INDENTURE
dated as of December 1, 2000
by and between
ABFS MORTGAGE LOAN TRUST 2000-4,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................................................................2
Section 1.01. General Definitions.........................................................................2
ARTICLE II THE NOTES 2
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 Notes..................................................5
Section 2.08. Payments of Principal and Interest..........................................................5
Section 2.09. Persons Deemed Owner........................................................................7
Section 2.10. Cancellation................................................................................7
Section 2.11. Authentication and Delivery of Notes........................................................8
Section 2.12. Book-Entry Note.............................................................................9
Section 2.13. Termination of Book Entry System...........................................................10
ARTICLE III COVENANTS...........................................................................................11
Section 3.01. Payment of Notes...........................................................................11
Section 3.02. Maintenance of Office or Agency............................................................11
Section 3.03. Money for Note Payments to Be Held In Trust................................................11
Section 3.04. Existence of Trust.........................................................................13
Section 3.05. Protection of Trust Estate.................................................................13
Section 3.06. Opinions as to the Trust Estate............................................................14
Section 3.07. Performance of Obligations.................................................................14
Section 3.08. Investment Company Act.....................................................................15
Section 3.09. Negative Covenants.........................................................................15
Section 3.10. Annual Statement as to Compliance..........................................................16
Section 3.11. Restricted Payments........................................................................16
Section 3.12. Treatment of Notes as Debt for Tax Purposes................................................16
Section 3.13. Notice of Events of Default................................................................16
Section 3.14. Further Instruments and Acts...............................................................17
ARTICLE IV SATISFACTION AND DISCHARGE...........................................................................17
Section 4.01. Satisfaction and Discharge of Indenture....................................................17
Section 4.02. Application of Trust Money.................................................................18
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ARTICLE V DEFAULTS AND REMEDIES.................................................................................18
Section 5.01. Event of Default...........................................................................18
Section 5.02. Acceleration of Maturity; Rescission and Annulment.........................................19
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..................20
Section 5.04. Remedies...................................................................................20
Section 5.05. Indenture Trustee May File Proofs of Claim.................................................21
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Notes...........................22
Section 5.07. Application of Money Collected.............................................................22
Section 5.08. Limitation on Suits........................................................................23
Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest......................23
Section 5.10. Restoration of Rights and Remedies.........................................................24
Section 5.11. Rights and Remedies Cumulative.............................................................24
Section 5.12. Delay or Omission Not Waiver...............................................................24
Section 5.13. Control by Noteholders.....................................................................24
Section 5.14. Waiver of Past Defaults....................................................................25
Section 5.15. Undertaking for Costs......................................................................25
Section 5.16. Waiver of Stay or Extension Laws...........................................................25
Section 5.17. Sale of Trust Estate.......................................................................26
Section 5.18. Action on Notes............................................................................27
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the Trust............................27
Section 5.20. Application of the Trust Indenture Act.....................................................27
Section 5.21. Note Insurer Default.......................................................................28
ARTICLE VI THE INDENTURE TRUSTEE................................................................................28
Section 6.01. Duties of Indenture Trustee................................................................28
Section 6.02. Notice of Default..........................................................................30
Section 6.03. Rights of Indenture Trustee................................................................30
Section 6.04. Not Responsible for Recitals or Issuance of Notes..........................................31
Section 6.05. May Hold Notes.............................................................................31
Section 6.06. Money Held in Trust........................................................................31
Section 6.07. Eligibility, Disqualification..............................................................31
Section 6.08. Indenture Trustee's Capital and Surplus....................................................31
Section 6.09. Resignation and Removal; Appointment of Successor..........................................32
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee...................................33
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee...........34
Section 6.12. Preferential Collection of Claims Against Trust............................................34
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees......................................34
Section 6.14. Authenticating Agents......................................................................35
Section 6.15. Review of Mortgage Files...................................................................36
Section 6.16. Indenture Trustee Fees and Expenses........................................................37
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ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS......................................................................38
Section 7.01. Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders.............38
Section 7.02. Preservation of Information; Communications to Noteholders.................................38
Section 7.03. Reports by Indenture Trustee...............................................................38
Section 7.04. Reports by Trust...........................................................................39
ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES.........................................39
Section 8.01. Accounts; Investment; Collection of Moneys.................................................39
Section 8.02. Payments; Statements.......................................................................41
Section 8.03. Claims against the Policy..................................................................41
Section 8.04. General Provisions Regarding the Payment Account and Mortgage Loans........................43
Section 8.05. Releases of Deleted Mortgage Loans.........................................................44
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to Certain Information.................44
Section 8.07. Release of Trust Estate....................................................................45
Section 8.08. Amendment to Sale and Servicing Agreement..................................................45
Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and Servicing Agreement....................45
Section 8.10. Servicer as Agent..........................................................................45
Section 8.11. Termination of Servicer....................................................................46
Section 8.12. Opinion of Counsel.........................................................................46
Section 8.13. Appointment of Collateral Agents...........................................................46
Section 8.14. Rights of the Note Insurer to Exercise Rights of Noteholders...............................46
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note Insurer.............................47
ARTICLE IX SUPPLEMENTAL INDENTURES..............................................................................47
Section 9.01. Supplemental Indentures Without Consent of Noteholders.....................................47
Section 9.02. Supplemental Indentures With Consent of Noteholders........................................48
Section 9.03. Execution of Supplemental Indentures.......................................................49
Section 9.04. Effect of Supplemental Indentures..........................................................49
Section 9.05. Conformity With Trust Indenture Act........................................................50
Section 9.06. Reference in Notes to Supplemental Indentures..............................................50
Section 9.07. Amendments to Governing Documents..........................................................50
ARTICLE X REDEMPTION OF NOTES...................................................................................51
Section 10.01. Redemption.................................................................................51
Section 10.02. Form of Redemption Notice..................................................................52
Section 10.03. Notes Payable on Optional Redemption.......................................................52
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ARTICLE XI MISCELLANEOUS........................................................................................52
Section 11.01. Compliance Certificates and Opinions.......................................................52
Section 11.02. Form of Documents Delivered to Indenture Trustee...........................................53
Section 11.03. Acts of Noteholders........................................................................54
Section 11.04. Notices, etc...............................................................................54
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices......................................55
Section 11.06. Rules by Indenture Trustee.................................................................56
Section 11.07. Conflict With Trust Indenture Act..........................................................56
Section 11.08. Effect of Headings and Table of Contents...................................................56
Section 11.09. Successors and Assigns.....................................................................56
Section 11.10. Separability...............................................................................56
Section 11.11. Benefits of Indenture......................................................................56
Section 11.12. Legal Holidays.............................................................................56
Section 11.13. Governing Law..............................................................................57
Section 11.14. Counterparts...............................................................................57
Section 11.15. Recording of Indenture.....................................................................57
Section 11.16. Trust Obligation...........................................................................57
Section 11.17. No Petition................................................................................57
Section 11.18. Inspection.................................................................................58
Section 11.19. Usury......................................................................................58
Section 11.20. Note Insurer Default.......................................................................58
Section 11.21. Third-Party Beneficiary....................................................................58
APPENDICES AND EXHIBITS
Appendix I........Defined Terms
Exhibit A.........Form of Note
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CROSS-REFERENCE TABLE
Cross-reference sheet showing the location in the Indenture of the provisions
inserted pursuant to Sections 310 through 318(a) inclusive of the Trust
Indenture Act of 1939.(1)
Trust Indenture Act of 1939 Indenture Section
--------------------------- -----------------
Section 310
(a) (1)................................................................ 6.07
(a) (2)................................................................ 6.07, 6.08
(a) (3)................................................................ 6.13
(a) (4)................................................................ Not Applicable
(a) (5)................................................................ 6.07
(b).................................................................... 6.07, 6.09
(c).................................................................... Not Applicable
Section 311
(a).................................................................... 6.12
(b).................................................................... 6.12
(c).................................................................... Not Applicable
Section 312
a (a).................................................................... 7.01(a), 7.02(a)
(b) ................................................................... 7.02(b)
b (c).................................................................... 7.02(c)
c (d).................................................................... 7.03(a)
Section 313
(a).................................................................... 7.03(a)
(b).................................................................... 7.03(a)
(c).................................................................... 11.05
(d).................................................................... 7.03(b)
Section 314
(a)(1)................................................................. 7.04
(a)(2)................................................................. 7.04
(a)(3)................................................................. 7.04
(a)(4)................................................................. 7.04
(b)(1)................................................................. 2.11(c), 11.01
(b)(2)................................................................. 3.06
(c)(1)................................................................. 2.11(d), 4.01,
8.02(d), 11.01
(c)(2)................................................................. 2.11(c), 4.01,
8.02(d), 11.01
(c)(3)................................................................. 8.02(d)
(d)(1)................................................................. 11.01(a)
(d)(2)................................................................. 11.01(a)
(d)(3)................................................................. 11.01(a)
(e).................................................................... 11.01(b)
--------
(1) This Cross-Reference Table is not part of the Indenture.
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Trust Indenture Act of 1939 Indenture Section
--------------------------- -----------------
Section 315
(a).................................................................... 6.01(b), 6.01(c)(1)
(b).................................................................... 6.02, 11.05
(c).................................................................... 6.01(a)
(d)(1)................................................................. 6.01(b), 6.01(c)
(d)(2)................................................................. 6.01(c)(2)
(d)(3)................................................................. 6.01(c)(3)
(e).................................................................... 5.15
Section 316
(a).................................................................... 5.20
(b).................................................................... 5.09
(c).................................................................... 5.20
Section 317
(a)(1)................................................................. 5.03
(a)(2)................................................................. 5.05
(b).................................................................... 3.01
Section 318
(a).................................................................... 11.07
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This INDENTURE, dated as of December 1, 2000 (as amended or
supplemented from time to time as permitted hereby, this "Indenture"), is
between ABFS MORTGAGE LOAN TRUST 2000-4, a Delaware statutory business trust
(together with its permitted successors and assigns, the "Trust"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, as indenture trustee (together
with its permitted successors in the trusts hereunder, the "Indenture Trustee").
Preliminary Statement
The Trust has duly authorized the execution and delivery of this
Indenture to provide for its Mortgage Backed Notes, Series 2000-4 (the "Notes"),
issuable 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 Notes and
the Note Insurer. 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 Notes and the Note Insurer, all of the Trust's
right, title and interest in and to (a) the Mortgage Loans listed in the
Mortgage Loan Schedule attached as Schedule I to this Indenture (including
property that secures a Mortgage Loan that becomes an REO Property), including
the related Mortgage Files delivered or to be delivered to the Collateral Agent,
on behalf of the Indenture Trustee, pursuant to the Sale and Servicing
Agreement, 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 and
any Qualified Substitute Mortgage Loan, (b) the Unaffiliated Seller's Agreement
and the Sale and Servicing Agreement, (c) the Insurance Policies, (d) all cash,
instruments or other property held or required to be deposited in the Collection
Account, the Payment Account and the Note Insurance Payment Account, including
all investments made with funds in such Accounts (but not including any income
on funds deposited in, or investments made with funds deposited in, such
Accounts, which income shall belong to and be for the account of the Servicer),
and (e) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid assets, including, without limitation, all
insurance proceeds and condemnation awards. Such Grants are made, however, in
trust, to secure the Notes equally and ratably without prejudice, priority or
distinction between any Note and any other Note by reason of difference in time
of issuance or otherwise, and for the benefit of the Note Insurer to secure (x)
the payment of all amounts due on the Notes in accordance with their terms, (y)
the payment of all other sums payable under this Indenture and (z) compliance
with the provisions of this Indenture, all as provided in this Indenture. All
terms used in the foregoing Granting Clause 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 Notes may be adequately and effectively protected. The Indenture Trustee
agrees that it will hold the Policy in trust and that it will hold any proceeds
of any claim upon the Policy, solely for the use and benefit of the Noteholders
in accordance with the terms hereof and the Policy.
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions. Except as otherwise specified or as
the context may otherwise require, the terms defined in Appendix I have the
respective meanings set forth in such 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 or a Default known to the Indenture Trustee or of which the Indenture
Trustee has notice or knowledge, such reference shall be construed to refer only
to an Event of Default or Default of which the Indenture Trustee is deemed to
have notice or knowledge pursuant to Section 6.01(d). All other terms used
herein that are defined in the Trust Indenture Act (as hereinafter defined),
either directly or by reference therein, have the meanings assigned to them
therein.
ARTICLE II
THE NOTES
Section 2.01. Forms Generally. The Notes shall be substantially in the
form set forth as Exhibit A attached hereto. Each Note may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
on which the Notes may be listed, or as may, consistently herewith, be
determined by the Trust, as evidenced by its execution thereof. Any portion of
the text of any Note may be set forth on the reverse thereof with an appropriate
reference on the face of the Note.
The Definitive Notes may be produced in any manner determined by the
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 Note attached hereto as Exhibit A.
