EXHIBIT 4.2
[ISSUING ENTITY]
Issuing Entity
and
[INDENTURE TRUSTEE]
Indenture Trustee
---------------------------------
INDENTURE
Dated as of [DATE]
--------------------------------------------------------------------------------
Asset-Backed Notes
---------------------
TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions.................................................................................. 3
Section 1.02 Rules of Construction........................................................................ 3
ARTICLE II
ORIGINAL ISSUANCE OF NOTES
Section 2.01 Form......................................................................................... 4
Section 2.02 Execution, Authentication and Delivery....................................................... 4
ARTICLE III
COVENANTS
Section 3.01 Collection of Payments with respect to the Mortgage Loans.................................... 6
Section 3.02 Maintenance of Office or Agency.............................................................. 6
Section 3.03 Money for Payments To Be Held in Trust; Paying Agent......................................... 6
Section 3.04 Existence.................................................................................... 7
Section 3.05 Protection of Trust Estate................................................................... 7
Section 3.06 Opinions as to Trust Estate.................................................................. 8
Section 3.07 Performance of Obligations................................................................... 9
Section 3.08 Negative Covenants........................................................................... 9
Section 3.09 Annual Statement as to Compliance............................................................ 10
Section 3.10 Representations and Warranties Concerning the Mortgage Loans................................. 10
Section 3.11 Amendments to Sale and Servicing Agreement................................................... 10
Section 3.12 Master Servicer as Agent and Bailee of the Indenture Trustee................................. 11
Section 3.13 Investment Company Act....................................................................... 11
Section 3.14 Issuing Entity May Consolidate, etc.......................................................... 11
Section 3.15 Successor or Transferee...................................................................... 13
Section 3.16 No Other Business............................................................................ 13
Section 3.17 No Borrowing................................................................................. 13
Section 3.18 Guarantees, Loans, Advances and Other Liabilities............................................ 13
Section 3.19 Capital Expenditures......................................................................... 13
Section 3.20 Determination of Note Rate................................................................... 13
Section 3.21 Restricted Payments.......................................................................... 14
Section 3.22 Notice of Events of Default.................................................................. 14
Section 3.23 Further Instruments and Acts................................................................. 14
Section 3.24 Certain Representations Regarding the Trust Estate........................................... 14
Section 3.25 The Pre-Funding Account...................................................................... 15
Section 3.26 [reserved]................................................................................... 16
Section 3.27 Grant of the Subsequent Mortgage Loans....................................................... 16
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Section 3.28 Allocation of Realized Losses................................................................ 16
ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01 The Notes.................................................................................... 19
Section 4.02 Priorities of Distribution................................................................... 19
Section 4.03 Registration of and Limitations on Transfer and Exchange of Notes; Appointment of
Note Registrar and Certificate Registrar..................................................... 26
Section 4.04 Mutilated, Destroyed, Lost or Stolen Notes................................................... 27
Section 4.05 Persons Deemed Owners........................................................................ 28
Section 4.06 Cancellation................................................................................. 28
Section 4.07 Book-Entry Notes............................................................................. 28
Section 4.08 Notices to Depository........................................................................ 29
Section 4.09 Definitive Notes............................................................................. 29
Section 4.10 Tax Treatment................................................................................ 29
Section 4.11 Satisfaction and Discharge of Indenture...................................................... 30
Section 4.12 Application of Trust Money................................................................... 31
Section 4.13 Repayment of Monies Held by Paying Agent..................................................... 31
Section 4.14 Temporary Notes.............................................................................. 31
Section 4.15 Representation Regarding ERISA............................................................... 32
Section 4.16 Private Notes................................................................................ 32
ARTICLE V
DEFAULT AND REMEDIES
Section 5.01 Events of Default............................................................................ 34
Section 5.02 Acceleration of Maturity; Rescission and Annulment........................................... 34
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.................... 35
Section 5.04 Remedies; Priorities......................................................................... 37
Section 5.05 Optional Preservation of the Trust Estate.................................................... 38
Section 5.06 Limitation of Suits.......................................................................... 39
Section 5.07 Unconditional Rights of Noteholders To Receive Principal and Interest........................ 39
Section 5.08 Restoration of Rights and Remedies........................................................... 40
Section 5.09 Rights and Remedies Cumulative............................................................... 40
Section 5.10 Delay or Omission Not a Waiver............................................................... 40
Section 5.11 Control By Noteholders....................................................................... 40
Section 5.12 Waiver of Past Defaults...................................................................... 40
Section 5.13 Undertaking for Costs........................................................................ 41
Section 5.14 Waiver of Stay or Extension Laws............................................................. 41
Section 5.15 Sale of Trust Estate......................................................................... 41
Section 5.16 Action on Notes.............................................................................. 43
Section 5.17 Performance and Enforcement of Certain Obligations........................................... 43
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01 Duties of Indenture Trustee.................................................................. 45
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Section 6.02 Rights of Indenture Trustee.................................................................. 46
Section 6.03 Individual Rights of Indenture Trustee....................................................... 47
Section 6.04 Indenture Trustee's Disclaimer............................................................... 47
Section 6.05 Notice of Event of Default................................................................... 47
Section 6.06 Reports by Indenture Trustee to Holders and Tax Administration............................... 47
Section 6.07 Compensation................................................................................. 47
Section 6.08 Replacement of Indenture Trustee............................................................. 48
Section 6.09 Successor Indenture Trustee by Merger........................................................ 49
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee............................ 49
Section 6.11 Representations and Warranties............................................................... 50
Section 6.12 Directions to Indenture Trustee.............................................................. 51
Section 6.13 The Agents................................................................................... 51
Section 6.14 Eligibility; Disqualification................................................................ 51
Section 6.15 Preferential Collection of Claims Against Issuing Entity..................................... 52
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01 Issuing Entity To Furnish Indenture Trustee Names and Addresses of Noteholders............... 53
Section 7.02 Preservation of Information; Communications to Noteholders................................... 53
Section 7.03 [Reserved]................................................................................... 53
Section 7.04 [Reserved]................................................................................... 53
Section 7.05 Monthly Statements to Noteholders............................................................ 53
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01 Collection of Money.......................................................................... 56
Section 8.02 [Reserved]................................................................................... 56
Section 8.03 Officer's Certificate........................................................................ 56
Section 8.04 Termination Upon Distribution to Noteholders................................................. 56
Section 8.05 Release of Trust Estate...................................................................... 56
Section 8.06 Surrender of Notes Upon Final Payment........................................................ 57
Section 8.07 Optional Redemption of the Notes............................................................. 57
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of Noteholders....................................... 58
Section 9.02 Supplemental Indentures With Consent of Noteholders.......................................... 59
Section 9.03 Execution of Supplemental Indentures......................................................... 60
Section 9.04 Effect of Supplemental Indenture............................................................. 60
Section 9.05 Reference in Notes to Supplemental Indentures................................................ 61
ARTICLE X
MISCELLANEOUS
Section 10.01 Compliance Certificates and Opinions, etc................................................... 62
Section 10.02 Form of Documents Delivered to Indenture Trustee............................................ 63
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Section 10.03 Acts of Noteholders......................................................................... 64
Section 10.04 Notices etc., to Indenture Trustee Issuing Entity and Rating Agencies....................... 64
Section 10.05 Notices to Noteholders; Waiver.............................................................. 65
Section 10.06 Effect of Headings.......................................................................... 65
Section 10.07 Successors and Assigns...................................................................... 66
Section 10.08 Separability................................................................................ 66
Section 10.09 [Reserved].................................................................................. 66
Section 10.10 Legal Holidays.............................................................................. 66
Section 10.11 GOVERNING LAW............................................................................... 66
Section 10.12 Counterparts................................................................................ 66
Section 10.13 Recording of Indenture...................................................................... 66
Section 10.14 Issuing Entity Obligation................................................................... 66
Section 10.15 No Petition................................................................................. 67
Section 10.16 Inspection.................................................................................. 67
ARTICLE XI
REMIC ELECTIONS AND ADMINISTRATION
Section 11.01 Indenture Trustee to Administer REMICS....................................................... 68
Section 11.02 Carryover Reserve Fund....................................................................... 70
Section 11.03 Prohibited Transactions and Activities....................................................... 71
Section 11.04 Indemnification with Respect to Certain Taxes and Loss of REMIC Status....................... 71
Section 11.05 REMIC Payment Rules.......................................................................... 72
Section 11.06 Notification of a TMP Trigger Event.......................................................... 78
ARTICLE XII
REMIC TERMINATION REQUIREMENTS.............................................................................. 79
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EXHIBITS
Exhibit A-1 -- Form of Class A Notes
Exhibit A-2 -- Form of Class M Notes
Exhibit A-3 -- Form of Class B Notes
Exhibit B -- Mortgage Loan Schedule
Exhibit C -- Form of Subsequent Transfer Agreement
Exhibit D -- Form of Transferor Certificate for Private Certificates
Exhibit E -- Form of Rule 144A Investment Letter
Exhibit F -- Form of Investment Letter
Exhibit G -- Form of Transferee Certificate
Appendix A -- Definitions
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This Indenture, dated as of [DATE]ntered into between [ISSUING
ENTITY], a Delaware statutory trust, as Issuing Entity (the "Issuing Entity"),
and [INDENTURE TRUSTEE], a _________, as Indenture Trustee (the "Indenture
Trustee").
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuing
Entity's Asset-Backed Notes, Series [______] (the "Notes").
GRANTING CLAUSE
The Issuing Entity hereby Grants to the Indenture Trustee at the
Closing Date, as trustee for the benefit of the Holders of the Notes, all of the
Issuing Entity's right, title and interest in and to whether now existing or
hereafter created by (a) the Mortgage Loans, Replacement Mortgage Loans, and the
proceeds thereto and all rights under the Related Documents; (b) all funds on
deposit from time to time in the Collection Account allocable to the Mortgage
Loans excluding any investment income from such funds; (c) all funds on deposit
from time to time in the Payment Account and in all proceeds thereof; (d) all
funds on deposit from time to time in the Pre-Funding Account and in all
proceeds thereof excluding any investment income from such funds; (e) any REO
Property, (f) each Required Insurance Policy, and any amounts payable by the
insurer under any Insurance Policy (to the extent the mortgagee has a claim
thereto); (g) all rights under (i) the Sale and Servicing Agreement as assigned
to the Issuing Entity, with respect to the Initial and Subsequent Mortgage
Loans, and the Subsequent Transfer Agreement, with respect to the Subsequent
Mortgage Loans as assigned to the Issuing Entity, with respect to the Subsequent
Mortgage Loans (ii) any subservicing agreements, (iii) any title, hazard and
primary insurance policies with respect to the Mortgaged Properties; and (g) all
present and future claims, demands, causes and choses in action in respect of
any or all of the foregoing and all payments on or under, and all proceeds of
every kind and nature whatsoever in respect of, any or all of the foregoing and
all payments on or under, and all proceeds of every kind and nature whatsoever
in the conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, checks, deposit accounts, rights to payment of any and every kind,
and other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing (collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as trustee on behalf of the Holders of the
Notes, acknowledges such ▇▇▇▇▇, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
The Indenture Trustee further agrees that upon a TMP Trigger Event,
pursuant to this Indenture, it will make all necessary elections to create the
Trust Estate as a one or more real
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estate mortgage investment conduits on the terms and conditions set forth under
Article XI herein.
