustee as provided in Article IV hereunder shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent, or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding, (ii) all sums due the Indenture Trustee pursuant to this
Indenture have been paid, and (iii) all sums due the Credit Enhancer have been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture. The Indenture Trustee shall release property
from the lien of this Indenture pursuant to this Section 8.05 only upon
receipt of an request from the Issuer accompanied by an Officers' Certificate,
an Opinion of Counsel, and (if required by the TIA) Independent Certificates
in accordance with TIA ss. 314(c) and 314(d)(1) meeting the applicable
requirements as described herein, and a letter from the President or any Vice
President or any Secretary of the Credit Enhancer, if any, stating that the
Credit Enhancer has no objection to such request from the Issuer.
Section 8.06. Surrender of Notes Upon Final Payment. By acceptance of any
Note, the Holder thereof agrees to surrender such Note to the Indenture
Trustee promptly, prior to such Noteholder's receipt of the final payment
thereon.
ARTICLE IX
Supplemental Indentures
Section 9.01. Supplemental Indentures Without Consent of
Noteholders. (a) Without the consent of the Holders of any Notes but with the
consent of the Credit Enhancer and prior notice to the Rating Agencies and the
Credit Enhancer, the Issuer and the Indenture Trustee, when authorized by an
Issuer Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required
to be subjected to the lien of this Indenture, or to subject to the lien
of this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture that may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided, that such action
shall not adversely affect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary
to facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such other
provisions as may be expressly required by the TIA;
provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
entering into such indenture supplement will not have any material adverse tax
consequences to the Noteholders.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the Notes but
with the consent of the Credit Enhancer and prior notice to the Rating
Agencies and the Credit Enhancer, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, (i) adversely affect in any material respect the interests
of any Noteholder or (ii) cause the Issuer to be subject to an entity level
tax or be classified as a taxable mortgage pool within the meaning of Section
7701(i) of the Code.
Section 9.02. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and, with the written consent of
the Credit Enhancer and with the consent of the Holders of not less than a
majority of the Security Balances of each Class of Notes, by Act of such
Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Note affected
thereby:
(i) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof or the
interest rate thereon, change the provisions of this Indenture relating
to the application of collections on, or the proceeds of the sale of, the
Trust Estate to payment of principal of or interest on the Notes, or
change any place of payment where, or the coin or currency in which, any
Note or the interest thereon is payable, or impair the right to institute
suit for the enforcement of the provisions of this Indenture requiring
the application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof;
(ii) reduce the percentage of the Security Balances of the Notes,
the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception in
the definition of the term "Holder";
(iv) reduce the percentage of the Security Balances of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section 9.02 except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified or
waived without the consent of the Holder of each Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation
of any of the individual components of such calculation); or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture; and provided, further, that such action shall
not, as evidenced by an Opinion of Counsel, cause the Issuer to be
subject to an entity level tax or be classified as a taxable mortgage
pool within the meaning of Section 7701(i) of the Code.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture
Trustee shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Indenture Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Indenture Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations
of rights, obligations, duties, liabilities and immunities under this
Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined, exercised and enforced hereunder subject in
all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
Section 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
[Reserved]
ARTICLE XI
Miscellaneous
Section 11.01. Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee and to the Credit Enhancer (i) an Officer's Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with and (iii) (if required by the TIA)
an Independent Certificate from a firm of certified public accountants meeting
the applicable requirements of this Section 11.01, except that, in the case of
any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with; and
(5) if the Signer of such Certificate or Opinion is required to
be Independent, the Statement required by the definition of the term
"Independent".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (i) above, the
Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of
the securities to be so deposited and of all other such securities made
the basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause (ii), is 10% or
more of the Security Balances of the Notes, but such a certificate need
not be furnished with respect to any securities so deposited, if the fair
value thereof to the Issuer as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the Security
Balances of the Notes.
(iii) Whenever any property or securities are to be released from
the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (iii) above, the
Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than property as contemplated
by clause (v) below or securities released from the lien of this
Indenture since the commencement of the then-current calendar year, as
set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Security Balances of the Notes,
but such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the then Security Balances of the Notes.