Section 2.03. General Provisions With Respect to Principal and Interest
Payment. The Notes shall be designated generally as the "ABFS Mortgage Loan
Trust 2000-4, Mortgage Backed Notes, Series 2000-4".
The Notes shall be issued in the form specified in Section 2.01 hereof.
The Notes shall be issued in one Class, the Class A Notes. The aggregate
Original Note Principal Balance
2
of Notes that may be authenticated and delivered under the Indenture is limited
to $275,000,000 of Class A Notes, except for the Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Notes pursuant to Sections 2.06, 2.07, or 9.06 of this Indenture.
Subject to the provisions of Sections 3.01, 5.07, 5.09 and 8.02 of this
Indenture, the principal of the Notes shall be payable in installments ending no
later than the Final Stated Maturity Date, unless the unpaid principal of such
Notes become due and payable at an earlier date by declaration of acceleration
or call for redemption or otherwise.
All payments made with respect to any Note shall be applied first to
the interest then due and payable on such Note and then to the principal
thereof. All computations of interest accrued on any Class A Note shall be made
on the basis of a year of 360 days and twelve 30-day months.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Notes, if the Notes have become or
been declared due and payable following an Event of Default and such
acceleration of maturity and its consequences have not been rescinded and
annulled, then payments of principal of and interest on the Notes shall be made
in accordance with Section 5.07 hereof.
Section 2.04. Denominations. The Notes shall be issuable only as
registered Notes in the denominations equal to the Authorized Denominations.
Section 2.05. Execution, Authentication, Delivery and Dating. The 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 Notes may be manual or by
facsimile.
Notes bearing the manual or facsimile signature of an individual who
was at any time an Authorized Officer of the Owner Trustee shall bind the Trust,
notwithstanding that such individual has ceased to be an Authorized Officer of
the Owner Trustee prior to the authentication and delivery of such Notes or was
not an Authorized Officer of the Owner Trustee at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Trust may deliver Notes executed on behalf of the Trust to
the Authenticating Agent for authentication, and the Authenticating Agent shall
authenticate and deliver such Notes as provided in this Indenture and not
otherwise.
Each Note authenticated on the Closing Date shall be dated the Closing
Date. All other Notes that are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for in Section
2.02 hereof, executed by the Authenticating Agent by the manual signature of one
of its Authorized Officers or employees, and such
3
certificate of authentication upon any Note shall be conclusive evidence, and
the only evidence, that such Note has been duly authenticated and delivered
hereunder.
Section 2.06. Registration, Registration of Transfer and Exchange. The
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 Notes and the registration of transfers of Notes. The
Indenture Trustee is hereby initially appointed "Note Registrar" for the purpose
of registering Notes and transfers of Notes as herein provided. The Indenture
Trustee shall remain the Note Registrar throughout the term hereof. Upon any
resignation of the Indenture Trustee, the Servicer, on behalf of the Trust,
shall promptly appoint a successor, with the approval of the Note Insurer, 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 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 Notes of any Authorized Denominations and of a like
aggregate initial Note Principal Balance.
At the option of the Holder, Notes may be exchanged for other Notes of
any Authorized Denominations, and of a like aggregate Note Principal Balance,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Owner Trustee shall execute, and
the Authenticating Agent shall authenticate and deliver, the Notes that the
Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Trust, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in the form included in 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 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 Notes,
other than exchanges pursuant to Section 2.07 hereof not involving any transfer
or any exchange made by the Note Insurer.
No transfer of a Note shall be made to the Unaffiliated Seller or, to
the actual knowledge of a Responsible Officer of the Indenture Trustee, to any
of the Unaffiliated Seller's Affiliates, successors or assigns.
The Note Registrar shall not register the transfer of a Note unless the
Note Registrar has received a representation letter from the transferee to the
effect that either (i) the transferee is not, and is not acquiring the Note on
behalf of or with the assets of, an employee
4
benefit plan or other retirement plan or arrangement that is subject to Title I
of the Employee Retirement Income Security Act or 1974, as amended, or Section
4975 of the Code or (ii) the acquisition and holding of the Note by the
transferee qualifies for exemptive relief under a Department of Labor Prohibited
Transaction Class Exemption. Each Beneficial Owner of a Note which is a
Book-Entry Note shall be deemed to make one of the foregoing representations.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes. If (1) any
mutilated Note is surrendered to the Note Registrar or the Note Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (2) there is delivered to the Note Registrar such security or
indemnity as may be required by the Note Registrar to save each of the Trust,
the Owner Trustee, the Note Insurer and the Note Registrar harmless, then, in
the absence of notice to the Note Registrar that such 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 Note, a
new Note or Notes of the same tenor and aggregate initial principal amount
bearing a number not contemporaneously outstanding. If, after the delivery of
such new Note, a bona fide purchaser of the original Note in lieu of which such
new Note was issued presents for payment such original Note, the Note Registrar,
shall be entitled to recover such new Note from the person to whom it was
delivered or any person taking therefrom, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expenses incurred by the Trust, the
Owner Trustee, the Note Insurer or the Note Registrar in connection therewith.
If any such mutilated, destroyed, lost or stolen Note shall have become or shall
be about to become due and payable, or shall have become subject to redemption
in full, instead of issuing a new Note, the Trust may pay such Note without
surrender thereof, except that any mutilated Note shall be surrendered.
Upon the issuance of any new Note under this Section 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 Note issued pursuant to this Section 2.07 in lieu of any
destroyed, lost or stolen Note shall constitute an original contractual
obligation of the Trust, whether or not the destroyed, lost or stolen Note shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Notes duly
issued hereunder.
The provisions of this Section 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 Notes.
Section 2.08. Payments of Principal and Interest. (a) Payments on Notes
issued as Book-Entry Notes will be made by or on behalf of the Indenture Trustee
to the Clearing Agency or its nominee. Any installment of interest or principal
payable on any Definitive Notes that is punctually paid or duly provided for by
the Trust on the applicable Payment Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered at
5
the close of business on the Record Date for such Notes 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
Note, which shall be payable as provided in subsection (b) of this Section 2.08.
A fee may be charged by the Indenture Trustee to a Holder of Definitive Notes
for any payment made by wire transfer. Any installment of interest or principal
not punctually paid or duly provided for shall be payable as soon as funds are
available to the Indenture Trustee for payment thereof, or if Section 5.07
applies, pursuant to Section 5.07.
(b) All reductions in the Note Principal Balance of a Note (or one or
more Predecessor Notes) effected by payments of installments of principal made
on any Payment Date shall be binding upon all Holders of such Note and of any
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, whether or not such payment is noted on such Note. The final
installment of principal of each Note 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.
Whenever the Indenture Trustee expects that the entire unpaid Note
Principal Balance of any Note will become due and payable on the next Payment
Date, other than pursuant to a redemption pursuant to Article X, it shall, no
later than two (2) Business Days prior to such Payment Date, telecopy or hand
deliver to each Person in whose name a Note to be so retired is registered at
the close of business on such otherwise applicable Record Date a notice to the
effect that:
(i) the Indenture Trustee expects that funds sufficient to pay
such final installment will be available in the Payment Account on such
Payment Date; and
(ii) if such funds are available, (A) such final installment
will be payable on such Payment Date, but only upon presentation and
surrender of such Note at the office or agency of the Note Registrar
maintained for such purpose pursuant to Section 3.02 (the address of
which shall be set forth in such notice) and (B) no interest shall
accrue on such Note after such Payment Date.
A copy of such form of notice shall be sent to the Note Insurer by the
Indenture Trustee.
Notices in connection with redemptions of Notes shall be mailed to
Noteholders in accordance with Section 10.02 hereof.
(c) Subject to the foregoing provisions of this Section 2.08, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to unpaid principal and
interest that were carried by such other
6
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 of (i) the Noteholder Statement, (which shall be prepared by
the Servicer based on the Servicer calculations of the loan level data provided
in the Servicer Remittance Report delivered to the Indenture Trustee pursuant to
the Sale and Servicing Agreement) and (ii) the Servicer Remittance Report shall
be delivered by the Indenture Trustee to the Rating Agencies, the Owner Trustee,
the Depositor and each Noteholder as the statements required pursuant to Section
8.06 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 Servicer Remittance
Report or Noteholder Statement except to the extent necessary to satisfy all
obligations under this Section 2.08(d).
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 "Noteholder Statement," aggregated for such
calendar year or the applicable portion thereof during which such person was a
Noteholder. Such obligation will be deemed to have been satisfied to the extent
that substantially comparable information is provided pursuant to any
requirements of the Code as are from time to time in force.
From time to time (but no more than once per calendar month), upon the
written request of the Depositor, the Servicer or the Note Insurer, the
Indenture Trustee shall report to the Depositor, the Servicer and the Note
Insurer the amount then held in each Account (including investment earnings
accrued) held by the Indenture Trustee and the identity of the investments
included therein. From time to time, at the request of the Note Insurer, the
Indenture Trustee shall report to the Note Insurer 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 3.03 of the Unaffiliated Seller's Agreement.
The Indenture Trustee shall also provide the Note Insurer such other information
within its control as may be reasonably requested by it.
Section 2.09. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, any agent on behalf of the Trust including
but not limited to the Indenture Trustee, or the Note Insurer, may treat the
Person in whose name any Note is registered as the owner of such Note (a) on the
applicable Record Date for the purpose of receiving payments of the principal of
and interest on such Note and (b) on any other date for all other purposes
whatsoever, and none of the Trust, the Indenture Trustee or any other agent of
the Trust, or the Note Insurer shall be affected by notice to the contrary.
Section 2.10. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Registrar, be delivered to the Note Registrar and
shall be promptly canceled by it. The Owner Trustee, on behalf of the Trust,
shall deliver to the Note Registrar for cancellation any Note previously
authenticated and delivered hereunder which the Owner Trustee, on behalf of the
Trust may have acquired in any manner whatsoever, and all Notes so delivered
shall be promptly
7
canceled by the Note Registrar. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section 2.10, except as
expressly permitted by this Indenture. All cancelled 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 Notes. The 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
receipt by the Authenticating Agent of all of the following:
(a) A Trust Order authorizing the execution, authentication and
delivery of the Notes and specifying the Note Principal Balance and the
Percentage Interest of such Notes to be authenticated and delivered.
(b) A Trust Order authorizing the execution and delivery of this
Indenture, the Sale and Servicing Agreement, the Insurance and Indemnity
Agreement and any other documents contemplated thereby.
(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 Insurer or upon which the Authenticating Agent and the Note
Insurer 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 Insurer.
In rendering the opinions set forth above, such counsel may rely upon
Officer's Certificates of the Trust, the Owner Trustee, the Unaffiliated Seller,
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).
The acceptability to the Note Insurer of the Opinion of Counsel
delivered to the Authenticating Agent and the Note Insurer at the Closing Date
shall be conclusively evidenced by the delivery on the Closing Date of the
Policy.
(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 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
8
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 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 this Indenture 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, 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 Unaffiliated Seller's Agreement.
(g) An executed counterpart of the Trust Agreement.
(h) An executed copy of the Insurance Agreement.
(i) An original executed copy of the Policy.
(j) A copy of a letter from ▇▇▇▇▇'▇ that it has assigned a rating of
"Aaa" to the Notes and a copy of a letter from S&P that it has assigned a rating
of "AAA" to the Notes.
Section 2.12. Book-Entry Note. The Notes will be issued initially as
one or more certificates in the name of Cede & Co., as nominee for the Clearing
Agency maintaining book-entry records with respect to ownership and transfer of
such Notes, and registration of the Notes may not be transferred by the Note
Registrar except upon Book-Entry Termination. In such case, the Note Registrar
shall deal with the Clearing Agency as representative of the Beneficial Owners
of such Notes for purposes of exercising the rights of Noteholders hereunder.
Each payment of principal of and interest on a Book-Entry Note shall be paid to
the Clearing Agency, which shall credit the amount of such payments to the
accounts of its Clearing Agency Participants in accordance with its normal
procedures. Each Clearing Agency Participant shall be responsible for disbursing
such payments to the Beneficial Owners of the Book-Entry Notes that it
represents and to each indirect participating brokerage firm (a "brokerage firm"
or "indirect participating firm") for which it acts as agent. Each brokerage
firm shall be responsible for disbursing funds to the Beneficial Owners of the
Book-Entry Notes that it represents. All such credits and disbursements are to
be made by the Clearing Agency and the Clearing Agency
9
Participants in accordance with the provisions of the Notes. None of the
Indenture Trustee, the Note Registrar, if any, the Trust or the Note Insurer
shall have any responsibility therefor except as otherwise provided by
applicable law. Requests and directions from, and votes of, such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Beneficial Owners.