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02 Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural
include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to time
amended, modified or supplemented and includes (in the case of agreements
or instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
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ARTICLE II
ORIGINAL ISSUANCE OF NOTES
Section 2.01 Form. The Class A, Class M and Class B, together with the
Indenture Trustee's certificate of authentication, shall be in substantially the
form set forth in Exhibit A-1, A-2 and A-3, as applicable, to this Indenture,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders).
The terms of the Notes set forth in Exhibit A-1, A-2 and A-3 to this
Indenture are part of the terms of this Indenture.
Section 2.02 Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuing Entity by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuing Entity shall bind the Issuing
Entity, notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
The Indenture Trustee shall upon Issuing Entity Request authenticate and
deliver the Bonds for original issue in an aggregate initial Note Principal
Balance of $_____________. Each Class of Bonds shall be issued in the following
aggregate Note Principal Balances:
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CLASS AGGREGATE INITIAL NOTE PRINCIPAL BALANCE
------------------ ----------------------------------------
1-A-1 $___________
1-A-2 $___________
2-A-1 $___________
2-A-2 $___________
3-A-1-A $___________
3-A-1-B $___________
3-A-2-A $___________
3-A-2-B $___________
4-A-1 $___________
4-A-2 $___________
4-A-1 $___________
4-A-2 $___________
1-IO $___________
2-IO $___________
3-IO $___________
4-IO $___________
5-IO $___________
M-1 $___________
M-2 $___________
B-1 $___________
B-2 $___________
B-3 $___________
B-4 $___________
B-5 $___________
* Notional Balance
Each of the Notes shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes and the Notes shall be issuable in the
minimum initial Note Principal Balances of $_____ and in integral multiples of
$_____ in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note or a facsimile
thereof, a certificate of authentication substantially in the form provided for
herein executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
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ARTICLE III
COVENANTS
Section 3.01 Collection of Payments with respect to the Mortgage Loans.
The Indenture Trustee shall maintain the Payment Account established pursuant to
Section 3.05 of the Sale and Servicing Agreement in accordance with the
requirements of such Section. The Indenture Trustee shall make all payments of
principal of and interest on the Notes, subject to Section 3.03 herein, as
provided in Section 3.05 of the Sale and Servicing Agreement from monies on
deposit in the Payment Account.
Section 3.02 Maintenance of Office or Agency. The Indenture Trustee will
maintain or cause to be maintained at its expense an office or offices or agency
or agencies in _________ where Notes may be surrendered for registration of
transfer or exchange. The Indenture Trustee initially designates its offices at
_________________________, as offices for such purposes. The Indenture Trustee
will give prompt written notice to the Noteholders of any change in such
location of any such office or agency.
Section 3.03 Money for Payments To Be Held in Trust; Paying Agent. (a) As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuing Entity by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Payment Account for payments of Notes shall be paid over to the Issuing Entity
except as provided in this Section 3.03. The Issuing Entity hereby appoints the
Indenture Trustee as its Paying Agent.
The Issuing Entity will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent it hereby so agrees), subject to the provisions of
this Section 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Indenture Trustee notice of any default by the Issuing
Entity of which it has actual knowledge in the making of any payment
required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment;
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(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith; and
(vi) not commence a bankruptcy proceeding against the Issuing Entity
in connection with this Indenture.
The Issuing Entity may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuing Entity Request direct any Paying Agent to pay to the Indenture Trustee
all sums held in trust by such Paying Agent, such sums to be held by the
Indenture Trustee upon the same trusts as those upon which the sums were held by
such Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuing Entity on Issuing Entity Request; and the Holder of
such Note shall thereafter, as an unsecured general creditor, look only to the
Issuing Entity for payment thereof (but only to the extent of the amounts so
paid to the Issuing Entity), and all liability of the Indenture Trustee or such
Paying Agent with respect to such trust money shall thereupon cease; provided,
however, that the Indenture Trustee or such Paying Agent, before being required
to make any such repayment, shall at the expense and direction of the Issuing
Entity cause to be published once, in an Authorized Newspaper published in the
English language, notice that such money remains unclaimed and that, after a
date specified therein which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Issuing Entity. The Indenture Trustee may also adopt and employ,
at the expense and direction of the Issuing Entity, any other reasonable means
of notification of such repayment (including, but not limited to, mailing notice
of such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
Section 3.04 Existence. The Issuing Entity will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuing Entity hereunder
is or becomes, organized under the laws of any other state or of the United
States of America, in which case the Issuing Entity will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.
Section 3.05 Protection of Trust Estate. (a) The Issuing Entity will from
time to time prepare, execute and deliver all such supplements and amendments
hereto and all such financing
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statements, continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) cause the Indenture Trustee or Master Servicer to enforce any
of the rights to the Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture Trustee
shall not remove any portion of the Trust Estate that consists of money or is
evidenced by an instrument, certificate or other writing from the jurisdiction
in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant to Section 3.06 hereof (or from the jurisdiction in which it was held
as described in the Opinion of Counsel delivered on the Closing Date pursuant to
Section 3.06(a) hereof, or if no Opinion of Counsel has yet been delivered
pursuant to Section 3.06(b) hereof, 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).
The Issuing Entity hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.05 upon the
Issuing Entity's preparation thereof and delivery to the Indenture Trustee.
Section 3.06 Opinions as to Trust Estate. (a) On the Closing Date, the
Issuing Entity shall furnish to the Indenture Trustee and the Owner Trustee an
Opinion of Counsel either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording and filing of this
Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the lien and first priority security interest in the Collateral and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and first priority
security interest effective.
(b) On or before April 15 in each calendar year, beginning in ____, the
Issuing Entity shall furnish to the Indenture Trustee an Opinion of Counsel at
the expense of the Issuing Entity either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and with respect to the execution and filing
of any financing statements and continuation statements as is necessary to
maintain the lien and first priority
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security interest in the Collateral and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest in the Collateral until December 31 in the following calendar
year.
Section 3.07 Performance of Obligations. (a) The Issuing Entity will
punctually perform and observe all of its obligations and agreements contained
in this Indenture, the Basic Documents and in the instruments and agreements
included in the Trust Estate.
(b) The Issuing Entity may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuing Entity shall be deemed to be action taken by the Issuing Entity.
(c) The Issuing Entity will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any of the documents relating to the Mortgage
Loans, or under any instrument included in the Trust Estate, or which would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any of the documents relating to
the Mortgage Loans or any such instrument, except such actions as the Master
Servicer is expressly permitted to take in the Sale and Servicing Agreement. The
Indenture Trustee, as pledgee of the Mortgage Loans, may exercise the rights of
the Issuing Entity to direct the actions of the Master Servicer pursuant to the
Sale and Servicing Agreement.
(d) The Issuing Entity may retain an administrator and may enter into
contracts with other Persons for the performance of the Issuing Entity's
obligations hereunder, and performance of such obligations by such Persons shall
be deemed to be performance of such obligations by the Issuing Entity.
Section 3.08 Negative Covenants. So long as any Notes are Outstanding, the
Issuing Entity shall not:
(i) except as expressly permitted by this Indenture, sell, transfer,
exchange or otherwise dispose of the Trust Estate, unless directed to do
so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against
any present or former Noteholder by reason of the payment of the taxes
levied or assessed upon any part of the Trust Estate;
(iii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with
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respect to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or burden
the Trust Estate or any part thereof or any interest therein or the
proceeds thereof or (C) permit the lien of this Indenture not to
constitute a valid first priority security interest in the Trust Estate;
or
(iv) waive or impair, or fail to assert rights under, the Mortgage
Loans or impair or cause to be impaired the Issuing Entity's interest in
the Initial Mortgage Loans, the Subsequent Mortgage Loans, the Sale and
Servicing Agreement or in any Basic Document, if any such action would
materially and adversely affect the interests of the Noteholders.
Section 3.09 Annual Statement as to Compliance. The Issuing Entity will
deliver to the Indenture Trustee, by March 1 of each year commencing with the
calendar year 2006, an Officer's Certificate stating, as to the Authorized
Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuing Entity during the
previous calendar year and of its performance under this Indenture has
been made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuing Entity has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has been
a default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
Section 3.10 Representations and Warranties Concerning the Mortgage Loans.
The Indenture Trustee, as pledgee of the Initial Mortgage Loans and Subsequent
Mortgage Loans, has the benefit of the representations and warranties made by
the Seller in the Sale and Servicing Agreement and the Subsequent Transfer
Agreement concerning the Seller the Initial Mortgage Loans and the Subsequent
Mortgage Loans to the same extent as though such representations and warranties
were made directly to the Indenture Trustee. If a Responsible Officer of the
Indenture Trustee has actual knowledge of any breach of any representation or
warranty made by the Seller in the Sale and Servicing Agreement, the Indenture
Trustee shall promptly notify the Seller of such finding and such party's
obligation to cure such defect or repurchase or substitute for the related
Initial Mortgage Loan or Subsequent Mortgage Loan.
Section 3.11 Amendments to Sale and Servicing Agreement. The Issuing
Entity covenants with the Indenture Trustee that it will not enter into any
amendment or supplement to the Sale and Servicing Agreement without the prior
written consent of the Indenture Trustee. Subsequent to a TMP Trigger Event, the
Indenture Trustee shall not enter into any such amendment or supplement without
receiving an opinion of counsel to the effect that such amendment or supplement
will not cause the imposition of any tax on the Trust or the Noteholders or
cause the any REMIC to fail to qualify as a REMIC at any time that any Notes are
outstanding.
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Section 3.12 Master Servicer as Agent and Bailee of the Indenture Trustee.
Solely for purposes of perfection under Section 9-305 of the Uniform Commercial
Code or other similar applicable law, rule or regulation of the state in which
such property is held by the Master Servicer, the Issuing Entity and the
Indenture Trustee hereby acknowledge that the Master Servicer is acting as
bailee of the Indenture Trustee in holding amounts on deposit in the Collection
Account, as well as its bailee in holding any related document in the Mortgage
File released to the Master Servicer, and any other items constituting a part of
the Trust Estate which from time to time come into the possession of the Master
Servicer. It is intended that, by the Master Servicer's acceptance of such
bailee arrangement, the Indenture Trustee, as a secured party of the Mortgage
Loans, will be deemed to have possession of such document, such monies and such
other items for purposes of Section 9-305 of the Uniform Commercial Code of the
state in which such property is held by the Master Servicer. The Indenture
Trustee shall not be liable with respect to such documents, monies or items
while in possession of the Master Servicer.
Section 3.13 Investment Company Act. The Issuing Entity shall not become
an "investment company" or be under the "control" of an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
provided, however, that the Issuing Entity shall be in compliance with this
Section 3.13 if it shall have obtained an order exempting it from regulation as
an "investment company" so long as it is in compliance with the conditions
imposed in such order.
