EXECUTION VERSION
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INDENTURE
dated as of September 22, 2003
by and between
ABFS MORTGAGE LOAN WAREHOUSE TRUST 2003-1,
as Issuer
and
JPMORGAN CHASE BANK,
as Indenture Trustee
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Page
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Section 1.01. General Definitions...........................................................................2
ARTICLE II
THE NOTES
Section 2.01. Forms Generally...............................................................................2
Section 2.02. Form of Certificate of Authentication.........................................................2
Section 2.03. General Provisions With Respect to Principal and Interest Payment.............................2
Section 2.04. Denominations.................................................................................3
Section 2.05. Execution, Authentication, Delivery and Dating................................................3
Section 2.06. Registration, Registration of Transfer and Exchange...........................................4
Section 2.07. Mutilated, Destroyed, Lost or Stolen Secured Notes............................................5
Section 2.08. Payments of Principal and Interest............................................................6
Section 2.09. Persons Deemed Owner..........................................................................8
Section 2.10. Cancellation..................................................................................8
Section 2.11. Authentication and Delivery of Secured Notes..................................................8
Section 2.12. Limitations on Transfer of the Secured Notes..................................................9
Section 2.13. Holding of Secured Notes.....................................................................11
Section 2.14. Reserved.....................................................................................11
Section 2.15. Release of Collateral........................................................................11
ARTICLE III
COVENANTS
Section 3.01. Payment of Secured Notes.....................................................................12
Section 3.02. Maintenance of Office or Agency..............................................................12
Section 3.03. Money for Secured Note Payments to Be Held In Trust..........................................12
Section 3.04. Existence of Trust...........................................................................14
Section 3.05. Protection of Trust Estate...................................................................15
Section 3.06. Opinions as to the Trust Estate..............................................................16
Section 3.07. Performance of Obligations...................................................................16
Section 3.08. Investment Company Act.......................................................................16
Section 3.09. Negative Covenants...........................................................................17
Section 3.10. Annual Statement as to Compliance............................................................18
Section 3.11. Restricted Payments..........................................................................18
Section 3.12. Treatment of Secured Notes as Debt for Tax Purposes..........................................18
Section 3.13. Notice of Events of Default..................................................................19
Section 3.14. Further Instruments and Acts.................................................................19
Section 3.15. Purpose......................................................................................19
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture......................................................19
Section 4.02. Application of Trust Money...................................................................20
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default.............................................................................20
Section 5.02. Acceleration of Maturity; Rescission and Annulment...........................................22
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee....................23
Section 5.04. Remedies.....................................................................................23
Section 5.05. Indenture Trustee May File Proofs of Claim...................................................24
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Secured Notes.....................25
Section 5.07. Application of Money Collected...............................................................25
Section 5.08. Limitation on Suits..........................................................................26
Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest........................27
Section 5.10. Restoration of Rights and Remedies...........................................................27
Section 5.11. Rights and Remedies Cumulative...............................................................27
Section 5.12. Delay or Omission Not Waiver.................................................................28
Section 5.13. Control by Noteholders.......................................................................28
Section 5.14. Waiver of Past Defaults......................................................................28
Section 5.15. Undertaking for Costs........................................................................29
Section 5.16. Waiver of Stay or Extension Laws.............................................................29
Section 5.17. Sale of Trust Estate.........................................................................29
Section 5.18. Action on Secured Notes......................................................................31
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee..................................................................31
Section 6.02. Notice of Default............................................................................33
Section 6.03. Rights of Indenture Trustee..................................................................33
Section 6.04. Not Responsible for Recitals or Issuance of Secured Notes....................................34
Section 6.05. May Hold Secured Notes.......................................................................34
Section 6.06. Money Held in Trust..........................................................................34
Section 6.07. Reserved.....................................................................................35
Section 6.08. Indenture Trustee's Capital and Surplus......................................................35
Section 6.09. Resignation and Removal; Appointment of Successor............................................35
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee.....................................36
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee.............37
Section 6.12. Reserved.....................................................................................37
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees........................................37
Section 6.14. Authenticating Agents........................................................................38
Section 6.15. Review of Custodial Loan Files...............................................................39
Section 6.16. Indenture Trustee Fees and Expenses..........................................................40
Section 6.17. Representations and Warranties of the Indenture Trustee......................................40
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders...............41
Section 7.02. Preservation of Information; Communications to Noteholders...................................41
Section 7.03. Reports by Trust.............................................................................42
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Account......................................................................................42
Section 8.02. Payments; Statements.........................................................................42
Section 8.03. Interest Payments............................................................................42
Section 8.04. Principal Payments; Payment on Maturity Date.................................................42
Section 8.05. Releases of Deleted Mortgage Loans...........................................................43
Section 8.06. Recourse Payment.............................................................................43
Section 8.07. Reports by Indenture Trustee to Noteholders; Access to Certain Information...................43
Section 8.08. Release of Trust Estate......................................................................44
Section 8.09. Amendment to the Servicing Agreement.........................................................44
Section 8.10. Delivery of the Custodial Loan Files Pursuant to Sale and Servicing Agreement................44
Section 8.11. Termination of Servicer......................................................................45
Section 8.12. Opinion of Counsel...........................................................................45
Section 8.13. Appointment of Collateral Agents.............................................................45
Section 8.14. Trust Estate and Accounts Held for Benefit of the Note Purchaser.............................45
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ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.......................................46
Section 9.02. Supplemental Indentures With Consent of Noteholders..........................................46
Section 9.03. Execution of Supplemental Indentures.........................................................48
Section 9.04. Effect of Supplemental Indentures............................................................48
Section 9.05. Reserved.....................................................................................48
Section 9.06. Reference in Secured Notes to Supplemental Indentures........................................48
Section 9.07. Amendments to Governing Documents............................................................48
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption...................................................................................49
Section 10.02. Form of Redemption Notice....................................................................50
Section 10.03. Secured Notes Payable on Redemption..........................................................50
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions.........................................................50
Section 11.02. Form of Documents Delivered to Indenture Trustee.............................................51
Section 11.03. Acts of Noteholders..........................................................................52
Section 11.04. Notices, etc., to Indenture Trustee, the Note Purchaser and Trust............................52
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices........................................53
Section 11.06. Rules by Indenture Trustee...................................................................54
Section 11.07. Reserved.....................................................................................54
Section 11.08. Effect of Headings and Table of Contents.....................................................54
Section 11.09. Successors and Assigns.......................................................................54
Section 11.10. Separability.................................................................................54
Section 11.11. Benefits of Indenture........................................................................54
Section 11.12. Legal Holidays...............................................................................54
Section 11.13. Governing Law................................................................................54
Section 11.14. Counterparts.................................................................................55
Section 11.15. Recording of Indenture.......................................................................55
Section 11.16. Trust Obligation.............................................................................55
Section 11.17. No Petition..................................................................................56
Section 11.18. Inspection...................................................................................56
Section 11.19. Usury........................................................................................56
Section 11.20. Third Party Beneficiary......................................................................57
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APPENDICES, SCHEDULES AND EXHIBITS
Appendix I Defined Terms
Exhibit A Form of Secured Note
Exhibit B Reserved
Exhibit C Form of Rule 144A Transfer Certificate
Exhibit D Form of Purchaser's Letter for Institutional Accredited Investor
Exhibit E Form of Transferee Certification-- Investment Company Act of 1940
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This INDENTURE, dated as of September 22, 2003 (as amended or
supplemented from time to time as permitted hereby, this "Indenture"), is
between ABFS MORTGAGE LOAN WAREHOUSE TRUST 2003-1, a Delaware statutory trust
(together with its permitted successors and assigns, the "Trust" or the
"Issuer"), and JPMORGAN CHASE BANK, a New York banking corporation, as indenture
trustee (together with its permitted successors in the trust hereunder, the
"Indenture Trustee").
PRELIMINARY STATEMENT
The Trust has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its Secured Notes, Series 2003-1 (the
"Secured Notes"), as provided in this Indenture. All covenants and agreements
made by the Trust herein are for the benefit and security of the Holders of the
Secured Notes. The Trust is entering into this Indenture, and the Indenture
Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Trust in accordance with its terms have been done.
GRANTING CLAUSE
The Trust hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Secured Notes, all of the Trust's right, title and
interest (whether now owned or existing or at any time hereafter acquired or
arising) in and to (a) the Mortgage Loans in the Mortgage Loan Schedule attached
as Schedule I to the Assignments (including property that secures a Mortgage
Loan that becomes an REO Property), including the related Mortgage File,
including all payments of principal received, collected or otherwise recovered
after the Cut-Off Date for each Mortgage Loan, all payments of interest due on
each Mortgage Loan after the Cut-Off Date therefor whenever received and all
other proceeds received in respect of such Mortgage Loans, including any
prepayment penalties and any Qualified Substitute Mortgage Loan, (b) the Sale
and Servicing Agreement, (c) Insurance Proceeds, (d) any Assignments, (e) the
servicing rights relating to such Mortgage Loans, (f) all "accounts," "general
intangibles," "instruments," "deposit accounts," and "investment property" (as
such terms are defined in the UCC) constituting or relating to any of the
foregoing, and (g) all proceeds of the foregoing, including without limitation,
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid assets, including, without limitation, all
insurance proceeds and condemnation awards. Such Grants are made, however, in
trust, to secure the Secured Notes equally and ratably without prejudice,
priority or distinction between any Secured Note and any other Secured Note by
reason of difference in time of issuance or otherwise to secure (x) the payment
of all amounts due on the Secured Notes in accordance with their terms, (y) the
payment of all other sums payable under this Indenture and (z) compliance with
the provisions of this Indenture, all as provided in this Indenture. All terms
used in the foregoing granting clauses that are defined in Appendix I are used
with the meanings given in said Appendix I.
The Indenture Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions of this Indenture and agrees to
perform the duties herein required to the end that the interests of the Holders
of the Secured Notes may be adequately and effectively protected. In addition,
the Indenture Trustee agrees that it will acknowledge the Grant on each Transfer
Date of the related Mortgage Loans pursuant to the terms of the related
Assignment, provided that the conditions precedent to the pledge of such
Mortgage Loans contained in the Sale and Servicing Agreement are satisfied on or
prior to such Transfer Date.
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions. Except as otherwise specified or as
the context may otherwise require, the following terms have the respective
meanings set forth in Appendix I for all purposes of this Indenture, and the
definitions of such terms are applicable to the singular as well as to the
plural forms of such terms and to the masculine as well as to the feminine
genders of such terms. Whenever reference is made herein to an Event of Default,
an Amortization Event or a Default known to the Indenture Trustee or of which
the Indenture Trustee has notice or knowledge, such reference shall be construed
to refer only to an Event of Default, an Amortization Event or a Default of
which the Indenture Trustee is deemed to have notice or knowledge pursuant to
Section 6.01(d). All other terms used herein that are defined in the Trust
Indenture Act (as hereinafter defined), either directly or by reference therein,
have the meanings assigned to them therein.
ARTICLE II
THE NOTES
Section 2.01. Forms Generally. The Secured Notes shall be substantially
in the form set forth at Exhibit A attached hereto and shall be issued solely in
the form of fully registered Definitive Notes and not in book-entry form. Each
Secured Note shall bear a sequential number. (For example, the first Secured
Note would be labeled 1, the second 2, and so forth). Any portion of the text of
any Secured Note may be set forth on the reverse thereof with an appropriate
reference on the face of the Secured Note.
The Secured Notes may be produced in any manner determined by the
Trust, as evidenced by its execution thereof.
Section 2.02. Form of Certificate of Authentication. The form of the
Authenticating Agent's certificate of authentication is as set forth on the
signature page of the form of the Secured Note attached hereto at Exhibit A.
Section 2.03. General Provisions With Respect to Principal and Interest
Payment. The Secured Notes shall be designated generally as the "ABFS Mortgage
Loan Warehouse Trust 2003-1, Secured Notes, Series 2003-1".
The Secured Notes shall be issued in the form specified in Section 2.01
hereof. The aggregate Note Principal Balance of Secured Notes that may be
authenticated and delivered under the Indenture is limited to the Maximum Note
Balance (as defined in Appendix I to the Sale and Servicing Agreement).
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Subject to the provisions of Sections 3.01, 5.07, 5.09 and 8.02 of this
Indenture, the principal of the Secured Notes shall be payable in installments
ending no later than the related Final Stated Maturity Date, unless the unpaid
principal of such Secured Notes become due and payable at an earlier date by
declaration of acceleration or call for redemption or otherwise.
All payments made with respect to any Secured Note shall be applied
first to the interest then due and payable on such Secured Note and then to the
principal thereof. All computations of interest accrued on any Secured Note
shall be made on the basis of a year of 360 days and the actual number of days
elapsed in the related Accrual Period.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Secured Notes, if the Secured Notes
have become or been declared due and payable following an Event of Default or an
Amortization Event and such acceleration of maturity and its consequences have
not been rescinded and annulled, then payments of principal of and interest on
the Secured Notes shall be made in accordance with Section 5.07 hereof.
The Servicer will deliver to each Noteholder and the Indenture Trustee,
at the time of issuance of each Secured Note and in connection with (i) the
execution of the related Assignment by the Depositor, the Issuer and the
Indenture Trustee to effect the delivery by the Depositor to the Issuer (and the
Grant by the Issuer to the Indenture Trustee) of Mortgage Loans pursuant to
Section 2.12(b) and (ii) the issuance by the Issuer of a Trust Order to
authenticate additional Secured Notes pursuant to Section 2.11 hereof, the
Mortgage Loan Schedule that relates to such Secured Note. Each Secured Note
shall be secured by all of the Collateral, equally and ratably with each other
Secured Note issued hereunder.
Section 2.04. Denominations. The Secured Notes shall be issuable only
as registered Definitive Notes in the denominations equal to the Authorized
Denominations.
Section 2.05. Execution, Authentication, Delivery and Dating. The
Secured Notes shall be executed on behalf of the Trust by an Authorized Officer
of the Owner Trustee, acting at the direction of the Certificateholders. The
signature of such Authorized Officer of the Owner Trustee on the Secured Notes
may be manual or by facsimile.
Secured Notes bearing the manual or facsimile signature of an
individual who was at any time an Authorized Officer of the Owner Trustee shall
bind the Trust, notwithstanding that such individual has ceased to be an
Authorized Officer of the Owner Trustee prior to the authentication and delivery
of such Secured Notes or was not an Authorized Officer of the Owner Trustee at
the date of such Secured Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Trust may deliver Secured Notes executed on behalf of the
Trust to the Authenticating Agent for authentication, and the Authenticating
Agent shall authenticate and deliver such Secured Notes as provided in this
Indenture and not otherwise.
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Each Secured Note authenticated on the Closing Date shall be dated the
Closing Date. All other Secured Notes that are authenticated after the Closing
Date for any other purpose hereunder shall be dated the date of their
authentication.
No Secured Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Secured
Note a certificate of authentication substantially in the form provided for in
Section 2.02 hereof, executed by the Authenticating Agent by the manual
signature of one of its Authorized Officers or employees, and such certificate
of authentication upon any Secured Note shall be conclusive evidence, and the
only evidence, that such Secured Note has been duly authenticated and delivered
hereunder.
Section 2.06. Registration, Registration of Transfer and Exchange. The
Trust shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Trust shall provide for
the registration of Secured Notes and the registration of transfers of Secured
Notes. The Indenture Trustee is hereby initially appointed "Note Registrar" for
the purpose of registering Secured Notes and transfers of Secured Notes as
herein provided. The Indenture Trustee shall remain the Note Registrar
throughout the term hereof. Upon any resignation of the Indenture Trustee, the
Servicer, on behalf of the Trust, shall promptly appoint a successor, with the
approval of the Note Purchaser, or, in the absence of such appointment, the
Servicer, on behalf of the Trust, shall assume the duties of Note Registrar.
Upon surrender for registration of transfer of any Secured Note at the
office or agency of the Trust to be maintained as provided in Section 3.02
hereof, the Owner Trustee on behalf of the Trust, acting at the direction of the
Certificateholders, shall execute, and the Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Secured Notes of any authorized denominations and
of a like aggregate Note Principal Balance.
At the option of the Holder, Secured Notes may be exchanged for other
Secured Notes of any authorized denominations, and of a like aggregate Note
Principal Balance, upon surrender of the Secured Notes to be exchanged at such
office or agency. Whenever any Secured Notes are so surrendered for exchange,
the Owner Trustee shall execute, and the Authenticating Agent shall authenticate
and deliver, the Secured Notes that the Noteholder making the exchange is
entitled to receive.
All Secured Notes issued upon any registration of transfer or exchange
of Secured Notes shall be the valid obligations of the Trust, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Secured Notes surrendered upon such registration of transfer or exchange.
Every Secured Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in the form of the Assignment included at Exhibit A
attached hereto, duly executed by the Holder thereof or its attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Secured Notes, but the Note Registrar, on behalf of the Trust, may
require payment of a sum sufficient to cover any tax or other governmental
charge as may be imposed in connection with any registration of transfer or
exchange of Secured Notes, other than exchanges pursuant to Section 2.07 hereof
not involving any transfer or any exchange made by the Note Purchaser.
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Solely for the purposes of giving any consent, waiver, request or
demand pursuant hereto, any Secured Note registered in the name of the Servicer
or any Subservicer, or any Affiliate of any of them, shall be deemed not to be
outstanding and the undivided Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite percentage of Secured
Notes necessary to effect any such consent, waiver, request or demand has been
obtained. For purposes of any consent, waiver, request or demand of Noteholders
pursuant hereto, upon the Indenture Trustee's request, the Servicer shall
provide to the Indenture Trustee a notice identifying any of its Affiliates of
the Affiliates of any Subservicer that is a Noteholder as of the date(s)
specified by the Indenture Trustee in such request.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Secured Notes. If
(1) any mutilated Secured Note is surrendered to the Note Registrar or the Note
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Secured Note, and (2) there is delivered to the Note Registrar such
security or indemnity as may be required by the Note Registrar to save each of
the Trust, the Owner Trustee, the Note Purchaser and the Note Registrar
harmless, then, in the absence of notice to the Note Registrar that such Secured
Note has been acquired by a bona fide purchaser, the Owner Trustee on behalf of
the Trust, acting at the direction of the Certificateholders, shall execute and
upon its delivery of a Trust Request the Authenticating Agent shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Secured Note, a new Secured Note or Secured Notes of the same tenor
and aggregate initial principal amount bearing a number not contemporaneously
outstanding. If, after the delivery of such new Secured Note, a bona fide
purchaser of the original Secured Note in lieu of which such new Secured Note
was issued presents for payment such original Secured Note, the Note Registrar,
shall be entitled to recover such new Secured Note from the person to whom it
was delivered or any person taking therefrom, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expenses incurred by the Trust, the
Owner Trustee, the Note Purchaser or the Note Registrar in connection therewith.