Section 2.13. Termination of Book Entry System. (a) The book-entry
system through the Clearing Agency with respect to the Book-Entry Notes may be
terminated upon the happening of any of the following:
(i) The Clearing Agency advises the Indenture Trustee that the
Clearing Agency is no longer willing or able to discharge properly its
responsibilities as nominee and depositary with respect to the Notes
and the Indenture Trustee is unable to locate a qualified successor
Clearing Agency satisfactory to the Servicer, on behalf of the Trust;
(ii) The Majority Certificateholders, on behalf of the Trust,
in their sole discretion, elects to terminate the book-entry system by
notice to the Clearing Agency and the Indenture Trustee; or
(iii) After the occurrence of an Event of Default (at which
time the Indenture Trustee shall use all reasonable efforts to promptly
notify each Beneficial Owner through the Clearing Agency of such Event
of Default), the Beneficial Owners of no less than 51% of the Note
Principal Balance of the Book-Entry Notes advise the Indenture Trustee
in writing, through the related Clearing Agency Participants and the
Clearing Agency, that the continuation of a book-entry system through
the Clearing Agency to the exclusion of any Definitive Notes being
issued to any person other than the Clearing Agency or its nominee is
no longer in the best interests of the Beneficial Owners.
(b) Upon the occurrence of any event described in subsection (a) of
this Section 2.13, the Indenture Trustee shall use all reasonable efforts to
notify all Beneficial Owners, through the Clearing Agency, of the occurrence of
such event and of the availability of Definitive Notes to Beneficial Owners
requesting the same, in an aggregate outstanding Note Principal Balance
representing the interest of each, making such adjustments and allowances as it
may find necessary or appropriate as to accrued interest and previous calls for
redemption. Definitive Notes shall be issued only upon surrender to the
Indenture Trustee of the global Note by the Clearing Agency, accompanied by
registration instructions for the Definitive Notes. Neither the Trust nor the
Indenture Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon issuance of the Definitive Notes, all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall cease
to be applicable and the provisions relating to Definitive Notes shall be
applicable.
10
ARTICLE III
COVENANTS
Section 3.01. Payment of 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 Notes in accordance with the terms of the Notes and this Indenture. The
Notes shall be non-recourse obligations of the Trust and shall be limited in
right of payment to amounts available from the Trust Estate as provided in this
Indenture and the Trust shall not otherwise be liable for payments on the Notes.
No person shall be personally liable for any amounts payable under the Notes. If
any other provision of this Indenture conflicts or is deemed to conflict with
the provisions of this Section 3.01, the provisions of this Section 3.01 shall
control.
Section 3.02. Maintenance of Office or Agency. The Indenture Trustee
will always maintain its corporate trust office at a location in the United
States of America where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Trust in respect of the
Notes and this Indenture may be served. Such location shall be the Corporate
Trust Office of the Indenture Trustee.
The Owner Trustee, at the direction of the Majority Certificateholder,
on behalf of the Trust may also from time to time, at the expense of the
Majority Certificateholders, designate one or more other offices or agencies
within the United States of America where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, any designation of an office or agency for
payment of Notes shall be subject to Section 3.03 hereof. The Owner Trustee, at
the direction of the Majority Certificateholders, on behalf of the Trust will
give prompt written notice to the Indenture Trustee and the Note Insurer of any
such designation or rescission and of any change in the location of any such
other office or agency.
Section 3.03. Money for Note Payments to Be Held In Trust. All payments
of amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the Payment 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 Payment Account for payments on the 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.
With respect to Definitive Notes, 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 Notes and of the number of Individual
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
Payment Account), such sum to be held in trust for the benefit of the Persons
11
entitled thereto. Any moneys deposited with a Paying Agent in excess of an
amount sufficient to pay the amounts then becoming due on the Notes with respect
to which such deposit was made shall, upon 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 Insurer, 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:
(a) allocate all sums received for payment to the Holders of Notes on
each Payment Date among such Holders in the proportion specified in the
applicable Noteholder Statement, 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 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 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 Notes) in the making of any payment required to be made with respect to any
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; and
(f) comply with all requirements of the Code, and all regulations
thereunder, with respect to withholding from any payments made by it on any
Notes of any applicable withholding taxes imposed thereon and with respect to
any applicable reporting requirements in connection therewith; provided,
however, that with respect to withholding and reporting requirements applicable
to original issue discount (if any) on any of the Notes, the Servicer, on behalf
of the Trust, has provided the calculations pertaining thereto to the Indenture
Trustee and the Paying Agent.
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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 Note and remaining
unclaimed for two and one-half years after such amount has become due and
payable to the Holder of such Note (or if earlier, three months before the date
on which such amount would escheat to a governmental entity under applicable
law) shall be discharged from such trust and paid to the Trust; and the Holder
of such 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 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 business 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 Notes and the other Basic Documents.
(b) Subject to Section 3.09(g) hereof, and with the prior written
consent of the Note Insurer, 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)).
(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) The Trust will, from time
to time, execute and deliver all such supplements and amendments hereto and all
such financing
13
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, the Sale and Servicing
Agreement, or the Unaffiliated Seller's Agreement; or
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, the Noteholders and the Note Insurer
in the Mortgage Loans and the other property held as part of the Trust
Estate against the claims of all Persons and parties.
(b) The Indenture Trustee shall not, 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 2001, the Servicer, on behalf of the Trust,
shall furnish to the Indenture Trustee and the Note Insurer an Opinion of
Counsel reasonably satisfactory in form and substance to the Indenture Trustee
and the Note Insurer 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 use its Best Efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's covenants or obligations under any of the Mortgage
Files or under any instrument included in the Trust Estate, or that would result
in the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any of the documents or instruments
14
contained in the Mortgage Files, except as expressly permitted in this
Indenture, the other Basic Documents or such document included in the Mortgage
File or other instrument or unless such action will not adversely affect the
interests of the Noteholders and the Note Insurer.
(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 or the Unaffiliated Seller's Agreement, the Servicer or the Owner
Trustee, as applicable, shall promptly notify the Indenture Trustee, the Note
Insurer and the Rating Agencies 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 Insurer and the Rating Agencies. As soon as any successor Servicer is
appointed, the Indenture Trustee shall notify the Note Insurer and the Rating
Agencies, 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.
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 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 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 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 Notes pursuant
to this Indenture;
(f) subject to Article IX of the Trust Agreement, dissolve or liquidate
in whole or in part (until the 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,
15
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; or
(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.
Section 3.10. Annual Statement as to Compliance. (a) On or before April
30, 2001, and each April 30 thereafter, the Servicer, on behalf of the Trust,
shall deliver to the Indenture Trustee, the Note Insurer and the Depositor a
written statement, signed by an Authorized Officer of the Servicer, on behalf of
the Trust, stating that:
(b) 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
(c) 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, the Note Insurer and the
Certificateholders 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 the Payment Account except in accordance with this Indenture.
Section 3.12. Treatment of 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 Notes as indebtedness, and hereby instructs the Indenture
Trustee, Paying Agent and the Servicer, on behalf of the Trust to treat the
Notes as indebtedness for all applicable tax reporting purposes.
Section 3.13. Notice of Events of Default. Pursuant to Section 5.01(c)
of the Sale and Servicing Agreement, the Servicer, on behalf of the Trust, shall
give the Indenture
16
Trustee, the Note Insurer, the Rating Agencies and the Depositor prompt written
notice of each Event of Default hereunder, each default on the part of the
Servicer of its obligations under the Sale and Servicing Agreement and each
default on the part of the Unaffiliated Seller of its obligations under the
Unaffiliated Seller's Agreement.
Section 3.14. Further Instruments and Acts. Upon written request of the
Indenture Trustee or the Note Insurer, the Owner Trustee, on behalf of the
Trust, will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. Whenever the
following conditions shall have been satisfied:
(a) either
(i) all Notes theretofore authenticated and delivered (other
than (x) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.07 hereof, and (y) Notes
for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Trust, as provided in Section 3.03 hereof)
have been delivered to the Note Registrar for cancellation; or
(ii) all Notes not theretofore delivered to the Note Registrar
for cancellation, (A) have become due and payable, or (B) will become
due and payable at the Final Stated Maturity Date within one (1) year,
or (C) are to be called for redemption pursuant to Section 10.01 hereof
within one (1) year under irrevocable arrangements satisfactory to the
Indenture Trustee for the giving of notice of redemption by the
Indenture Trustee in the name, and at the expense, of the
Certificateholder or Servicer, as applicable,
and the Certificateholder, in the case of clause (ii)(C), or Servicer, in the
case of clauses (ii)(A), (ii)(B) or (ii)(C) above, has irrevocably deposited or
caused to be deposited with the Indenture Trustee, in trust for such purpose, an
amount sufficient to pay and discharge the entire unpaid Note Principal Balance
of such Notes not theretofore delivered to the Indenture Trustee for
cancellation, for principal and interest to the Final Stated Maturity Date or to
the Redemption Date, as the case may be, and in the case of Notes that were not
paid at the Final Stated Maturity Date of their entire unpaid Note Principal
Balance, for all overdue principal and all interest payable on such Notes to the
next succeeding Payment Date therefor;
(b) the Servicer, on behalf of the Trust, has paid or caused to be paid
all other sums payable hereunder by the Trust (including, without limitation,
amounts due the Note Insurer); and
(c) the Servicer, on behalf of the Trust, has delivered to the
Indenture Trustee and the Note Insurer an Officers' Certificate and an Opinion
of Counsel satisfactory in form and
17
substance to the Indenture Trustee and the Note Insurer each stating that all
conditions precedent herein providing for the satisfaction and discharge of this
Indenture have been complied with;
then, upon 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 Notes under Section 3.03 hereof, the obligations of the Indenture
Trustee to the Holders of Notes under Section 4.02 hereof and the provisions of
Section 2.07 hereof with respect to lost, stolen, destroyed or mutilated Notes,
registration of transfers of Notes and rights to receive payments of principal
of and interest on the Notes shall survive.
Section 4.02. Application of Trust Money. All money deposited with the
Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with the
Indenture Trustee.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default. "Event of Default", wherever used
herein, means, with respect to Notes issued hereunder, any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(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 Notes, on any
Payment Date, any Class A Interest Payment Amount or shall fail to pay any Net
Mortgage Loan Interest Shortfalls on the Final Stated Maturity Date for the
Notes;
(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 Notes, (x) on any
Payment Date, an amount equal to the Principal Payment Amount due on the 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 the Notes, the
aggregate outstanding Note Principal Balance of Notes;
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(c) if the Trust shall breach or default in the due observance of any
one or more of the covenants set forth in clauses (a) through (h) of 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;
(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 ninety (90) days
after the date of entry thereof; or
(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 ninety (90) 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
ninety (90) days.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs and is continuing, then and in every such case, but with
the consent of the Note Insurer in the absence of a Note Insurer Default, the
Indenture Trustee may, and on request of the Note Insurer, in the absence of a
Note Insurer Default, or, with the prior written consent of the Note Insurer,
the Holders of Notes representing not less than 50% of the Note Principal
Balance of the Outstanding Notes, shall, declare all the 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 Notes, in
an amount equal to the entire unpaid Note Principal Balance of such Notes,
together with accrued and unpaid interest thereon to the date of such
acceleration, shall become immediately due and payable, all subject to the prior
written consent of the Note Insurer in the absence of a Note Insurer Default.
At any time after such a declaration of acceleration of maturity of the
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by
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the Indenture Trustee as hereinafter provided in this Article V, the Note
Insurer, in the absence of a Note Insurer Default, or the Holders of Notes
representing more than 50% of the Note Principal Balance of the Outstanding
Notes, with the prior written consent of the Note Insurer, 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 Notes and all other amounts that would then be due
hereunder or upon such Notes if the Event of Default giving rise to
such acceleration had not occurred; and
(ii) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the principal
of Notes that have become due solely by such acceleration, have been cured or
waived as provided in Section 5.14 hereof.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. Subject to the provisions of Section 3.01 hereof and the
following sentence, if an Event of Default occurs and is continuing, the
Indenture Trustee may, with the prior written consent of the Note Insurer,
proceed to protect and enforce its rights and the rights of the Noteholders and
the Note Insurer by any Proceedings the Indenture Trustee deems appropriate to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or enforce any other proper remedy. Any Proceedings brought by
the Indenture Trustee, on behalf of the Noteholders and the Note Insurer, or any
Noteholder against the 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 Notes in respect of which such Event
of Default has occurred. If there is a foreclosure of any such liens,
assignments, rights and security interests under this Indenture, by private
power of sale or otherwise, no judgment for any deficiency upon the indebtedness
represented by the Notes may be sought or obtained by the Indenture Trustee or
any Noteholder against the Trust. The Indenture Trustee shall be entitled to
recover the costs and expenses expended by it pursuant to this Article V
including reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee, its agents and counsel.
Section 5.04. Remedies. If an Event of Default shall have occurred and
be continuing and the Notes been declared due and payable and such declaration
and its consequences have not been rescinded and annulled, the Indenture
Trustee, at the direction of the
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Note Insurer (subject to Section 5.17 hereof, to the extent applicable) may, for
the benefit of the Noteholders and the Note Insurer, do one or more of the
following:
(a) institute Proceedings for the collection of all amounts then
payable on the Notes, or under this Indenture, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Trust moneys
adjudged due, subject in all cases to the provisions of Sections 3.01 and 5.03
hereof;
(b) 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;
(c) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Trust Estate;
(d) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee or the Holders of the Notes and the
Note Insurer hereunder; and
(e) refrain from selling the Trust Estate and apply all funds on
deposit in each of the Accounts pursuant to Section 5.07 hereof.