(v) Notwithstanding any provision of this Indenture, the Issuer may,
without compliance with the requirements of the other provisions of this
Section 11.01, (A) collect, sell or otherwise dispose of Mortgage Loans
and Mortgaged Properties as and to the extent permitted or required by
the Basic Documents or (B) make cash payments out of the Payment Account
as and to the extent permitted or required by the Basic Documents, so
long as the Issuer shall deliver to the Indenture Trustee every six
months, commencing __________, 199_, an Officer's Certificate of the
Issuer stating that all the dispositions of Collateral described in
clauses (A) or (B) above that occurred during the preceding six calendar
months were in the ordinary course of the Issuer's business and that the
proceeds thereof were applied in accordance with the Basic Documents.
Section 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 an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Seller, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Seller, the Issuer or the Administrator, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application
or at the effective date of such certificate or report (as the case may be),
of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application
granted or to the sufficiency of such certificate or report. The foregoing
shall not, however, be construed to affect the Indenture Trustee's right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
Section 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 agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument
or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section 11.03.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of
every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
Section 11.04. Notices, etc., to Indenture Trustee, Issuer, Credit
Enhancer and Rating Agencies. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or act of Noteholders is to
be made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee at the Corporate Trust
Office, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to: Home Equity Loan
Trust 199_-__ in care of [_____________], [______________] Attention of
[_________] with a copy to the Administrator at [______________],
Attention: [_____________], or at any other address previously furnished
in writing to the Indenture Trustee by the Issuer or the Administrator.
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee, or
(iii) the Credit Enhancer by the Issuer, the Indenture Trustee or by
any Noteholders shall be sufficient for every purpose hereunder to in
writing and mailed, first-class postage pre-paid, or personally delivered
or telecopied to: [_______________], Attention: [______________],
Telephone: [_____________], Telecopier: [___________].
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to [(i) in
the case of ▇▇▇▇ & ▇▇▇▇▇▇, at the following address: [________________];]
[and] [(ii) in the case of Fitch Investors Service, L.P., at the following
address: [______________];] [and] [(iii) in the case of Moody's, at the
following address: ▇▇▇▇▇'▇ Investors Service, ABS Monitoring Department, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]; [and] [(iv) in the case of Standard
& Poor's, at the following address: Standard & Poor's Corporation, ▇▇ ▇▇▇▇▇▇▇▇
(▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed Surveillance
Department;] or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
Section 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to
mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of
Default.
Section 11.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the
Issuer may enter into any agreement with any Holder of a Note providing for a
method of payment, or notice by the Indenture Trustee or any Administrator to
such Holder, that is different from the methods provided for in this Indenture
for such payments or notices. The Issuer will furnish to the Indenture Trustee
a copy of each such agreement and the Indenture Trustee will cause payments to
be made and notices to be given in accordance with such agreements.
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 Trust
Indenture Act, such required provision shall control.
The provisions of TIA ▇▇.▇▇. 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 11.08. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 11.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
Section 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. The Credit Enhancer and its
successors and assigns shall be a third-party beneficiary to the provisions of
this Indenture. Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Noteholders, and any other party secured hereunder, and any
other Person with an ownership interest in any part of the Trust Estate, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
Section 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.14. Counterparts. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
Section 11.16. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may
have expressly agreed (it being understood that the Indenture Trustee and the
Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity. For all purposes of this Indenture, in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Article VI, VII and VIII of the Trust Agreement.
Section 11.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Depositor or the Issuer,
or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the Basic Documents.
Section 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all
such information except to the extent disclosure may be required by law (and
all reasonable applications for confidential treatment are unavailing) and
except to the extent that the Indenture Trustee may reasonably determine that
such disclosure is consistent with its obligations hereunder.
Section 11.19. Authority of the Administrator. Each of the parties to
this Indenture acknowledges that the Issuer and the Owner Trustee have each
appointed the Administrator to act as its agent to perform the duties and
obligations of the Issuer hereunder. Unless otherwise instructed by the Issuer
or the Owner Trustee, copies of all notices, requests, demands and other
documents to be delivered to the Issuer or the Owner Trustee pursuant to the
terms hereof shall be delivered to the Administrator. Unless otherwise
instructed by the Issuer or the Owner Trustee, all notices, requests, demands
and other documents to be executed or delivered, and any action to be taken,
by the Issuer or the Owner Trustee pursuant to the terms hereof may be
executed, delivered and/or taken by the Administrator pursuant to the
Administration Agreement.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
HOME EQUITY LOAN TRUST 199_-__
as Issuer
By: [______________________],
not in its individual capacity
but solely as Owner Trustee
By:___________________________________
Name:
Title:
[______________________________________],
as Indenture
Trustee, as Certificate Paying Agent and as
Certificate Registrar
By:____________________________________
Name:
Title:
[_______________]
hereby accepts the appointment
as Certificate Paying Agent
pursuant to Section 3.03
hereof and as Certificate
Registrar pursuant to Section
4.02 hereof.