If any such mutilated, destroyed, lost or stolen Secured Note shall have become
or shall be about to become due and payable, or shall have become subject to
redemption in full, instead of issuing a new Secured Note, the Trust may pay
such Secured Note without surrender thereof, except that any mutilated Secured
Note shall be surrendered.
Upon the issuance of any new Secured Note under this Section 2.07, the
Note Registrar, may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trust, the Indenture
Trustee or the Note Registrar) connected therewith.
Every new Secured Note issued pursuant to this Section 2.07 in lieu of
any destroyed, lost or stolen Secured Note shall constitute an original
contractual obligation of the Trust, whether or not the destroyed, lost or
stolen Secured 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 Secured Notes duly issued hereunder.
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The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Secured Notes.
Section 2.08. Payments of Principal and Interest. (a) Any installment
of interest or principal payable on any Secured Notes that is punctually paid or
duly provided for by the Trust on the applicable Payment Date shall be paid to
the Person in whose name such Secured Note (or one or more Predecessor Notes) is
registered at the close of business on the Record Date for such Secured Note and
such Payment Date by either (i) check mailed to such Person's address as it
appears in the Note Register on such Record Date, or (ii) by wire transfer of
immediately available funds to the account of a Noteholder, if such Noteholder
(A) is the registered holder of Definitive Notes having an initial principal
amount of at least $1,000,000 and (B) has provided the Indenture Trustee with
wiring instructions in writing by five (5) Business Days prior to the related
Record Date or has provided the Indenture Trustee with such instructions for any
previous Payment Date, except for the final installment of principal payable
with respect to such Secured Note, which shall be payable as provided in
subsection (b) of this Section 2.08. No fee may be charged by the Indenture
Trustee to a Holder for any payment made by wire transfer. Any installment of
interest or principal not punctually paid or duly provided for shall be payable
as soon as funds are available to the Indenture Trustee for payment thereof, or
if Section 5.07 applies, pursuant to Section 5.07. Notwithstanding the forgoing,
as long as JPMorgan Chase Bank is the holder of 100% of the aggregate
outstanding principal balance of the Secured Notes, all installments of
principal and interest shall be paid by wire transfer in immediately available
funds to JPMorgan Chase Bank, ABA#: ▇▇▇▇▇▇▇▇▇, A/C #: 00113327002, Account Name:
ABFS Balapointe Inc., Note Payment Account, Attn: ▇▇▇▇▇ ▇▇▇▇, Associate, Ref:
ABFS Warehouse Trust.
(b) All reductions in the Note Principal Balance of a Secured Note (or
one or more Predecessor Notes) effected by payments of installments of principal
made on any Payment Date shall be binding upon all Holders of such Secured Note
and of any Secured Note issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, whether or not such payment is noted on
such Secured Note. The final installment of principal of each Secured Note shall
be payable only upon presentation and surrender thereof on or after the Payment
Date therefor at the Corporate Trust Office of the Indenture Trustee located
within the United States of America pursuant to Section 3.02. Notwithstanding
the forgoing, as long as JPMorgan Chase Bank is the holder of 100% of the
aggregate outstanding principal balance of the Secured Notes, all installments
of principal and interest shall be paid by wire transfer in immediately
available funds JPMorgan Chase Bank, ABA#: ▇▇▇▇▇▇▇▇▇, A/C #: 00113327002,
Account Name: ABFS Balapointe Inc., Note Payment Account, Attn: ▇▇▇▇▇ ▇▇▇▇,
Associate, Ref: ABFS Warehouse Trust..
Whenever the Indenture Trustee expects that the entire unpaid Note
Principal Balance of any Secured Note will become due and payable on the next
Payment Date, other than pursuant to a redemption pursuant to Article X, it
shall, no later than two (2) Business Days prior to such Payment Date, telecopy
or hand deliver to each Person in whose name a Secured Note to be so retired is
registered at the close of business on such otherwise applicable Record Date a
notice to the effect that:
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(i) the Indenture Trustee expects that funds sufficient to pay
such final installment will be available in the Collection Account on
such Payment Date; and
(ii) if such funds are available, (A) such final installment
will be payable on such Payment Date, but only upon presentation and
surrender of such Secured Note at the office or agency of the Note
Registrar maintained for such purpose pursuant to Section 3.02 (the
address of which shall be set forth in such notice) and (B) no interest
shall accrue on such Secured Note after such Payment Date.
Notwithstanding the forgoing, as long as JPMorgan Chase Bank is the
holder of 100% of the aggregate outstanding principal balance of the
Secured Notes, all installments of principal and interest shall be paid
by wire transfer in immediately available funds to JPMorgan Chase Bank,
ABA#: ▇▇▇▇▇▇▇▇▇, A/C #: 00113327002, Account Name: ABFS Balapointe
Inc., Note Payment Account, Attn: ▇▇▇▇▇ ▇▇▇▇, Associate, Ref: ABFS
Warehouse Trust.
Notices in connection with redemptions of Secured Notes shall be mailed
to Noteholders in accordance with Section 10.02 hereof.
(c) Subject to the foregoing provisions of this Section 2.08, each
Secured Note delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Secured Note shall carry the rights to
unpaid principal and interest that were carried by such other Secured Note. Any
checks mailed pursuant to subsection (a) of this Section 2.08 and returned
undelivered shall be held in accordance with Section 3.03 hereof.
(d) Each (i) Monthly Report delivered to the Indenture Trustee pursuant
to the Sale and Servicing Agreement, (ii) Remittance Report, and (iii) report
regarding the Mortgage Loans delivered to the Indenture Trustee by the Servicer
pursuant to Section 7.16(b) of the Sale and Servicing Agreement, shall be
delivered by the Indenture Trustee to the Note Purchaser, the Servicer, the
Owner Trustee, the Depositor and each Noteholder as the statements required
pursuant to Section 8.07 hereof. Neither the Indenture Trustee nor the
Collateral Agent shall have any responsibility to recalculate, verify or
recompute information contained in any such tape, electronic data file or disk
or any such Monthly Report or Remittance Report.
Within ninety (90) days after the end of each calendar year, the
Indenture Trustee will be required to furnish to each Person who at any time
during the calendar year was a Noteholder, if requested in writing by such
person, a statement containing the information set forth in subclauses (a), (b)
and (c) in the definition of "Monthly Report," aggregated for such calendar year
or the applicable portion thereof during which such person was a Noteholder.
Such obligation will be deemed to have been satisfied to the extent that
substantially comparable information is provided pursuant to any requirements of
the Code as are from time to time in force.
From time to time (but no more than once per calendar month), upon the
written request of the Depositor and the Servicer or the Note Purchaser, the
Indenture Trustee shall report to the Depositor, the Servicer and the Note
Purchaser the amount then held in each Account (including investment earnings
accrued thereon) held by the Indenture Trustee and the identity of the
investments included therein. From time to time, at the request of the Note
Purchaser, the Indenture Trustee shall report to the Note Purchaser with respect
to the actual knowledge of a Responsible Officer, without independent
investigation, of any breach of any of the representations or warranties
relating to individual Mortgage Loans set forth in Section 4.01 of the Sale and
Servicing Agreement. The Indenture Trustee shall also provide the Note Purchaser
such other information within its control as may be reasonably requested by it.
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Section 2.09. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Secured Note, any agent on behalf of the Trust
including but not limited to the Indenture Trustee may treat the Person in whose
name any Secured Note is registered as the owner of such Secured Note (a) on the
applicable Record Date for the purpose of receiving payments of the principal of
and interest on such Secured Note and (b) on any other date for all other
purposes whatsoever, and none of the Trust, the Indenture Trustee or any other
agent of the Trust shall be affected by notice to the contrary.
Section 2.10. Cancellation. All Secured Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Registrar, be delivered to the Note Registrar and
shall be promptly canceled by it. The Owner Trustee, on behalf of the Trust,
shall deliver to the Note Registrar for cancellation any Secured Note previously
authenticated and delivered hereunder which the Owner Trustee, on behalf of the
Trust may have acquired in any manner whatsoever, and all Secured Notes so
delivered shall be promptly canceled by the Note Registrar. No Secured Notes
shall be authenticated in lieu of or in exchange for any Secured Notes cancelled
as provided in this Section 2.10, except as expressly permitted by this
Indenture. All cancelled Secured Notes held by the Note Registrar shall be held
by the Note Registrar in accordance with its standard retention policy, unless
the Owner Trustee, on behalf of the Trust shall direct by a Trust Order that
they be destroyed or returned to it.
Section 2.11. Authentication and Delivery of Secured Notes. The Secured
Notes shall be executed by an Authorized Officer of the Owner Trustee, on behalf
of the Trust, and delivered to the Authenticating Agent for authentication, and
thereupon the same shall be authenticated and delivered by the Authenticating
Agent, upon a Trust Request and upon receipt by the Authenticating Agent of all
of the following: ]
(a) A Trust Order authorizing the execution, authentication and
delivery of the Secured Notes and specifying the Note Principal Balance and the
Percentage Interest of such Secured Notes to be authenticated and delivered.
(b) With respect to the initial issuance of the Secured Notes on the
Closing Date, a Trust Order authorizing the execution and delivery of this
Indenture and the Sale and Servicing Agreement.
(c) One or more Opinions of Counsel (which opinion shall not be at the
expense of the Indenture Trustee or the Trust) addressed to the Authenticating
Agent and the Note Purchaser or upon which the Authenticating Agent and the Note
Purchaser are expressly permitted to rely, complying with the requirements of
Section 11.01, reasonably satisfactory in form and substance to the
Authenticating Agent and the Note Purchaser.
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In rendering the opinions set forth above, such counsel may rely upon
Officer's Certificates of the Trust, the Owner Trustee, the Originators, the
Depositor, the Servicer and the Indenture Trustee, without independent
confirmation or verification with respect to factual matters relevant to such
opinions. In rendering the opinions set forth above, such counsel need express
no opinion as to (A) the existence of, or the priority of the security interest
created by the Indenture against, any liens or other interests that arise by
operation of law and that do not require any filing or similar action in order
to take priority over a perfected security interest or (B) the priority of the
security interest created by this Indenture with respect to any claim or lien in
favor of the United States or any agency or instrumentality thereof (including
federal tax liens and liens arising under Title IV of ERISA).
(d) An Officer's Certificate of the Trust complying with the
requirements of Section 11.01 and stating that:
(i) the Trust is not in Default under this Indenture and the
issuance of the Secured Notes will not result in any breach of any of
the terms, conditions or provisions of, or constitute a default under,
the Trust's Certificate of Trust or any indenture, mortgage, deed of
trust or other agreement or instrument to which the Trust is a party or
by which it is bound, or any order of any court or administrative
agency entered in any proceeding to which the Trust is a party or by
which it may be bound or to which it may be subject, and that all
conditions precedent provided in this Indenture relating to the
authentication and delivery of the Secured Notes have been complied
with;
(ii) the Trust is the owner of each Mortgage Loan, free and
clear of any lien, security interest or charge, has not assigned any
interest or participation in any such Mortgage Loan (or, if any such
interest or participation has been assigned, it has been released) and
has the right to Grant each such Mortgage Loan to the Indenture
Trustee;
(iii) the information set forth in the Mortgage Loan Schedule
attached as Schedule I to the Assignments is correct;
(iv) the Trust has Granted to the Indenture Trustee all of its
right, title and interest in each Mortgage Loan; and
(v) as of the Closing Date (or any Transfer Date), no lien in
favor of the United States described in Section 6321 of the Code, or
lien in favor of the Pension Benefit Guaranty Corporation described in
Section 4068(a) of the ERISA, has been filed as described in
subsections 6323(f) and 6323(g) of the Code upon any property belonging
to the Trust.
(e) An executed counterpart of the Sale and Servicing Agreement.
(f) An executed counterpart of the Assignments.
Section 2.12. Limitations on Transfer of the Secured Notes. (a) Any
transfer of a Secured Note shall be made in accordance with the Securities Act
and the Investment Company Act. Each prospective purchaser (other than the Note
Purchaser) and any subsequent transferee of a Secured Note other than the
Depositor or an affiliate of the Depositor (each, a "Prospective Owner") shall
represent and warrant in writing, to the Indenture Trustee and the Note
Registrar and any of their respective successors that:
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(i) Such Person is duly authorized to purchase the Secured
Notes and its purchase of investments having the characteristics of the
Secured Notes is authorized under, and not directly or indirectly in
contravention of, any law, charter, trust instrument or other operative
document, investment guidelines or list of permissible or impermissible
investments that is applicable to the investor.
(ii) Such Person understands that each holder of a Secured
Note, by virtue of its acceptance thereof, assents to the terms,
provisions and conditions of the Indenture.
(b) Each Prospective Owner of a Secured Note (other than an Note
Purchaser) shall represent and warrant in writing, to the Indenture Trustee and
the Note Registrar and any of their respective successors that:
(i) Such Person is a Qualified Purchaser and either (A) a QIB
and is aware that the seller of such Secured Note may be relying on the
exemption from the registration requirements of the Securities Act
provided by Rule 144A and is acquiring such Secured Note for its own
account or for the account of one or more qualified institutional
buyers, for whom it is authorized to act, or (B) an institutional
investor that is an "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act).
(ii) It understands that such Secured Notes have not been
registered under the Securities Act, and the Trust has not been
registered under the Investment Company Act, and that, if in the future
it decides to offer, resell, pledge or otherwise transfer such Secured
Notes, such Secured Notes may be offered, resold, pledged or otherwise
transferred only (A) pursuant to a Registration Statement which has
been declared effective under the Securities Act, (B) to a Qualified
Purchaser, and (C) for so long as such Secured Notes are eligible for
resale pursuant to Rule 144A under the Securities Act, to a person whom
the seller reasonably believes is a QIB, which is purchasing such
Secured Notes for its own account or for the account of a qualified
institutional buyer, to whom notice is given that the transfer is being
made in reliance on Rule 144A, or (D) to an institutional "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of
Rule 501 under the Securities Act, which is acquiring such Secured
Notes for its own account or for the account of such an institutional
"accredited investor," for investment purposes and not with a view to,
or for offer or sale in connection with, any distribution in violation
of the Securities Act, in each case in compliance with the requirements
of the Indenture.
In the event that a transfer of a Secured Note is to be made in
reliance upon an exemption from the Securities Act, Investment Company Act or
state securities laws, in order to assure compliance with the Securities Act,
the Investment Company Act and such laws, the prospective transferor and
transferee shall certify to the Indenture Trustee in writing the facts
surrounding the transfer in substantially the forms set forth in Exhibit C or
Exhibit D and Exhibit E.
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The Servicer on behalf of the Depositor shall provide to any Holder of
a Secured Note and any prospective transferee designated by any such Holder,
information regarding the Secured Notes and the Mortgage Loans and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) and Section 3(c)(7) of the Investment Company Act for
transfer of any such Secured Note without registration under the Securities Act
or the Investment Company Act pursuant to the registration exemption provided
thereunder. Each Holder of a Secured Note desiring to effect such a transfer
shall, and does hereby agree to, indemnify the Issuer, the Owner Trustee, the
Indenture Trustee and the Depositor against any liability that may result if the
transfer is not so exempt or is not made in accordance with federal and state
securities laws.
Each Secured Note shall contain a legend substantially similar to the
applicable legend provided in Exhibit A stating that transfer of such Secured
Notes is subject to certain restrictions and referring prospective purchasers of
the Secured Notes to this Section 2.12 with respect to such restrictions.
(c) Notwithstanding anything herein to the contrary, no Originator, or
any of their Affiliates or agents, may be the transferee of a Secured Note.
Section 2.13. Holding of Secured Notes. With respect to each Secured
Note executed as provided in Section 2.05, the Indenture Trustee shall cause the
Authorized Representative who executed such Secured Note to deliver such Secured
Note to the Note Purchaser or such other Person as the Note Purchaser shall
designate in writing from time to time. The Note Purchaser hereby initially
directs that, until further notice, each Secured Note be delivered to its
custodian, as follows:
JPMorgan Chase Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Account: ABFS Mortgage Loan Warehouse Trust 2003-1
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇)-▇▇▇-▇▇▇▇
Section 2.14. Reserved.
Section 2.15. Release of Collateral. The Issuer or the Servicer, on
behalf of the Issuer, shall be entitled to obtain a release from the lien of
this Indenture for any Collateral at any time, (i) after liquidation of the
Collateral in accordance with Section 7.06 of the Sale and Servicing Agreement
and the deposit of all Liquidation Proceeds and Insurance Proceeds in the
Collection Account or (ii) upon the payment in full of the Mortgage Loans or the
sale or other disposition of the Collateral. Any such release shall be subject
to the condition that the Issuer shall have delivered to the Indenture Trustee a
Trust Request (A) identifying the Collateral to be released, (B) requesting the
release thereof, (C) setting forth the amount deposited in the Collection
Account with respect thereto, and (D) certifying that the amount deposited in
the Collection Account equals the entire amount of Insurance Proceeds and
Liquidation Proceeds received with respect to such Collateral.
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ARTICLE III
COVENANTS
Section 3.01. Payment of Secured Notes. The Servicer, on behalf of the
Trust will pay or cause to be duly and punctually paid the principal of, and
interest on, the Secured Notes in accordance with the terms of the Secured Notes
and this Indenture. The Secured Notes shall be recourse obligations of the
Trust. If any other provision of this Indenture conflicts or is deemed to
conflict with the provisions of this Section 3.01, the provisions of this
Section 3.01 shall control.
Section 3.02. Maintenance of Office or Agency. The Indenture Trustee
will always maintain its corporate trust office at a location in the United
States of America where Secured Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Trust in
respect of the Secured Notes and this Indenture may be served. Such location
shall be the Corporate Trust Office of the Indenture Trustee.
Section 3.03. Money for Secured Note Payments to Be Held In Trust. All
payments of amounts due and payable with respect to any Secured Notes that are
to be made from amounts withdrawn from the Collection Account pursuant to
Sections 5.07 or 8.02 hereof shall be made on behalf of the Trust by the
Indenture Trustee, and no amounts so withdrawn from the Collection Account for
payments on the Secured Notes shall be paid over to the Trust under any
circumstances except as provided in this Section 3.03 or in Sections 5.07 or
8.02 hereof.
If the Trust shall have a Note Registrar that is not also the Indenture
Trustee, such Note Registrar shall furnish, no later than the fifth (5th)
calendar day after each Record Date, a list, in such form as such Indenture
Trustee may reasonably require, of the names and addresses of the Holders of
Secured Notes and of the number of individual Secured Notes held by each such
Holder.