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 Notes or the property of the
Trust or of such other obligor or their creditors, the Indenture Trustee
(irrespective of whether the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand on the Trust for the payment of any
overdue principal or interest) shall, with the prior written consent of the Note
Insurer, be entitled and empowered, by intervention in such Proceeding or
otherwise to:
(a) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes and file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel), the Noteholders and the Note Insurer 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 Insurer
to make such payments to the Indenture Trustee and, in the event that the
Indenture Trustee shall consent to the making of such payments directly to the
Noteholders and the Note Insurer, to pay to the Indenture Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee, its agents and counsel.
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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 Insurer any plan of reorganization, arrangement,
adjustment or composition affecting any of the Notes or the rights of any Holder
thereof, or the Note Insurer, or to authorize the Indenture Trustee to vote in
respect of the claim of any Noteholder or the Note Insurer in any such
Proceeding.
Section 5.06. Indenture Trustee May Enforce Claims Without Possession
of Notes. All rights of action and claims under this Indenture or any of the
Notes may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any Proceeding
relating thereto, and any such Proceeding instituted by the Indenture Trustee,
at the direction of the Note Insurer, shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Holders of the Notes and the Note Insurer in respect of
which such judgment has been recovered after payment of amounts required to be
paid pursuant to clause (a) of Section 5.07 hereof.
Section 5.07. Application of Money Collected. If the Notes have been
declared due and payable following an Event of Default and such declaration and
its consequences have not been rescinded and annulled, any money collected by
the Indenture Trustee with respect to the 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 the Notes shall be applied in the
following order, at the date or dates fixed by the Indenture Trustee and, in
case of the payment of the entire amount due on account of principal of, and
interest on, the Notes, upon presentation and surrender thereof:
(a) 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;
(b) second, to the Servicer, any amounts required to pay the Servicer
for any unpaid Servicing Fees then due and to reimburse the Servicer for
Periodic Advances 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
previously made by, and not previously reimbursed to or retained by, the
Servicer;
(c) third, to the payment of Class A Interest Payment Amounts then due
and unpaid upon the Outstanding Notes through the day preceding the date on
which such payment is made;
(d) fourth, to the payment of the Note Principal Balance of the
Outstanding Notes, up to the amount of the unpaid Note Principal Balance;
(e) fifth, to the Note Insurer, as subrogee to the rights of the
Noteholders, (x) the aggregate amount necessary to reimburse the Note Insurer
for any unreimbursed Reimbursement Amounts paid by the Note Insurer on prior
Payment Dates, together with interest thereon at the "Late Payment Rate"
specified in the Insurance Agreement from the date such Reimbursement Amounts
were due to the Note Insurer to such Payment Date, (y) the amount of
22
any unpaid Premium Amount then due, together with interest thereon at the "Late
Payment Rate" specified in the Insurance Agreement from the date such amounts
were due to such Payment Date and (z) any other amounts due and owing to the
Note Insurer under the Insurance Agreement;
(f) sixth, to the payment of any Net Mortgage Loan Interest Shortfalls,
through the day preceding the date on which such payment is made; and
(g) seventh, the remainder to the Holders of Trust Certificates.
Section 5.08. Limitation on Suits. No Holder of a Note shall have any
right to institute any Proceedings, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to the Indenture
Trustee and the Note Insurer of a continuing Event of Default;
(b) the Holders of Notes representing not less than 25% of the Note
Principal Balance of the Outstanding Notes shall have made written request to
the Indenture Trustee to institute Proceedings in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(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;
(d) the Indenture Trustee, for sixty (60) 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 sixty (60) day period by the Holders of
Notes representing more than 50% of the Note Principal Balance of the
Outstanding Notes; and
(f) the consent of the Note Insurer shall have been obtained; it being
understood and intended that no one or more Holders of Notes shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders
of Notes or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all the Holders of
Notes.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than 50% of the Note Principal Balances of the
Outstanding Notes, the Indenture Trustee shall take the action prescribed by the
group representing a greater percentage of the Note Principal Balances of the
Outstanding Notes.
Section 5.09. Unconditional Rights of Noteholders to Receive Principal
and Interest. Subject to the provisions in this Indenture (including Sections
3.01 and 5.03 hereof) limiting the right to recover amounts due on a Note to
recovery from amounts in the portion of
23
the Trust Estate relating to such Note, the Holder of any Note shall have the
right, to the extent permitted by applicable law, which right is absolute and
unconditional, to receive payment of each installment of interest on such Note
on the respective Payment Date for such installments of interest, to receive
payment of each installment of principal of such Note when due (or, in the case
of any Note called for redemption, on the date fixed for such redemption) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
Section 5.10. Restoration of Rights and Remedies. If the Indenture
Trustee, the Note Insurer or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason, or has been determined to be adverse
to the Indenture Trustee, the Note Insurer or to such Noteholder, then and in
every such case the Indenture Trustee, the Note Insurer and the Noteholders
shall, subject to any determination in such Proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Indenture Trustee, the Note Insurer and the Noteholders
shall continue as though no such Proceeding had been instituted.
Section 5.11. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Note Insurer or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.12. Delay or Omission Not Waiver. No delay or omission of the
Indenture Trustee, the Note Insurer or of any Holder of any Note to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the
Indenture Trustee, the Note Insurer or to the Noteholders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture Trustee,
the Note Insurer or by the Noteholders with the prior consent of the Note
Insurer, as the case may be.
Section 5.13. Control by Noteholders. The Holders of Notes representing
more than 50% of the Note Principal Balance of the Outstanding Notes on the
applicable Record Date shall, with the consent of the Note Insurer, have the
right to direct the time, method and place of conducting any Proceeding for any
remedy available to the Indenture Trustee or exercising any trust or power
conferred on the Indenture Trustee; provided that:
(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 Notes representing the percentage of the
Note Principal Balance
24
of the Outstanding 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 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 Notes
representing more than 50% of the Note Principal Balance of the Outstanding
Notes on the applicable Record Date may on behalf of the Holders of all the
Notes, and with the consent of the Note Insurer, waive any past Default
hereunder and its consequences, except a Default:
(a) in the payment of principal or any installment of interest on any
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 arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 5.15. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.15 shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate Notes representing more than 10% of the
Note Principal Balance of the Outstanding Notes, or to any suit instituted by
any Noteholder for the enforcement of the payment of any Class A Interest
Payment Amount or Principal Payment Amount on any Note on or after the related
Payment Date or for the enforcement of the payment of principal of any Note on
or after the Final Stated Maturity Date (or, in the case of any Note called for
redemption, on or after the applicable Redemption Date).
Section 5.16. Waiver of Stay or Extension Laws. The 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,
25
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 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 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 Notes representing not less than 50% of the
Note Principal Balance of the 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 Notes, in
full payment thereof in accordance with Section 5.07 hereof, on the
Payment Date next succeeding the date of such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or disposition thereof for purposes
of this Section 5.17(b). In the absence of a Note Insurer Default, no Sale
hereunder shall be effective without the consent of the Note Insurer.
(c) Unless the Holders of all Outstanding Notes have otherwise
consented or directed the Indenture Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater than the
amount described in paragraph (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 Insurer, 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 Insurer.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(i) any Holder or Holders of Notes may bid for and purchase
the property offered for Sale, and upon compliance with the terms of
sale may hold, retain and possess and dispose of such property, without
further accountability, and may, in paying the purchase money therefor,
deliver any Outstanding Notes or claims for interest thereon in lieu of
cash up to the amount that shall, upon distribution of the net proceeds
of such Sale, be payable thereon, and such Notes, in case the amounts
so payable thereon shall be less than the amount due thereon, shall be
returned to the Holders thereof after being appropriately stamped to
show such partial payment;
26
(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 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 Notes in
order to complete any such Sale or in order for the net Sale price to
be credited against such Notes, and any property so acquired by the
Indenture Trustee shall be held and dealt with by it in accordance with
the provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Trust Estate in connection with a Sale thereof,
(iv) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the 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; and
(v) no purchaser or transferee at such a Sale shall be bound
to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any moneys.
Section 5.18. Action on Notes. The Indenture Trustee's right to seek
and recover judgment under this Indenture shall not be affected by the seeking,
obtaining or application of any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee, the Note Insurer or the Holders of Notes shall be impaired by
the recovery of any judgment by the Indenture Trustee against the Trust or by
the levy of any execution under such judgment upon any portion of the Trust
Estate.
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the
Trust. The Trust Estate Granted to the Indenture Trustee as security for the
Notes serves as security only for the Notes. Holders of the Notes shall have no
recourse against the trust estate granted as security for any other series of
Notes issued by the Trust, and no judgment against the Trust for any amount due
with respect to the Notes may be enforced against either the trust estate
securing any other series or any other assets of the Trust, nor may any
prejudgment lien or other attachment be sought against any such other trust
estate or any other assets of the Trust. The Noteholders shall have no recourse
against the Owner Trustee, the Indenture Trustee, the Note Registrar, the
Authenticating Agent, the Collateral Agent, the Depositor, the Unaffiliated
Seller, the Servicer or any of their respective Affiliates, or to the assets of
any of the foregoing entities.
Section 5.20. Application of the Trust Indenture Act. Pursuant to
Section 316(a) of the TIA, all provisions automatically provided for in Section
316(a) are hereby expressly excluded.
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Section 5.21. Note Insurer Default. Notwithstanding anything elsewhere
in this Indenture or in the Notes to the contrary, if a Note Insurer Default
exists, the provisions of this Article V and all other provisions of this
Indenture which (a) permit the Note Insurer to exercise rights of the
Noteholders, (b) restrict the ability of the Noteholders or the Indenture
Trustee to act without the consent or approval of the Note Insurer, (c) provide
that a particular act or thing must be acceptable to the Note Insurer, (d)
permit the Note Insurer to direct (or otherwise to require) the actions of the
Indenture Trustee or the Noteholders, (e) provide that any action or omission
taken with the consent, approval or authorization of the Note Insurer shall be
authorized hereunder or shall not subject the party taking or omitting to take
such action to any liability hereunder or (f) which have a similar effect, shall
be of no further force and effect and the Indenture Trustee shall administer the
Trust Estate and perform its obligations hereunder solely for the benefit of the
Holders of the Notes. Nothing in the foregoing sentence, nor any action taken
pursuant thereto or in compliance therewith, shall be deemed to have released
the Note Insurer from any obligation or liability it may have to any party or to
the Noteholders hereunder, under any other agreement, instrument or document
(including, without limitation, the Policy) or under applicable law.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(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 negligent action, its own 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) Except with respect to duties of the Indenture Trustee prescribed
by the TIA, as to which this Section 6.01(d) shall not apply, for all purposes
under this Indenture, the Indenture Trustee shall not be deemed to have notice
or knowledge of any Event of Default described in Sections 5.01(e) or 5.01(f)
hereof or any Default described in Sections 5.01(c) or 5.01(d) 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 or Default
is received by the Indenture Trustee at the Corporate Trust Office, and such
notice references the 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 and a
consequent declaration of acceleration of the maturity of the Notes, whether
such extinguishment occurs through a Sale of the Trust Estate to another Person,
the acquisition of the Trust Estate by the Indenture Trustee or otherwise, the
rights, powers and duties of the Indenture Trustee with respect to the Trust
Estate (or the proceeds thereof), the Noteholders and the Note Insurer and the
rights of Noteholders and the Note Insurer shall continue to be governed by the
terms of this Indenture.
(h) The Indenture Trustee, the Collateral Agent or any successor
Collateral Agent appointed pursuant to Section 9.08 of the Sale and Servicing
Agreement shall at all times retain possession of the Indenture Trustee's
Mortgage Files in the State of Delaware or the State of New York (or, with
respect to The Chase Manhattan Bank, as initial Collateral Agent, in the State
of Texas), except for those Indenture Trustee's Mortgage Files or portions
thereof released to the Servicer or the Note Insurer pursuant to this Indenture,
the Unaffiliated Seller's Agreement 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
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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 Payment 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.
Section 6.02. Notice of Default. Immediately after the occurrence of
any Default known to the Indenture Trustee, the Indenture Trustee shall transmit
by mail to the Note Insurer and the 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 Notes notice of each such Default, unless such Default shall have been cured
or waived; provided, however, that in no event shall the Indenture Trustee
provide notice, or fail to provide notice of a Default known to the Indenture
Trustee in a manner contrary to the requirements of the Trust Indenture Act.
Concurrently with the mailing of any such notice to the Holders of the Notes,
the Indenture Trustee shall transmit by mail a copy of such notice to the Rating
Agencies.
Section 6.03. Rights of Indenture Trustee. (a) Except as otherwise
provided in Section 6.01 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 Insurer, which consent shall not be
unreasonably withheld, the Indenture Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within its
rights or powers.