____________________________
By:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared
______________, to me known, who being by me duly sworn, did depose and say,
that he resides at _________________, __________________ _____, that he is the
of the Owner Trustee, one of the corporations described in and which executed
the above instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by order of the Board of Directors of said corporation; and that he signed his
name thereto by like order.
_____________________________
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared
______________________ , to me known, who being by me duly sworn, did depose
and say, that he resides at __________________________________________________
, that he is the ______________ of ________________, as Indenture Trustee, one
of the corporations described in and which executed the above instrument; that
he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation; and that he signed his name thereto by
like order.
_____________________________
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared
______________________ , to me known, who being by me duly sworn, did depose
and say, that he resides at __________________________________________________
, that he is an ________________ of _______________, as Indenture Trustee, one
of the corporations described in and which executed the above instrument; that
he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation; and that he signed his name thereto by
like order.
_____________________________
Notary Public
[NOTARIAL SEAL]
[EXHIBIT C
[FORM OF OPINION]
[Date]
To: The Persons Listed On the Attached Schedule
Re: HOME EQUITY LOAN TRUST 199_-__
Home Equity Loan Asset-Backed Securities
Series 199__-__
Ladies and Gentlemen:
We have acted as counsel to [____________________] ("[_____]") in
connection with the issuance by [________] of its Surety Bond Number [SB___]
(the "Surety Bond") issued pursuant to the [ ___________ ], dated as of
______________, 199_ among ["________"], ▇.▇. ▇▇▇▇▇▇ Securities Inc., as
Depositor (the "Depositor"), [_____________] ("[___]"), as Seller and Master
Servicer and Home Equity Loan Trust 199_-__ (the "Issuer") (the "Insurance
Agreement") with respect to the Additional Variable Funding Notes issued
pursuant to the Indenture, dated as of ____________, 199_ between the Issuer
and [_______________], as Indenture Trustee.]
For the purposes of this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction of
[(i) the [Articles of Incorporation] [Certificate of Incorporation] [Articles
of Association] and the By-Laws of [____]; (ii) resolutions adopted by the
Board of Directors of [____] relevant to the issuance of the Surety Bond;
(iii) the Surety Bond; (iv) the Insurance Agreement; (v) the certificate of
the Secretary of [_____] dated as of the date hereof (the "Certificate");] and
(vi) such other documents that we have deemed necessary or appropriate as a
basis for the opinion set forth below.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the [Definitions incorporated in and attached as
an Appendix to the Indenture.]
In our examination we have assumed the genuineness of all signatures and
the legal capacity of natural persons (other than with respect to officers of
[_____]), the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such copies. We
have relied upon the certificates, statements and representations of officers
and other representatives of [_____] with regard to all facts (but not
conclusions of law) material to the opinions set forth below and have not
conducted an independent inquiry as to such matters. Based upon and subject to
the foregoing, we are of the opinion that:
1. [____] is a corporation validly existing, in good standing and
licensed to transact the business of surety and financial guaranty
insurance under the laws of the State of New York.
2. [____] has the corporate power to execute and deliver, and to
take all action required of it under the Surety Bond.
3. Except as have already been obtained, no authorization, consent,
approval, license, formal exemption, or declaration from, nor any
registration or filing with, any court or governmental agency or body of
the United States of America or the State of New York, which if not
obtained would affect or impair the validity or enforceability of the
Surety Bond is required in connection with the execution and delivery by
[____] of the Surety Bond or in connection with [____]'s performance of
its obligations thereunder.
4. The Surety Bond has been duly authorized, executed and delivered
by [____] and constitutes the legally valid and binding obligation of
[____], enforceable in accordance with its terms subject, as to
enforcement, to (a) bankruptcy, reorganization, insolvency, moratorium
and other similar laws relating to or affecting the enforcement of
creditors' rights generally, including, without limitation, laws relating
to fraudulent transfers or conveyances, preferential transfers and
equitable subordination, presently or from time to time in effect, and
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law), as such laws may be
applied in any such proceeding with respect to [_____] and (b) the
qualification that the remedy of specific performance may be subject to
equitable defenses and to the discretion of the court before which any
proceedings with respect thereto may be brought.
5. The Surety Bond is not required to be registered under the
Securities Act of 1933, as amended.