Section 3.14 Issuing Entity May Consolidate, etc. (a) The Issuing Entity
shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuing Entity) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any state or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in
form reasonably satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes, and all
other amounts payable to the Indenture Trustee, the payment to the Paying
Agent of all amounts due to the Noteholders, and the performance or
observance of every agreement and covenant of this Indenture on the part
of the Issuing Entity to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Event
of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuing Entity
that such transaction shall not cause the rating of the Offered Notes to
be reduced, suspended or withdrawn or to be considered by either Rating
Agency to be below investment grade;
(iv) the Issuing Entity shall have received an Opinion of Counsel
(and shall have delivered a copy thereof to the Indenture Trustee) to the
effect that such transaction will not (A) result in a "substantial
modification" of the Notes under Treasury Regulation
11
section 1.1001-3, or adversely affect the status of the Offered Notes as
indebtedness for federal income tax purposes and cause the Trust to be
subject to an entity level tax for federal income tax purposes other than
in the event of a TMP Trigger Event;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuing Entity shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided
for or relating to such transaction have been complied with (including any
filing required by the Exchange Act), and that such supplemental indenture
is enforceable.
(b) The Issuing Entity shall not convey or transfer any of its properties
or assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuing Entity, the conveyance or transfer of
which is hereby restricted, shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any state thereof, (B) expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in
form satisfactory to the Indenture Trustee, the due and punctual payment
of the principal of and interest on all Offered Notes and the performance
or observance of every agreement and covenant of this Indenture on the
part of the Issuing Entity to be performed or observed, all as provided
herein, (C) expressly agree by means of such supplemental indenture that
all right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of the Holders of the Offered Notes, (D)
unless otherwise provided in such supplemental indenture, expressly agree
to indemnify, defend and hold harmless the Issuing Entity, the Indenture
Trustee against and from any loss, liability or expense arising under or
related to this Indenture and the Notes and (E) expressly agree by means
of such supplemental indenture that such Person (or if a group of Persons,
then one specified Person) shall make all filings with the Commission (and
any other appropriate Person) required by the Exchange Act in connection
with the Offered Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuing Entity
that such transaction shall not cause the rating of the Offered Notes to
be reduced, suspended or withdrawn;
(iv) the Issuing Entity shall have received an Opinion of Counsel
(and shall have delivered a copy thereof to the Indenture Trustee) to the
effect that such transaction will not (A) result in a "substantial
modification" of the Notes under Treasury Regulation section 1.1001-3, or
adversely affect the status of the Offered Notes as indebtedness for
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federal income tax purposes and cause the Trust to be subject to an entity
level tax for federal income tax purposes other than in the event of a TMP
Trigger Event;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuing Entity shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any
filing required by the Exchange Act).
Section 3.15 Successor or Transferee. (a) Upon any consolidation or merger
of the Issuing Entity in accordance with Section 3.14(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuing Entity)
shall succeed to, and be substituted for, and may exercise every right and power
of, the Issuing Entity under this Indenture with the same effect as if such
Person had been named as the Issuing Entity herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuing Entity pursuant to Section 3.14(b), the Issuing Entity will be released
from every covenant and agreement of this Indenture to be observed or performed
on the part of the Issuing Entity with respect to the Notes immediately upon the
delivery of written notice to the Indenture Trustee of such conveyance or
transfer.
Section 3.16 No Other Business. The Issuing Entity shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Mortgage Loans and the issuance of the Notes and Certificates in the manner
contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.
Section 3.17 No Borrowing. The Issuing Entity shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes under this Indenture.
Section 3.18 Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by this Indenture or the Basic Documents, the Issuing Entity shall
not make any loan or advance or credit to, or guarantee (directly or indirectly
or by an instrument having the effect of assuring another's payment or
performance on any obligation or capability of so doing or otherwise), endorse
or otherwise become contingently liable, directly or indirectly, in connection
with the obligations, stocks or dividends of, or own, purchase, repurchase or
acquire (or agree contingently to do so) any stock, obligations, assets or
securities of, or any other interest in, or make any capital contribution to,
any other Person.
Section 3.19 Capital Expenditures. The Issuing Entity shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.20 Determination of Note Rate. On each Interest Determination
Date on or after the Note Rate Change Date, the Indenture Trustee shall
determine One-Year LIBOR and
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the related Note Rate for each Class of Notes, for the following Accrual Period
and shall inform the Issuing Entity, the Master Servicer, and the Depositor at
their respective facsimile numbers given to the Indenture Trustee in writing
thereof. The establishment of One-Year LIBOR on each such Interest Determination
Date by the Indenture Trustee and the Indenture Trustee's calculation of the
rate of interest applicable to each Class of Notes for the related Accrual
Period shall (in the absence of manifest error) be final and binding.
Section 3.21 Restricted Payments. The Issuing Entity shall not, directly
or indirectly, (i) pay any dividend or make any payment (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 Issuing Entity
or otherwise with respect to any ownership or equity interest or security in or
of the Issuing Entity, (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 Issuing Entity may make, or cause to be made, (x) payments and payments to
the Owner Trustee, the Indenture Trustee, Noteholders and the Certificateholders
as contemplated by, and to the extent funds are available for such purpose under
this Indenture and the Trust Agreement and (y) payments to the Master Servicer,
and the Subservicers pursuant to the terms of the Servicing Agreement. The
Issuing Entity will not, directly or indirectly, make payments to or payments
from the Collection Account except in accordance with this Indenture and the
Basic Documents.
Section 3.22 Notice of Events of Default. The Issuing Entity shall give
the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder and under the Trust Agreement.
Section 3.23 Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuing Entity will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
Section 3.24 Certain Representations Regarding the Trust Estate.
(a) With respect to that portion of the Collateral described in clauses
(a) through (g) of the definition of Trust Estate, the Issuing Entity represents
to the Indenture Trustee that:
(i) This Indenture creates a valid and continuing security interest
(as defined in the applicable UCC) in the Collateral in favor of the
Indenture Trustee, which security interest is prior to all other liens,
and is enforceable as such as against creditors of and purchasers from the
Issuing Entity.
(ii) In each case, within the meaning of the applicable UCC: (A) the
Collateral described in clauses (a) through (c) constitutes "deposit
accounts" or "instruments," as applicable; (B) the Collateral described in
clause (d) constitutes "real property;"(C) the Collateral described in
clause (e) constitutes "insurance;" and (D) the Collateral described in
clauses (e), (f) and (g) constitute "general intangibles."
(iii) The Issuing Entity owns and has good and marketable title to
the Collateral, free and clear of any lien, claim or encumbrance of any
Person.
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(iv) The Issuing Entity has taken all steps necessary to cause the
Indenture Trustee to become the account holder of the Collateral.
(v) Other than the security interest granted to the Indenture
Trustee pursuant to this Indenture, the Issuing Entity has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any
of the Collateral.
(vi) The Collateral is not in the name of any Person other than the
Issuing Entity or the Indenture Trustee. The Issuing Entity has not
consented to the bank maintaining the Collateral to comply with
instructions of any Person other than the Indenture Trustee.
(b) With respect to any Collateral in which a security interest may be
perfected by filing, the Issuing Entity has not authorized the filing of, and is
not aware of any financing statements against, the Issuing Entity, that include
a description of collateral covering such Collateral, other than any financing
statement relating to the security interest granted to the Indenture Trustee
hereunder or that has been terminated. The Issuing Entity is not aware of any
judgment or tax lien filings against the Issuing Entity.
(c) The Issuing Entity has caused or will have caused, within ten days of
the Closing Date, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in all Collateral granted to the
Indenture Trustee hereunder in which a security interest may be perfected by
filing. Any financing statement that is filed in connection with this Section
3.24 shall contain a statement that a purchase or security interest in any
collateral described therein will violate the rights of the secured party named
in such financing statement.
(d) The foregoing representations may not be waived and shall survive the
issuance of the Notes.
Section 3.25 The Pre-Funding Account.
(a) The Indenture Trustee shall establish and maintain, on behalf of the
Noteholders, the Pre-Funding Account. On the Closing Date the Depositor shall
remit the Original Pre-Funded Amount to the Indenture Trustee for deposit in the
Pre-Funding Account.
On each Subsequent Transfer Date, upon satisfaction of the conditions in
Section 2.01 of the Sale and Servicing Agreement, the Indenture Trustee shall
withdraw from the Pre-Funding Account 100% of the aggregate of the Cut-off Date
Principal Balances of the Subsequent Mortgage Loans sold to the Trust Fund on
the Subsequent Transfer Date and pay that amount to the order of the Seller.
On the Business Day before the Payment Date following the end of the
Funding Period, the Indenture Trustee shall (i) withdraw the unused Pre-Funded
Amount from the Pre-Funding Account, (ii) promptly deposit such amount in the
Payment Account, and (iii) pay such amount to the Notes on the Payment Date
pursuant to Section 4.02.
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The amount deposited in the Payment Account pursuant to the preceding
paragraph shall be net of any investment earnings on the amounts on deposit in
the Pre-Funding Account.
(b) The Indenture Trustee shall invest funds in the Pre-Funding Account,
as directed by the Seller, in Permitted Investments, which shall mature not
later than the Business Day immediately preceding the first Payment Date that
follows the date of such investment, and which shall not be sold or disposed of
prior to its maturity. All Permitted Investments in the Pre-Funding Account
shall be made in the name of the Indenture Trustee, for the benefit of the
Seller. The amount of any losses incurred in the Pre-Funding Account in respect
of any such investments shall be paid by the Seller to the Indenture Trustee for
deposit into the Pre-Funding Account out of the Seller's own funds immediately
as realized. The Indenture Trustee shall not be liable for the amount of any
loss incurred in respect of any investment or lack of investment of funds held
in the Pre-Funding Account and made in accordance with this Section.
Section 3.26 [reserved].
Section 3.27 Grant of the Subsequent Mortgage Loans. In consideration of
the delivery on each Subsequent Transfer Date to or upon the order of the
Issuing Entity of all or a portion of the amount on deposit in the Pre-Funding
Account, the Depositor shall, to the extent of the availability thereof, on such
Subsequent Transfer Date during the Funding Period, grant to the Indenture
Trustee all of its rights, title and interest in the Subsequent Mortgage Loans
and simultaneously with the grant of the Subsequent Mortgage Loans, the
Depositor will cause the related Mortgage File to be delivered to the Indenture
Trustee.
Section 3.28 Allocation of Realized Losses. (a) Prior to each Payment
Date, the Master Servicer shall determine the total amount of Realized Losses
that occurred during the related Prepayment Period. The amount of each Realized
Loss shall be evidenced by an Officer's Certificate delivered to the Indenture
Trustee with the related Remittance Report.