(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 Insurer, pursuant to the
provisions of this Indenture, unless such Noteholders or the Note Insurer shall
have offered to the Indenture Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or thereby.
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(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 Insurer; 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 negligence or
willful misconduct in the performance of such act.
Section 6.04. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except, with respect to the
Indenture Trustee, the certificates of authentication on the 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 Notes. Neither the Indenture Trustee nor the Owner Trustee
shall be accountable for the use or application by the Trust of the 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 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 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 need not be segregated from other funds except to the extent
required by this Indenture or by law. The Indenture Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the 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. Eligibility, Disqualification. Irrespective of whether
this Indenture is qualified under the TIA, this Indenture shall always have an
indenture trustee who satisfies the requirements of TIA Sections 310(a)(1) and
310(a)(5). The Indenture Trustee shall always have a combined capital and
surplus as stated in Section 6.08 hereof. The Indenture Trustee shall be subject
to TIA Section 310(b).
Section 6.08. Indenture Trustee's Capital and Surplus. The Indenture
Trustee shall at all times (a)(i) have a combined capital and surplus of at
least $50,000,000, or (ii) be a
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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 ▇▇▇▇▇'▇; provided, however,
that the Indenture Trustee's separate capital and surplus shall at all times be
at least the amount required by TIA Section 310(a)(2). If the Indenture Trustee
publishes annual reports of condition of the type described in TIA Section
310(a)(1), its combined capital and surplus for purposes of this Section 6.08
shall be as set forth in the latest such report. If at any time the Indenture
Trustee shall cease to be eligible in accordance with the provisions of this
Section 6.08 and TIA Section 310(a)(2), it shall resign immediately in the
manner and with the effect hereinafter specified in this Article VI.
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, the Note Insurer and each Rating Agency. 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
Insurer or, with the consent of the Note Insurer, by Act of the Holders
representing more than 50% of the Note Principal Balance of the Outstanding
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 Insurer, 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 Insurer and to vest in such successor
Indenture Trustee any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Indenture; provided, however,
if the Owner Trustee, on behalf of the Trust, and the Note Insurer do not join
in such appointment within fifteen (15) days after the
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receipt by it of a request to do so, or in case an Event of Default has occurred
and is continuing, the Indenture Trustee may petition a court of competent
jurisdiction to make such appointment, or (y) subject to Section 5.15 hereof,
and, in the case of a conflicting interest as described in clause (i) above,
unless the Indenture Trustee's duty to resign has been stayed as provided in TIA
Section 310(b), the Note Insurer or any Noteholder who has been a bona fide
Holder of a Note for at least six (6) months may, on behalf of himself and all
others similarly situated, with the consent of the Note Insurer, petition any
court of competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Indenture
Trustee for any cause, the Owner Trustee, on behalf of the Trust, by a Trust
Order, shall promptly appoint a successor Indenture Trustee acceptable to the
Note Insurer. 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 Insurer or, with the consent of the Note Insurer,
by Act of the Holders of Notes representing more than 50% of the Note Principal
Balance of the Outstanding 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
Insurer or Noteholders and shall have accepted appointment in the manner
hereinafter provided, any Noteholder who has been a bona fide Holder of a Note
for at least six (6) months may, on behalf of himself and all others similarly
situated, with the consent of the Note Insurer, petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(f) The 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 Notes, the Rating Agencies and the
Note Insurer. Each notice shall include the name of the successor Indenture
Trustee and the address of its Corporate Trust Office.
Section 6.10. Acceptance of Appointment by Successor Indenture Trustee.
Every successor Indenture Trustee appointed hereunder shall execute, acknowledge
and deliver to the Trust, the Note Insurer and the retiring Indenture Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Indenture Trustee shall become effective and such successor
Indenture Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Indenture
Trustee. Notwithstanding the foregoing, 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 Insurer, 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.
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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.
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 Notes have
been authenticated, but not delivered, by the Indenture Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Indenture Trustee may adopt such authentication and deliver the Notes so
authenticated with the same effect as if such successor Indenture Trustee had
authenticated such Notes.
Section 6.12. Preferential Collection of Claims Against Trust. The
Indenture Trustee (and any co-trustee or separate trustee) shall be subject to
TIA Section 311(a), excluding any creditor relationship listed in TIA Section
311(b), and an Indenture Trustee (and any co-trustee or separate trustee) who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees. At
any time or times, for the purpose of meeting the legal requirements of the TIA
or of any jurisdiction in which any of the Trust Estate may at the time be
located, the Indenture Trustee shall have power to appoint, and, upon the
written request of the Indenture Trustee, the Note Insurer or of the Holders of
Notes representing more than 50% of the Note Principal Balance of the
Outstanding Notes with respect to which a co-trustee or separate trustee is
being appointed, with the written consent of the Note Insurer, 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
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 Trust.
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,
34
acknowledged and delivered by the Owner Trustee, on behalf of the Trust, with
the written consent of the Note Insurer.
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 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.
(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 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 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 Notes of
the authority of an Authenticating Agent appointed after the initial
authentication and delivery of such Notes) in connection with transfers and
exchanges under Section 2.06 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
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deliver Notes. For all purposes of this Indenture (other than in connection with
the authentication and delivery of Notes pursuant to Sections 2.05 and 2.11
hereof in connection with their initial issuance), the authentication and
delivery of Notes by the Authenticating Agent pursuant to this Section 6.14
shall be deemed to be the authentication and delivery of Notes "by the Indenture
Trustee." Such Authenticating Agent shall at all times be a Person that both
meets the requirements of Section 6.07 hereof for the Indenture Trustee
hereunder and has an office for presentation of Notes in the United States of
America. The Indenture Trustee shall initially be the Authenticating Agent and
shall be the Note Registrar as provided in Section 2.06 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 negligence or
bad faith on its part, arising out of or in connection with the acceptance,
administration of the trust or exercise of authority by such Authenticating
Agent, Note Registrar or co-Note Registrar.
Any corporation 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 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 Mortgage Files. (a) The Indenture Trustee
shall, on or prior to the Closing Date, execute and deliver the acknowledgement
of receipt of the Policy required by Section 2.06(a) of the Sale and Servicing
Agreement.
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(b) The Indenture Trustee shall cause the Collateral Agent to (i) on or
prior to the Closing Date, execute and deliver the acknowledgement of receipt of
the Mortgage Loans required by Section 2.06(b)(i) of the Sale and Servicing
Agreement, (ii) on or prior to thirty (30) days following the Closing Date,
execute and deliver the Initial Certificate required by Section 2.06(b)(ii) of
the Sale and Servicing Agreement, and (iii) on or prior to ninety (90) days
following the Closing Date, execute and deliver the Final Certification required
by Section 2.06(b)(iii) of the Sale and Servicing Agreement.
(c) In giving each of the acknowledgements, the Initial Certification
and the Final Certification referred to in clauses (a) and (b) 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 Mortgage File
should include a flood insurance policy, any rider, addenda, surety or guaranty
agreement, power of attorney, buy down agreement, assumption agreement,
modification agreement, written assurance or substitution agreement.
(d) 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 third month, commencing
in March 2001, the Indenture Trustee shall cause the Collateral Agent to deliver
to the Servicer and the Note Insurer a recordation report dated as of the first
day of such month, identifying those Mortgage Loans for which it has not yet
received (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. The Indenture
Trustee shall be entitled to receive the Indenture Trustee Fee on each Payment
Date as provided herein. The Indenture Trustee also shall be entitled to (i)
payment of or reimbursement for expenses, disbursements and advances incurred or
made by the Indenture Trustee in accordance with any of the provisions of this
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), and (ii) indemnification against losses, liability and expenses,
including reasonable attorney's fees, incurred, arising out of or in connection
with this Indenture, the 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 Notes, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or 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 Notes, and shall extend to any
co-Indenture Trustee or separate-Indenture Trustee appointed pursuant to this
Article VI.
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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 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 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
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 pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Trust, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
Section 7.03. Reports by Indenture Trustee. (a) Within sixty (60) days
after December 31 of each year (the "reporting date"), commencing December 31,
2001, (i) the Indenture Trustee shall, if required by TIA Section 313(a), mail
to all Holders a brief report dated as of such reporting date that complies with
TIA Section 313(a); (ii) the Indenture Trustee shall, to the extent not set
forth in the Noteholder Statement pursuant to Section 2.08(d) hereof, also mail
to Holders of Notes and the Note Insurer with respect to which it has made
advances, any reports with respect to such advances that are required by TIA
Section 313(b)(2); and, the Indenture Trustee shall also mail to Holders of
Notes and the Note Insurer any reports required by TIA Section 313(b)(1). For
purposes of the information required to be included in any such reports pursuant
to TIA Sections 313(a)(2), 313(b)(1) (if applicable), or 313(b)(2), the
principal amount of indenture securities outstanding on the date as of which
such information is provided shall be the Note Principal Balance of the then
Outstanding Notes covered by the report.
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(b) A copy of each report required under this Section 7.03 shall, at
the time of such transmission to Holders of Notes and the Note Insurer be filed
by the Indenture Trustee with the Commission and with each securities exchange
upon which the Notes are listed. The Servicer, on behalf of the Trust, will
notify the Indenture Trustee when the Notes are listed on any securities
exchange.
Section 7.04. 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 Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and (b)
shall also comply with the other provisions of TIA Section 314(a).
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Accounts; Investment; Collection of Moneys. (a) The Trust
hereby directs the Indenture Trustee to establish, on or before the Closing
Date, at its Corporate Trust Office, one or more Eligible Accounts that shall
collectively be the "Payment Account". The Indenture Trustee shall promptly
deposit in the Payment Account (i) the Servicer Remittance Amount received by it
from the Servicer on the Servicer Payment Date pursuant to the Sale and
Servicing Agreement, (ii) any other funds from any deposits to be made by the
Servicer pursuant to the Sale and Servicing Agreement, (iii) any amount required
to be deposited in the Payment Account pursuant to this Section 8.01, (iv) all
amounts received pursuant to Section 8.03 hereof, (v) any amount required to be
deposited pursuant to Section 8.05 hereof, (vi) the Termination Price received
by it from either the Majority Certificateholder or the Servicer on the Clean-up
Call Date pursuant to Section 10.01, and (vii) all other amounts for the
Mortgage Loan Pool received for deposit in the Payment Account, including the
payment of any Loan Repurchase Price for a Mortgage Loan received by the
Indenture Trustee. All amounts that are deposited from time to time in the
Payment Account are subject to withdrawal by the Indenture Trustee for the
purposes set forth in Sections 8.02 hereof. All funds withdrawn from the Payment
Account pursuant to Section 8.02 hereof for the purpose of making payments to
the Holders of Notes shall be applied in accordance with Sections 3.03 and 8.02
hereof.
(b) [Reserved]
(c) [Reserved]
(d) So long as no Default or Event of Default shall have occurred and
be continuing, amounts held in the Accounts, other than the Note Insurance
Payment Account, shall at the written direction of the Servicer be invested in
Permitted Investments, which Permitted Investments shall mature no later than
the Business Day preceding the immediately following Payment Date.
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All income or other gains, if any, from investment of moneys deposited
in the Payment Account and Collection Account shall be for the benefit of the
Servicer and on each Payment Date, any such amounts may be released from the
Accounts and paid to the Servicer as part of its compensation for acting as
Servicer. Any loss resulting from such investment of moneys deposited in an
Account shall be reimbursed immediately as incurred to the related Account by
the Servicer. Subject to Section 6.01 hereof and the preceding sentence, neither
the Indenture Trustee nor the Servicer shall in any way be held liable by reason
of any insufficiency in the Accounts.
The Indenture Trustee shall not in any way be held liable by reason of
any insufficiency in any Account held by the Indenture Trustee resulting from
any investment loss on any Permitted Investment included therein (except to the
extent that the Indenture Trustee is the obligor and has defaulted thereon).
(e) Except as otherwise expressly provided herein, the Indenture
Trustee may demand payment or delivery of, and shall receive and collect,
directly and without intervention or assistance of any fiscal agent or other
intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall hold
all such money and property received by it as part of the Trust Estate and shall
apply it as provided in this Indenture.
If the Indenture Trustee shall not have received the Servicer
Remittance Amount by close of business on any related Servicer Payment Date, the
Indenture Trustee shall, unless the Servicer shall have made provisions
satisfactory to the Indenture Trustee for delivery to the Indenture Trustee of
an amount equal to such Servicer Remittance Amount, deliver a notice, with a
copy to the Note Insurer, to the Servicer of its failure to remit such Servicer
Remittance Amount and that such failure, if not remedied by the close of
business on the Business Day after the date upon which such notice is delivered
to the Servicer, shall constitute a Servicer Event of Default under the Sale and
Servicing Agreement. If the Indenture Trustee shall subsequently receive any
such Servicer Remittance Amount by the close of business on such Business Day,
such Servicer Event of Default shall not be deemed to have occurred.