Whenever the Trust shall have a Paying Agent other than the Indenture
Trustee, the Servicer, on behalf of the Trust, will, on or before the Business
Day next preceding each Payment Date, direct the Indenture Trustee to deposit
with such Paying Agent an aggregate sum sufficient to pay the amounts then
becoming due (to the extent funds are then available for such purpose in the
Collection Account), such sum to be held in trust for the benefit of the Persons
entitled thereto. Any moneys deposited with a Paying Agent in excess of an
amount sufficient to pay the amounts then becoming due on the Secured Notes with
respect to which such deposit was made shall, upon Trust Order, be paid over by
such Paying Agent to the Indenture Trustee for application in accordance with
Article VIII hereof.
Subject to the prior written consent of the Note Purchaser, any Paying
Agent other than the Indenture Trustee may be appointed by Trust Order and at
the expense of the Trust. The Trust shall not appoint any Paying Agent (other
than the Indenture Trustee) that is not, at the time of such appointment, a
depository institution or trust company whose obligations would be Permitted
Investments pursuant to clause (b) of the definition of the term "Permitted
Investments". The Servicer, on behalf of the Trust, will cause each Paying Agent
other than the Indenture Trustee to execute and deliver to the Indenture Trustee
and the Owner Trustee, on behalf of the Trust, an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section 3.03, that such Paying Agent will:
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(a) allocate all sums received for payment to the Holders of Secured
Notes on each Payment Date among such Holders in the proportion specified in the
Remittance Report, in each case to the extent permitted by applicable law;
(b) hold all sums held by it for the payment of amounts due with
respect to the Secured Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and pay such sums to such Persons as herein provided;
(c) if such Paying Agent is not the Indenture Trustee, immediately
resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums
held by it in trust for the payment of the Secured Notes if at any time the
Paying Agent ceases to meet the standards set forth above required to be met by
a Paying Agent at the time of its appointment;
(d) if such Paying Agent is not the Indenture Trustee, give the
Indenture Trustee notice of any Default by the Trust (or any other obligor upon
the Secured Notes) in the making of any payment required to be made with respect
to any Secured Notes for which it is acting as Paying Agent;
(e) if such Paying Agent is not the Indenture Trustee, at any time
during the continuance of any such Default, upon the written request of the
Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in
trust by such Paying Agent;
(f) comply with all requirements of the Code, and all regulations
thereunder, with respect to withholding from any payments made by it on any
Secured Notes of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith;
provided, further, however, that with respect to withholding and reporting
requirements applicable to any of the Secured Notes, the Servicer, on behalf of
the Trust, has provided the calculations pertaining thereto to the Indenture
Trustee and the Paying Agent;
(g) on the Determination Date, the Paying Agent shall prepare and
provide to the Indenture Trustee, the Servicer, the Owner Trustee and the Note
Purchaser a Remittance Report containing the following information;
(i) the amount of the payment with respect to the Secured
Notes and the Trust Certificates;
(ii) the amount of such payments allocable to principal,
separately identifying the aggregate amount of any Prepayments or other
unscheduled recoveries of principal included therein;
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(iii) the amount of such payments allocable to interest and
the calculation thereof; and
(iv) the Note Principal Balance of each Secured Note as of
such Payment Date after giving effect to any payment of principal on
such Payment Date.
Such information shall, with respect to the Secured Notes, be presented
on the basis of each Secured Note's actual denomination. In addition, by January
31 of each calendar year following any year during which the Secured Notes are
outstanding, the Paying Agent shall furnish a report to each Holder of record,
if so requested, in writing at any time during each calendar year as to the
aggregate of amounts reported pursuant to (i), (ii), (iii) and (iv) with respect
to the Secured Notes for such calendar year.
The Trust may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or any other purpose, by Trust
Order direct any Paying Agent, if other than the Indenture Trustee, to pay to
the Indenture Trustee all sums held in trust by such Paying Agent, such sums to
be held by the Indenture Trustee upon the same trusts as those upon which such
sums were held by such Paying Agent; and upon such payment by any Paying Agent
to the Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money held by the Indenture Trustee or any Paying Agent in trust
for the payment of any amount due with respect to any Secured Note and remaining
unclaimed for two and one-half years after such amount has become due and
payable to the Holder of such Secured Note (or if earlier, three months before
the date on which such amount would escheat to a governmental entity under
applicable law) shall be discharged from such trust and paid to the Trust; and
the Holder of such Secured Note shall thereafter, as an unsecured general
creditor, look only to the Trust for payment thereof (but only to the extent of
the amounts so paid to the Trust), and all liability of the Indenture Trustee or
such Paying Agent with respect to such trust money shall thereupon cease. The
Indenture Trustee may adopt and employ, at the expense of the Trust, any
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Secured Notes have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or any Paying Agent, at the last address of
record for each such Holder).
Section 3.04. Existence of Trust. (a) Subject to clauses (b) and (c) of
this Section 3.04, the Trust will keep in full effect its existence, rights and
franchises as a statutory trust under the laws of the State of Delaware or under
the laws of any other state of the United States of America, and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Secured Notes and the other Basic
Documents.
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(b) The Trust is not permitted under the Trust Agreement to consolidate
or merge with any other entity. Nevertheless, should the Trust merge or
consolidate with another entity involuntarily, or in contravention of the Trust
Agreement, whether by operation of law or otherwise, subject to Section 3.09(g)
hereof, and with the prior written consent of the Note Purchaser, any entity
into which the Trust may be merged or with which it may be consolidated, or any
entity resulting from any merger or consolidation to which the Trust shall be a
party, shall be the successor issuer under this Indenture without the execution
or filing of any paper, instrument or further act to be done on the part of the
parties hereto, anything in any agreement relating to such merger or
consolidation, by which any such Trust may seek to retain certain powers, rights
and privileges therefore obtaining for any period of time following such merger
or consolidation to the contrary notwithstanding (other than Section 3.09(g)).
For the avoidance of doubt, the parties hereto acknowledge that the
Indenture Trustee does not have the authority, acting alone, to enter into any
agreement for the merger or consolidation of the Trust with any other entity.
(c) Upon any consolidation or merger of or other succession to the
Trust in accordance with this Section 3.04, the Person formed by or surviving
such consolidation or merger (if other than the Trust) may exercise every right
and power of, and shall have all of the obligations of, the Trust under this
Indenture with the same effect as if such Person had been named as the issuer
herein.
Section 3.05. Protection of Trust Estate. (a) On or before the initial
Transfer Date, the Trust shall cause to be filed UCC-1 Financing Statements
naming the Indenture Trustee as "secured party" and the Trust as "debtor" and
describing the Mortgage Loans being pledged by the Trust to the Indenture
Trustee with the office of the Secretary of State in which the Trust was formed
and such other jurisdictions as shall be necessary to perfect a security
interest in the Trust Estate.
(b) The Trust will, from time to time, execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action as may be necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate as made by this Indenture;
(ii) maintain or preserve the lien of this Indenture or carry
out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iv) enforce any of the Mortgage Loans or the Sale and
Servicing Agreement; or
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, the Noteholders and the Note Purchaser
in the Mortgage Loans and the other property held as part of the Trust
Estate against the claims of all Persons and parties.
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(c) The Indenture Trustee shall not, and shall not permit the
Collateral Agent to, remove any portion of the Trust Estate that consists of
money or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the Closing Date or cause or permit
ownership or the pledge of any portion of the Trust Estate that consists of
book-entry securities to be recorded on the books of a Person located in a
different jurisdiction from the jurisdiction in which such ownership or pledge
was recorded at such time unless the Indenture Trustee shall have first received
an Opinion of Counsel to the effect that the lien and security interest created
by this Indenture with respect to such property will continue to be maintained
after giving effect to such action or actions.
Section 3.06. Opinions as to the Trust Estate. On or before April 30th
in each calendar year, beginning in 2004, the Servicer, on behalf of the Trust,
shall furnish to the Indenture Trustee and the Note Purchaser an Opinion of
Counsel reasonably satisfactory in form and substance to the Indenture Trustee
and the Note Purchaser either stating that, in the opinion of such counsel, such
action has been taken as is necessary to maintain the lien and security interest
created by this Indenture and reciting the details of such action or stating
that in the opinion of such counsel no such action is necessary to maintain such
lien and security interest. Such Opinion of Counsel shall also describe all such
action, if any, that will, in the opinion of such counsel, be required to be
taken to maintain the lien and security interest of this Indenture with respect
to the Trust Estate until May 1st in the following calendar year.
Section 3.07. Performance of Obligations. (a) The Trust shall
punctually perform and observe all of its obligations under this Indenture and
the other Basic Documents.
(b) The Trust shall not take any action and will not permit any action
to be taken by others that would release any Person from any of such Person's
covenants or obligations under any of the Servicer's Loan Files or under any
instrument included in the Trust Estate, or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the documents or instruments contained in
the Servicer's Loan Files, except as expressly permitted in this Indenture, the
other Basic Documents or such document included in the Servicer's Loan File or
other instrument or unless such action will not adversely affect the interests
of the Noteholders and the Note Purchaser.
(c) If the Servicer or the Owner Trustee, on behalf of the Trust, shall
have knowledge of the occurrence of a default under the Sale and Servicing
Agreement, the Servicer or the Owner Trustee, as applicable, shall promptly
notify the Indenture Trustee and the Note Purchaser thereof, and, in the case of
the Servicer, shall specify in such notice the action, if any, the Servicer is
taking with respect to such default.
(d) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Indenture Trustee shall promptly notify
the Note Purchaser. As soon as any successor Servicer is appointed, the
Indenture Trustee shall notify the Note Purchaser, specifying in such notice the
name and address of such successor Servicer.
Section 3.08. Investment Company Act. The Trust shall at all times
conduct its operations so as not to be subject to, or shall comply with, the
requirements of the Investment Company Act of 1940, as amended (or any successor
statute), and the rules and regulations thereunder.
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Section 3.09. Negative Covenants. The Trust shall not:
(a) sell, transfer, exchange or otherwise dispose of any portion of the
Trust Estate, except as expressly permitted by this Indenture and the other
Basic Documents;
(b) claim any credit on, or make any deduction from, the principal of,
or interest on, any of the Secured Notes by reason of the payment of any taxes
levied or assessed upon any portion of the Trust Estate;
(c) engage in any business or activity other than as permitted by the
Trust Agreement or other than in connection with, or relating to, the issuance
of the Secured Notes pursuant to this Indenture, or amend the Trust Agreement,
as in effect on the Closing Date, other than in accordance with Section 11.01 of
the Trust Agreement;
(d) incur, issue, assume or otherwise become liable for an indebtedness
other than the Secured Notes;
(e) incur, assume, guaranty or agree to indemnify any Person with
respect to any indebtedness of any Person, except for such indebtedness as may
be incurred by the Trust in connection with the issuance of the Secured Notes
pursuant to this Indenture;
(f) subject to Article IX of the Trust Agreement, dissolve or liquidate
in whole or in part (until the Secured Notes are paid in full);
(g) (i) permit the validity or effectiveness of this Indenture or any
Grant to be impaired, or permit the lien of this Indenture to be impaired,
amended, hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations under this Indenture,
except as may be expressly permitted hereby, (ii) permit any lien, charge,
security interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or burden the
Trust Estate or any part thereof or any interest therein or the proceeds
thereof, or (iii) permit the lien of this Indenture not to constitute a valid
perfected first priority security interest in the Trust Estate;
(h) take any other action that should reasonably be expected to, or
fail to take any action if such failure should reasonably be expected to, cause
the Trust to be taxable as (x) an association pursuant to Section 7701 of the
Code or (y) a taxable mortgage pool pursuant to Section 7701(i) of the Code;
(i) merge with or into or consolidate with any other Person;
(j) change its name, chief executive office or location where its books
and records are kept with respect to the Mortgage Loans without filing UCC-1
financing statements, amendments and continuation statements required to be
filed to create in favor of the Indenture Trustee, for the benefit of the
Noteholders, a perfected security interest in the Trust Estate and delivering to
the Indenture Trustee, the Servicer and the Note Purchaser an Opinion of Counsel
to such effect;
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(k) without obtaining the prior written consent of the Note Purchaser
in each case, either (i) amend, supplement or otherwise modify (or agree to
amend, supplement or otherwise modify) the Trust's organizational documents
(unless such amendment, supplement or other modification cannot reasonably be
expected to have a Material Adverse Effect on the interests of the Noteholders
or (ii) amend, supplement or otherwise modify (or agree to amend, supplement or
otherwise modify, or, to the extent its consent is required therefor, consent to
any amendment or supplement to or modification of) any Basic Document;
(l) make any distributions to any security holder other than as
provided in the Basic Documents;
(m) liquidate any Permitted Investment prior to its stated maturity;
(n) engage in activity contrary to the status of the Trust as a
qualified special purpose entity under the accounting literature then in effect:
or
(o) engage in activity contrary to Section 2.03(b) of the Trust
Agreement.
Section 3.10. Annual Statement as to Compliance. On or before April 30,
2004, and each April 30 thereafter, the Servicer, on behalf of the Trust, shall
deliver to the Indenture Trustee, the Note Purchaser and the Depositor a written
statement, signed by an Authorized Officer of the Servicer, on behalf of the
Trust, stating that:
(i) a review of the fulfillment by the Trust during such year
of its obligations under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Trust has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a Default in the fulfillment of any such covenant or condition,
specifying each such Default known to such Authorized Officer and the
nature and status thereof.
Section 3.11. Restricted Payments. The Trust shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the Trust
or otherwise with respect to any ownership or equity interest or security in or
of the Trust or to the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Trust may make, or cause to be made, distributions to the
Servicer, the Indenture Trustee, the Owner Trustee and the holder of
Certificates as contemplated by, and to the extent funds are available for such
purpose under this Indenture and the other Basic Documents and the Trust will
not, directly or indirectly, make or cause to be made payments to or
distributions from any Collection Account except in accordance with this
Indenture.
Section 3.12. Treatment of Secured Notes as Debt for Tax Purposes. For
purposes of federal, state and local income, franchise and any other income
taxes, the Trust will treat the Secured Notes as indebtedness, and hereby
instructs the Indenture Trustee, the Paying Agent and the Servicer, on behalf of
the Trust to treat the Secured Notes as indebtedness for all applicable tax
reporting purposes.
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Section 3.13. Notice of Events of Default. The Servicer, on behalf of
the Trust, shall give the Indenture Trustee, the Note Purchaser and the
Depositor prompt written notice of each Event of Default hereunder and each
Default on the part of the Servicer or the Originators of their obligations.
Section 3.14. Further Instruments and Acts. Upon written request of the
Indenture Trustee or the Note Purchaser, the Owner Trustee, on behalf of the
Trust, and at the direction of the Certificateholders, 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 3.15. Purpose. The funds derived from issuing and selling the
Secured Notes will be used solely to purchase Mortgage Loans and other
Collateral from the Depositor.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. Whenever the
following conditions shall have been satisfied:
(a) the entire unpaid Note Principal Balance of the Secured Notes not
theretofore delivered to the Indenture Trustee for cancellation has been paid
and discharged;
(b) the Servicer, on behalf of the Trust, has paid or caused to be paid
all other sums payable hereunder by the Servicer; and
(c) the Servicer, on behalf of the Trust, has delivered to the
Indenture Trustee and the Note Purchaser an Officers' Certificate and an Opinion
of Counsel satisfactory in form and substance to the Indenture Trustee and the
Note Purchaser each stating that all conditions precedent herein providing for
the satisfaction and discharge of this Indenture have been complied with;
then, upon a Trust Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the
Indenture Trustee and each co-trustee and separate trustee, if any, then acting
as such hereunder shall, at the expense of the Trust (or of the Servicer in the
case of a redemption by the Servicer pursuant to Section 10.01 hereof), execute
and deliver all such instruments as may be necessary to acknowledge the
satisfaction and discharge of this Indenture and shall pay, or assign or
transfer and deliver, to the Trust or upon Trust Order all cash, securities and
other property held by it as part of the Trust Estate remaining after
satisfaction of the conditions set forth in clauses (a) and (b) above.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Indenture Trustee and any Paying Agent to the Trust and the
Holders of Secured Notes under Section 3.03 hereof, the obligations of the
Indenture Trustee to the Holders of Secured Notes under Section 4.02 hereof and
the provisions of Section 2.07 hereof with respect to lost, stolen, destroyed or
mutilated Secured Notes, registration of transfers of Secured Notes and rights
to receive payments of principal of and interest on the Secured Notes shall
survive.