(b) On each Payment Date following the application of all amounts
distributable on such date, to the extent the aggregate Stated Principal Balance
of the Mortgage Loans is less than the aggregate Note Principal Balances of the
Senior Notes and Subordinate Notes due to Realized Losses on the Mortgage Loans,
the Indenture Trustee shall allocate Applied Realized Loss Amount and Realized
Loss Excess Coverage Amounts, in the following order of priority:
(i) in an amount equal to the Applied Realized Loss Amount, to the
Class B-5 Notes, until the Note Principal Balance thereof is reduced to
zero;
(ii) in an amount equal to the Applied Realized Loss Amount, to the
Class B-4 Notes, until the Note Principal Balance thereof is reduced to
zero;
(iii) in an amount equal to the Applied Realized Loss Amount, to the
Class B-3 Notes, until the Note Principal Balance thereof is reduced to
zero;
(iv) in an amount equal to the Applied Realized Loss Amount, to the
Class B-2 Notes, until the Note Principal Balance thereof is reduced to
zero;
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(v) in an amount equal to the Applied Realized Loss Amount, to the
Class B-1 Notes, until the Note Principal Balance thereof is reduced to
zero;
(vi) in an amount equal to the Applied Realized Loss Amount, to the
Class M-2 Notes, until the Note Principal Balance thereof is reduced to
zero;
(vii) in an amount equal to the Realized Loss Excess Coverage
Amount, to the related Class IO Notes, in reduction of the related Class
Optimal Interest Distribution Amount for such Class;
(viii) in an amount equal to the Realized Loss Excess Coverage
Amount, to the non-related Class IO Notes, on a pro rata basis, in
reduction of the related Class Optimal Interest Distribution Amount for
such class(es);
(ix) in an amount equal to the Applied Realized Loss Amount, to the
Class M-1 Notes, until the Note Principal Balance thereof is reduced to
zero;
(x) in an amount equal to the Applied Realized Loss Amount, to the
Senior Notes:
(A) the amount of any Realized Loss with respect to the Group
1 Mortgage Loans will be allocated to the Class 1-A-1 Notes
and Class 1-A-2 Notes on a pro rata basis, provided, however,
that any realized losses otherwise allocable to the Class
1-A-1 Notes shall first be applied to the Class 1-A-2 Notes
until the Note Principal Balance thereof is reduced to zero;
(B) the amount of any Realized Loss with respect to the Group
2 Mortgage Loans will be allocated to the Class 2-A-1 Notes
and Class 2-A-2 Notes on a pro rata basis, provided, however,
that any realized losses otherwise allocable to the Class
2-A-1 Notes shall first be applied to the Class 2-A-2 Notes
until the Note Principal Balance thereof is reduced to zero;
(C) the amount of any Realized Loss with respect to the Group
3 Mortgage Loans will be allocated in the following order (y)
concurrently, (A) to the Class 3-A-1-B Notes, to the extent of
a fraction of such loss equal to (a) the aggregate Note
Principal Balance of the Class 3-A-1-A Notes and Class 3-A-1-B
Notes divided by (b) the aggregate Note Principal Balance of
all of the Class 3-A Notes and (B) to the Class 3-A-2-B Notes,
to the extent of a fraction of such loss equal to (a) the
aggregate Note Principal Balance of the Class 3-A-2-A Notes
and Class 3-A-2-B Notes divided by (b) the aggregate Note
Principal Balance of all of the Class 3-A Notes and (z) to the
Class 3-A-1-A Notes and Class 3-A-2-A Notes, pro rata basis,
in each case, until the Note Principal Balance thereof is
reduced to zero;
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(D) the amount of any Realized Loss with respect to the Group
4 Mortgage Loans will be allocated to the Class 4-A-1 Notes
and Class 4-A-2 Notes on a pro rata basis, provided, however,
that any realized losses otherwise allocable to the Class
4-A-1 Notes shall first be applied to the Class 4-A-2 Notes
until the Note Principal Balance thereof is reduced to zero;
and
(E) the amount of any Realized Loss with respect to the Group
5 Mortgage Loans will be allocated to the Class 5-A-1 Notes
and Class 5-A-2 Notes on a pro rata basis, provided, however,
that any realized losses otherwise allocable to the Class
5-A-1 Notes shall first be applied to the Class 5-A-2 Notes
until the Note Principal Balance thereof is reduced to zero.
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ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01 The Notes. Each Class of Book-Entry Notes shall be registered
in the name of a nominee designated by the Depository. Beneficial Owners will
hold interests in the Book-Entry Notes through the book-entry facilities of the
Depository in minimum initial Note Principal Balances of $______ and integral
multiples of $_____ in excess thereof.
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Notes for the
purposes of exercising the rights of Holders of the Notes hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08
hereof, Beneficial Owners shall not be entitled to definitive certificates for
the Notes as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Holder of the Notes shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Noteholders and give notice to the
Depository of such record date. Without the consent of the Issuing Entity and
the Indenture Trustee, no Note may be transferred by the Depository except to a
successor Depository that agrees to hold such Note for the account of the
Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuing Entity may
appoint a successor Depository. If no successor Depository has been appointed
within 30 days of the effective date of the Depository's resignation or removal,
each Beneficial Owner shall be entitled to certificates representing the Notes
it beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuing
Entity by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Indenture Trustee and delivered by the Indenture
Trustee to or upon the order of the Issuing Entity.
Section 4.02 Priorities of Distribution.
(a) (1) With respect to the Available Funds for Loan Group 1, on each
Payment Date, the Indenture Trustee shall withdraw such Available Funds from the
Payment Account and apply such funds to distributions on the specified Classes
of Group 1 Senior Notes in the following order and priority and, in each case,
to the extent of such funds remaining:
(i) concurrently, to each interest-bearing Class of the Group 1
Senior Notes, an amount allocable to interest equal to the related Class
Optimal Interest Distribution Amount for such Payment Date, any shortfall
being allocated among such Classes in proportion to the amount of the
Class Optimal Interest Distribution Amount that would have been
distributed in the absence of such shortfall;
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(ii) to each Class of Group 1 Senior Notes, the related Principal
Amount, up to the amount of the Senior Principal Distribution Amount for
Loan Group 1 for such Payment Date will be distributed concurrently, to
the Class 1-A-1 Notes and Class 1-A-2 Notes, pro rata, until their
respective Note Principal Balances are reduced to zero.
(2) With respect to the Available Funds for Loan Group 2, on each Payment
Date, the Trustee shall withdraw such Available Funds from the Payment Account
and apply such funds to distributions on the specified Classes of Group 2 Senior
Notes in the following order and priority and, in each case, to the extent of
such funds remaining:
(i) concurrently, to each interest-bearing Class of Group 2 Senior
Notes, an amount allocable to interest equal to the related Class Optimal
Interest Distribution Amount for such Payment Date, any shortfall being
allocated among such Classes in proportion to the amount of the Class
Optimal Interest Distribution Amount that would have been distributed in
the absence of such shortfall;
(ii) to each Class of Group 2 Senior Notes, the related Principal
Amount, up to the amount of the Senior Principal Distribution Amount for
Loan Group 2 for such Payment Date will be distributed concurrently, to
the Class 2-A-1 Notes and Class 2-A-2 Notes, pro rata, until their
respective Note Principal Balances are reduced to zero.
(3) With respect to the Available Funds for Loan Group 3, on each Payment
Date, the Trustee shall withdraw such Available Funds from the Distribution
Account and apply such funds to distributions on the specified Classes of Group
3 Senior Notes in the following order and priority and, in each case, to the
extent of such funds remaining:
(i) concurrently, to each interest-bearing Class of Group 3 Senior
Notes, an amount allocable to interest equal to the related Class Optimal
Interest Distribution Amount for such Payment Date, any shortfall being
allocated among such Classes in proportion to the amount of the Class
Optimal Interest Distribution Amount that would have been distributed in
the absence of such shortfall;
(ii) to each Class of Group 3 Senior Notes, the related Principal
Amount, up to the amount of the Senior Principal Distribution Amount for
Loan Group 3 for such Payment Date will be distributed concurrently, to
the Class 3-A-1-A, Class 3-A-1-B, Class 3-A-2-A and Class 3-A-2-B Notes,
pro rata, until their respective Note Principal Balances are reduced to
zero.
(4) With respect to the Available Funds for Loan Group 4, on each Payment
Date, the Trustee shall withdraw such Available Funds from the Distribution
Account and apply such funds to distributions on the specified Classes of Group
4 Senior Notes in the following order and priority and, in each case, to the
extent of such funds remaining:
(i) concurrently, to each interest-bearing Class of Group 4 Senior
Notes, an amount allocable to interest equal to the related Class Optimal
Interest Distribution Amount for such Payment Date, any shortfall being
allocated among such Classes in
20
proportion to the amount of the Class Optimal Interest Distribution Amount
that would have been distributed in the absence of such shortfall;
(ii) to each Class of Group 4 Senior Notes, the related Principal
Amount, up to the amount of the Senior Principal Distribution Amount for
Loan Group 4 for such Payment Date will be distributed concurrently, to
the Class 4-A-1 Notes and Class 4-A-2 Notes, pro rata, until their
respective Note Principal Balances are reduced to zero.
(5) With respect to the Available Funds for Loan Group 5, on each Payment
Date, the Trustee shall withdraw such Available Funds from the Distribution
Account and apply such funds to distributions on the specified Classes of Group
5 Senior Notes in the following order and priority and, in each case, to the
extent of such funds remaining:
(i) concurrently, to each interest-bearing Class of Group 5 Senior
Notes, an amount allocable to interest equal to the related Class Optimal
Interest Distribution Amount for such Payment Date, any shortfall being
allocated among such Classes in proportion to the amount of the Class
Optimal Interest Distribution Amount that would have been distributed in
the absence of such shortfall;
(ii) to each Class of Group 5 Senior Notes, the related Principal
Amount, up to the amount of the Senior Principal Distribution Amount for
Loan Group 5 for such Payment Date will be distributed concurrently, to
the Class 5-A-1 Notes and Class 5-A-2 Notes, pro rata, until their
respective Note Principal Balances are reduced to zero.
(6) On each Payment Date, Available Funds from all Loan Groups remaining
after making the distributions described in Section 4.02(a)(1) through Section
4.02(a)(5), shall be distributed to the Senior Notes to the extent provided in
Section 4.02(g).