Notwithstanding any other provision hereof, the Indenture Trustee shall deliver
to the Servicer, or its designee or assignee, any Servicer Remittance Amount
received with respect to a Mortgage Loan after the related Servicer Payment Date
to the extent that the Servicer previously made payment or provision for payment
with respect to such Servicer Remittance Amount in accordance with this Section
8.01, and any such Servicer Remittance Amount shall not be deemed part of the
Trust Estate.
Except as otherwise expressly provided in this Indenture and the Sale
and Servicing Agreement, if, following delivery by the Indenture Trustee of the
notice described above, the Servicer shall fail to remit the Servicer Remittance
Amount on any Servicer Payment Date, the Indenture Trustee shall deliver a
second notice to the Servicer, the Trust and the Note Insurer by the close of
business on the third Business Day prior to the related Payment Date indicating
that a Servicer Event of Default occurred and is continuing under the Sale and
Servicing Agreement. Thereupon, the Indenture Trustee shall take such actions as
are required of the Indenture Trustee under Article VII of the Sale and
Servicing Agreement. In addition, if a default occurs in any other performance
required under the Sale and Servicing Agreement, the Indenture Trustee may, and
upon the request of the Note Insurer or, with the consent of the Note
40
Insurer, the Holders of Notes representing more than 50% of the Note Principal
Balance of the Outstanding Notes, shall, take such action as may be appropriate
to enforce such payment or performance including the institution and prosecution
of appropriate Proceedings. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture and to proceed
thereafter as provided in Article V hereof.
Section 8.02. Payments; Statements. On each Payment Date, unless the
Notes have been declared due and payable pursuant to Section 5.02 hereof and
moneys collected by the Indenture Trustee are being applied in accordance with
Section 5.07 hereof, Available Funds on deposit in the Payment Account on any
Payment Date or Redemption Date shall be withdrawn from such Payment Account, in
the amounts required (based on the Noteholder Statement prepared by the Servicer
on or before such Payment Date), for application on such Payment Date in respect
of payments for the Notes as follows:
(i) to the Indenture Trustee, an amount equal to the Indenture
Trustee Fees then due to it;
(ii) from amounts then on deposit in the Payment Account, to
the Note Insurer, the Premium Amount for such payment date;
(iii) from amounts then on deposit in the Payment Account, to
the Holders of the Notes, the Class A Interest Payment Amount;
(iv) from amounts then on deposit in the Payment Account, to
the Holders of the Notes, the Class A Principal Payment Amount;
(v) from amounts then on deposit in the Payment Account
(excluding any Insured Payments), to the Note Insurer, all
Reimbursement Amounts which have not been previously paid as of such
Payment Date and any other amounts then due to the Note Insurer
pursuant to the Insurance Agreement;
(vi) from amounts then on deposit in the Payment Account, to
the Holders of the Notes, the amount of any Net Mortgage Loan Interest
Shortfalls; and
(vii) following the making by the Indenture Trustee of all
allocations, transfers and disbursements described above, from amounts
then on deposit in the Payment Account, the Indenture Trustee shall
distribute to the Holders of the Trust Certificates, the amount
remaining on such Payment Date, if any.
Section 8.03. Claims against the Policy. (a) Within two (2) Business
Days of receipt of each Servicer Remittance Report, the Indenture Trustee shall
determine with respect to the immediately following Payment Date, the amount to
be on deposit in the Payment Account on such Payment Date as a result of the
Servicer's remittance of the Servicer Remittance Amount on the related Servicer
Payment Date, excluding the amount of any Insured Payment and prior to the
application of the amounts described in clauses (i) through (vi) of Section 8.02
hereof for the related Payment Date.
41
(b) If on any Payment Date there is a Deficiency Amount, the Indenture
Trustee shall complete a Notice in the form of Exhibit A to the Policy and
submit such notice to the Note Insurer no later than 12:00 noon New York City
time on the second Business Day preceding such Payment Date as a claim for an
Insured Payment in an amount equal to such Deficiency Amount.
(c) The Indenture Trustee shall establish a separate Eligible Account
for the benefit of Holders of the Notes and the Note Insurer referred to herein
as the "Note Insurance Payment Account" over which the Indenture Trustee shall
have exclusive control and sole right of withdrawal. The Indenture Trustee shall
deposit upon receipt any amount paid under the Policy in the Note Insurance
Payment Account and distribute such amount only for purposes of payment to the
Noteholders of the Insured Amount for which a claim was made and such amount may
not be applied to satisfy any costs, expenses or liabilities of the Servicer,
the Indenture Trustee or the Trust. Amounts paid under the Policy, to the extent
needed to pay the Insured Amount shall be transferred to the Payment Account on
the related Payment Date and disbursed by the Indenture Trustee to the
Noteholders in accordance with Section 8.02. It shall not be necessary for such
payments to be made by checks or wire transfers separate from the checks or wire
transfers used to pay the Insured Amount with other funds available to make such
payment. However, the amount of any payment of principal or of interest on the
Notes to be paid from funds transferred from the Note Insurance Payment Account
shall be noted as provided in subsection (d) of this Section 8.03 in the Note
Register and in the Noteholder Statement. Funds held in the Note Insurance
Payment Account shall not be invested. Any funds remaining in the Note Insurance
Payment Account on the first Business Day following a Payment Date shall be
returned to the Note Insurer pursuant to the written instructions of the Note
Insurer by the end of such Business Day.
(d) The Indenture Trustee shall keep a complete and accurate record of
the amount of interest and principal paid in respect of any Note from moneys
received under the Policy. The Note Insurer shall have the right to inspect such
records at reasonable times during normal business hours upon one (1) Business
Day's prior notice to the Indenture Trustee.
(e) In the event that the Indenture Trustee has received a certified
copy of an order of the appropriate court that any Insured Payment has been
voided in whole or in part as a preference payment under applicable bankruptcy
law, the Indenture Trustee shall so notify the Note Insurer, shall comply with
the provisions of the Policy to obtain payment by the Note Insurer of such
voided Insured Payment, and shall, at the time it provides notice to the Note
Insurer, notify, by mail to the Noteholders of the affected Notes that, in the
event any Noteholder's Insured Payment is so recovered, such Noteholder will be
entitled to payment pursuant to the Policy, a copy of which shall be made
available through the Indenture Trustee, the Note Insurer or the Note Insurer's
fiscal agent, if any, and the Indenture Trustee shall furnish to the Note
Insurer or its fiscal agent, if any, its records evidencing the payments which
have been made by the Indenture Trustee and subsequently recovered from the
Noteholders, and dates on which such payments were made.
(f) The Indenture Trustee shall promptly notify the Note Insurer of any
proceeding or the institution of any action, of which a Responsible Officer of
the Indenture Trustee has actual knowledge, seeking the avoidance as a
preferential transfer under applicable
42
bankruptcy, insolvency, receivership or similar law (a "Preference Claim") of
any payment made with respect to the Notes. Each Noteholder, by its purchase of
Notes, the Servicer and the Indenture Trustee agree that, the Note Insurer (so
long as no Note Insurer Default exists) may at any time during the continuation
of any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim, including, without limitation, (i) the direction of any
appeal of any order relating to such Preference Claim and (ii) the posting of
any surety, supersedeas or performance bond pending any such appeal. In addition
and without limitation of the foregoing, the Note Insurer shall be subrogated
to, and each Noteholder, the Servicer and the Indenture Trustee hereby delegate
and assign to the Note Insurer, to the fullest extent permitted by law, the
rights of the Servicer, the Indenture Trustee and each Noteholder in the conduct
of any such Preference Claim, including, without limitation, all rights of any
party to any adversary proceeding or action with respect to any court order
issued in connection with any such Preference Claim.
(g) The Indenture Trustee shall, upon retirement of the Notes, furnish
to the Note Insurer a notice of such retirement, and, upon retirement of the
Notes and the expiration of the term of the Policy, surrender the Policy to the
Note Insurer for cancellation.
(h) Unless a Note Insurer Default exists and is continuing, the
Indenture Trustee and the Trust shall cooperate in all respects with any
reasonable request by the Note Insurer for action to preserve or enforce the
Note Insurer's rights or interests hereunder without limiting the rights or
affecting the interests of the Noteholders as otherwise set forth herein.
(i) Each Noteholder, by its purchase of Notes, and the Indenture
Trustee hereby agree that, unless a Note Insurer Default exists and is
continuing, the Note Insurer shall have the right to direct all matters relating
to the Notes in any proceeding in a bankruptcy of the Trust, including without
limitation any proceeding relating to a Preference Amount and the posting of any
surety or Note pending any such appeal.
(j) Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on the Notes which is made with moneys
received pursuant to the terms of the Policy shall not be considered payment of
the Notes from the Trust. The Trust and the Indenture Trustee acknowledge, and
each Holder by its acceptance of a Note agrees, that without the need for any
further action on the part of the Note Insurer, the Trust, the Indenture Trustee
or the Note Registrar (x) to the extent the Note Insurer makes payments,
directly or indirectly, on account of principal of or interest on the Notes to
the Holders of such Notes, the Note Insurer will be fully subrogated to, and
each Noteholder, the Trust and the Indenture Trustee hereby delegate and assign
to the Note Insurer, to the fullest extent permitted by law, the rights of such
Holders to receive such principal and interest from the Trust, including,
without limitation, any amounts due to the Noteholders in respect of securities
law violations arising from the offer and sale of the Notes, and (y) the Note
Insurer shall be paid such amounts from the sources and in the manner provided
herein for the payment of such amounts.
Section 8.04. General Provisions Regarding the Payment Account and
Mortgage Loans. (a) The Payment Account shall relate solely to the Notes and to
the Mortgage Loans, Permitted Investments and other property securing the Notes.
Funds and other property in the Payment Account shall not be commingled with any
other moneys or property of the Trust or
43
any Affiliate thereof. Notwithstanding the foregoing, the Indenture Trustee may
hold any funds or other property received or held by it as part of the Payment
Account in collective accounts maintained by it in the normal course of its
business and containing funds or property held by it for other Persons (which
may include the Trust or an Affiliate); provided, that such accounts are under
the sole control of the Indenture Trustee and the Indenture Trustee maintains
adequate records indicating the ownership of all such funds or property and the
portions thereof held for credit to the Payment Account.
(b) If any amounts are needed for payment from the Payment Account and
sufficient uninvested funds are not available therein to make such payment, the
Indenture Trustee shall cause to be sold or otherwise converted to cash a
sufficient amount of the investments in the Payment Account.
(c) The Indenture Trustee shall, at all times while any Notes are
Outstanding, maintain in its possession, or in the possession of an agent whose
actions with respect to such items are under the sole control of the Indenture
Trustee, all certificates or other instruments, if any, evidencing any
investment of funds in the Payment Account. The Indenture Trustee shall
relinquish possession of such items, or direct its agent to do so, only for
purposes of collecting the final payment receivable on such investment or
certificate or, in connection with the sale of any investment held in the
Payment Account, against delivery of the amount receivable in connection with
any sale.
(d) The Indenture Trustee shall not invest any part of the Trust Estate
in Permitted Investments that constitute uncertificated securities (as defined
in Section 8-102 of the Uniform Commercial Code, as enacted in the relevant
jurisdiction) or in any other book-entry securities unless it has received an
Opinion of Counsel reasonably satisfactory in form and substance to the
Indenture Trustee setting forth, with respect to each type of security for which
authority to invest is being sought, the procedures that must be followed to
maintain the lien and security interest created by this Indenture with respect
to the Trust Estate.
Section 8.05. Releases of Deleted Mortgage Loans. Upon notice or
discovery by a Responsible Officer of the Indenture Trustee that any of the
representations or warranties of the Unaffiliated Seller set forth in Section
3.03 of the Unaffiliated Seller's Agreement was materially incorrect or
otherwise misleading with respect to any Mortgage Loan as of the time made, the
Indenture Trustee shall direct the Unaffiliated Seller to either cure,
repurchase or substitute for such Mortgage Loan as provided in Section 3.05 of
the Unaffiliated Seller's Agreement. Upon any purchase of or substitution for a
Deleted Mortgage Loan by the Unaffiliated Seller in accordance with Section 3.05
of the Unaffiliated Seller's Agreement, the Indenture Trustee shall cause the
Collateral Agent to deliver the Indenture Trustee's Mortgage File relating to
such Deleted Mortgage Loan to the Unaffiliated Seller, 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
Unaffiliated Seller 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
Unaffiliated Seller.
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to
Certain Information. On each Payment Date, the Indenture Trustee shall deliver
the written reports
44
required by Section 2.08(d) to Noteholders of record as of the related Record
Date (including the Clearing Agency, if any).
The Indenture Trustee shall make available at its Corporate Trust
Office, during normal business hours, for review by any Noteholder or any person
identified to the Indenture Trustee as a prospective Noteholder, originals or
copies of the following items: (a) the Indenture and any amendments thereto, (b)
all Noteholder Statements 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 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.
Section 8.07. 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 Notes pursuant to
Section 3.03 or 4.02 hereof).