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Section 4.02. Application of Trust Money. All money deposited with the
Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Secured Notes
and this Indenture, to the payment, either directly or through any Paying Agent,
as the Indenture Trustee may determine, to the Persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with the
Indenture Trustee.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default. "Event of Default", wherever used
herein, means, with respect to Secured Notes issued hereunder, any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) if the Trust shall fail to distribute or cause to be distributed to
the Indenture Trustee, for the benefit of the holders of the Secured Notes, on
any Payment Date, any Interest Payment Amount due and payable on the Secured
Notes on such Payment Date;
(b) if the Trust shall fail to distribute or cause to be distributed to
the Indenture Trustee, for the benefit of the holders of the Secured Notes, (x)
on any Payment Date, an amount equal to the Principal Payment Amount due on the
Secured Notes on such Payment Date, to the extent that sufficient funds are on
deposit in the Collection Account or (y) on the Final Stated Maturity Date for
any Secured Notes, the aggregate outstanding Note Principal Balance of such
Secured Notes;
(c) if the Trust shall breach or default in the due observance of any
one or more of the covenants set forth in Section 3.09 hereof;
(d) if the Trust shall consent to the appointment of a custodian,
receiver, trustee or liquidator (or other similar official) of itself, or of a
substantial part of its property, or shall admit in writing its inability to pay
its debts generally as they come due, or a court of competent jurisdiction shall
determine that the Trust is generally not paying its debts as they come due, or
the Trust shall make a general assignment for the benefit of creditors;
(e) if the Trust shall file a voluntary petition in bankruptcy or a
voluntary petition or an answer seeking reorganization in a proceeding under any
bankruptcy laws (as now or hereafter in effect) or an answer admitting the
material allegation of a petition filed against the Trust in any such
proceeding, or the Trust shall, by voluntary petition, answer or consent, seek
relief under the provisions of any now existing or future bankruptcy or other
similar law providing for the reorganization or winding-up of debtors, or
providing for an agreement, composition, extension or adjustment with its
creditors;
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(f) if an order, judgment or decree shall be entered in any proceeding
by any court of competent jurisdiction appointing, without the consent (express
or legally implied) of the Trust, a custodian, receiver, trustee or liquidator
(or other similar official) of the Trust or any substantial part of its
property, or sequestering any substantial part of its respective property, and
any such order, judgment or decree or appointment or sequestration shall remain
in force undismissed, unstayed or unvacated for a period of thirty (30) days
after the date of entry thereof;
(g) if a petition against the Trust in a proceeding under applicable
bankruptcy laws or other insolvency laws, as now or hereafter in effect, shall
be filed and shall not be stayed, withdrawn or dismissed within thirty (30) days
thereafter, or if, under the provisions of any law providing for reorganization
or winding-up of debtors which may apply to the Trust, any court of competent
jurisdiction shall assume jurisdiction, custody or control of the Trust or any
substantial part of its property, and such jurisdiction, custody or control
shall remain in force unrelinquished, unstayed or unterminated for a period of
thirty (30) days;
(h) if there shall have occurred a Servicer Event of Default under the
Sale and Servicing Agreement which has not been cured or waived;
(i) a Shortfall exists under Section 2.19 of the Sale and Servicing
Agreement and such Shortfall has not been cured within the applicable cure
period, or if, prior to expiration of such period, the Depositor has notified
the Note Purchaser in writing that the Depositor does not intend to effect the
Minimum Margin Contribution;
(j) the Trust shall have become an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or shall have come
under the "control" of an "investment company" under the Investment Company Act
of 1940, as amended;
(k) the failure on the part of any of the Sponsor, the Originators or
the Depositor to observe or perform in any material respect any material
covenants or agreements of any of the Sponsor, the Originators or Depositor
under the Sale and Servicing Agreement which failure continues for a period of
fifteen (15) days after written notice or actual knowledge thereof;
(l) any representation or warranty made by any of the Sponsor, the
Originators or the Depositor pursuant to the Sale and Servicing Agreement shall
prove to have been incorrect when made in any material respect when made or
delivered and which continues to be incorrect in any material respect for a
period of fifteen (15) days after written notice or actual knowledge thereof;
(m) any representation or warranty made or deemed to be made by the
Trust in any Basic Document or in any written certificates or statement made or
entered into in connection therewith shall prove to have been incorrect when
made in any material respect and continues to be incorrect in any material
respect for a period of fifteen (15) days after the Trust shall have written
notice thereof; or
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(n) the Trust fails to comply with any of its other agreements or
covenants in, or provisions of, the Secured Notes or this Indenture and the
failure to so comply materially and adversely affects the interests of the
Holders of the Secured Notes and continues to materially and adversely affect
the interests of the Holders of the Secured Notes for a period of thirty (30)
days after the earlier of the date on which (i) the Trust obtains knowledge
thereof or (ii) the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Trust by the Indenture Trustee
or the Trust and the Indenture Trustee by the Majority Noteholders.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default or an Amortization Event occurs and is continuing, then and in
every such case, but with the consent of the Note Purchaser, the Indenture
Trustee may, and on request of the Note Purchaser, or, with the prior written
consent of the Note Purchaser, the Holders of Secured Notes representing not
less than 50% of the Note Principal Balance of the Outstanding Secured Notes of
the Secured Notes, shall, declare all the Secured Notes to be immediately due
and payable by a notice in writing to the Trust (and to the Indenture Trustee if
given by Noteholders), and upon any such declaration such Secured Notes, in an
amount equal to the entire unpaid Note Principal Balance of such Secured Notes,
together with accrued and unpaid interest thereon to the date of such
acceleration, shall become immediately due and payable, all subject to the prior
written consent of the Note Purchaser.
At any time after such a declaration of acceleration of maturity of the
Secured Notes has been made and before a judgment or decree for payment of the
money due has been obtained by the Indenture Trustee as hereinafter provided in
this Article V, the Note Purchaser, or the Holders of Secured Notes representing
more than 50% of the Note Principal Balance of the Outstanding Secured Notes,
with the prior written consent of the Note Purchaser, by written notice to the
Trust and the Indenture Trustee, may rescind and annul such declaration and its
consequences if:
(a) the Trust has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(i) all payments of principal of, and interest on, all
Outstanding Secured Notes and all other amounts that would then be due
hereunder or upon such Secured Notes if the Event of Default or
Amortization Event giving rise to such acceleration had not occurred;
and
(ii) all sums paid by the Indenture Trustee hereunder and the
reasonable compensation, expenses and disbursements of the Indenture
Trustee, its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the principal
of Secured Notes that have become due solely by such acceleration, have been
cured or waived as provided in Section 5.14 hereof.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
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Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. Subject to the provisions of Section 3.01 hereof and the
following sentence, if an Event of Default or an Amortization Event occurs and
is continuing, the Indenture Trustee may, and at the prior written direction of
Majority Noteholders and with the prior written consent of the Note Purchaser
shall, proceed to protect and enforce its rights and the rights of the
Noteholders by any Proceedings the Indenture Trustee deems appropriate to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or enforce any other proper remedy. Any Proceedings brought by
the Indenture Trustee, on behalf of the Noteholders, or any Noteholder against
the Trust shall be limited to the preservation, enforcement and foreclosure of
the liens, assignments, rights and security interests under the Indenture and no
attachment, execution or other unit or process shall be sought, issued or levied
upon any assets, properties or funds of the Trust, other than the Trust Estate
relative to the Secured Notes in respect of which such Event of Default or an
Amortization Event has occurred. If there is a foreclosure of any such liens,
assignments, rights and security interests under this Indenture, by private
power of sale or otherwise, no judgment for any deficiency upon the indebtedness
represented by the Secured Notes may be sought or obtained by the Indenture
Trustee or any Noteholder against the Trust; provided, that notwithstanding the
foregoing, nothing shall limit the ability of the Indenture Trustee from
proceeding against the Sponsor in respect of its obligations set forth in
Section 4.03 of the Sale and Servicing Agreement. The Indenture Trustee shall be
entitled to recover the costs and expenses expended by it pursuant to this
Article V including reasonable compensation, expenses and disbursements of the
Indenture Trustee, its agents and counsel.
Section 5.04. Remedies. (a) If an Event of Default or Amortization
Event shall have occurred and be continuing and the Secured Notes have been
declared due and payable and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, and at the prior written
direction of Majority Noteholders and with the prior written consent of the Note
Purchaser (subject to Section 5.17 hereof, to the extent applicable) shall, for
the benefit of the Noteholders, do one or more of the following:
(i) institute Proceedings for the collection of all amounts
then payable on the Secured Notes, or under this Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Trust moneys adjudged due, subject in all cases to the
provisions of Sections 3.01 and 5.03 hereof;
(ii) in accordance with Section 5.17 hereof, sell the Trust
Estate or any portion thereof or rights or interest therein, at one or
more public or private Sales called and conducted in any manner
permitted by law and as permitted by the Sale and Servicing Agreement;
(iii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iv) exercise any remedies of a secured party under the
Uniform Commercial Code and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture Trustee or
the Holders of the Secured Notes and the Note Purchaser hereunder; and
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(v) refrain from selling the Trust Estate and apply all funds
on deposit in each of the Accounts pursuant to Section 5.07 hereof.
(b) Upon the occurrence of an Amortization Event or an Event of Default
under Section 5.01 that has not been cured by the Depositor or the Trust within
the applicable cure period provided in the Sale and Servicing Agreement, the
Indenture Trustee may, and at the prior written direction of Majority
Noteholders and with the prior written consent of the Note Purchaser shall take
any one of the following courses of action: (i) subject to providing prior
written notice thereof to the Depositor, the Noteholders and the Note Purchaser,
sell the Sold Mortgage Loans in the manner set forth in Section 13.01 of the
Sale and Servicing Agreement; (ii) apply all collections on the Sold Mortgage
Loans to pay outstanding principal on the Secured Notes (but solely after
payment of any outstanding Servicing Fees, Indenture Trustee Fees, and interest
payments on the Secured Notes due on such Payment Date); (iii) apply the
collections on the Sold Mortgage Loans in the priorities set forth in Section
5.07; provided that the payment of any outstanding Indenture Trustee Fees and
Servicing Fees shall not be made subordinate to payment of principal or interest
on the Secured Notes; (iv) require the Depositor to transfer additional Mortgage
Loans to the Trust in accordance with the procedures set forth in the Sale and
Servicing Agreement and this Indenture; (v) increase the per annum interest rate
on the Secured Notes to LIBOR plus 5.00% or any lesser rate the Note Purchaser
determines in its sole discretion to be appropriate; (vi) arrange for the
transfer of servicing of the Mortgage Loans to an newly appointed successor
servicer; or (vii) waive any such Amortization Event or an Event of Default
indefinitely or for a specific period of time as it deems appropriate.
(c) Upon the occurrence of an Event of Default under Section 5.01 that
has not been cured by the Depositor or the Trust within the applicable cure
period provided in the Sale and Servicing Agreement, the Note Purchaser may take
action in the manner set forth in Section 12.16 of the Sale and Servicing
Agreement.
Section 5.05. Indenture Trustee May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, composition or other judicial Proceeding relative
to the Trust or any other obligor upon any of the Secured Notes or the property
of the Trust or of such other obligor or their creditors, the Indenture Trustee
(irrespective of whether the Secured Notes shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand on the Trust for the payment of any
overdue principal or interest) shall, with the prior written consent of the Note
Purchaser, be entitled and empowered, by intervention in such Proceeding or
otherwise to:
(a) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Secured Notes and file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee (including any claim for the reasonable compensation,
expenses and disbursements of the Indenture Trustee, its agents and counsel),
the Noteholders and the Note Purchaser allowed in such Proceeding, and
(b) collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any receiver,
assignee, trustee, liquidator, or sequestrator (or other similar official) in
any such Proceeding is hereby authorized by each Noteholder and the Note
Purchaser to make such payments to the Indenture Trustee and, in the event that
the Indenture Trustee shall consent to the making of such payments directly to
the Noteholders and the Note Purchaser, to pay to the Indenture Trustee any
amount due to it for the reasonable compensation, expenses and disbursements of
the Indenture Trustee, its agents and counsel.
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Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder or the Note Purchaser any plan of reorganization, arrangement,
adjustment or composition affecting any of the Secured Notes or the rights of
any Holder thereof, or the Note Purchaser, or to authorize the Indenture Trustee
to vote in respect of the claim of any Noteholder or the Note Purchaser in any
such Proceeding.
Section 5.06. Indenture Trustee May Enforce Claims Without Possession
of Secured Notes. All rights of action and claims under this Indenture or any of
the Secured Notes may be prosecuted and enforced by the Indenture Trustee
without the possession of any of the Secured Notes or the production thereof in
any Proceeding relating thereto, and any such Proceeding instituted by the
Indenture Trustee, at the direction of the Note Purchaser, shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall
be for the ratable benefit of the Holders of the Secured Notes in respect of
which such judgment has been recovered after payment of amounts required to be
paid pursuant to clause (a) of Section 5.07 hereof.
Section 5.07. Application of Money Collected. (a) If the Secured Notes
have been declared due and payable following an Event of Default or an
Amortization Event and such declaration and its consequences have not been
rescinded and annulled, any money collected by the Indenture Trustee with
respect to the Secured Notes pursuant to this Article V or otherwise and any
other monies that may then be held or thereafter received by the Indenture
Trustee as security for such Secured Notes (including any amounts then on
deposit in either Account) shall be applied in the following order, at the date
or dates fixed by the Indenture Trustee and, in case of the payment of the
entire amount due on account of principal of, and interest on, the Secured
Notes, upon presentation and surrender thereof:
(i) first, to the Indenture Trustee, any unpaid Indenture
Trustee Fees then due and any other amounts payable and due to the
Indenture Trustee under this Indenture, including any costs or expenses
incurred by it in connection with the enforcement of the remedies
provided for in this Article V and to the Collateral Agent, any unpaid
Collateral Agent Fees;
(ii) second, from amounts collected from the Related Mortgage
Loans, to the Holders of each Secured Note, to the payment of any
Interest Payment Amount then due and unpaid through the day preceding
the date on which such payment is made;
(iii) third, from amounts collected from non-Related Mortgage
Loans, to the Holders of each Secured Note, to the payment of any
Interest Payment Amount remaining after the distribution in clause (ii)
is made;
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(iv) fourth, to the Note Purchaser such other amounts (except
for principal) including, without limitation, the Facility Fee, then
due and owing to the Note Purchaser under the Basic Documents as the
Note Purchaser may have given written notice of to the Indenture
Trustee and the Servicer not later than noon Eastern time on such date;
(v) fifth, from amounts collected from the Related Mortgage
Loans, to the Holders of each Secured Note, to the payment of the
related unpaid Note Principal Balance;
(vi) sixth, from amounts collected from the non-Related
Mortgage Loans, to the Holders of each Secured Note, to the payment of
the related unpaid Note Principal Balance;
(vii) seventh, to the extent not paid pursuant to clause (i)
above, to the Indenture Trustee, any unpaid Indenture Trustee Fees then
due and any other amounts payable and due to the Indenture Trustee
under this Indenture, including any costs or expenses incurred by it in
connection with the enforcement of the remedies provided for in this
Article V;
(viii) eighth, to the Servicer, any amounts required to pay
the Servicer for any unpaid Servicing Fees then due and to reimburse
the Servicer for Servicing Advances, Periodic Advances and Compensating
Interest previously made by, and not previously reimbursed to or
retained by, the Servicer and, upon the final liquidation of the
related Mortgage Loan or the final liquidation of the Trust Estate,
Servicing Advances, Periodic Advances and Compensating Interest
previously made by, and not previously reimbursed to or retained by,
the Servicer; and
(ix) ninth, the remainder to the Holder of Trust Certificates.
(b) Amounts which are to be paid out of collections generally pursuant
to clauses (i), (iii), (vi), (vii), (viii) and (ix) above shall be allocated
among the groups of Related Mortgage Loans pro rata in relation to the unpaid
principal balances of the related Secured Notes immediately prior to such
distribution.
Section 5.08. Limitation on Suits. No Holder of a Secured Note shall
have any right to institute any Proceedings, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default or Amortization Event;
(b) the Holders of Secured Notes representing not less than 25% of the
Note Principal Balance of the Outstanding Secured Notes shall have made written
request to the Indenture Trustee to institute Proceedings in respect of such
Event of Default or Amortization Event in its own name as Indenture Trustee
hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee
indemnity in full against the costs, expenses and liabilities to be incurred in
compliance with such request;
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(d) the Indenture Trustee, for five (5) days after its receipt of such
notice, request and offer of indemnity, has failed to institute any such
Proceeding;
(e) no direction inconsistent with such written request has been given
to the Indenture Trustee during such five (5) day period by the Holders of
Secured Notes representing more than 50% of the Note Principal Balance of the
Outstanding Secured Notes; and
(f) the consent of the Note Purchaser shall have been obtained; it
being understood and intended that no one or more Holders of Secured 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 Secured Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all the Holders of Secured Notes.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Secured Notes, each representing less than 50% of the Note Principal Balances of
the Outstanding Secured Notes, the Indenture Trustee shall take the action
prescribed by the group representing a greater percentage of the Note Principal
Balances of the Outstanding Secured Notes. Section 5.09. Unconditional Rights of
Noteholders to Receive Principal and Interest. The Holder of any Secured Note
shall have the right, to the extent permitted by applicable law, which right is
absolute and unconditional, to receive payment of each installment of interest
on such Secured Note on the respective Payment Date for such installments of
interest, to receive payment of each installment of principal of such Secured
Note when due (or, in the case of any Secured Note called for redemption, on the
date fixed for such redemption) and to institute suit for the enforcement of any
such payment, and such right shall not be impaired without the consent of such
Holder.
Section 5.10. Restoration of Rights and Remedies. If the Indenture
Trustee, the Note Purchaser or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason, or has been determined to be adverse
to the Indenture Trustee, the Note Purchaser or to such Noteholder, then and in
every such case the Indenture Trustee, the Note Purchaser and the Noteholders
shall, subject to any determination in such Proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Indenture Trustee, the Note Purchaser and the Noteholders
shall continue as though no such Proceeding had been instituted.
Section 5.11. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Note Purchaser 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.
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Section 5.12. Delay or Omission Not Waiver. No delay or omission of the
Indenture Trustee, the Note Purchaser or of any Holder of any Secured Note to
exercise any right or remedy accruing upon any Event of Default or Amortization
Event shall impair any such right or remedy or constitute a waiver of any such
Event of Default or Amortization Event or an acquiescence therein. Every right
and remedy given by this Article V or by law to the Indenture Trustee, the Note
Purchaser or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee, the Note Purchaser or by
the Noteholders with the prior consent of the Note Purchaser, as the case may
be.
Section 5.13. Control by Noteholders. The Holders of Secured Notes
representing more than 50% of the Note Principal Balance of the Outstanding
Secured Notes on the applicable Record Date shall, with the consent of the Note
Purchaser, have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee or exercising any
trust or power conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) any direction to the Indenture Trustee to undertake a Sale of the
Trust Estate shall be by the Holders of Secured Notes representing the
percentage of the Note Principal Balance of the Outstanding Secured Notes
specified in Section 5.17(b)(i) hereof, unless Section 5.17(b)(ii) hereof is
applicable; and
(c) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee or as directed by the Note Purchaser that is not
inconsistent with such direction; provided, however, that, subject to Section
6.01 hereof, the Indenture Trustee need not take any action that it determines
might involve it in liability or be unjustly prejudicial to the Noteholders not
consenting.
Section 5.14. Waiver of Past Defaults. The Holders of Secured Notes
representing more than 50% of the Note Principal Balance of the Outstanding
Secured Notes on the applicable Record Date may on behalf of the Holders of all
the Secured Notes, and with the consent of the Note Purchaser, waive any past
Default hereunder and its consequences, except a Default:
(a) in the payment of principal or any installment of interest on any
Secured Note; or
(b) in respect of a covenant or provision hereof that under Section
9.02 hereof cannot be modified or amended without the consent of the Holder of
each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default or Amortization Event arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
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Section 5.15. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Secured Note by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.15 shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by the Note Purchaser or any
Noteholder, or group of Noteholders, holding in the aggregate Secured Notes
representing more than 10% of the Note Principal Balance of the Outstanding
Secured Notes, or to any suit instituted by the Note Purchaser or any Noteholder
for the enforcement of the payment of any Interest Payment Amount or Principal
Payment Amount on any Secured Note on or after the related Payment Date or for
the enforcement of the payment of principal of any Secured Note on or after the
Final Stated Maturity Date (or, in the case of any Secured Note called for
redemption, on or after the applicable Redemption Date).