(7) On each Payment Date, Available Funds remaining after making the
distributions described in Section 4.02(a)(1) through Section 4.02(a)(6) above,
shall be distributed to the Notes the following order and priority and, in each
case, to the extent of such funds remaining:
(A) from Available Funds from all Loan Groups, to the Class
M-1 Notes, an amount allocable to interest equal to the Class
Optimal Interest Distribution Amount for such Class for such
Payment Date;
(B) from Available Funds from all Loan Groups, to the Class
M-1 Notes, an amount allocable to principal equal to its Pro
Rata Share for such Payment Date until the Note Principal
Balance thereof is reduced to zero; provided, however, that if
the Senior Step Down Conditions are failed after the aggregate
Note Principal Balance of the Senior Notes is reduces to zero,
the Class M-1 Notes will receive an amount allocable to
principal equal to the Pro Rata Share for all Classes of
Subordinate Notes for such Payment Date until the Note
Principal Balance thereof is reduced to zero;
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(C) from Available Funds from the related Loan Group, to the
Classes of Senior Notes relating to each Loan Group, on a pro
rata basis, based on the amount of Unpaid Realized Loss Amount
for such Classes, in an amount equal to the Unpaid Realized
Loss Amount for each such Class;
(D) from remaining Available Funds from the related Loan
Group, to the Classes of Senior Notes relating to each Loan
Group, on a pro rata basis, based on the Note Principal
Balances thereof, to the extent needed to pay any Net Rate
Carryover Amount for each such Class; provided that any
related Available Funds remaining after such allocation to pay
Net Rate Carryover Amount based on the Note Principal Balances
of these Notes will be distributed to each such Class of Notes
with respect to which there remains any unpaid Net Rate
Carryover Amount (after the distribution based on Note
Principal Balances), pro rata, based on the amount of such
unpaid Net Rate Carryover Amount, to the extent needed to pay
any remaining Net Rate Carryover Amount for each such Class;
(E) from remaining Available Funds from all of the Loan
Groups, to the Class M-1 Notes, in an amount equal to the
Unpaid Realized Loss Amount for such Class;
(F) from remaining Available Funds from all of the Loan
Groups, to the Class M-1 Notes, in an amount equal to any Net
Rate Carryover Amount for such Class;
(G) concurrently, to each Class of Class IO Notes, an amount
allocable to interest equal to the related Class Optimal
Interest Distribution Amount for such Payment Date, any
shortfall being allocated among such Classes in proportion to
the amount of the Class Optimal Interest Distribution Amount
that would have been distributed in the absence of such
shortfall;
(H) from remaining Available Funds from all of the Loan
Groups, to the Class M-2 Notes, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Payment Date;
(I) from remaining Available Funds from all of the Loan
Groups, to the Class M-2 Notes, an amount allocable to
principal equal to its Pro Rata Share for such Payment Date
until the Note Principal Balance thereof is reduced to zero;
(J) from remaining Available Funds from all of the Loan
Groups, to the Class B-1 Notes, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Payment Date;
22
(K) from remaining Available Funds from all of the Loan
Groups, to the Class B-1 Notes, an amount allocable to
principal equal to its Pro Rata Share for such Payment Date
until the Note Principal Balance thereof is reduced to zero;
(L) from remaining Available Funds from all of the Loan
Groups, to the Class B-2 Notes, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Payment Date;
(M) from remaining Available Funds from all of the Loan
Groups, to the Class B-2 Notes, an amount allocable to
principal equal to its Pro Rata Share for such Payment Date
until the Note Principal Balance thereof is reduced to zero;
(N) from remaining Available Funds from all of the Loan
Groups, to the Class B-3 Notes, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Payment Date;
(O) from remaining Available Funds from all of the Loan
Groups, to the Class B-3 Notes, an amount allocable to
principal equal to its Pro Rata Share for such Payment Date
until the Note Principal Balance thereof is reduced to zero;
(P) from remaining Available Funds from all of the Loan
Groups, to the Class B-4 Notes, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Payment Date;
(Q) from remaining Available Funds from all of the Loan
Groups, to the Class B-4 Notes, an amount allocable to
principal equal to its Pro Rata Share for such Payment Date
until the Note Principal Balance thereof is reduced to zero;
(R) from remaining Available Funds from all of the Loan
Groups, to the Class B-5 Notes, an amount allocable to
interest equal to the Class Optimal Interest Distribution
Amount for such Class for such Payment Date;
(S) from remaining Available Funds from all of the Loan
Groups, to the Class B-5 Notes, an amount allocable to
principal equal to its Pro Rata Share for such Payment Date
until the Note Principal Balance thereof is reduced to zero;
(T) from Available Funds from all Loan Groups, to the Classes
of Subordinate Notes (other than the Class IO Notes and Class
M-1 Notes),
23
on a pro rata basis, based on the amount of Unpaid Realized
Loss Amount for such Classes, in an amount equal to the Unpaid
Realized Loss Amount for each such Class;
(U) from remaining Available Funds from all Loan Groups, to
the Classes of to the Classes of Subordinate Notes (other than
the Class IO Notes and Class M-1 Notes), on a pro rata basis,
based on the Note Principal Balances thereof, to the extent
needed to pay any Net Rate Carryover Amount for each such
Class; provided that any related Available Funds remaining
after such allocation to pay Net Rate Carryover Amount based
on the Note Principal Balances of these Notes will be
distributed to each such Class of Notes with respect to which
there remains any unpaid Net Rate Carryover Amount (after the
distribution based on Note Principal Balances), pro rata,
based on the amount of such unpaid Net Rate Carryover, to the
extent needed to pay any remaining Net Rate Carryover Amount
for each such Class; and
(V) any remaining amounts to the Certificate Paying Agent, as
designee of the Issuing Entity, for the benefit of the Holders
of the Trust Certificates.
(b) [Reserved]
(c) [Reserved]
(d) On each Payment Date, Net Interest Shortfalls for a Loan Group on any
Payment Date will be allocated in the following order: (1) to the Owner Trust
Certificates, in reduction of any amounts otherwise distributable to the Owner
Trust Certificates pursuant to Section 4.02(a)(7)(V), (2) to the Class B-5,
Class B-4, Class B-3, Class B-2, Class B-1 and Class M-2 Notes, in that order,
in reduction of the amount referred to in clause (i) of the definition of Class
Optimal Interest Distribution Amount for each Class of Notes for such Payment
Date, (3) to the related Class IO Notes, in reduction of the amount referred to
in clause (i) of the definition of Class Optimal Interest Distribution Amount
for each Class of Notes for such Payment Date, (4) to the non-related Classes of
Class IO Notes, in reduction of the amount referred to in clause (i) of the
definition of Class Optimal Interest Distribution Amount for each Class of Notes
for such Payment Date, (5) to the Class M-1 Notes, in reduction of the amount
referred to in clause (i) of the definition of Class Optimal Interest
Distribution Amount for each Class of Notes for such Payment Date and (6) to the
classes of related Senior Notes, on a pro rata basis, in reduction of the amount
referred to in clause (i) of the definition of Class Optimal Interest
Distribution Amount for each Class of Notes for such Payment Date.
[The amount referred to in clause (i) of the definition of Class Optimal
Interest Distribution Amount for each Class of Notes for such Payment Date shall
be reduced for each Class of Senior Notes of a Senior Note Group and each Class
of Subordinated Notes by (i) the related Class' pro rata share of Net Interest
Shortfalls for such Loan Group based (x) with respect to a Class of Senior
Notes, on the related Class Optimal Interest Distribution Amount for such
Payment Date, and (y) with respect to a Class of Subordinated Notes on and prior
to the
24
SeniorTermination Date, on the Assumed Interest Amount or after such Senior
Termination Date, on the related Class Optimal Interest Distribution Amount for
such Payment Date, without taking into account such Net Interest Shortfalls.]
(e) Notwithstanding the priority and allocation contained in Section
4.02(a)(7), if with respect to any Class of Subordinated Notes on any Payment
Date (other than the Class of Subordinated Notes then outstanding with the
highest priority of distribution) the sum of the related Class Subordination
Percentages of such Class and of all Classes of Subordinated Notes which have a
higher numerical Class designation than such Class (the "Applicable Credit
Support Percentage") is less than the Original Applicable Credit Support
Percentage for such Class, no distribution of Principal Prepayments will be made
to any such Classes (the "Restricted Classes") and the amount of such Principal
Prepayments otherwise distributable to the Restricted Classes shall be
distributed to any Classes of Subordinated Notes having lower numerical Class
designations than such Class, pro rata, based on their respective Note Principal
Balances immediately prior to such Payment Date and shall be distributed in the
sequential order provided in Section 4.02(a)(7).
(f) If Subsequent Recoveries have been received with respect to a
Liquidated Mortgage Loan, the amount of such Subsequent Recoveries will be
applied sequentially, in the order of payment priority to increase the Note
Principal Balance of each Class of Notes to which Realized Losses have been
allocated, but in each case by not more than the amount of Realized Losses
previously allocated to that Class of Notes pursuant to Section 3.28. Holders of
such Notes will not be entitled to any payment in respect of the Class Optimal
Interest Distribution Amount on the amount of such increases for any Interest
Accrual Period preceding the Payment Date on which such increase occurs. Any
such increases shall be applied pro rata to the Note Principal Balance of each
Note of such Class.
(g) On each Payment Date prior to the earlier of the Senior Credit Support
Depletion Date and the Senior Termination Date, but after a Senior Termination
Date, the Trustee shall distribute the principal portion of Available Funds on
the Mortgage Loans relating to the Senior Notes that will have been paid in full
to the holders of the Senior Notes of the other Senior Note Groups, pro rata,
based on Note Principal Balance Balances, provided, however, that the Indenture
Trustee shall not make such distribution on such Payment Date if (a) the
Aggregate Subordinated Percentage for such Payment Date is greater than or equal
to 200% of such Aggregate Subordinated Percentage as of the Closing Date and (b)
the average aggregate Stated Principal Balance of the Mortgage Loans delinquent
60 days or more over the last six months, as a percentage of the aggregate Note
Principal Balance of the Subordinated Certificates, is less than 50%.
If on any Payment Date the Note Principal Balance of Senior Notes in a
Senior Note Group immediately prior to each Payment Date is greater than the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group (the "Undercollateralized Group"), then the Indenture Trustee shall apply
the Available Funds of the other Loan Group(s) that are not undercollateralized
(each, an "Overcollateralized Group"), as follows:
(1) to add to the Available Funds of the Undercollateralized Groups an
amount equal to the lesser of (a) one month's interest on the Transfer Payment
Received of the
25
Undercollateralized Group at the Weighted Average Adjusted Net Mortgage Rate
applicable to the Undercollateralized Group and (b) Available Funds of the
Overcollateralized Group(s) remaining after making distributions to the
Certificates of the Overcollateralized Group(s) on such Payment Date pursuant to
Section 4.02; and
(2) to the Senior Notes of the Undercollateralized Groups, to the extent
of the principal portion of Available Funds of the Overcollateralized Groups
remaining after making distributions to the Senior Notes of the
Overcollateralized Groups on such Payment Date pursuant to Section 4.02, until
the Note Principal Balance of the Senior Notes of such Undercollateralized
Groups equals the aggregate Stated Principal Balance of the Mortgage Loans in
the related Loan Group.
If more than one Overcollateralized Group exists on any Payment Date,
reductions in the Available Funds of such groups to make the payments required
to be made pursuant to this Section 4.02(g) on such Payment Date shall be made
pro rata, based on the amount of remaining Available Funds for each such
Overcollateralized Group. If more than one Undercollateralized Group exists on
any Payment Date, the payments required to be made pursuant to this Section
4.02(g) on such Payment Date shall be made pro rata, based on the amount of
payments required to be made to the Undercollateralized Groups.
The payment received by the Undercollateralized Group (including the
interest thereon as provided in (1) above) is referred to as a "Transfer Payment
Received." The payment made by the Overcollateralized Group (including the
interest thereon as provided in (1) above) is referred to as a "Transfer Payment
Made."
Section 4.03 Registration of and Limitations on Transfer and Exchange of
Notes; Appointment of Note Registrar and Certificate Registrar. The Issuing
Entity shall cause to be kept at the Corporate Trust Office a Note Register in
which, subject to such reasonable regulations as it may prescribe, the Note
Registrar shall provide for the registration of Notes and of transfers and
exchanges of Notes as herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office, the Issuing Entity shall execute and the Note Registrar shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes in authorized initial Note Principal Balances
evidencing the same Class and aggregate Percentage Interests.
Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged for other Notes of like tenor and in authorized initial Note Principal
Balances evidencing the same Class and aggregate Percentage Interests upon
surrender of the Notes to be exchanged at the Corporate Trust Office of the Note
Registrar. Whenever any Notes are so surrendered for exchange, the Issuing
Entity shall execute and the Indenture Trustee shall authenticate and deliver
the Notes which the Noteholder making the exchange is entitled to receive. Each
Note presented or surrendered for registration of transfer or exchange shall (if
so required by the Note Registrar) be duly endorsed by, or be accompanied by a
written instrument of transfer in form reasonably satisfactory to the Note
Registrar duly executed by the Holder thereof or his attorney duly authorized in
writing with such signature guaranteed by a commercial bank or trust
26
company located or having a correspondent located in the city of New York. Notes
delivered upon any such transfer or exchange will evidence the same obligations,
and will be entitled to the same rights and privileges, as the Notes
surrendered.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
The Issuing Entity hereby appoints the Indenture Trustee as (i)
Certificate Registrar to keep at its Corporate Trust Office a Certificate
Register pursuant to Section 3.09 of the Trust Agreement in which, subject to
such reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of Certificates and of transfers and exchanges
thereof pursuant to Section 3.05 of the Trust Agreement and (ii) Note Registrar
under this Indenture. The Indenture Trustee hereby accepts such appointments.