Section 8.08. Amendment to Sale and Servicing Agreement. The Indenture
Trustee may, without the consent of any Holder, 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 Notes. The Indenture Trustee may, in its
discretion, decline to enter into or consent to any such supplement or
amendment: (i) unless the Indenture Trustee receives an Opinion of Counsel that
the position of the Holders would not be materially adversely affected or
written confirmation of satisfaction of the Rating Agency Condition or (ii) if
its own rights, duties or immunities would be adversely affected.
Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and
Servicing Agreement. 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 Mortgage 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:
(a) such Officer's Certificates, if any, as are required by the Sale
and Servicing Agreement; and
(b) a Request for Release, executed by the Servicer, providing that the
Servicer will hold or retain the Indenture Trustee's Mortgage Files in trust for
the benefit of the Indenture Trustee, the Note Insurer and the Holders of Notes.
Section 8.10. Servicer as Agent. In order to facilitate the servicing
of the Mortgage Loans by the Servicer of such Mortgage Loans, the Servicer of
the Mortgage Loans has been appointed by the Trust to retain, in accordance with
the provisions of the Sale and Servicing Agreement and this Indenture, all
Servicer Remittance Amounts on such Mortgage
45
Loans prior to their deposit into the Payment Account on or prior to the related
Servicer Payment Date.
Section 8.11. Termination of Servicer. In the event of the occurrence
of a Servicer Event of Default specified in Section 7.01 of the Sale and
Servicing Agreement, the Indenture Trustee may, with the consent of the Note
Insurer or, with the prior written consent of the Note Insurer, the Holder of
Notes representing not less than 50% of the Note Principal Balance of the
Outstanding Notes, and shall, upon the direction of the Note Insurer (or as
otherwise provided in the Sale and Servicing Agreement), terminate the Servicer
as provided in Section 7.01 of the Sale and Servicing Agreement. If the
Indenture Trustee terminates the Servicer, the Indenture Trustee shall, pursuant
to Section 7.02 of the Sale and Servicing Agreement, assume the duties of the
Servicer or appoint a successor Servicer acceptable to the Trust, the Note
Insurer and the Rating Agencies 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 8.08 and 8.09 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 Insurer, appoint one or more Collateral Agents to hold all
or a portion of the Indenture Trustee Mortgage Files, as Agent for the Indenture
Trustee. Such Collateral Agent shall meet the requirements of Article IX of the
Sale and Servicing Agreement. Matters concerning the Collateral Agents shall be
governed by said Article IX. The Chase Manhattan Bank is hereby appointed as the
initial Collateral Agent hereunder.
Section 8.14. Rights of the Note Insurer to Exercise Rights of
Noteholders. By accepting its Notes, each Noteholder agrees that unless a Note
Insurer Default exists, the Note Insurer shall have the right to exercise all
rights of the Noteholders under this Indenture, without any further consent of
the Noteholders, including, without limitation:
(a) the right to require the Servicer to effect foreclosures upon
Mortgage Loans upon failure of the Servicer to do so;
(b) the right to require the Unaffiliated Seller to repurchase or
substitute for Deleted Mortgage Loans pursuant to Section 8.05;
(c) the right to direct the actions of the Indenture Trustee during the
continuance of an Event of Default; and
46
(d) the right to vote on proposed amendments to this Indenture.
In addition, each Noteholder agrees that, unless a Note Insurer Default exists,
the rights specifically set forth above may be exercised by the Noteholders only
with the prior written consent of the Note Insurer.
Except as otherwise provided in Section 8.03 hereof and notwithstanding
any provision in this Indenture to the contrary, so long as a Note Insurer
Default has occurred and is continuing, the Note Insurer shall have no rights to
exercise any voting rights of the Noteholders hereunder, nor shall the Indenture
Trustee be required to obtain the consent of, or act at the direction of, the
Note Insurer.
All notices, statements, reports, certificates or opinions required by
this Indenture to be sent to any other party hereto or to the Noteholders shall
also be sent to the Note Insurer.
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note
Insurer. The Collateral Agent, on behalf of the Indenture Trustee, shall hold
the Trust Estate and the Indenture Trustee's Mortgage Files, for the benefit of
the Noteholders and the Note Insurer, and all references in this Indenture and
in the Notes to the benefit of Holders of the Notes shall be deemed to include
the Note Insurer (provided there does not exist a Note Insurer Default).
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
With the consent of the Note Insurer and without the consent of the Holders of
any Notes, the 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:
(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 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 Notes contained;
(d) to add to the covenants of the Trust, for the benefit of the
Holders of all Notes and the Note Insurer, or to surrender any right or power
herein conferred upon the Trust;
47
(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 Notes or the Holders of the Trust
Certificates; provided, that the amendment shall not be deemed to adversely
affect in any material respect the interests of the Holders of the Notes and the
Note Insurer if the Person requesting the amendment obtains written confirmation
of the satisfaction of the Rating Agency Condition; or
(f) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this Indenture
under the TIA or under any similar federal statute hereafter enacted, and to add
to this Indenture such other provisions as may be expressly required by the TIA.
Section 9.02. Supplemental Indentures With Consent of Noteholders. With
the consent of the Note Insurer and with the consent of Holders of Notes
representing not less than a majority of the Note Principal Balance of all
Outstanding 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 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
Notes or, with respect to the Notes, reduce the Note Principal Balance thereof
or the Note Rate thereon, change the earliest date on which any Note may be
redeemed at the option of the Servicer, change any place of payment where, or
the coin or currency in which, any Note or any interest thereon is payable, or
impair the right to institute suit for the enforcement of the payment of any
installment of interest due on any Note on or after the Final Stated Maturity
Date thereof or for the enforcement of the payment of the entire remaining
unpaid principal amount of any Note on or after the Final Stated Maturity Date
(or, in the case of redemption, on or after the Redemption Date);
(b) reduce the percentage of the Note Principal Balance of the
Outstanding Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is required for
any waiver of compliance with provisions of this Indenture or Defaults hereunder
and their consequences provided for in this Indenture;
(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";
48
(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 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 Class A Interest Payment Amount or Class A
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 Notes to the benefits of any provisions for the mandatory redemption of
Notes contained herein; or
(g) incur any indebtedness, other than the 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).
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the 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 Notes to which such supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article 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, duties 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 Insurer and the Rating
Agencies.
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;
49
and every Holder of Notes to which such supplemental indenture relates that have
theretofore been or thereafter are authenticated and delivered hereunder shall
be bound thereby.
Section 9.05. Conformity With Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article IX shall conform to the requirements
of the TIA as then in effect so long as this Indenture shall then be qualified
under the TIA.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 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 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 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
without the necessity of obtaining the consent of the Holders of any Notes upon
receipt by the Indenture Trustee of:
(a) 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; and
(b) written confirmation of the satisfaction of the Rating Agency
Condition with respect to such proposed amendment.
Notwithstanding the foregoing, the Indenture Trustee may decline to
consent to a proposed waiver or amendment that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require that any
Person obtain the consent of the Indenture Trustee to any amendment or waiver or
any provision of any document where the making of such amendment or the giving
of such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the subject
of the proposed amendment or waiver.
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ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption. (a) At the option of the Majority
Certificateholders or, if such Holders fail to exercise such option, at the
option of the Servicer, and, in each case at such parties' sole cost and
expense, this Indenture may be terminated and all the Notes may be redeemed in
whole, but not in part, on any Redemption Date on and after the Clean-Up Call
Date at the Termination Price.
(b) Any such purchase or redemption shall be accomplished by deposit by
the exercising party, into the Payment Account of the Termination Price on the
Servicer Payment Date preceding the Redemption Date. 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 8.02 hereof. No termination or
redemption is permitted without the prior written consent of the Note Insurer if
any termination or redemption would result in a draw on the Policy.
(c) Notice by the Majority Certificateholder referred to in paragraph
(a) of this Section 10.01 of the election to redeem the Notes pursuant to
subsection (a) of this Section 10.01 shall be furnished to the Indenture Trustee
not later than thirty (30) days prior to the Payment Date selected for such
redemption. Upon receiving such notice, the Indenture Trustee shall notify each
Holder of such Notes and Note Insurer of such election pursuant to Section 10.02
hereof. Any expenses associated with the compliance of the provisions hereof in
connection with a redemption of the Notes shall be paid by the Majority
Certificateholder exercising such redemption or the Servicer, as the case may
be.
If the Indenture Trustee does not receive notice from the Majority
Certificateholder referred to in paragraph (a) of this Section 10.01 that they
intend to exercise their option to redeem the Notes at least thirty (30) days
prior to the first Payment Date on which they are entitled to do so, the
Indenture Trustee shall promptly notify the Servicer that it may effect a
redemption of the Notes by responding to the Indenture Trustee's notice no later
than fifteen (15) days prior to the next succeeding Payment Date.
(d) Upon the redemption of the Notes, the Mortgage Loans in the Trust
Estate shall be released and delivered to the Majority Certificateholder or the
Servicer, as the case may be.
(e) Upon receipt of the notice from the Majority Certificateholder or
the Servicer of their respective election to redeem the Notes pursuant to
Section 10.01(a) hereof (which shall state, in the case of an election by the
Servicer, that the Servicer has determined that the conditions to redemption at
the option of the Servicer have been satisfied and setting forth the amount, if
any, to be withdrawn from the Payment Account and paid to the Servicer as
reimbursement for Nonrecoverable Advances in respect of the related Mortgage
Loans and such other information as may be required to accomplish such
redemption), the Indenture Trustee shall prepare and deliver to the Trust, the
Servicer and the Note Insurer, no later than the Redemption Date, a Noteholder
Statement.
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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
first class mail, postage prepaid, mailed not less than ten days prior to the
Redemption Date to each Holder of Notes to be redeemed, such Holders being
determined as of the Record Date for such Payment Date, and to the Note Insurer.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the price at which the Notes will be redeemed; and
(c) the fact of payment in full on such Notes, the place where such
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 Note for any period after the date fixed
for redemption.
Failure to give notice of redemption, or any defect therein, to any
Holder of any Note selected for redemption shall not impair or affect the
validity of the redemption of any other Note.
Section 10.03. Notes Payable on Optional Redemption. Notice of
redemption having been given as provided in Section 10.02 hereof, the 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 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 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 (other than certificates provided pursuant to
TIA Section 314(a)(4)) shall include and shall be deemed to include (regardless
of whether specifically stated therein) the following:
52
(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;
(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 or Event of Default is a condition
precedent to the taking of any action
53
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 or
Event of Default as provided in Section 6.01(d) hereof.
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 Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Trust in reliance thereon, whether or not notation
of such action is made upon such Notes.
Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer
and 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
54
Trust 2000-4, in care of First Union Trust Company, National Association, One
▇▇▇▇▇▇ Square, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
Attention: Corporate Trust Administration, or at any other address previously
furnished in writing to the Indenture Trustee by the Trust.
(c) the Note Insurer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to Ambac Assurance Corporation addressed to it at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Risk Management -
Consumer Asset-Backed Securities (in each case in which notice or other
communication to the Note Insurer refers to an Event of Default, a claim on the
Policy or with respect to which failure on the part of the Note Insurer to
respond shall be deemed to constitute consent or acceptance, then a copy of such
notice or other communication should also be sent to the attention of the
General Counsel 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 Insurer; 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 Bear ▇▇▇▇▇▇▇ Asset Backed Securities, Inc. c/o Bear, ▇▇▇▇▇▇▇ &
Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Attention: Chief Counsel,
or at any other address previously furnished in writing to the Indenture Trustee
by the Depositor; or
(e) the Unaffiliated Seller or the Servicer by the Indenture Trustee or
by any Noteholder shall be sufficient for every purpose hereunder if in writing
and mailed, first-class, postage paid, to such party, in care of American
Business Financial Services, Inc., ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: General
Counsel or at any other address previously furnished in writing to the Indenture
Trustee by the Unaffiliated Seller or the Servicer; or
(f) the Representative by any party or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class,
postage prepaid, to Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Chief Counsel, or at any other address previously
furnished in writing to the Indenture Trustee by the Representative.
Notices required to be given to the Rating Agencies by the Trust or the
Indenture Trustee shall be in writing, personally delivered or mailed
first-class postage pre-paid, to (i) in the case of Moody's, at the following
address: ▇▇▇▇▇'▇ Investors Service, Inc., Residential Mortgage Monitoring
Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (ii) in the case of
S&P, at the following address: Standard & Poor's Ratings Services, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Asset-Backed Surveillance
Department; or as to each of the foregoing, at such other address as shall be
designed by written notice to the other parties.
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.
Where this Indenture provides for notice to Noteholders of any event or the
mailing of any report to Noteholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to
55
whom such report is required to be mailed, at the address of such Noteholder as
it appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Noteholders is mailed in
the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Noteholder
shall affect the sufficiency of such notice or report with respect to other
Noteholders, and any notice or report that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Section 11.06. Rules by Indenture Trustee. The Indenture Trustee may
make reasonable rules for any meeting of Noteholders.