Section 5.16. Waiver of Stay or Extension Laws. The Trust covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension of law wherever enacted, now or at any time hereafter in
force, that may affect the covenants in, or the performance of, this Indenture;
and the Trust (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 5.17. Sale of Trust Estate. (a) The power to effect any sale (a
"Sale") of any portion of the Trust Estate pursuant to Section 5.04 or 5.17
hereof shall not be exhausted by any one or more Sales as to any portion of the
Trust Estate remaining unsold, but shall continue unimpaired until the entire
Trust Estate shall have been sold or all amounts payable on the Secured Notes
and under this Indenture with respect thereto shall have been paid. The
Indenture Trustee may from time to time postpone any public Sale by public
announcement made at the time and place of such Sale.
(b) To the extent permitted by law, the Indenture Trustee shall not in
any private Sale sell or otherwise dispose of the Trust Estate, or any portion
thereof, unless:
(i) the Holders of Secured Notes representing not less than
50% of the Note Principal Balance of the Secured Notes then Outstanding
consent to or direct the Indenture Trustee to make such Sale; or
(ii) the proceeds of such Sale would be not less than the
entire amount that would be payable to the Holders of the Secured
Notes, in full payment thereof in accordance with Section 5.07 hereof,
on the Payment Date next succeeding the date of such Sale.
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In making such a determination, the Indenture Trustee may rely on an
opinion of an independent investment banking firm obtained and delivered to the
Indenture Trustee not at the expense of the Indenture Trustee.
No Sale hereunder shall be effective without the consent of the Note
Purchaser.
(c) Unless the Holders of all Outstanding Secured Notes have otherwise
consented or directed the Indenture Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater than the
amount described in paragraph (ii) of subsection (b) of this Section 5.17 has
not been established by the Indenture Trustee and no Person bids an amount equal
to or greater than such amount, the Indenture Trustee, acting in its capacity as
Indenture Trustee (i) on behalf of the Noteholders and the Note Purchaser, shall
prevent such Sale and bid an amount (which shall include the Indenture Trustee's
right, in its capacity as Indenture Trustee, to credit bid) at least $1.00 more
than the highest other bid in order to preserve the Trust Estate on behalf of
the Noteholders and the Note Purchaser.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(i) any Holder or Holders of Secured Notes may bid for and
purchase the property offered for Sale, and upon compliance with the
terms of sale may hold, retain and possess and dispose of such
property, without further accountability, and may, in paying the
purchase money therefor, deliver any Outstanding Secured Notes or
claims for interest thereon in lieu of cash up to the amount that
shall, upon distribution of the net proceeds of such Sale, be payable
thereon, and such Secured Notes, in case the amounts so payable thereon
shall be less than the amount due thereon, shall be returned to the
Holders thereof after being appropriately stamped to show such partial
payment;
(ii) the Indenture Trustee may bid for and acquire the
property offered for Sale in connection with any public Sale thereof,
and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting the gross Sale price against the sum of (A)
the amount that would be payable to the Holders of the Secured Notes as
a result of such Sale in accordance with Section 5.07 hereof on the
Payment Date next succeeding the date of such Sale and (B) the expenses
of the Sale and of any Proceedings in connection therewith which are
reimbursable to it, without being required to produce the Secured Notes
in order to complete any such Sale or in order for the net Sale price
to be credited against such Secured Notes, and any property so acquired
by the Indenture Trustee shall be held and dealt with by it in
accordance with the provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Trust Estate in connection with a Sale thereof,
(iv) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Trust to transfer and convey its
interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale;
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(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;
(vi) no Sale may be affected without the prior written consent
of the Note Purchaser; and
(vii) no Sale shall be made to any Originator or any of their
Affiliates or agents.
Section 5.18. Action on Secured Notes. The Indenture Trustee's right to
seek and recover judgment under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Indenture Trustee, the Note Purchaser or the Holders of Secured Notes shall
be impaired by the recovery of any judgment by the Indenture Trustee against the
Trust or by the levy of any execution under such judgment upon any portion of
the Trust Estate.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default
or an Amortization Event has occurred and is continuing, the Indenture Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default or an
Amortization Event:
(i) the Indenture Trustee need perform only those duties that
are specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may request and conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture. The Indenture Trustee
shall, however, examine such certificates and opinions to determine
whether they conform on their face to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own grossly negligent action, its own grossly negligent failure to act or its
own willful misconduct, except that:
(i) this paragraph does not limit the effect of subsection (b)
of this Section 6.01;
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(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Sections 5.13 or 5.17
hereof or exercising any trust or power or remedy conferred upon the
Indenture Trustee under this Indenture.
(d) For all purposes under this Indenture, the Indenture Trustee shall
not be deemed to have notice or knowledge of any Event of Default or
Amortization Event or any Default hereof or of any event described in Section
3.05 hereof unless a Responsible Officer assigned to and working in the
Indenture Trustee's corporate trust department and having direct responsibility
for this Indenture has actual knowledge thereof or unless written notice of any
event that is in fact such an Event of Default, Amortization Event or Default is
received by the Indenture Trustee at the Corporate Trust Office, and such notice
references the Secured Notes generally, the Trust, the Trust Estate or this
Indenture.
(e) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it under this Indenture or the other Basic Documents.
(f) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to the provisions of this Section 6.01.
(g) Notwithstanding any extinguishment of all right, title and interest
of the Trust in and to the Trust Estate following an Event of Default or
Amortization Event and a consequent declaration of acceleration of the maturity
of the Secured Notes, whether such extinguishment occurs through a Sale of the
Trust Estate to another Person, the acquisition of the Trust Estate by the
Indenture Trustee or otherwise, the rights, powers and duties of the Indenture
Trustee with respect to the Trust Estate (or the proceeds thereof), the
Noteholders and the Note Purchaser and the rights of Noteholders and the Note
Purchaser shall continue to be governed by the terms of this Indenture.
(h) The Indenture Trustee, the Collateral Agent or any successor
Collateral Agent appointed pursuant to Section 11.08 of the Sale and Servicing
Agreement shall at all times retain possession of the Custodial Loan Files in
the State of Texas except for those Custodial Loan Files or portions thereof
released to the Servicer or the Note Purchaser pursuant to this Indenture or the
Sale and Servicing Agreement.
(i) Subject to the other provisions of this Indenture and without
limiting the generality of this Section 6.01, the Indenture Trustee shall have
no duty (A) to see to any recording, filing, or depositing of this Indenture or
any agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording, filing or depositing or to any rerecording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Estate from funds available in the Collection
Account or (D) to confirm or verify the contents of any reports or certificates
of the Servicer delivered to the Indenture Trustee pursuant to this Indenture
believed by the Indenture Trustee to be genuine and to have been signed or
presented by the proper party or parties.
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(j) In the event the Trust shall be required to file tax returns, the
Servicer shall prepare or shall cause to be prepared any tax returns required to
be filed by the Trust and shall remit such returns to the Owner Trustee for
signature at least five days before such returns are due to be filed. The
Indenture Trustee, upon request, will furnish the Servicer with all such
information known to the Indenture Trustee as may be reasonably required in
connection with the preparation of all tax returns of the Trust. In no event
shall the Indenture Trustee or the Owner Trustee in their respective individual
capacities be liable for any liabilities, costs or expenses of the Trust, the
Noteholders or the Servicer arising under any tax law or regulation, including,
without limitation, federal, state or local income or excise taxes or any other
tax imposed on or measured by income (or any interest or penalty with respect
thereto or arising from any failure to comply therewith).
Section 6.02. Notice of Default. Immediately after the occurrence of
any Default known to the Indenture Trustee, the Indenture Trustee shall transmit
by mail to the Note Purchaser and the Depositor notice of each such Default and,
within ninety (90) days after the occurrence of any Default known to the
Indenture Trustee, the Indenture Trustee shall transmit by mail to all Holders
of Secured Notes notice of each such Default, unless such Default shall have
been cured or waived; provided, however, that in no event shall the Indenture
Trustee provide notice, or fail to provide notice of a Default known to the
Indenture Trustee in a manner contrary to the requirements of the Trust
Indenture Act.
Section 6.03. Rights of Indenture Trustee. (a) Except as otherwise
provided in Section 6.01 hereof, the Indenture Trustee may rely on, and be
protected in acting or refraining to act upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Indenture
Trustee need not investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on any such Officer's Certificate or Opinion of Counsel.
(c) With the consent of the Note Purchaser, which consent shall not be
unreasonably withheld, the Indenture Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within its
rights or powers.
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(e) The Indenture Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Noteholders or the Note Purchaser, pursuant to the
provisions of this Indenture, unless such Noteholders or the Note Purchaser
shall have offered to the Indenture Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby.
(f) The Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Noteholders
or the Note Purchaser; provided, however, that if the payment within a
reasonable time to the Indenture Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to taking any such action.
(g) The right of the Indenture Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the Indenture
Trustee shall not be answerable for anything other than its gross negligence or
willful misconduct in the performance of such act.
Section 6.04. Not Responsible for Recitals or Issuance of Secured
Notes. The recitals contained herein and in the Secured Notes, except, with
respect to the Indenture Trustee, the certificates of authentication on the
Secured Notes, shall be taken as the statements of the Trust, and the Owner
Trustee, the Indenture Trustee and the Authenticating Agent assume no
responsibility for their correctness. The Owner Trustee and the Indenture
Trustee make no representations with respect to the Trust Estate or as to the
validity or sufficiency of this Indenture or of the Secured Notes. Neither the
Indenture Trustee nor the Owner Trustee shall be accountable for the use or
application by the Trust of the Secured Notes or the proceeds thereof or any
money paid to the Trust or upon a Trust Order pursuant to the provisions hereof.
Section 6.05. May Hold Secured Notes. The Indenture Trustee, any Agent,
or any other agent of the Trust, in its individual or any other capacity, may
become the owner or pledgee of Secured Notes and, subject to Sections 6.07 and
6.13 hereof, may otherwise deal with the Trust or any Affiliate of the Trust
with the same rights it would have if it were not Indenture Trustee, Agent or
such other agent.
Section 6.06. Money Held in Trust. Money held by the Indenture Trustee
in trust hereunder shall be segregated from other funds as provided in this
Indenture, the Sale and Servicing Agreement and otherwise as required by law.
The Indenture Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Trust and except to
the extent of income or other gain on investments that are obligations of the
Indenture Trustee, in its commercial capacity, and income or other gain actually
received by the Indenture Trustee on investments, which are obligations of
others.
Section 6.07. Reserved.
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Section 6.08. Indenture Trustee's Capital and Surplus. The Indenture
Trustee shall at all times (a)(i) have a combined capital and surplus of at
least $50,000,000, or (ii) be a member of a bank holding company system, the
aggregate combined capital and surplus of which is at least $100,000,000 and (b)
be rated (or have long-term debt rated) "BBB" or better by S&P and "Baa2" by
▇▇▇▇▇'▇;
Section 6.09. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Indenture Trustee and no appointment of a
successor Indenture Trustee pursuant to this Article VI shall become effective
until the acceptance of appointment by the successor Indenture Trustee under
Section 6.10 hereof.
(b) The Indenture Trustee may resign at any time by giving written
notice thereof to the Trust and the Note Purchaser. If an instrument of
acceptance by a successor Indenture Trustee shall not have been delivered to the
Indenture Trustee within thirty (30) days after the giving of such notice of
resignation, the resigning Indenture Trustee may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time by the Note
Purchaser or, with the consent of the Note Purchaser, by Act of the Holders
representing more than 50% of the Note Principal Balance of the Outstanding
Secured Notes, by written notice delivered to the Indenture Trustee and to the
Trust.
(d) If at any time:
(i) the Indenture Trustee shall have a conflicting interest
prohibited by Section 6.07 hereof and shall fail to resign or eliminate
such conflicting interest in accordance with Section 6.07 hereof after
written request therefor by the Trust or by any Noteholder; or
(ii) the Indenture Trustee shall cease to be eligible under
Section 6.08 hereof or shall become incapable of acting or shall be
adjudged bankrupt or insolvent, or a receiver of the Indenture Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Indenture Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, (x) the Owner Trustee, on behalf of the Trust, by a
Trust Order, with the consent of the Note Purchaser, may remove the Indenture
Trustee, and the Owner Trustee, on behalf of the Trust, by a Trust Order, shall
join with the Indenture Trustee in the execution, delivery and performance of
all instruments and agreements necessary or proper to appoint a successor
Indenture Trustee acceptable to the Note Purchaser and to vest in such successor
Indenture Trustee any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Indenture; provided, however,
if the Owner Trustee, on behalf of the Trust, and the Note Purchaser do not join
in such appointment within fifteen (15) days after the receipt by it of a
request to do so, or in case an Event of Default or Amortization Event has
occurred and is continuing, the Indenture Trustee may petition a court of
competent jurisdiction to make such appointment, or (y) subject to Section 5.15
hereof, any Noteholder who has been a bona fide Holder of a Secured Note for at
least six (6) months or the Note Purchaser may, on behalf of himself and all
others similarly situated, with the consent of the Note Purchaser, petition any
court of competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
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(e) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Indenture
Trustee for any cause, the Owner Trustee, on behalf of the Trust, by a Trust
Order, shall promptly appoint a successor Indenture Trustee acceptable to the
Note Purchaser. If within one (1) year after such resignation, removal or
incapability or the occurrence of such vacancy a successor Indenture Trustee
shall be appointed by the Note Purchaser or, with the consent of the Note
Purchaser, by Act of the Holders of Secured Notes representing more than 50% of
the Note Principal Balance of the Outstanding Secured Notes delivered to the
Trust and the retiring Indenture Trustee, the successor Indenture Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Indenture Trustee and supersede the predecessor Indenture Trustee
appointed by the Trust. If no successor Indenture Trustee shall have been so
appointed by the Trust, the Note Purchaser or Noteholders and shall have
accepted appointment in the manner hereinafter provided, any Noteholder who has
been a bona fide Holder of a Secured Note for at least six (6) months may, on
behalf of himself and all others similarly situated, with the consent of the
Note Purchaser, petition any court of competent jurisdiction for the appointment
of a successor Indenture Trustee.
(f) The Servicer, on behalf of the Trust, shall give notice of each
resignation and each removal of the Indenture Trustee and each appointment of a
successor Indenture Trustee to the Holders of Secured Notes and the Note
Purchaser. Each notice shall include the name of the successor Indenture Trustee
and the address of its Corporate Trust Office.
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee.
Every successor Indenture Trustee appointed hereunder shall execute, acknowledge
and deliver to the Trust, the Note Purchaser and the retiring Indenture Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Indenture Trustee shall become effective and such
successor Indenture Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Indenture Trustee. Notwithstanding the foregoing, upon a Trust Request of the
Owner Trustee, on behalf of the Trust, or the successor Indenture Trustee, such
retiring Indenture Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Indenture Trustee all the
rights, powers and trusts of the retiring Indenture Trustee, and shall duly
assign, transfer and deliver to such successor Indenture Trustee all property
and money held by such retiring Indenture Trustee hereunder. Upon a written
request of any such successor Indenture Trustee, the Owner Trustee, on behalf of
the Trust, shall, with the written consent of the Note Purchaser, execute and
deliver any and all instruments for more fully and certainly vesting in and
confirming to such successor Indenture Trustee all such rights, powers and
trusts.
No successor Indenture Trustee shall accept its appointment unless at
the time of such acceptance such successor Indenture Trustee shall be qualified
and eligible under this Article VI.
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Section 6.11. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee. Any corporation or banking association into which
the Indenture Trustee may be merged or converted or with which it may be
consolidated, or any corporation or banking association resulting from any
merger, conversion or consolidation to which the Indenture Trustee shall be a
party, or any corporation or banking association succeeding to all or
substantially all of the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee hereunder; provided, that such
corporation or banking association shall be otherwise qualified and eligible
under this Article VI, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Secured Notes
have been authenticated, but not delivered, by the Indenture Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Indenture Trustee may adopt such authentication and deliver the
Secured Notes so authenticated with the same effect as if such successor
Indenture Trustee had authenticated such Secured Notes.
Section 6.12. Reserved.
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees. At
any time or times, the Indenture Trustee shall have power to appoint, and, upon
the written request of the Indenture Trustee, the Note Purchaser or of the
Holders of Secured Notes representing more than 50% of the Note Principal
Balance of the Outstanding Secured Notes with respect to which a co-trustee or
separate trustee is being appointed, with the written consent of the Note
Purchaser, the Owner Trustee, on behalf of the Trust, shall for such purpose
join with the Indenture Trustee in the execution, delivery and performance of
all instruments and agreements necessary or proper to appoint, one or more
Persons approved by the Indenture Trustee either to act as co-trustee, jointly
with the Indenture Trustee, of all or any part of the Trust Estate, or to act as
separate trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person or Persons
in the capacity aforesaid, any property, title, right or power deemed necessary
or desirable, subject to the other provisions of this Section 6.13. If the Owner
Trustee, on behalf of the Trust, does not join in such appointment within
fifteen (15) days after the receipt by it of a request to do so, or in case an
Event of Default or Amortization Event has occurred and is continuing, the
Indenture Trustee alone shall have power to make such appointment. All fees and
expenses of any co-trustee or separate trustee shall be payable by the Indenture
Trustee.
Should any written instrument from the Trust be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on written request, be executed, acknowledged and
delivered by the Owner Trustee, on behalf of the Trust, with the written consent
of the Note Purchaser.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(a) The Secured Notes shall be authenticated and delivered and all
rights, powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Indenture Trustee hereunder, shall be exercised,
solely by the Indenture Trustee.
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(b) The rights, powers, duties and obligations hereby conferred or
imposed upon the Indenture Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Indenture Trustee or by the Indenture Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Indenture
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(c) The Indenture Trustee at any time, by an instrument in writing,
executed by it, with the concurrence of the Owner Trustee, on behalf of the
Trust, evidenced by a Trust Order, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section 6.13, and, in case
an Event of Default or Amortization Event has occurred and is continuing, the
Indenture Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the Trust, but
upon the written request of the Indenture Trustee, the Owner Trustee, on behalf
of the Trust, shall join with the Indenture Trustee in the execution, delivery
and performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the manner provided
in this Section 6.13.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Indenture Trustee, or any other
such trustee hereunder.