We express no opinion as to the laws of any jurisdiction other than the
federal laws of the United States of America and the laws of the State of New
York. This opinion is limited to the laws of New York and the United States of
America as in effect on the date hereof and, in rendering this opinion, we
assume no obligation to revise or supplement this opinion should the present
laws, or the interpretation thereof, be changed.
This opinion has been furnished solely for the benefit of the persons
listed on the attached Schedule A in connection with the transactions
described herein and on the condition that the opinions expressed herein may
not be published or otherwise communicated to any other party, or relied upon
by any other party, without prior written approval in each instance.
Very truly yours,]
Schedule A
Opinion of [Date]
Re: HOME EQUITY LOAN TRUST 199__-__
Home Equity Loan Asset-Backed Securities
Series 199__-__
----------------------------------------
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-0060
[_______________________],
as Seller and Servicer
[_______________________]
[Duff & ▇▇▇▇▇▇ Credit Rating Co.]
[__________________________________]
[▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]
[Fitch Investors Service, L.P.]
[ ]
[Standard & Poor's Ratings Group
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]
[________________________],
as Indenture Trustee
[________________________]
[________________________],
as Owner Trustee
[________________________]
[EXHIBIT D
__________, 199_
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-0060
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
Re: Home Equity Loan Trust 199_-__
Ladies and Gentlemen:
We have acted as counsel to ▇.▇. ▇▇▇▇▇▇ Securities Inc., a Delaware
corporation (the "Depositor"), in connection with (i) the purchase of certain
adjustable rate home equity revolving credit line loans (the "Mortgage Loans")
pursuant to a mortgage loan purchase agreement, dated as of __________, 199_
(the "Mortgage Loan Purchase Agreement") between [_____________________], as
seller (the "Seller") and the Depositor, dated as of __________, 199_ (the
"Agreement"), and (ii) the sale by the Depositor of the Mortgage Loans to Home
Equity Loan Trust 199_-__, a Delaware business trust (the "Issuer"), created
by a Trust Agreement dated as of ____________, 199_ (the "Trust Agreement")
among the Depositor, and [___________] as owner trustee (the "Owner Trustee").
In exchange for the Mortgage Loans, the Issuer has issued Home Equity Loan
Asset-Backed Term Notes, Series 199__-__ (the "Term Notes"), Home Equity Loan
Asset-Backed Variable Funding Notes, Series 199__-__ (the "Variable Funding
Notes", and together with the Term Notes, the "Notes") and Home Equity Loan
Asset-Backed Certificates, Series 199__-__ (the "Certificates", and together
with the Notes, the "Securities"). The Issuer wishes to increase the Maximum
Variable Funding Balance of the Variable funding Notes in excess of
$[___________] as provided for in Section 4.01 of the Indenture. Capitalized
terms not otherwise defined herein shall (unless otherwise specifically set
forth herein) have the meanings ascribed to such terms in the Trust Agreement.
This opinion is rendered pursuant to Section 4.01(b)(iii) of the
Indenture.
In arriving at the opinions expressed below, we have examined such
documents and records as we have deemed appropriate, including the following:
1. A signed copy of the Indenture.
2. A signed copy of the Trust Agreement.
3. Specimens of the Notes.
As to any facts material to the following opinions which we did not
independently establish or verify, we have relied upon statements and
representations of the responsible officers and other representations of the
Depositor and of public officials and agencies.
Based upon the foregoing and consideration of such other matters as we
have deemed appropriate, we are of the opinion that:
1. For federal income tax purposes, as a result of the increase in the
Maximum Variable Funding Balance of the Variable Funding Notes in excess of
$[____________], the Issuer will not be classified as an association or a
publicly traded partnership taxable as a corporation, or as a taxable mortgage
pool within the meaning of section 7701(i) of the Code.
2. The Variable Funding Notes will be treated as debt for federal income
tax purposes and will not affect the Classification as debt of any other class
of Notes.
We do not express any opinion as to any laws other than the federal tax
law of the United States of America.
The opinions set forth herein are expressly subject to there being no
additional facts that would materially affect the validity of the assumptions
and conclusions set forth herein or upon which this opinion is based.
No one other than you shall be entitled to rely on the opinions expressed
herein. This opinion letter is not intended to be employed in any transaction
other than the one described above and is being delivered to you on the
understanding that neither it nor its contents may be published, communicated
or otherwise made available, in whole or in part, to any other party or entity
without, in each instance, our specific prior written consent.
Very truly yours,]