Section 11.07. Conflict With Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the TIA,
such required provision shall control.
Section 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 11.09. Successors and Assigns. All covenants and agreements in
this Indenture by the 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 Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, expressed or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any separate trustee or
co-trustee appointed under Section 6.14 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 Note is proposed to be paid shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this Indenture) payment
need not be made on such date, but may be made on the next succeeding
56
Business Day with the same force and effect as if made on the nominal date of
any such Payment Date, Redemption Date or other date for the payment of
principal of or interest on any Note and no interest shall accrue for the period
from and after any such nominal date, provided such payment is made in full on
such next succeeding Business Day.
Section 11.13. Governing Law. IN VIEW OF THE FACT THAT NOTEHOLDERS ARE
EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE
TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A
WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF
THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
Section 11.14. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.15. Recording of Indenture. This Indenture is subject to
recording in any appropriate public recording offices, such recording to be
effected by the 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. 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 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.
Section 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder and Beneficial Owner, by accepting a Note,
hereby covenant and agree that they will not at any time institute against the
Unaffiliated Seller or the Trust, or join in any institution against the
Unaffiliated Seller or the Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United
57
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, this Indenture or any of the Basic Documents.
In addition, the Indenture Trustee will on behalf of the Holders of the Notes,
(a) file a written objection to any motion or other proceeding seeking the
substantive consolidation of any Originator with the Unaffiliated Seller or 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
Insurer, 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 Insurer, as the case may be, and
to discuss its affairs, finances and accounts with its officers, employees and
Independent Accountants (and by this provision the 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
Note under the terms of this Indenture shall be limited to an amount that shall
not exceed the maximum nonusurious rate of interest allowed by the applicable
laws of the United States or the State of New York (whichever shall permit the
higher rate), that could lawfully be contracted for, charged or received (the
"Highest Lawful Rate"). In the event any payment of interest on any Note exceeds
the Highest Lawful Rate, the 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 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 Note, if any, remaining
unpaid. In addition, all sums paid or agreed to be paid to the Indenture Trustee
for the benefit of Holders of Notes for the use, forbearance or detention of
money shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such Notes.
Section 11.20. Note Insurer Default. Any right conferred to the Note
Insurer shall be suspended during any period in which a Note Insurer Default
exists. At such time as the Notes are no longer Outstanding under this
Indenture, and no amounts owed to the Note Insurer under the Basic Documents
remain unpaid, the Note Insurer's rights under this Indenture shall terminate.
Section 11.21. Third-Party Beneficiary. The Note Insurer is intended as
a third- party beneficiary of this Indenture which shall be binding upon and
inure to the benefit of the Note Insurer; provided, that, notwithstanding the
foregoing, for so long as a Note Insurer Default is continuing with respect to
its obligations under the Policy, the Noteholders shall succeed to the
58
Note Insurer's rights hereunder. Without limiting the generality of the
foregoing, all covenants and agreements in this Indenture that expressly confer
rights upon the Note Insurer shall be for the benefit of and run directly to the
Note Insurer, and the Note Insurer shall be entitled to rely on and enforce such
covenants to the same extent as if it were a party to this Indenture.
[Remainder of Page Intentionally Left Blank]
59
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 TRUST 2000-4
By: FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner
Trustee under the Trust Agreement
By:
--------------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By:
--------------------------------------------
Name:
Title:
[Signature Page to Indenture]
EXHIBIT A
FORM OF NOTE
ABFS MORTGAGE LOAN TRUST 2000-4
CLASS A NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE NOTE IS A NON-RECOURSE OBLIGATION OF THE TRUST, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AND THE POLICY 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.
-------------------------------------------
Note No.: CUSIP No.:
A
Class A Original Note Principal Balance: Percentage Interest:
$275,000,000 100%
Date of Indenture: First Payment Date:
As of December 1, 2000 January 16, 2001
------------------------------------------
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ABFS MORTGAGE LOAN TRUST 2000-4
MORTGAGE BACKED NOTES, SERIES 2000-4, CLASS A
ABFS Mortgage Loan Trust 2000-4, a statutory business trust formed and
existing under the laws of the State of Delaware (herein referred to as the
"Trust"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of $275,000,000 (Two Hundred Seventy-Five
Million Dollars) payable on each Payment Date in an amount equal to the result
obtained by multiplying (x) the Percentage Interest of this Note set forth on
the cover page hereof, by (y) the aggregate amount, if any, payable from the
Payment Account in respect of principal on the Class A Notes, pursuant to the
Indenture, dated as of December 1, 2000, between the Trust and The Chase
Manhattan Bank, a New York banking corporation, as Indenture Trustee (the
"Indenture Trustee"); provided, however, that the entire unpaid Note Principal
Balance of this Note shall be due and payable on the earlier of (i) the Payment
Date occurring in December 2031 (this Note's "Final Stated Maturity Date"), (ii)
the Redemption Date, if any, applicable to this Note pursuant to Article X of
the Indenture or (iii) the date on which an Event of Default shall have occurred
and be continuing, if the Notes have been declared to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. Capitalized
terms used but not defined herein are defined in Appendix I to the Indenture.
Pursuant to the terms of the Indenture, payments will be made on the 15th day of
each month or, if such day is not a Business Day, on the Business Day
immediately following such 15th day (each a "Payment Date"), commencing on the
first Payment Date specified on the cover page hereof, to the Person in whose
name this Note is registered at the close of business on the applicable Record
Date, in an amount equal to the product of (a) the Percentage Interest evidenced
by this Note and (b) the sum of the amounts to be paid on the Class A Notes with
respect to such Payment Date, all as more specifically set forth in the
Indenture.
Notwithstanding the foregoing, in the case of Definitive Notes, upon written
request at least five (5) days prior to the related Record Date with appropriate
instructions by the Holder of this 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.
On each Payment Date, Noteholders will be entitled to receive interest payments
in an aggregate amount equal to the Current Interest for such Payment Date,
together with principal payments in an aggregate amount equal to the Class A
Principal Payment Amount for such Payment Date, plus, until the
Over-collateralization Amount for such Payment Date is equal to the Specified
Over-collateralization Amount for such Payment Date, the Net Monthly Excess
Cashflow, if any, for such Payment Date. The "Note Principal Balance" of a Note
as of any date of determination is equal to the initial Note Principal Balance
thereof as of the Closing Date, reduced by the aggregate of all amounts
previously paid with respect to such Note on account of principal.
The principal of and interest on this Note are payable in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private
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debts. All payments made by the Trust with respect to this Note shall be applied
first to interest due and payable on this Note as provided above and then to the
unpaid principal of this Note.
This Note is one of a duly authorized issue of Notes of the Trust, designated as
the "ABFS Mortgage Loan Trust 2000-4, Mortgage Backed Notes, Series 2000-4,
Class A," 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 Notes. To the extent that any provision of this Note contradicts
or is inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supersede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the Mortgage Loans in
the Mortgage Loan Pool, and 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 Note shall
be due and payable on the earlier of the Final Stated Maturity Date and the
Redemption Date, pursuant to Article X of the Indenture. Notwithstanding the
foregoing, the entire unpaid Note Principal Balance of the Notes shall be due
and payable on the date on which an Event of Default shall have occurred and be
continuing if the Indenture Trustee, at the direction or upon the prior written
consent of Ambac Assurance Corporation (the "Note Insurer") in the absence of a
Note Insurer Default, or the Holders of the Notes representing not less than 50%
of the Note Principal Balance of the Outstanding Notes (with the prior written
consent of the Note Insurer in the absence of a Note Insurer Default), shall
have declared the Notes to be immediately due and payable in the manner provided
in Section 5.02 of the Indenture. All principal payments on the Notes shall be
made pro rata to the Noteholders entitled thereto.
The Note Insurer, in consideration of the payment of the premium and subject to
the terms of the Certificate Guaranty Insurance Policy, dated December 21, 2000
(the "Policy") thereby has unconditionally and irrevocably guaranteed the
payment of the Insured Payments.
Pursuant to the Indenture, unless a Note Insurer Default exists (i) the Note
Insurer shall be deemed to be the holder of the Notes for certain purposes
specified in the Indenture and will be entitled to exercise all rights of the
Noteholders thereunder, including the rights of Noteholders relating to the
occurrence of, and the remedies with respect to, an Event of Default, without
the consent of such Noteholders, and (ii) the Indenture Trustee may take actions
which would otherwise be at its option or within its discretion, including
actions relating to the occurrence of, and the remedies with respect to, an
Event of Default, only at the direction of the Note Insurer. In addition, on
each Payment Date, after the Noteholders have been paid all amounts to which
they are entitled, the Note Insurer will be entitled to be reimbursed for any
unreimbursed Insured Payments, unreimbursed Premium Amounts (each with interest
thereon at the "Late Payment Rate" specified in the Insurance Agreement) and any
other amounts owed under the Policy.
The Trust shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate and payments under the Policy will be sole source
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of payments on the Notes, and each Holder hereof, by its acceptance of this
Note, agrees that (i) such Note will be limited in right of payment to amounts
available from the Trust Estate and the Policy 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 Unaffiliated 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 Notes pursuant to
the Indenture.
Payments of interest on this Note due and payable on each Payment Date, together
with the installment of principal, if any, to the extent not in full payment of
this Note, shall be made by check mailed to the Person whose name appears as the
Holder of this Note (or one or more Predecessor Notes) on the Note Register as
of the close of business on each Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Notwithstanding the foregoing, in the case of Definitive Notes, upon
written request at least five days prior to the related Record Date with
appropriate instructions by the Holder of this Note (holding an aggregate
initial Note 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. Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Payment Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Payment Date, then the Indenture Trustee, in the name of and on behalf of the
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 Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes.
As provided in the Indenture, the Notes may be redeemed in whole, but not in
part, at the option of the Majority Certificateholder or, if the Majority
Certificateholder elects not to exercise such option, by the Servicer, on any
Payment Date on and after the date on which the aggregate unpaid Current Pool
Principal Balance is less than or equal to 10% of the aggregate Original Pool
Principal Balance.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the 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
A-4
Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
In the case of a transfer of a Class A Note, the Note Registrar shall not
register the transfer of this Note unless the Note Registrar has received a
representation letter from the transferee to the effect that either (i) the
transferee is not, and is not acquiring the Note on behalf of or with the assets
of, an employee benefit plan or other retirement plan or arrangement that is
subject to Title I of the Employee Retirement Income Security Act or 1974, as
amended, or Section 4975 of the Code or (ii) the acquisition and holding of this
Note by the transferee qualifies for exemptive relief under a Department of
Labor Prohibited Transaction Class Exemption. Each Beneficial Owner, by
acceptance of a beneficial interest herein, shall be deemed to make one of the
foregoing representations.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of
a Beneficial Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Trust, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the 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.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of
a Beneficial Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Beneficial Owner
will not at any time institute against American Business Financial Services,
Inc. or the Trust, or join in any institution against American Business
Financial Services, Inc. or the Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture, the Trust Agreement, the Unaffiliated
Seller's Agreement, the Sale and Servicing Agreement, the Insurance Agreement
and the Indemnification Agreement (the "Basic Documents").
The Trust has entered into the Indenture and this Note is issued with the
intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Trust
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each
Beneficial Owner by acceptance of a beneficial interest in a Note), agrees to
treat
A-5
the 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 Note, the
Trust, the Indenture Trustee and any agent of the Trust or the Indenture Trustee
may treat the Person in whose name this Note (as of the day of determination or
as of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and none of
the 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 Notes under the Indenture at any time
by the Trust with the consent of the Note Insurer and the Holders of Notes
representing a majority of the Note Principal Balance of all Outstanding Notes.
The Indenture also contains provisions permitting the (i) Note Insurer or (ii)
if a Note Insurer Default exists, the Holders of Notes representing specified
percentages of the Note Principal Balance of Outstanding Notes, on behalf of the
Holders of all the 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 Insurer or by the
Holder of this Note (or any one or more Predecessor Notes) shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the amendment thereof, in certain limited
circumstances, or the waiver of certain terms and conditions set forth in the
Indenture, without the consent of Holders of the Notes issued thereunder.
The term "Trust" as used in this Note includes any successor to the Trust under
the Indenture.
Initially, the Notes will be represented by one Note registered in the name of
Cede & Co. as nominees of the Clearing Agency. The Notes will be delivered in
denominations as provided in the Indenture and subject to certain limitations
therein set forth. The Notes are exchangeable for a like aggregate initial Note
Principal Balance of Notes of different authorized denominations, as requested
by the Holder surrendering the same.
THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Trust, which is absolute
and unconditional, to pay the principal of and interest on this Note at the
times, place and rate, and in the coin or currency herein prescribed.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to herein, or
be valid or obligatory for any purpose.
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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 TRUST 2000-4
By: FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Owner
Trustee under the Trust Agreement
By:
------------------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes designated above and referred to in the
within-mentioned Indenture.
Dated:
THE CHASE MANHATTAN BANK,
as Authenticating Agent
By:
-------------------------------------------------
Authorized Signatory
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