(e) Any Act of Noteholders delivered to the Indenture Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
Section 6.14. Authenticating Agents. The Owner Trustee, acting at the
direction of the Majority Certificateholders, shall appoint an Authenticating
Agent with power to act on the Trust's behalf, subject to the direction of the
Majority Certificateholders, in the authentication and delivery of the Secured
Notes designated for such authentication and, containing provisions therein for
such authentication (unless the Owner Trustee, acting at the direction of the
Majority Certificateholders, has made other arrangements, satisfactory to the
Indenture Trustee and such Authenticating Agent, for notation on the Secured
Notes of the authority of an Authenticating Agent appointed after the initial
authentication and delivery of such Secured Notes) in connection with transfers
and exchanges under Section 2.06 hereof, as fully to all intents and purposes as
though the Authenticating Agent had been expressly authorized by Section 2.06
hereof to authenticate and deliver Secured Notes. For all purposes of this
Indenture (other than in connection with the authentication and delivery of
Secured Notes pursuant to Sections 2.05 and 2.11 hereof in connection with their
initial issuance), the authentication and delivery of Secured Notes by the
Authenticating Agent pursuant to this Section 6.14 shall be deemed to be the
authentication and delivery of Secured Notes "by the Indenture Trustee." Such
Authenticating Agent shall at all times be a Person that both meets the
requirements of Section 6.07 hereof for the Indenture Trustee hereunder and has
an office for presentation of Secured Notes in the United States of America. The
Indenture Trustee shall initially be the Authenticating Agent and shall be the
Note Registrar as provided in Section 2.06 hereof. The office from which the
Indenture Trustee shall perform its duties as Note Registrar and Authenticating
Agent shall be its Corporate Trust Office. Any Authenticating Agent appointed
pursuant to the terms of this Section 6.14 or pursuant to the terms of any
supplemental indenture shall deliver to the Indenture Trustee as a condition
precedent to the effectiveness of such appointment an instrument accepting the
trusts, duties and responsibilities of Authenticating Agent and of Note
Registrar or co-Note Registrar and indemnifying the Indenture Trustee for and
holding the Indenture Trustee harmless against, any loss, liability or expense
(including reasonable attorneys' fees) incurred without gross negligence or bad
faith on its part, arising out of or in connection with the acceptance,
administration of the trust or exercise of authority by such Authenticating
Agent, Note Registrar or co-Note Registrar.
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Any corporation or banking association into which any Authenticating
Agent may be merged or converted or with which it may be consolidated, or any
corporation or banking association resulting from any merger, consolidation or
conversion to which any Authenticating Agent shall be a party, or any
corporation or banking association succeeding to the corporate trust business of
any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 6.14, without the execution or filing of any further act on the part of
the parties hereto or the Authenticating Agent or such successor corporation or
banking association.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trust. The Owner Trustee, acting at the direction
of the Majority Certificateholders, may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Indenture Trustee. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section 6.14, the
Owner Trustee, acting at the direction of the Majority Certificateholders, shall
promptly appoint a successor Authenticating Agent, shall give written notice of
such appointment to the Indenture Trustee, and shall mail notice of such
appointment to all Holders of Secured Notes.
The Indenture Trustee agrees, subject to Section 6.01(e) hereof, to pay
to any Authenticating Agent from time to time reasonable compensation for its
services and the Indenture Trustee shall be entitled to be reimbursed for such
payments pursuant to Section 6.16 hereof. The provisions of Sections 2.09, 6.04
and 6.05 hereof shall be applicable to any Authenticating Agent.
Section 6.15. Review of Custodial Loan Files. (a) The Indenture Trustee
shall cause the Collateral Agent to execute and deliver each Trust Receipt and
the Exceptions Report required by Section 2.07(a) of the Sale and Servicing
Agreement.
(b) In giving each of the Trust Receipts and Exceptions Reports
referred to in clause (a) of this Section 6.15, neither the Indenture Trustee
nor the Collateral Agent shall be under any duty or obligation (i) to inspect,
review or examine any such documents, instruments, securities or other papers to
determine that they or the signatures thereto are genuine, enforceable, or
appropriate for the represented purpose or that they have actually been recorded
or that they are other than what they purport to be on their face or (ii) to
determine whether any Custodial Loan File should include a flood insurance
policy, any rider, addenda, surety or guaranty agreement, power of attorney, buy
down agreement, assumption agreement, modification agreement, written assurance
or substitution agreement.
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(c) In the event that the Mortgage Loans are required to be recorded in
accordance with the provisions of Article II of the Sale and Servicing
Agreement, no later than the fifth Business Day of each month, commencing in
October 2003, the Indenture Trustee shall cause the Collateral Agent to deliver
to the Servicer and the Note Purchaser an exception report dated as of the first
day of such month, identifying those Mortgage Loans for which it has not yet
received (i) an original recorded Mortgage or a copy thereof certified to be
true and correct by the public recording office in possession of such Mortgage
or (ii) an original recorded Assignment of Mortgage to the Indenture Trustee and
any required intervening Assignments of Mortgage or a copy thereof certified to
be a true and correct copy by the public recording office in possession of such
Assignment of Mortgage.
Section 6.16. Indenture Trustee Fees and Expenses. On each Payment
Date, pursuant to Section 7.08 of the Sale and Servicing Agreement, the Servicer
shall pay to the Indenture Trustee (i) the Indenture Trustee Fee and (ii)
payment of or reimbursement for expenses and disbursements incurred or made by
the Indenture Trustee in any preceding month in accordance with any of the
provisions of this Indenture (including, but not limited to, the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ). In the event that such fees and expenses
remain unpaid for 60 days or more, such fees and expenses as shall be disbursed
to the Indenture Trustee from amounts on deposit in the Collection Account,
pursuant to Section 8.06 of the Sale and Servicing Agreement. The Indenture
Trustee shall also be entitled to indemnification against losses, liability and
expenses, including reasonable attorney's fees, incurred, arising out of or in
connection with this Indenture, the Secured Notes and the Sale and Servicing
Agreement. The Indenture Trustee and any director, officer, employee or agent of
the Indenture Trustee shall be indemnified by, first, the Trust and, second, the
Servicer and held harmless against any loss, liability or reasonable expense
incurred in connection with this Indenture or the Secured Notes, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or gross negligence in the performance by the Indenture Trustee of its duties
hereunder. The obligations of the Servicer and the Trust under this Section 6.16
shall survive termination of the Trust and payment of the Secured Notes, and
shall extend to any co-Indenture Trustee or separate-Indenture Trustee appointed
pursuant to this Article VI.
Section 6.17. Representations and Warranties of the Indenture Trustee.
The Indenture Trustee represents and warrants for the benefit of the Noteholders
that:
(a) Organization and Good Standing. The Indenture Trustee is a banking
corporation duly organized, validly existing and in good standing under the laws
of the state of New York.
(b) Authorization. The Indenture Trustee has the power, authority and
legal right to execute, deliver and perform this Indenture, and the execution,
delivery and performance of this Indenture have been duly authorized by the
Indenture Trustee by all necessary corporate action.
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(c) Binding Obligations. This Indenture, assuming due authorization,
execution and delivery by all other parties thereto, constitutes the legal,
valid and binding obligation of the Indenture Trustee, enforceable against the
Indenture Trustee in accordance with its terms, except that (i) such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws (whether statutory, regulatory or decisional) now or hereafter in
effect relating to creditors' rights generally and the rights of trust companies
in particular and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to certain equitable defenses and
to the discretion of the court before which any proceeding therefor may be
brought, whether in a proceeding at law or in equity.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Note Registrar to Furnish Indenture Trustee Names and
Addresses of Noteholders. (a) The Note Registrar shall furnish or cause to be
furnished to the Indenture Trustee (i) semiannually, not less than forty-five
(45) days nor more than sixty (60) days after the Payment Date occurring closest
to six (6) months after the Closing Date and each Payment Date occurring at six
(6) month intervals thereafter, all information in the possession or control of
the Note Registrar, in such form as the Indenture Trustee may reasonably
require, as to names and addresses of the Holders of Secured Notes, and (ii) at
such other times, as the Indenture Trustee may request in writing, within thirty
(30) days after receipt by the Note Registrar of any such request, a list of
similar form and content as of a date not more than ten (10) days prior to the
time such list is furnished; provided, however, that so long as the Indenture
Trustee is the Note Registrar, no such list shall be required to be furnished.
(b) In addition to furnishing to the Indenture Trustee the Noteholder
lists, if any, required under clause (a) of this Section 7.01, the Note
Registrar shall also furnish all Noteholder lists, if any, required under
Section 3.03 hereof at the times required by such Section 3.03.
Section 7.02. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Secured
Notes contained in the most recent list, if any, furnished to the Indenture
Trustee as provided in Section 7.01 hereof and the names and addresses of the
Holders of Secured Notes received by the Indenture Trustee in its capacity as
Note Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in Section 7.01 hereof upon receipt of a new list so furnished.
(b) Noteholders may communicate with other Noteholders with respect to
their rights under this Indenture or under the Secured Notes.
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Section 7.03. Reports by Trust. The Servicer, on behalf of the Trust,
(a) shall deliver to the Indenture Trustee within fifteen (15) days after the
Trust is required to file the same with the Commission copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and regulations
prescribe) that the Trust is required to file with the SEC pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended.
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Account. The Collection Account established pursuant to
Section 8.03 of the Sale and Servicing Agreement.
Section 8.02. Payments; Statements. On each Payment Date, the Indenture
Trustee shall effect the distributions described in Section 8.06 of the Sale and
Servicing Agreement.
Section 8.03. Interest Payments. (a) The Principal Amount of each
Secured Note shall bear interest, for each day, at the Note Rate, in each case
computed on the basis of a 360-day year for the actual number of days elapsed.
(b) All interest accrued on each Secured Note for each Interest Period
(the "Interest Payment Amount") shall be payable pursuant to Section 8.06(c) of
the Sale and Servicing Agreement.
(c) If, by the terms of this Indenture or any Secured Note, the Trust
at any time is required or obligated to pay interest at a rate in excess of the
maximum rate permitted by applicable law, the rate of interest payable with
respect to the affected Secured Notes shall be immediately reduced to that
maximum rate and the portion of all prior applicable interest payments in excess
of the maximum rate permitted by applicable law shall be applied in reduction of
the Principal Amounts of the affected Secured Notes.
Section 8.04. Principal Payments; Payment on Maturity Date. (a) The
Trust will make payments of principal pursuant to Sections 2.20, 4.02 and
8.06(d) of the Sale and Servicing Agreement and Article X hereof.
(b) From time to time, the Note Purchaser may, in the exercise of its
rights under Article XII of the Sale and Servicing Agreement (and in compliance
therewith), direct that the Trust sell one or more Mortgage Loans to one or more
identified Persons and on specified terms and conditions, and apply the proceeds
of such sale (i) to the extent required to avoid the occurrence of a Shortfall
upon giving effect to such sale, to the prepayment of the principal of the
Secured Notes, and (ii) to the payment of accrued and unpaid interest on that
portion of the Secured Notes so prepaid, to the date of prepayment. The Trust
shall comply with all such directions, and, upon the closing of such sale, shall
apply the proceeds thereof in accordance with the preceding sentence.
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(c) The Trust shall repay the Note Principal Balance of each Secured
Note in full on the Final Stated Maturity Date, together with all accrued and
unpaid interest thereon to the Final Stated Maturity Date and all other accrued
and unpaid obligations under the Basic Documents. In addition, if an optional
redemption is exercised pursuant to Section 10.01 hereof, the Trust shall repay
the respective Note Principal Balance of all issued and outstanding Secured
Notes in full on the related optional redemption date, together with all accrued
and unpaid interest thereon to such date and all other accrued and unpaid
obligations under the Basic Documents.
Section 8.05. Releases of Deleted Mortgage Loans. Upon notice or
discovery by a Responsible Officer of the Indenture Trustee that any of the
representations or warranties of the Originators or the Depositor set forth in
Section 4.01 of the Sale and Servicing Agreement was materially incorrect or
otherwise misleading with respect to any Mortgage Loan as of the time made, the
Indenture Trustee shall direct the Originators or the Depositor, as applicable,
to either cure, repurchase or substitute for such Mortgage Loan as provided in
Section 4.02 of the Sale and Servicing Agreement. In the event that the
Originator or the Depositor fail to cure, repurchase or substitute, as required
by Section 4.02 of the Sale and Servicing Agreement, the Indenture Trustee shall
direct the Sponsor to satisfy its obligations under Section 4.02 of the Sale and
Servicing Agreement. Upon any purchase of or substitution for a Deleted Mortgage
Loan by the Originators, the Sponsor or the Depositor in accordance with Section
4.02 of the Sale and Servicing Agreement, the Indenture Trustee shall cause the
Collateral Agent to deliver the Custodial Loan File relating to such Deleted
Mortgage Loan to the Originators, the Sponsor or the Depositor, as applicable,
and the Trust, the Collateral Agent and the Indenture Trustee shall execute such
instruments of transfer as are necessary to convey title to such Deleted
Mortgage Loan to the Originators, Sponsor or the Depositor, as applicable, from
the lien of this Indenture. Nothing in this Section 8.05 should be construed to
obligate the Indenture Trustee to actively monitor the correctness or accuracy
of the representations and warranties of the Originators, Sponsor or the
Depositor.
Section 8.06. Recourse Payment. In the event that any amounts become
due and owing under this Indenture and are not paid as requested by the Trust,
the Indenture Trustee shall direct the Sponsor to satisfy its obligations under
Section 4.03 of the Sale and Servicing Agreement.
Section 8.07. Reports by Indenture Trustee to Noteholders; Access to
Certain Information. On each Payment Date, the Indenture Trustee shall deliver
the written reports required by Section 2.08(d) to Noteholders of record as of
the related Record Date.
The Indenture Trustee will provide the above statement via the
Indenture Trustee's internet website, which will initially be located at
▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇ and assistance in using the internet website can be
obtained by calling the trustee's investor relations desk at ▇-▇▇▇-▇▇▇-▇▇▇▇. A
paper copy of the above statement will also be made available upon request.
The Indenture Trustee shall make available at its Corporate Trust
Office, during normal business hours, for review by any Noteholder or any person
identified to the Indenture Trustee as a prospective Noteholder, after
reasonable notice, originals or copies of the following items: (a) the Indenture
and any amendments thereto, (b) all Monthly Reports, Remittance Reports and
other reports delivered since the Closing Date pursuant to Section 2.08(d)
hereof, (c) any Officers' Certificates delivered to the Indenture Trustee since
the Closing Date as described in the Indenture, to the extent they have been
received by the Indenture Trustee and (d) any Accountants' reports delivered to
the Indenture Trustee since the Closing Date as required under the Sale and
Servicing Agreement. Copies of any and all of the foregoing items will be
available from the Indenture Trustee upon request; however, the Indenture
Trustee will be permitted to require payment of a sum sufficient to cover the
reasonable costs and expenses of providing such copies and shall not be required
to provide such copies without reasonable assurances that such sum will be paid.
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Section 8.08. Release of Trust Estate. The Indenture Trustee shall, at
such time as there are no Notes Outstanding, release all of the Trust Estate to
the Trust (other than any cash held for the payment of the Secured Notes
pursuant to Section 3.03 or 4.02 hereof).
Section 8.09. Amendment to the Servicing Agreement. The Indenture
Trustee may, without the consent of any Holder (other than the Note Purchaser),
enter into or consent to any amendment or supplement to the Sale and Servicing
Agreement for the purpose of increasing the obligations or duties of any party
other than the Indenture Trustee or the Holders of the Secured Notes. The
Indenture Trustee may, in its discretion, decline to enter into or consent to
any such supplement or amendment: (i) unless the Indenture Trustee receives an
Opinion of Counsel that the position of the Holders would not be materially
adversely affected or (ii) if its own rights, duties or immunities would be
adversely affected.
Section 8.10. Delivery of the Custodial Loan Files Pursuant to Sale and
Servicing Agreement. (a) As is appropriate for the servicing or foreclosure of
any Mortgage Loan, the Indenture Trustee shall cause the Collateral Agent to
deliver to the Servicer the Custodial Loan Files for such Mortgage Loan upon
receipt by the Indenture Trustee and the Collateral Agent on or prior to the
date such release is to be made of:
(i) such Officer's Certificates, if any, as are required by
the Sale and Servicing Agreement; and
(ii) a Request for Release, executed by the Servicer,
providing that the Servicer will hold or retain the Custodial Loan
Files in trust for the benefit of the Indenture Trustee, the Note
Purchaser and the Holders of Secured Notes.
(b) As is appropriate for the release for sale of any Mortgage Loan,
the Indenture Trustee shall direct the Collateral Agent to deliver to the
Disposition Participant the Custodial Loan Files for such Mortgage Loan upon
receipt by the Indenture Trustee and Collateral Agent on or prior to the date
such release is to be made of:
(i) a Request for Release, executed by the Originators or the
Note Purchaser (as permitted by Section 2.12 of the Sale and Servicing
Agreement), providing that the Disposition Participant will hold or
retain the Custodial Loan Files in trust for the benefit of the
Indenture Trustee the Note Purchaser and the Holders of Secured Notes;
and
(ii) a Bailee Letter, executed by the Disposition Participant,
providing that the Disposition Participant will hold or retain the
Custodial Loan Files in trust for the benefit of the Indenture Trustee,
the Note Purchaser and the Holders of Secured Notes.
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Section 8.11. Termination of Servicer. Upon the occurrence and during
the continuance of a Servicer Event of Default specified in Section 9.01 of the
Sale and Servicing Agreement, the Indenture Trustee may, with the consent of the
Note Purchaser or, with the prior written consent of the Note Purchaser, the
Holder of Secured Notes representing not less than 50% of the Note Principal
Balance of the Outstanding Secured Notes, and shall, upon the direction of the
Note Purchaser (or as otherwise provided in the Sale and Servicing Agreement),
terminate the Servicer as provided in Section 9.01 of the Sale and Servicing
Agreement. If the Indenture Trustee terminates the Servicer, the Indenture
Trustee shall, pursuant to Section 9.02 of the Sale and Servicing Agreement,
assume the duties of the Servicer or appoint a successor Servicer acceptable to
the Trust and the Note Purchaser and meeting the requirements set forth in the
Sale and Servicing Agreement.
Section 8.12. Opinion of Counsel. The Indenture Trustee shall be
entitled to receive at least five (5) Business Days' notice of any action to be
taken pursuant to Sections 8.09 and 8.10 hereof (other than in connection with
releases of Mortgage Loans that were subject to a prepayment in full),
accompanied by copies of any instruments involved, and the Indenture Trustee
shall be entitled to receive an Opinion of Counsel, in form and substance
reasonably satisfactory to the Indenture Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have been
complied with. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
Section 8.13. Appointment of Collateral Agents. The Indenture Trustee
may, at no additional cost to the Trust or to the Indenture Trustee, with the
consent of the Note Purchaser, appoint one or more Collateral Agents to hold all
or a portion of the Custodial Loan Files, as Agent for the Indenture Trustee.
Such Collateral Agent shall meet the requirements of Article XI of the Sale and
Servicing Agreement. Matters concerning the Collateral Agents shall be governed
by said Article XI. JPMorgan Chase Bank is hereby appointed as the initial
Collateral Agent hereunder.