Section 4.04 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuing Entity and the Indenture
Trustee harmless, then, in the absence of notice to the Issuing Entity, the Note
Registrar or the Indenture Trustee that such Note has been acquired by a bona
fide purchaser, and provided that the requirements of Section 8-405 of the UCC
are met, the Issuing Entity shall execute, and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note; provided,
however, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven days shall be due and payable, instead
of issuing a replacement Note, the Issuing Entity may pay such destroyed, lost
or stolen Note when so due or payable without surrender thereof. If, after the
delivery of such replacement Note or payment of a destroyed, lost or stolen Note
pursuant to the proviso to the preceding sentence, a bona fide purchaser of the
original Note in lieu of which such replacement Note was issued presents for
payment such original Note, the Issuing Entity and the Indenture Trustee shall
be entitled to recover such replacement Note (or such payment) from the Person
to whom it was delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuing Entity or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section 4.04, the
Issuing Entity may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.04 in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuing Entity, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
27
The provisions of this Section 4.04 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.05 Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuing Entity, the Indenture Trustee,
the Paying Agent and any agent of the Issuing Entity or the Indenture Trustee
may treat the Person in whose name any Note is registered (as of the day of
determination) as the owner of such Note for the purpose of receiving payments
of principal of and interest, if any, on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Issuing Entity,
the Indenture Trustee, the Paying Agent nor any agent of the Issuing Entity or
the Indenture Trustee shall be affected by notice to the contrary.
Section 4.06 Cancellation. All Notes surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled by the Indenture Trustee. The Issuing Entity may at any time
deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuing Entity may have acquired
in any manner whatsoever, and all Notes so delivered shall be promptly cancelled
by the Indenture Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section 4.06, except as
expressly permitted by this Indenture. All cancelled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuing Entity shall
direct by an Issuing Entity Request that they be destroyed or returned to it;
provided, however, that such Issuing Entity Request is timely and the Notes have
not been previously disposed of by the Indenture Trustee.
Section 4.07 Book-Entry Notes. The Offered Notes, upon original issuance,
will be issued in the form of typewritten Notes to be delivered to the Indenture
Trustee as Custodian for the Depository. The Offered Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
Depository, and no Beneficial Owner will receive a Definitive Note representing
such Beneficial Owner's interest in such Note, except as provided in Section
4.09. With respect to such Notes, unless and until definitive, fully registered
Notes (the "Definitive Notes") have been issued to Beneficial Owners pursuant to
Section 4.09:
(i) the provisions of this Section 4.07 shall be in full force and
effect;
(ii) the Note Registrar, the Paying Agent and the Indenture Trustee
shall be entitled to deal with the Depository for all purposes of this
Indenture (including the payment of principal of and interest on the Notes
and the giving of instructions or directions hereunder) as the sole holder
of the Notes, and shall have no obligation to the Beneficial Owners of the
Notes;
(iii) to the extent that the provisions of this Section 4.07
conflict with any other provisions of this Indenture, the provisions of
this Section 4.07 shall control;
28
(iv) the rights of Beneficial Owners shall be exercised only through
the Depository and shall be limited to those established by law and
agreements between such Owners of Notes and the Depository and/or the
Depository Participants. Unless and until Definitive Notes are issued
pursuant to Section 4.09, the initial Depository will make book-entry
transfers among the Depository Participants and receive and transmit
payments of principal of and interest on the Notes to such Depository
Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Note Principal Balances of the Notes, the
Depository shall be deemed to represent such percentage with respect to
the Notes only to the extent that it has received instructions to such
effect from Beneficial Owners and/or Depository Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Notes and has delivered such instructions to the Indenture
Trustee.
Section 4.08 Notices to Depository. Whenever a notice or other
communication to the Note Holders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Beneficial Owners pursuant to
Section 4.09, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Depository, and shall have no obligation to the Beneficial Owners.
Section 4.09 Definitive Notes. If (i) the Depository notifies the Issuing
Entity that it is no longer willing or able to properly discharge its
responsibilities with respect to the Offered Notes or (ii) after the occurrence
of an Event of Default, Beneficial Owners of Offered Notes representing
beneficial interests aggregating at least a majority of the Note Principal
Balances of the Offered Notes advise the Depository in writing that the
continuation of a book-entry system through the Depository is no longer in the
best interests of the Beneficial Owners, then the Depository shall notify all
Beneficial Owners and the Indenture Trustee of the occurrence of any such event
and of the availability of Definitive Notes to Beneficial Owners requesting the
same. Upon surrender to the Indenture Trustee of any such Note representing the
Book-Entry Notes by the Depository, accompanied by registration instructions,
the Issuing Entity shall execute and the Indenture Trustee shall authenticate
the Definitive Notes in accordance with the instructions of the Depository. None
of the Issuing Entity, the Note Registrar or the Indenture Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Notes, the Indenture Trustee shall recognize the Holders of the
Definitive Notes as Noteholders.
Section 4.10 Tax Treatment. The Issuing Entity has entered into this
Indenture, and the Offered Notes and the Class M-2 and Class B Notes will be
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Offered Notes and the Class M-2 and
Class B Notes will qualify as indebtedness. The Issuing Entity and the Indenture
Trustee (in accordance with Section 6.07 hereof), by entering into this
Indenture, and each Noteholder, by its acceptance of its Note (and each
Beneficial Owner by its acceptance of an interest in the applicable Book-Entry
Note), agree to treat the Notes for federal, state and local income, single
business and franchise tax purposes as indebtedness. Subsequent to a TMP Trigger
Event, it is the intention that three REMIC Elections will be made with respect
to certain assets of the Trust Estate pursuant to Article XI herein.
29
Section 4.11 Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect with respect to the Notes except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08,
3.15, 3.17 and 3.18, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.08 and the obligations of the Indenture Trustee under Section 4.12) and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuing Entity, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes and shall release and deliver the Collateral
to or upon the order of the Issuing Entity, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 4.02 hereof and (ii) Notes for
whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Issuing Entity and thereafter repaid to the
Issuing Entity or discharged from such trust, as provided in Section 3.03)
have been delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation
a. have become due and payable,
b. will become due and payable at the Last Scheduled
Payment Date within one year, or
c. have been called for early redemption and the Trust has
been terminated pursuant to Section 8.07 hereof,
and the Issuing Entity, in the case of a. or b. above, has irrevocably deposited
or caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on
such Notes then outstanding and all amounts owing under the Swap Agreement not
theretofore delivered to the Indenture Trustee for cancellation when due on the
Last Scheduled Payment Date or other final Payment Date and has delivered to the
Indenture Trustee a verification report from a nationally recognized accounting
firm certifying that the amounts deposited with the Indenture Trustee are
sufficient to pay and discharge the entire indebtedness of such Notes, or, in
the case of c. above, the Issuing Entity shall have complied with all
requirements of Section 9.07 hereof,
(B) the Issuing Entity has paid or caused to be paid all other sums
payable hereunder; and
30
(C) the Issuing Entity has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel, each meeting the
applicable requirements of Section 11.01 hereof, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with and, if the Opinion of
Counsel relates to a deposit made in connection with Section 4.10(A)(2)b.
above, such opinion shall further be to the effect that such deposit will
constitute an "in-substance defeasance" within the meaning of Revenue
Ruling 85-42, 1985-1 C.B. 36, and in accordance therewith, the Issuing
Entity will be the owner of the assets deposited in trust for federal
income tax purposes.
(D) Subsequent to a TMP Trigger Event, the additional termination
requirements as specified in Article XII shall be complied with.
Section 4.12 Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.11 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or the
Issuing Entity, Certificate Paying Agent as designee of the Issuing Entity, as
the Indenture Trustee may determine, to the Holders of Notes, of all sums due
and to become due thereon for principal and interest or otherwise; but such
monies need not be segregated from other funds except to the extent required
herein or required by law.
Section 4.13 Repayment of Monies Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuing Entity, be paid to the Indenture Trustee to be held and applied
according to Section 3.05 of the Servicing Agreement and thereupon such Person
shall be released from all further liability with respect to such monies.
Section 4.14 Temporary Notes. Pending the preparation of any Definitive
Notes, the Issuing Entity may execute and upon its written direction, the
Indenture Trustee may authenticate and make available for delivery, temporary
Notes that are printed, lithographed, typewritten, photocopied or otherwise
produced, in any denomination, substantially of the tenor of the Definitive
Notes in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuing Entity will cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of the
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the office of the Indenture Trustee in
care of DTC Transfer Services, located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Notes, the Issuing Entity shall
execute and the Indenture Trustee shall authenticate and make available for
delivery, in exchange therefor, Definitive Notes of authorized denominations and
of like tenor, class and aggregate principal amount. Until so exchanged, such
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as Definitive Notes.
31
Section 4.15 Representation Regarding ERISA. By acquiring an Offered Note
or interest therein, each Holder of such Note or Beneficial Owner of any such
interest will be deemed to represent that either (1) it is not acquiring the
Note with Plan Assets or (2) (A) the acquisition, holding and transfer of such
Note will not give rise to a nonexempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code and (B) the Notes are rated investment
grade or better and such person believes that the Offered Notes are properly
treated as indebtedness without substantial equity features for purposes of the
Department of Labor regulation 29 C.F.R. Section 2510.3-101, and agrees to so
treat the Offered Notes. Alternatively, regardless of the rating of the Offered
Notes, such person may provide the Indenture Trustee and the Owner Trustee with
an opinion of counsel, which opinion of counsel will not be at the expense of
the Issuing Entity, the Seller, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Master Servicer or any successor servicer which opines
that the acquisition, holding and transfer of such Note or interest therein is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Issuing Entity, the Seller, the Depositor, any Underwriter, the
Owner Trustee, the Indenture Trustee, the Master Servicer or any successor
servicer to any obligation in addition to those undertaken in the Indenture or
Servicing Agreement.
Section 4.16 Private Notes.