Section 8.14. Trust Estate and Accounts Held for Benefit of the Note
Purchaser. The Collateral Agent, on behalf of the Indenture Trustee, shall hold
the Trust Estate and the Custodial Loan Files for the benefit of the
Noteholders.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
With the consent of the Note Purchaser and without the consent of the Holders of
any Secured Notes, the Trust and the Indenture Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Indenture Trustee, for any of the following purposes;
provided, however, that any such supplement shall not, as evidenced by an
Officer's Certificate acceptable to the Note Purchaser, adversely affect in any
respect the interests of any Noteholder:
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(a) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and confirm
unto the Indenture Trustee any property subject or required to be subjected to
the lien of this Indenture, or to subject to the lien of this Indenture
additional property;
(b) to add to the conditions, limitations and restrictions on the
authorized amount, terms and purposes of the issuance, authentication and
delivery of any Secured Notes, as herein set forth, additional conditions,
limitations and restrictions thereafter to be observed;
(c) to evidence the succession of another Person to the Trust to the
extent permitted herein, and the assumption by any such successor of the
covenants of the Trust herein and in the Secured Notes contained;
(d) to add to the covenants of the Trust, for the benefit of the
Holders of all Secured Notes, or to surrender any right or power herein
conferred upon the Trust; or
(e) to cure any ambiguity, to correct or supplement any provision
herein that may be defective or inconsistent with any other provision herein, or
to amend any other provisions with respect to matters or questions arising under
this Indenture, which shall not be inconsistent with the provisions of this
Indenture, provided that such action shall not adversely affect in any material
respect the interests of the Holders of the Secured Notes or the Holders of the
Trust Certificates.
Section 9.02. Supplemental Indentures With Consent of Noteholders. With
the consent of the Note Purchaser and with the consent of Holders of Secured
Notes representing not less than a majority of the Note Principal Balance of all
Outstanding Secured Notes by Act of said Holders delivered to the Trust and the
Indenture Trustee, the Trust and the Indenture Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Secured Notes under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(a) change any Payment Date or the Final Stated Maturity Date of the
Secured Notes or, with respect to the Secured Notes, reduce the Note Principal
Balance thereof or the Note Rate thereon, change the earliest date on which any
Secured Note may be redeemed at the option of the Servicer, change any place of
payment where, or the coin or currency in which, any Secured Note or any
interest thereon is payable, or impair the right to institute suit for the
enforcement of the payment of any installment of interest due on any Secured
Note on or after the Final Stated Maturity Date thereof or for the enforcement
of the payment of the entire remaining unpaid principal amount of any Secured
Note on or after the Final Stated Maturity Date (or, in the case of redemption,
on or after the applicable Redemption Date);
(b) reduce the percentage of the Note Principal Balance of the
Outstanding Secured Notes, the consent of the Holders of which is required for
any such supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with provisions of this Indenture or
Defaults hereunder and their consequences provided for in this Indenture;
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(c) modify any of the provisions of this Section 9.02 or Sections 5.13
or 5.17(b) hereof, except to increase any percentage specified therein or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Note affected
thereby;
(d) modify or alter the provisions of the proviso to the definition of
the term "Outstanding";
(e) permit the creation of any lien other than the lien of this
Indenture with respect to any part of the Trust Estate or terminate the lien of
this Indenture on any property at any time subject hereto or deprive the Holder
of any Secured Note of the security afforded by the lien of this Indenture;
(f) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the Interest Payment Amount or Principal Payment
Amount for any Payment Date (including the calculation of any of the individual
components of such amounts) or to affect rights of the Holders of the Secured
Notes to the benefits of any provisions for the mandatory redemption of Secured
Notes contained herein;
(g) incur any indebtedness, other than the Secured Notes, that would
cause the Trust or the Trust Estate to be treated as a "taxable mortgage pool"
within the meaning of Code Section 7701(i); or
(h) engage in any activities contrary to the status of the Trust as a
qualified special purpose entity under the existing accounting literature.
The Indenture Trustee may in its discretion determine whether or not
any Secured Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Secured Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Trust and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Secured Notes to which such supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
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Section 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article IX or the modifications thereby of the trusts created by this
Indenture, the Indenture Trustee shall be entitled to receive, and (subject to
Section 6.01 hereof) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights or immunities under this Indenture or otherwise.
The Servicer, on behalf of the Trust, shall cause executed copies of any
supplemental indentures to be delivered to the Note Purchaser.
Section 9.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Secured Notes to
which such supplemental indenture relates that have theretofore been or
thereafter are authenticated and delivered hereunder shall be bound thereby.
Section 9.05. Reserved.
Section 9.06. Reference in Secured Notes to Supplemental Indentures.
Secured Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Owner Trustee, acting at the direction of the Majority Certificateholders, shall
so determine, new Secured Notes so modified as to conform, in the opinion of the
Indenture Trustee and the Owner Trustee, acting at the direction of the Majority
Certificateholders, to any such supplemental indenture may be prepared by the
Servicer and executed by the Owner Trustee, acting at the direction of the
Majority Certificateholders, on behalf of the Trust, and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Secured Notes.
Section 9.07. Amendments to Governing Documents. The Indenture Trustee
shall, upon a Trust Request, consent to any proposed amendment to the Trust's
governing documents, or an amendment to or waiver of any provision of any other
document relating to the Trust's governing documents, such consent to be given
with the consent of the majority Holders of all the Outstanding Secured Notes
and the Note Purchaser, except that such consent to any proposed amendment to or
waiver of any of the Special Purpose Provisions (as such term is defined in
Section 11.01 of the Trust Agreement) shall be given with the consent of all of
the Holders of the Outstanding Secured Notes and the Note Purchaser, upon
receipt by the Indenture Trustee of an Officer's Certificate, to which such
proposed amendment or waiver shall be attached, stating that such attached copy
is a true copy of the proposed amendment or waiver and that all conditions
precedent to such consent specified in this Section 9.07 have been satisfied.
Notwithstanding the foregoing, the Indenture Trustee may decline to
consent to a proposed waiver or amendment that adversely affects its own rights,
duties or immunities under this Indenture.
Nothing in this Section 9.07 shall be construed to require that any
Person obtain the consent of the Indenture Trustee to any amendment or waiver or
any provision of any document where the making of such amendment or the giving
of such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the subject
of the proposed amendment or waiver.
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ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption. (a) If the Note Purchaser so elects in its
sole discretion (such election to be made by the Note Purchaser in writing and
delivered to the Trust and the Indenture Trustee at least two (2) Business Days
prior to the date specified in the writing as the Redemption Date), the Trust
shall repay the respective Note Principal Balance of all issued and outstanding
Secured Notes in full on the Optional Redemption Date, together with all accrued
and unpaid interest thereon to the Optional Redemption Date and all other
accrued and unpaid obligations under the Basic Documents. Pursuant to the
preceding sentence, the Note Purchaser hereby elects, and the Trust hereby
acknowledges receipt of such notice of election, to require the Trust to repay
the respective Note Principal Balances of all issued and outstanding Secured
Notes in full on the Optional Redemption Date (which shall be the Redemption
Date), together with all accrued and unpaid interest thereon to, but not
including, the Redemption Date and all other accrued and unpaid obligations
under the Basic Documents; provided, however, that the Note Purchaser and the
Trust may mutually agree to revoke such election on any date that is 90 or more
days prior to the Optional Redemption Date.
(b) Any redemption shall be accomplished by a Disposition by the Trust
pursuant to Article XII of the Sale and Servicing Agreement, or if the Indenture
Trustee shall not have received notice of a Disposition within 2 Business Days
prior to the Redemption Date, then the Indenture Trustee shall sell the Trust
Estate at one or more private Sales called and conducted in any manner permitted
by law. The amounts on deposit therein shall be distributed by the Indenture
Trustee on such Redemption Date in accordance with the priority set forth in
Section 5.07 hereof. No termination or redemption is permitted without the prior
written consent of the Note Purchaser.
(c) Any expenses associated with the compliance of the provisions
hereof in connection with a redemption of the Secured Notes shall be paid by the
Trust.
(d) Upon receipt of the notice from the Note Purchaser of its election
to cause the Trust to redeem the Secured Notes pursuant to Section 10.01(a)
hereof, the Servicer shall prepare, and the Indenture Trustee shall deliver to
the Trust and the Note Purchaser, no later than the related Redemption Date, a
Monthly Report.
Section 10.02. Form of Redemption Notice. Notice of redemption shall be
given by the Indenture Trustee in the name of and at the expense of the Trust by
facsimile at least one Business Day prior to the Redemption Date to each Holder
of Secured Notes to be redeemed, such Holders being determined as of the Record
Date for such Payment Date, and to the Note Purchaser.
All notices of redemption shall state:
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(a) the Redemption Date;
(b) the price at which the Secured Notes will be redeemed; and
(c) the fact of payment in full on such Secured Notes, the place where
such Secured Notes are to be surrendered for final payment (which shall be the
office or agency of the Trust to be maintained as provided in Section 3.02
hereof), and that no interest shall accrue on such Secured Note for any period
after the date fixed for redemption.
Failure to give notice of redemption, or any defect therein, to any
Holder of any Secured Note selected for redemption shall not impair or affect
the validity of the redemption of any other Secured Note.
Section 10.03. Secured Notes Payable on Redemption. Notice of
redemption having been given as provided in Section 10.02 hereof, the Secured
Notes to be redeemed shall, on the applicable Redemption Date, become due and
payable and (unless the Trust shall default in such payment) no interest shall
accrue on such Secured Notes for any period after such Redemption Date;
provided, however, that if such payment is not made on the Redemption Date, the
Note Principal Balance shall, until paid, bear interest from the Redemption Date
at the applicable Note Rate.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions. (a) Upon any
application or request by any Person to the Indenture Trustee to take any action
under any provision of this Indenture, such Person shall furnish to the
Indenture Trustee an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel, if requested by the
Indenture Trustee, stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
(b) Every certificate, opinion or letter with respect to compliance
with a condition or covenant provided for in this Indenture, including one
furnished pursuant to specific requirements of this Indenture relating to a
particular application or request shall include and shall be deemed to include
(regardless of whether specifically stated therein) the following:
(i) a statement that each individual signing such certificate,
opinion or letter has read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate, opinion or letter are based;
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(iii) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of the Trust may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
Opinion of Counsel may be based on the written opinion of other counsel, in
which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel's opinion and shall include a statement to the effect that such counsel
believes that such counsel and the Indenture Trustee may reasonably rely upon
the opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Wherever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Trust
shall deliver any document as a condition of the granting of such application,
or as evidence of the Trust's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Trust to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Section 6.01(b)(ii) hereof.
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default, Event of Default or Amortization Event
is a condition precedent to the taking of any action by the Indenture Trustee at
the request or direction of the Trust, then, notwithstanding that the
satisfaction of such condition is a condition precedent to the Trust's right to
make such request or direction, the Indenture Trustee shall be protected in
acting in accordance with such request or direction if it does not have
knowledge of the occurrence and continuation of such Default, Event of Default
or Amortization Event as provided in Section 6.01(d) hereof.
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Section 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Trust. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Indenture
Trustee and the Trust, if made in the manner provided in this Section 11.03.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The ownership of Secured 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 Secured Notes shall bind the Holder
of every Secured Note issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Indenture Trustee or the Trust in reliance thereon,
whether or not notation of such action is made upon such Secured Notes.
Section 11.04. Notices, etc., to Indenture Trustee, the Note Purchaser
and Trust. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Indenture Trustee by any Noteholder or by the Trust shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with and received by the Indenture Trustee at its Corporate Trust
Office; or
(b) the Trust by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder (except as provided in Section 5.01(c)
and (d)) hereof if in writing and mailed, first-class postage prepaid, to the
Trust addressed to it at ABFS Mortgage Loan Warehouse Trust 2003-1, in care of
Wilmington Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: Corporate Trust Administration, or at
any other address previously furnished in writing to the Indenture Trustee by
the Trust.
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(c) the Note Purchaser 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 JPMorgan Chase Bank, addressed to it at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ (in each case in which notice or other communication to the Note
Purchaser refers to an Event of Default or an Amortization Event, then a copy of
such notice or other communication should also be sent to the attention of
JPMorgan Chase Bank--Mortgage Banking and Warehouse Services, addressed to it at
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇, Associate,
and shall be marked to indicate "URGENT MATERIAL ENCLOSED"), or at any other
address previously furnished in writing to the Indenture Trustee by the Note
Purchaser; or
(d) the Depositor by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed, first-class,
postage paid, to ABFS Balapointe, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, or at any other
address previously furnished in writing to the Indenture Trustee by the
Depositor; or
(e) the Originators or the Servicer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in writing and
mailed, first-class, postage paid, to such party, in care of American Business
Financial Services, Inc., The ▇▇▇▇▇▇▇▇▇ Building, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel or at any
other address previously furnished in writing to the Indenture Trustee by the
Originators or the Servicer.
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.
Where this Indenture provides for notice to Noteholders of any event or the
mailing of any report to Noteholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to
whom such report is required to be mailed, at the address of such Noteholder as
it appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Noteholders is mailed in
the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Noteholder
shall affect the sufficiency of such notice or report with respect to other
Noteholders, and any notice or report that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
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Section 11.06. Rules by Indenture Trustee. The Indenture Trustee may
make reasonable rules for any meeting of Noteholders.
Section 11.07. Reserved.
Section 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 11.09. Successors and Assigns. All covenants and agreements in
this Indenture by the Trust shall bind its successors and assigns, whether so
expressed or not.
Section 11.10. Separability. In case any provision in this Indenture or
in the Secured Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Secured Notes, expressed or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, any separate trustee or
co-trustee appointed under Section 6.14 hereof and the Noteholders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
Section 11.12. Legal Holidays. In any case where the date of any
Payment Date, Redemption Date or any other date on which principal of or
interest on any Secured Note is proposed to be paid shall not be a Business Day,
then (notwithstanding any other provision of the Secured Notes or this
Indenture) payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the nominal
date of any such Payment Date, Redemption Date or other date for the payment of
principal of or interest on any Secured Note and no interest shall accrue for
the period from and after any such nominal date, provided such payment is made
in full on such next succeeding Business Day.
Section 11.13. Governing Law. IN VIEW OF THE FACT THAT NOTEHOLDERS ARE
EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE
TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A
WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF
THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICTS OF
LAW PRINCIPLES THEREOF.
Section 11.14. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
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Section 11.15. Recording of Indenture. This Indenture is subject to
recording in any appropriate public recording offices, such recording to be
effected by the Servicer, on behalf of the Trust, and at its expense in
compliance with any Opinion of Counsel delivered pursuant to Sections 2.11(c) or
3.06 hereof.
Section 11.16. Trust Obligation(a) . (a) Except as set forth in Section
4.03 of the Sale and Servicing Agreement with respect to the Sponsor, no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Trust, the Owner Trustee or the Indenture Trustee on the Secured Notes or
under this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Trust or
(iii) any partner, owner, beneficiary, agent, officer, director, employee or
agent of the Indenture Trustee or the Owner Trustee in its individual capacity,
any holder of a beneficial interest in the Trust, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties or
obligations of the Trust hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of the Trust Agreement.
(b) The recitals contained herein and in the Certificates (other than
the signature and countersignature of the Owner Trustee on the Certificates)
shall be taken as the statements of the Depositor, and the Owner Trustee assumes
no responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
other Basic Document or of the Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates and as specified in
Section 7.03 of the Trust Agreement) or the Notes, or of any Mortgage Loans or
related documents. The Owner Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Mortgage Loan, or the perfection and priority of any security interest
created by any Mortgage Loan or the maintenance of any such perfection and
priority, or for or with respect to the sufficiency of the Owner Trust Estate or
its ability to generate the payments to be distributed to Certificateholders
under this Agreement or the Noteholders under this Indenture, including, without
limitation, the existence, condition and ownership of any Mortgaged Property,
the existence and enforceability of any insurance thereon, the existence and
contents of any Mortgage Loan on any computer or other record thereof, the
validity of the assignment of any Mortgage Loan to the Trust or of any
intervening assignment, the completeness of any Mortgage Loan, the performance
or enforcement of any Mortgage Loan, the compliance by the Depositor or the
Servicer with any warranty or representation made under any Basic Document or in
any related document or the accuracy of any such warranty or representation or
any action of the Indenture Trustee or the Servicer or any subservicer taken in
the name of the Owner Trustee.
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Section 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder and Beneficial Owner, by accepting a Secured
Note, hereby covenant and agree that, prior to the date which is one year and
one day after the payment in full of the Secured Notes, they will not at any
time institute against the Trust, or join in any institution against the Trust
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Secured Notes, this Indenture or any of the Basic Documents. In addition, the
Indenture Trustee will on behalf of the Holders of the Secured Notes, (a) file a
written objection to any motion or other proceeding seeking the substantive
consolidation of any Originator with the Trust, (b) file an appropriate
memorandum of points and authorities or other brief in support of such
objection, or (c) endeavor to establish at the hearing on such objection that
the substantive consolidation of such entity would be materially prejudicial to
the Noteholders.
This Section 11.17 will survive for one year and one day following the
termination of this Indenture.
Section 11.18. Inspection. The Trust agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee and the Note
Purchaser, during the Trust's normal business hours, to examine all of books of
account, records, reports and other papers of the Trust, to make copies and
extracts therefrom, to cause such books to be audited by Independent Accountants
selected by the Indenture Trustee or the Note Purchaser, as the case may be, and
to discuss its affairs, finances and accounts with its officers, employees and
Independent Accountants (and by this provision the Trust hereby authorizes its
Accountants to discuss with such representatives such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any expense incident to the exercise by the Indenture Trustee of any
right under this Section 11.18 shall be borne by the Trust.
Section 11.19. Usury. The amount of interest payable or paid on any
Secured Note under the terms of this Indenture shall be limited to an amount
that shall not exceed the maximum nonusurious rate of interest allowed by the
applicable laws of the United States or the State of New York (whichever shall
permit the higher rate), that could lawfully be contracted for, charged or
received (the "Highest Lawful Rate"). In the event any payment of interest on
any Secured Note exceeds the Highest Lawful Rate, the Trust stipulates that such
excess amount will be deemed to have been paid as a result of an error on the
part of both the Indenture Trustee, acting on behalf of the Holder of such
Secured Note, and the Trust, and the Holder receiving such excess payment shall
promptly, upon discovery of such error or upon notice thereof from the Trust or
the Indenture Trustee, refund the amount of such excess or, at the option of the
Indenture Trustee, apply the excess to the payment of principal of such Secured
Note, if any, remaining unpaid. In addition, all sums paid or agreed to be paid
to the Indenture Trustee for the benefit of Holders of Secured Notes for the
use, forbearance or detention of money shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such Secured Notes.
Section 11.20. Third Party Beneficiary. The parties agree that the Note
Purchaser is intended and shall have all rights of a third-party beneficiary of
this Indenture, and may exercise its rights hereunder directly.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Trust and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers thereunto duly
authorized, all as of the day and year first above written.