No Transfer of a Private Note shall be made unless such Transfer is made
pursuant to an effective registration statement under the Securities Act and any
applicable state securities laws or is exempt from the registration requirements
under the Securities Act and such state securities laws. In the event that a
transfer is to be made in reliance upon an exemption from the Securities Act and
such state securities laws, in order to assure compliance with the Securities
Act and such state securities laws, the Noteholder desiring to effect such
Transfer and such Noteholder's prospective transferee shall each certify to the
Indenture Trustee in writing the facts surrounding the Transfer in substantially
the forms set forth in Exhibit D (the "Transferor Certificate") and (i) deliver
a letter in substantially the form of either Exhibit F (the "Investment Letter")
or Exhibit E (the "Rule 144A Letter") or (ii) there shall be delivered to the
Indenture Trustee at the expense of the Noteholder desiring to effect such
transfer an Opinion of Counsel that such Transfer may be made pursuant to an
exemption from the Securities Act. The Depositor shall provide to any Holder of
a Private Note and any prospective transferee designated by any such Holder,
information regarding the related Notes and the Mortgage Loans and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Note without registration
thereof under the Securities Act pursuant to the registration exemption provided
by Rule 144A. The Indenture Trustee and the Master Servicer shall cooperate with
the Depositor in providing the Rule 144A information referenced in the preceding
sentence, including providing to the Depositor such information regarding the
Notes, the Mortgage Loans and other matters regarding the Issuing Entity as the
Depositor shall reasonably request to meet its obligation under the preceding
sentence. Each Holder of a Private Note desiring to effect such Transfer shall,
and does hereby agree to, indemnify the Indenture Trustee, the Depositor, the
Seller and the Master Servicer against any liability that may result if the
Transfer is not so exempt or is not made in accordance with such federal and
state laws. Notwithstanding the foregoing, the provisions of this paragraph
shall not apply to the initial transfer of the Private Notes to the Depositor or
the Seller.
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So long as a TMP Trigger Event has not occurred, no person shall become a
Noteholder of a Private Note, so long as any such Notes are Outstanding, until
it shall establish its status as a real estate investment trust ("REIT") or as a
"qualified REIT subsidiary" ("QRS") within the meaning of Section 856(a) or
Section 856(i) of the Code, respectively, by submitting to the Indenture Trustee
and the Owner Trustee, the Transferee Certificate set forth in Exhibit G hereto.
So long as a TMP Trigger Event has not occurred, no offer, sale, transfer,
pledge, hypothecation or other disposition (including any pledge, sale or
transfer under a repurchase transaction or securities loan) of any Private Note
shall be made to any transferee unless, prior to such disposition, the proposed
transferor delivers to the Owner Trustee and the Indenture Trustee an Opinion of
Counsel, rendered by a law firm generally recognized to be qualified to opine
concerning the tax aspects of asset securitization, to the effect that such
transfer (including any disposition permitted following any default under any
pledge or repurchase transaction) will not cause the Trust to be no longer be
treated for federal income tax purposes as a "qualified REIT subsidiary" within
the meaning of Section 856(i) of the Code. Notwithstanding the foregoing, the
provisions of this paragraph shall not apply to the initial transfer of the
Private Notes to the Depositor or the Seller.
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ARTICLE V
DEFAULT AND REMEDIES
Section 5.01 Events of Default. The Issuing Entity shall deliver to the
Indenture Trustee, within five days after learning of the occurrence of an Event
of Default, written notice in the form of an Officer's Certificate of any event
which with the giving of notice and the lapse of time would become an Event of
Default under clause (iii) or (iv) of the definition of "Event of Default", its
status and what action the Issuing Entity is taking or proposes to take with
respect thereto. The Indenture Trustee shall not be deemed to have knowledge of
any Event of Default unless a Responsible Officer has actual knowledge thereof
or unless written notice of such Event of Default is received by a Responsible
Officer and such notice references the Notes, the Trust Estate or this
Indenture.
Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee at the written direction of the Holders of Offered Notes
representing not less than a majority of the aggregate Note Principal Balance of
the Offered Notes may declare the Notes Offered Notes to be immediately due and
payable, by a notice in writing to the Issuing Entity (and to the Indenture
Trustee if such notice is given by Noteholders), and upon any such declaration
the unpaid Note Principal Balance of the Notes Offered Notes, together with
accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, Holders of the Notes Offered Notes
representing not less than a majority of the aggregate Note Principal Balance of
the Notes Offered Notes, by written notice to the Issuing Entity and the
Indenture Trustee, may waive the related Event of Default and rescind and annul
such declaration and its consequences if
(i) the Issuing Entity has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on the Notes
Offered Notes and all other amounts that would then be due hereunder
or upon the Offered Notes if the Event of Default giving rise to
such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel;
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
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No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.03 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuing Entity covenants that if (i) default is made in the
payment of any interest on any Offered Note when the same becomes due and
payable, and such default continues for a period of five days, or (ii) default
is made in the payment of the principal of or any installment of the principal
of any Offered Note when the same becomes due and payable, the Issuing Entity
shall, upon demand of the Indenture Trustee, at the direction of the Holders of
a majority of the aggregate Note Principal Balances of the Offered Notes, pay to
the Indenture Trustee, for the benefit of the Holders of Offered Notes, the
whole amount then due and payable on the Offered Notes for principal and
interest, with interest at the applicable Note Rate upon the overdue principal,
and in addition thereto such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents and
counsel.
(b) In case the Issuing Entity shall fail forthwith to pay such amounts
upon such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, subject to the provisions of Section 11.16 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuing Entity or other obligor upon the Offered Notes and collect in the
manner provided by law out of the property of the Issuing Entity or other
obligor the Offered Notes, wherever situated, the monies adjudged or decreed to
be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee, subject to the provisions of Section 11.16 hereof may, as more
particularly provided in Section 5.04 hereof, in its discretion, proceed to
protect and enforce its rights and the rights of the Noteholders (, by such
appropriate Proceedings, as directed in writing by Holders of a majority of the
aggregate Note Principal Balances of the Offered Notes, to protect and enforce
any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuing Entity or any
other obligor upon the Offered Notes or any Person having or claiming an
ownership interest in the Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuing Entity or its property or such
other obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuing Entity or other obligor upon the Offered Notes, or to
the creditors or property of the Issuing Entity or such other obligor, the
Indenture Trustee, as directed in writing by Holders of a majority of the
aggregate Note Principal Balances of the Offered Notes, irrespective of whether
the principal of any Offered 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
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pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Offered Notes
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee (including
any claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence or bad faith) and of
the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable or
deliverable on any such claims and to pay all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf, and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee or the Holders of Notes allowed in any judicial proceedings
relative to the Issuing Entity, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee
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and their respective agents and attorneys, shall be for the ratable benefit of
the Holders of the Notes, subject to Section 5.05 hereof.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
Section 5.04 Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing and if an acceleration has been declared and not
rescinded pursuant to Section 5.02 hereof, the Indenture Trustee subject to the
provisions of Section 11.16 hereof may, and shall, at the written direction of
the Holders of a majority of the aggregate Note Principal Balances of the
Offered Notes, do one or more of the following (subject to Section 5.05 hereof):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
or under this Indenture with respect thereto, whether by declaration or
otherwise, enforce any judgment obtained and collect from the Issuing
Entity and any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Note Principal Balance of the Offered Notes, (B) the proceeds of such sale or
liquidation distributable to the Holders of the Offered Notes are sufficient to
discharge in full all amounts then due and unpaid upon such Notes for principal
and interest and amounts due and unpaid under the Swap Agreement or (C) the
Indenture Trustee determines that the Mortgage Loans will not continue to
provide sufficient funds for the payment of principal of and interest on the
applicable Offered Notes as they would have become due if the Offered Notes had
not been declared due and payable, and the Indenture Trustee obtains the consent
of the Holders of 66 2/3% of the aggregate Note Principal Balance of the Offered
Notes. In determining such sufficiency or insufficiency with respect to clause
(B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an
opinion (obtained at the expense of the Trust) of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.
Notwithstanding the foregoing, so long as an Event of Default under the
Servicing Agreement has not occurred, any Sale of the Trust Estate shall be made
subject to the continued servicing of the Mortgage Loans by the Master Servicer
as provided in the Servicing Agreement.
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(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07
hereof or the Sale and Servicing Agreement and to the Master Servicer for
amounts due under the Sale and Servicing Agreement;
SECOND: to the Noteholders for amounts due and unpaid on the Notes
with respect to interest and principal, first, to the Class 1-A, Class
2-A, Class 3-A, Class 4-A and Class 5-A Noteholders on a pro rata basis,
and second, to the Class M-1 Noteholders, according to the amounts due and
payable on the Notes for interest and principal;
THIRD: first, to the Class 1-A, Class 2-A, Class 3-A, Class 4-A and
Class 5-A Noteholders on a pro rata basis, and second, to the Class M-1
Noteholders, , the amount of any related Unpaid Realized Loss Amounts and
any related Net Rate Carryover Amounts not previously paid;
FOURTH: to the Noteholders for amounts due and unpaid on the Notes
with respect to interest and, if applicable, principal, first, to the
Class IO Noteholders on a pro rata basis, second, to the Class M-2
Noteholders, third, to the Class B-1 Noteholders, fourth, to the Class B-2
Noteholders, ffith, to the Class B-3 Noteholders, sixth, to the Class B-4
Noteholders, and seventh, to the Class B-5 Noteholders, according to the
amounts due and payable on the Notes for interest and principal;
FFITH: first, to the Class IO Noteholders on a pro rata basis,
second, to the Class M-2 Noteholders, third, to the Class B-1 Noteholders,
fourth, to the Class B-2 Noteholders, ffith, to the Class B-3 Noteholders,
sixth, to the Class B-4 Noteholders, and seventh, to the Class B-5
Noteholders, the amount of any related Unpaid Realized Loss Amounts and
any related Net Rate Carryover Amounts not previously paid; and
SIXTH: to the payment of the remainder, if any to the holder of the
Owner Trust Certificates on behalf of the Issuing Entity or to any other
person legally entitled thereto.
The Indenture Trustee may fix a record date and Payment Date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the Payment Date and the amount to be paid.
Section 5.05 Optional Preservation of the Trust Estate. If the Notes have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may elect to take and maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Noteholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Offered Notes and other obligations of the Issuing Entity and
the Indenture Trustee shall take such desire into account when determining
whether or not to take and maintain possession of the Trust Estate. In
determining whether to take and maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent
38
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
Section 5.06 Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 11.16 hereof
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the aggregate Note
Principal Balances of the Offered Notes have made a written request to the
Indenture Trustee to institute such Proceeding in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice of request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of
a majority of the Note Principal Balances of the Offered Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
Subject to the last paragraph of Section 5.11 herein, in the event the
Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Notes, each representing less
than a majority of the Note Principal Balances of the Offered Notes, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07 Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
39
Section 5.08 Restoration of Rights and Remedies. If the Indenture Trustee
or any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuing Entity, the Indenture
Trustee and the Noteholders shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee and
the Noteholders shall continue as though no such Proceeding had been instituted.
Section 5.09 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10 Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
Section 5.11 Control By Noteholders. The Holders of a majority of the
aggregate Note Principal Balances of Offered Notes shall have the right to
direct the time, method and place of conducting any Proceeding for any remedy
available to the Indenture Trustee with respect to the Offered Notes or
exercising any trust or power conferred on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) any direction to the Indenture Trustee to sell or liquidate the
Trust Estate shall be by Holders of Notes representing not less than 100%
of the Note Principal Balances of the Offered Notes; and
(iii) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction of
the Holders of Notes representing a majority of the Note Principal
Balances of the Offered Notes.
Notwithstanding the rights of Noteholders set forth in this Section 5.11 the
Indenture Trustee need not take any action that it determines might involve it
in liability.
Section 5.12 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02 hereof,
the Holders of Notes representing not less than a majority of the aggregate Note
Principal Balance of the Offered Notes may waive any past Event of Default and
its consequences except an Event of Default (a) with respect to
40
payment of principal of or interest on any of the Offered Notes or (b) in
respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note. In the case of any such waiver,
the Issuing Entity, the Indenture Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively, but no
such waiver shall extend to any subsequent or other Event of Default or impair
any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Section 5.13 Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note and each Beneficial Owner of any interest therein by
such ▇▇▇▇▇▇'s or Beneficial Owner's acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the Note
Principal Balances of the Offered Notes or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note and in this
Indenture.