ABFS MORTGAGE LOAN WAREHOUSE
TRUST 2003-1
By: WILMINGTON TRUST COMPANY, not in its individual
capacity, but solely as Owner Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
JPMORGAN CHASE BANK,
as Indenture Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Trust Officer
[Signature Page to Indenture]
EXHIBIT A
FORM OF SECURED NOTE
ABFS MORTGAGE LOAN WAREHOUSE TRUST 2003-1, SERIES 2003-1
SECURED NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND THE ISSUER HAS
NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS
AMENDED ("THE INVESTMENT COMPANY ACT"). THIS NOTE MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM, AND IN ACCORDANCE WITH SECTION 3(c)(7) OF THE INVESTMENT
COMPANY ACT. IN ADDITION, THE TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN
RESTRICTIONS AND CONDITIONS SET FORTH IN SECTION 2.12 OF THE INDENTURE UNDER
WHICH THIS NOTE IS ISSUED (A COPY OF WHICH INDENTURE IS AVAILABLE FROM THE OWNER
TRUSTEE OR INDENTURE TRUSTEE UPON REQUEST), INCLUDING RECEIPT BY THE OWNER
TRUSTEE AND THE INDENTURE TRUSTEE OF AN INVESTMENT LETTER IN WHICH THE
TRANSFEREE MAKES CERTAIN REPRESENTATIONS.
THE NOTE IS A NON-RECOURSE OBLIGATION OF THE TRUST, AND IS LIMITED IN
RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE
INDENTURE REFERRED TO BELOW. THE TRUST IS NOT OTHERWISE PERSONALLY LIABLE FOR
PAYMENTS ON THIS NOTE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
----------------------
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Secured Note |
A |
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$200,000,000 | Percentage Interest 100%
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Date of Indenture: | First Payment Date:
As of September 22, 2003 | October 25, 2003
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----------------------
A-1
ABFS MORTGAGE LOAN WAREHOUSE TRUST 2003-1
MORTGAGE BACKED NOTES, SERIES 2003-1
ABFS Mortgage Loan Warehouse Trust 2003-1, a statutory business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Trust"), for value received, hereby promises to pay to the registered
owner, the principal sum of $200,000,000 (the "Sale Amount"), together with
interest on the unpaid balance thereof from time to time outstanding at the
applicable interest rate and on the dates set forth in the Indenture, dated as
of September 22, 2003 (the "Indenture"), between the Trust and JPMorgan Chase
Bank, a New York banking corporation, as Indenture Trustee (the "Indenture
Trustee").
The entire unpaid Note Principal Balance of this Secured Note shall be
due and payable on the earlier of (i) the Payment Date occurring in September
2033 (this Secured Note's "Final Stated Maturity Date"), (ii) the Redemption
Date, if any, applicable to the Secured Notes pursuant to Article X of the
Indenture or (iii) the date on which an Event of Default or Amortization Event
shall have occurred and be continuing, if the Secured Notes have been declared
to be immediately due and payable in the manner provided in Section 5.02 of the
Indenture. Capitalized terms used but not defined herein are defined in Appendix
I to the Indenture.
Pursuant to the terms of the Indenture, payments will be made on the
25th day of each month or, if such day is not a Business Day, on the Business
Day immediately following such 25th day and any date on which Mortgage Loans are
sold by the Trust (each such date a "Payment Date"), commencing on the first
Payment Date specified on the cover page hereof, to the Person in whose name
this Secured Note is registered at the close of business on the applicable
Record Date, in an amount equal to the product of (a) the Percentage Interest
evidenced by this Secured Note and (b) the sum of the amounts to be paid on the
Secured Notes with respect to such Payment Date, all as more specifically set
forth in the Indenture.
On each Payment Date, Noteholders will be entitled to receive interest
payments in an aggregate amount equal to the Interest Payment Amount for such
Payment Date, together with principal payments in an aggregate amount equal to
the Principal Payment Amount for such Payment Date. The "Note Principal Balance"
of a Secured Note as of any date of determination is equal to the Sale Amount
(disregarding clause (ii) of the definition thereof) of such Secured Note minus
(ii) all payments of principal on such Secured Note pursuant to the terms of the
Indenture.
The principal of and interest on this Secured Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Trust with respect to this Secured Note shall be applied first to interest due
and payable on this Secured Note as provided above and then to the unpaid
principal of this Secured Note.
This Secured Note is one of a duly authorized issue of Secured Notes of
the Trust, designated as the "ABFS Mortgage Loan Warehouse Trust 2003-1, Secured
Notes, Series 2003-1," issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Trust, the Indenture Trustee
and the Holders of the Secured Notes. To the extent that any provision of this
Secured Note contradicts or is inconsistent with the provisions of the
Indenture, the provisions of the Indenture shall control and supersede such
contradictory or inconsistent provision herein. The Secured Notes are subject to
all terms of the Indenture.
A-2
This Secured Note is secured by the related Mortgage Loans, the other
collateral related thereto pledged as security therefor as provided in the
Indenture.
As described above, the entire unpaid Note Principal Balance of this
Secured Note shall be due and payable on the earlier of the Final Stated
Maturity Date and any Redemption Date, pursuant to Article X of the Indenture.
Notwithstanding the foregoing, the entire unpaid Note Principal Balance of the
Secured Notes shall be due and payable on the date on which an Event of Default
or an Amortization Event shall have occurred and be continuing if the Indenture
Trustee, at the direction or upon the prior written consent of the Note
Purchaser, or the Holders of the Secured Notes representing not less than 50% of
the Note Principal Balance of the Outstanding Secured Notes (with the prior
written consent of the Note Purchaser), shall have declared the Secured Notes to
be immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Secured Notes shall be made pro rata to
the Noteholders entitled thereto.
The Trust shall not be liable upon the indebtedness evidenced by the
Secured Notes except to the extent of amounts available from the Trust Estate
which constitutes security for the payment of the Secured Notes. The assets
included in the Trust Estate will be sole source of payments on the Secured
Notes, and each Holder hereof, by its acceptance of this Secured Note, agrees
that (i) such Secured Note will be limited in right of payment to amounts
available from the Trust Estate as provided in the Indenture and (ii) such
Holder shall have no recourse to the Trust, the Owner Trustee, the Indenture
Trustee, the Depositor, the Seller, the Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Trust pledged to secure the Secured Notes pursuant to the Indenture.
Payments of interest on this Secured Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Secured Note, shall be made by check mailed to the
Person whose name appears as the Holder of this Secured Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Secured Note be submitted for notation
of payment. Notwithstanding the foregoing, upon written request at least five
days prior to the related Record Date with appropriate instructions by the
Holder of this Secured Note (holding an aggregate initial Note Principal Balance
of at least $1,000,000), any payment of principal or interest, other than the
final installment of principal or interest, shall be made by wire transfer to an
account in the United States of America designated by such Holder reasonably
satisfactory to the Indenture Trustee. Notwithstanding the forgoing, so long as
JPMorgan Chase Bank is the Holder of all of the Secured Notes, payments of
interest and principal shall be made to JPMorgan Chase Bank, ABA#: ▇▇▇▇▇▇▇▇▇,
A/C #: 00113327002, Account Name: ABFS Balapointe Inc., Note Payment Account,
Attn: ▇▇▇▇▇ ▇▇▇▇, Associate, Ref: ABFS Warehouse Trust. Any reduction in the
principal amount of this Secured Note (or any one or more Predecessor Notes)
effected by any payments made on any Payment Date shall be binding upon all
future Holders of this Secured Note and of any Secured Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Secured Note on a Payment Date, then the Indenture Trustee, in the name of
and on behalf of the Trust, will notify the Person who was the Holder hereof as
of the Record Date preceding such Payment Date by notice mailed or transmitted
by facsimile prior to such Payment Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Secured Note at
the Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes.
A-3
As provided in the Indenture, this Secured Note may be redeemed at the
option of the Note Purchaser upon the conditions set forth in Section 10.01 of
the Indenture.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Secured Note may be registered on the Note
Register upon surrender of this Secured Note for registration of transfer at the
office or agency designated by the Trust pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Secured Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Secured Note, but the transferor may be required to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such registration of transfer or exchange.
In the case of a transfer of a Secured Note, the Note Registrar shall
not register the transfer of this Secured Note unless the Note Registrar has
received a representation letter from the transferee to the effect that either
(i) the transferee is not, and is not acquiring the Secured Note on behalf of or
with the assets of, an employee benefit plan or other retirement plan or
arrangement that is subject to Title I of the Employee Retirement Income
Security Act or 1974, as amended, or Section 4975 of the Code or (ii) the
acquisition and holding of this Secured Note by the transferee qualifies for
exemptive relief under a class exemption from the prohibited transaction
provisions of Sections 4.06 and 4.07 of ERISA issued by the Department of Labor.
Each Noteholder, by acceptance of a Secured Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Trust, the Owner Trustee or the Indenture Trustee on the
Secured Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Trust or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Trust, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
A-4
Each Noteholder agrees, by acceptance of this Secured Note, to treat
this Secured Note as indebtedness for all federal, state and other tax purposes.
The Trust has entered into the Indenture and this Secured Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Secured Notes will qualify as
indebtedness of the Trust secured by the Trust Estate. Each Noteholder, by
acceptance of a Secured Note, agrees to treat the Secured Notes for federal,
state and local income, single business and franchise tax purposes as
indebtedness of the Trust.
Prior to the due presentment for registration of transfer of this
Secured Note, the Trust, the Indenture Trustee and any agent of the Trust or the
Indenture Trustee may treat the Person in whose name this Secured Note (as of
the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Secured Note be overdue, and none of the Trust, the Indenture Trustee or
any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Holders of the Secured Notes under the Indenture at
any time by the Trust with the consent of the Note Purchaser and the Holders of
Secured Notes representing a majority of the Note Principal Balance of all
Outstanding Secured Notes. The Indenture also contains provisions permitting (i)
the Note Purchaser or (ii) the Holders of Secured Notes representing specified
percentages of the Note Principal Balance of Outstanding Secured Notes, on
behalf of the Holders of all the Secured Notes, to waive compliance by the Trust
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Note
Purchaser or by the Holder of this Secured Note (or any one or more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future
Holders of this Secured Note and of any Secured Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Secured Note. The
Indenture also permits the amendment thereof, in certain limited circumstances,
or the waiver of certain terms and conditions set forth in the Indenture,
without the consent of Holders of the Secured Notes issued thereunder.
The term "Trust" as used in this Secured Note includes any successor to
the Trust under the Indenture.
The Secured Notes will be delivered in fully registered, definitive
form in denominations as provided in the Indenture and subject to certain
limitations therein set forth. The Secured Notes are exchangeable for a like
aggregate initial Note Principal Balance of Secured Notes of different
authorized denominations, as requested by the Holder surrendering the same.
A-5
THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Secured
Note or of the Indenture shall alter or impair the obligation of the Trust,
which is absolute and unconditional, to pay the principal of and interest on
this Secured Note at the times, place and rate, and in the coin or currency
herein prescribed.
Unless the certificate of authentication hereon has been executed by
the Authenticating Agent whose name appears below by manual signature, this
Secured Note shall not be entitled to any benefit under the Indenture referred
to herein, or be valid or obligatory for any purpose.
A-6
IN WITNESS WHEREOF, the Trust has caused this Instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below. Dated:
ABFS MORTGAGE LOAN WAREHOUSE
TRUST 2003-1
By: WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee under the
Trust Agreement
By: _________________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Secured Notes designated above and referred
to in the within-mentioned Indenture.
Dated:
JPMORGAN CHASE BANK,
as Authenticating Agent
By: ____________________________
Authorized Signatory
A-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
_______________________________________________________
(name and address of assignee)
the within Secured Note and all rights thereunder, and hereby
irrevocably constitutes and appoints
__________________________________________, attorney, to transfer said Secured
Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: _______________________________ */
Signature Guaranteed:
____________________________________*/
*/ NOTICE: The signature to this assignment must correspond
with the name of the registered owner as it appears on the face of the within
Secured Note in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
A-8
EXHIBIT B
Reserved
B-1
EXHIBIT C
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: ABFS Mortgage Loan Warehouse Trust 2003-1 Mortgage
Backed Notes, Series 2003-1(the "Secured Notes")
----------------------------------------------------
Reference is hereby made to the Indenture dated as of _____, 2003 (the
"Indenture") between ABFS Mortgage Loan Warehouse Trust 2003-1, as Issuer, and
JPMorgan Chase Bank, as Indenture Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture. This
letter relates to $__________ initial Note Principal Balance of Secured Notes
which are held in the form of Definitive Notes registered in the name of
_________________ (the "Transferor"). The Transferor has requested a transfer of
such Definitive Notes for Definitive Notes registered in the name of [insert
name of transferee]. In connection with such request, and in respect of such
Certificates, the Transferor hereby certifies that such Certificates are being
transferred in accordance with (i) the transfer restrictions set forth in the
Indenture and the Secured Notes, (ii) the Investment Company Act of 1940, as
amended and (iii) Rule 144A under the Securities Act to a purchaser that the
Transferor reasonably believes is a Qualified Purchaser and a "qualified
institutional buyer" within the meaning of Rule 144A, purchasing for its own
account or for the account of a "qualified institutional buyer," and is aware
that the sale to it is being made in reliance upon Rule 144A, in a transaction
meeting the requirements of Rule 144A and in accordance with any applicable
securities laws of any state of the United States or any other applicable
jurisdiction. This certificate and the statements contained herein are made for
your benefit and the benefit of the Indenture Trustee.
_________________________________
[Name of Transferor]
By:__________________________________
Name:
Title:
Dated:______________, ____
C-1
EXHIBIT D
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
_______________
Date
Dear Sirs:
In connection with our proposed purchase of $______________ aggregate
principal balance of ABFS Mortgage Loan Warehouse Trust 2003-1 Secured Notes,
Series 2003-1 (the "Secured Notes"), we confirm that:
(1) We understand that the Secured Notes have not been, and will not be,
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we
should sell any Secured Notes within three years of the later of the
date of original issuance of the Secured Notes or the last day on which
such Secured Notes are owned by the Depositor or any affiliate of the
Depositor we will do so only (A) to the Depositor, (B) to "qualified
purchasers" (within the meaning of Section (3)(c)(7) of the Investment
Company Act of 1940, as amended, which are also "qualified
institutional buyers" (within the meaning of Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act
("QIBs"), (C) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act, or (D) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act that is not a QIB (an
"Institutional Accredited Investor") which prior to such transfer,
delivers to the Indenture Trustee under the Indenture dated as of
_____, 2003 (the "Indenture") between ABFS Mortgage Loan Warehouse
Trust 2003-1, as Issuer, and JPMorgan Chase Bank, as Indenture Trustee,
a signed letter in the form of this letter; and we further agree, in
the capacities stated above, to provide to any person purchasing any of
the Secured Notes from us a notice advising such purchaser that resales
of the Secured Notes are restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Secured Notes to an Institutional Accredited Investor, we will be
required to furnish to the Indenture Trustee a certification from such
transferee in the form hereof to confirm that the proposed sale is
being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. We
further understand that the Secured Notes purchased by us will bear a
legend to the foregoing effect.
(3) We are acquiring the Secured Notes for investment purposes and not with
a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act. We have such knowledge and experience
in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Secured Notes, and we and any
account for which we are acting are each able to bear the economic risk
of such investment.
(4) We are an Institutional Accredited Investor, and we are acquiring the
Secured Notes purchased by us for our own account or for one or more
accounts (each of which is an Institutional Accredited Investor) as to
each of which we exercise sole investment discretion.
(5) We have received such information as we deem necessary in order to
make our investment decision.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Indenture.
D-1
You and the Indenture Trustee are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
__________________________________
[Purchaser]
By: ________________________________
Name:
Title
D-2
EXHIBIT E
FORM OF TRANSFEREE CERTIFICATION --
INVESTMENT COMPANY ACT OF 1940
_________________
[date]
Dear Sirs:
In connection with our proposed purchase of $______________ aggregate
principal balance of ABFS Mortgage Loan Warehouse Trust 2003-1 Secured Notes,
Series 2003-1 (the "Secured Notes"), the undersigned (the "Transferee") confirms
that:
1. The Transferee is a Qualified Purchaser as defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act").
2. The Transferee is not a dealer that owns and invests on a
discretionary basis less than US$25,000,000 in securities of issuers that are
not affiliated persons of said dealer.
3. The Transferee was not formed for the purpose of investing in the
Secured Notes or other securities of the Issuer.
4. If the Transferee is an investment company excepted from the
Investment Company Act pursuant to Section 3(c)(1) or Section 3(c)(7) thereof
(or a foreign investment company under Section 7(d) thereof relying on Section
3(c)(1) or Section 3(c)(7) thereof with respect to its U.S. holders) and was
formed on or before April 30, 1996, it has received the consent of those of its
beneficial owners who acquired their interests on or before April 30, 1996 with
respect to its treatment as a qualified purchaser in the manner required by
Section 2(a)(51)(C) of the Investment Company Act and the rules thereunder.
5. The Transferee is not a (a) partnership, (b) common trust fund, (c)
special trust, pension fund or retirement plan or (d) other entity in which the
partners, beneficiaries, beneficial owners or participants, as the case may be,
may designate the particular investments to be made or the allocation thereof.
6. The value of the Secured Notes and other securities of the Trust
purchased shall constitute less than 40% of the value of the Transferee's total
assets.
7. The Transferee will hold at least the minimum denomination of the
Secured Notes.
8. The Transferee is purchasing the Secured Notes for its own account
or for the accounts of one or more persons each of whom meets all of the
requirements of items 1 through 8 herein.
E-1
9. The Transferee agrees that it will not reoffer, resell, pledge, or
otherwise transfer any Secured Note or interest therein except to a transferee
who (a) duly completes a purchase application or transfer certificate in the
form hereof, (b) submits the purchase application or transfer certificate to the
Indenture Trustee, and (c) receives approval from the Depositor for the
transfer. The Transferee also agrees that it will not reoffer, resell, pledge or
otherwise transfer any Secured Note or interest therein through an intermediary
or in any manner other than pursuant to direct contact with the transferee
thereof.
10. The Transferee understands that the Secured Notes have not been and
will not be registered under the Securities Act, that the Trust has not been
registered under the Investment Company Act and that the Secured Notes are being
sold to it in a transaction that is exempt from the registration requirements of
the Securities Act and in accordance with the requirements of Section 3(c)(7) of
the Investment Company Act.
11. In making this purchase the Transferee is not acting with the
intention of evading, either alone or in conjunction with any other person, the
requirements of the Investment Company Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Trust.
[insert name of Transferee],
on behalf of itself and each
Beneficial Owner
By:___________________________________
Name:
Title:
E-2