Section 5.14 Waiver of Stay or Extension Laws. The Issuing Entity
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuing Entity (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 5.15 Sale of Trust Estate. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 hereof is expressly subject to the provisions of Section 5.05
hereof and this Section 5.15. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all amounts payable on the Notes and under this
Indenture shall have been paid. The Indenture Trustee may from time to time
postpone any public Sale by public announcement made at the time and place of
such Sale. The Indenture Trustee hereby expressly waives its right to any amount
fixed by law as compensation for any Sale.
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(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless
(1) the Holders of all Notes consent to or direct the Indenture
Trustee to make, such Sale, or
(2) the proceeds of such Sale would be not less than the entire
amount which would be payable to the Noteholders under the Notes, in full
payment thereof in accordance with Section 5.02 hereof, on the Payment
Date next succeeding the date of such Sale, or
(3) the Indenture Trustee determines that the conditions for
retention of the Trust Estate set forth in Section 5.05 hereof cannot be
satisfied (in making any such determination, the Indenture Trustee may
rely upon an opinion of an Independent investment banking firm obtained
and delivered as provided in Section 5.05 hereof, the cost for which the
Indenture Trustee shall be entitled to be reimbursed pursuant to Section
6.07 hereof), the Holders of Notes representing at least 100% of the Note
Principal Balances of the Offered Notes consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) Unless the Holders representing at least 66-2/3% of the Note Principal
Balances of the Offered Notes have otherwise consented or directed the Indenture
Trustee, at any public Sale of all or any portion of the Trust Estate at which a
minimum bid equal to or greater than the amount described in paragraph (2) of
subsection (b) of this Section 5.15 has not been established by the Indenture
Trustee and no Person bids an amount equal to or greater than such amount, the
Indenture Trustee, as trustee for the benefit of the Holders of the Offered
Notes, shall bid an amount at least $1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust Estate,
(1) any Holder or Holders of Notes may bid for and purchase the
property offered for sale, and upon compliance with the terms of sale may
hold, retain and possess and dispose of such property, without further
accountability, and may, in paying the purchase money therefor, deliver
any Notes or claims for interest thereon in lieu of cash up to the amount
which shall, upon payment of the net proceeds of such sale, be payable
thereon, and such Notes, in case the amounts so payable thereon shall be
less than the amount due thereon, shall be returned to the Holders thereof
after being appropriately stamped to show such partial payment;
(2) the Indenture Trustee, may bid for and acquire the property
offered for Sale in connection with any Sale thereof, and, subject to any
requirements of, and to the extent permitted by, applicable law in
connection therewith, may purchase all or any portion of the Trust Estate
in a private sale, and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting the gross Sale price
against the sum of (A) the amount which would be distributable to the
Holders of the Notes and Holders
42
of Certificates on the Payment Date next succeeding the date of such Sale
and (B) the expenses of the Sale and of any Proceedings in connection
therewith which are reimbursable to it, without being required to produce
the Notes in order to complete any such Sale or in order for the net Sale
price to be credited against such Notes, and any property so acquired by
the Indenture Trustee shall be held and dealt with by it in accordance
with the provisions of this Indenture;
(3) the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance, prepared by the Issuing Entity and satisfactory
to the Indenture Trustee, transferring its interest in any portion of the
Trust Estate in connection with a Sale thereof;
(4) the Indenture Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuing Entity to transfer and convey its
interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any monies.
Section 5.16 Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuing Entity or by the levy
of any execution under such judgment upon any portion of the Trust Estate or
upon any of the assets of the Issuing Entity. Any money or property collected by
the Indenture Trustee shall be applied in accordance with Section 5.04(b)
hereof.
Section 5.17 Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so, the Issuing
Entity in its capacity as holder of the Mortgage Loans, shall take all such
lawful action as the Indenture Trustee may request to cause the Issuing Entity
to compel or secure the performance and observance by the Seller and the Master
Servicer, as applicable, of each of their obligations to the Issuing Entity
under or in connection with the Servicing Agreement, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuing Entity
under or in connection with the Servicing Agreement to the extent and in the
manner directed by the Indenture Trustee, as pledgee of the Mortgage Loans,
including the transmission of notices of default on the part of the Seller or
the Master Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Master Servicer of each of their obligations under the Sale and the Servicing
Agreement.
(b) The Indenture Trustee, as pledgee of the Mortgage Loans, may, and at
the direction (which direction shall be in writing or by telephone (confirmed in
writing promptly thereafter)) of the Holders of 66-2/3% of the Note Principal
Balances of the Offered Notes, shall exercise all rights, remedies, powers,
privileges and claims of the Issuing Entity against the
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Seller or the Master Servicer under or in connection with the Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Seller or the Master Servicer, as the case may
be, of each of their obligations to the Issuing Entity thereunder and to give
any consent, request, notice, direction, approval, extension or waiver under the
Servicing Agreement, as the case may be, and any right of the Issuing Entity to
take such action shall not be suspended.
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ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01 Duties of Indenture Trustee. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and the other
Basic Documents to which it is a party and no implied covenants or
obligations shall be read into this Indenture and the other Basic
Documents against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it from Noteholders or from the Issuing Entity,
which they are entitled to give under the Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuing Entity.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other trust funds except to the extent required by law or the terms of this
Indenture, the Servicing Agreement or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to
45
believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section.
(h) The Indenture Trustee shall act in accordance with Sections 6.03 and
6.04 of the Servicing Agreement and shall act as successor to the Master
Servicer or appoint a successor Master Servicer in accordance with Section 6.02
of the Servicing Agreement.
Section 6.02 Rights of Indenture Trustee. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
Opinion of Counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
(f) For the limited purpose of effecting any action to be undertaken by
the Indenture Trustee, but not specifically as a duty of the Indenture Trustee
in the Indenture, the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder, either directly or by or through
agents, attorneys, custodians or nominees appointed with due care, and shall not
be responsible for any willful misconduct or negligence on the part of any
agent, attorney, custodian or nominee so appointed.
(g) The Indenture Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Indenture Trustee's
economic self-interest for (i) serving as investment adviser, administrator,
shareholder servicing agent, custodian or sub-custodian with respect to certain
of the Permitted Investments, (ii) using Affiliates to effect transactions in
certain Permitted
46
Investments and (iii) effecting transactions in certain Permitted Investments.
Such compensation shall not be considered an amount that is reimbursable or
payable to the Indenture Trustee (i) as part of the Indenture Trustee Fee or
(ii) pursuant to Sections 3.05(d), 5.04(b) or 6.07 hereunder.
Section 6.03 Individual Rights of Indenture Trustee. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuing Entity or its Affiliates with the same
rights it would have if it were not Indenture Trustee.. Any Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Indenture Trustee must comply with Sections 6.11 and 6.12 hereof.
Section 6.04 Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, other Basic Documents or the Notes, it shall not be
accountable for the Issuing Entity's use of the proceeds from the Notes, and it
shall not be responsible for any statement of the Issuing Entity in the
Indenture or in any document issued in connection with the sale of the Notes or
in the Notes other than the Indenture Trustee's certificate of authentication.
Section 6.05 Notice of Event of Default. Subject to Section 5.01, the
Indenture Trustee shall promptly mail to each Noteholder notice of the Event of
Default after it is actually known to a Responsible Officer of the Indenture
Trustee, unless such Event of Default shall have been waived or cured. Except in
the case of an Event of Default in payment of principal of or interest on any
Offered Note, the Indenture Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of Noteholders.
Section 6.06 Reports by Indenture Trustee to Holders and Tax
Administration. The Indenture Trustee shall deliver to each Noteholder such
information as may be required to enable such holder to prepare its federal and
state income tax returns.
Prior to a TMP Trigger Event the Indenture Trustee shall prepare and file
(or cause to be prepared and filed), on behalf of the Owner Trustee, all tax
returns (if any) and information reports, tax elections and such annual or other
reports of the Issuing Entity as are necessary for preparation of tax returns
and information reports as provided in Section 5.03 of the Trust Agreement,
including without limitation Form 1099 and shall file such information returns
with the Internal Revenue Service with respect to payments or accruals of
interest on the Notes as are required to be filed under the Code or applicable
Treasury Regulations. All tax returns and information reports shall be signed by
the Owner Trustee as provided in Section 5.03 of the Trust Agreement. Subsequent
to a TMP Trigger Event, the Indenture Trustee shall perform the obligations
under Article XI.
Section 6.07 Compensation. The Indenture Trustee shall (a) concurrently
and in accordance with Section 3.08 of the Sale and Servicing Agreement (i) on
each Payment Date, withdraw the Indenture Trustee Fee from the Payment Account
for such Payment Date and (ii) on each anniversary of the first Payment Date,
commencing in ____________, withdraw the Owner Trustee Fee from the Payment
Account and distribute such fee to the Owner Trustee and (b) distribute all
remaining amounts on deposit in the Payment Account to the Noteholders in
respect of the Notes and to such other persons in the order of priority set
forth in Section 4.02
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hereof. In addition, the Indenture Trustee will each be entitled to recover from
the Payment Account pursuant to Section 3.08(a) of the Sale and Servicing
Agreement all reasonable out-of-pocket expenses, disbursements and advances and
the expenses of the Indenture Trustee in connection with any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Indenture Trustee in the
administration of the trusts hereunder (including the reasonable compensation,
expenses and disbursements of its counsel) except any such expense, disbursement
or advance as may arise from its willful misfeasance, bad faith or negligence or
which is the responsibility of the Noteholders as provided herein. Such
compensation and reimbursement obligation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust.
Additionally, the Indenture Trustee and any director, officer, employee or agent
of the Indenture Trustee shall be indemnified by the Trust and held harmless
against any loss, liability or expense (including reasonable attorney's fees and
expenses) incurred in the administration of this Indenture (other than its
ordinary out of pocket expenses incurred hereunder) or in connection with any
claim or legal action relating to (a) the Basic Documents or (b) the Notes,
other than any loss, liability or expense incurred by reason of its negligence
or intentional misconduct, or which is the responsibility of the Noteholders as
provided herein. Such indemnity shall survive the termination of this Indenture
or the resignation or removal of the Indenture Trustee hereunder.
The Issuing Entity's payment obligations to the Indenture Trustee pursuant
to this Section 6.07 shall survive the discharge of this Indenture and the
termination or resignation of the Indenture Trustee. When the Indenture Trustee
incurs expenses after the occurrence of an Event of Default with respect to the
Issuing Entity, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
Section 6.08 Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may
resign at any time by so notifying the Issuing Entity. Holders of a majority of
Note Principal Balances of the Offered Notes may remove the Indenture Trustee by
so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuing Entity shall, remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11 hereof;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as
48
the retiring Indenture Trustee), the Issuing Entity shall, promptly appoint a
successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuing Entity.
Thereupon, the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuing Entity or the Holders of a majority of Note Principal
Balances of the Offered Notes may petition any court of competent jurisdiction
for the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuing Entity's obligations under Section 6.07 shall continue for
the benefit of the retiring Indenture Trustee.
Section 6.09 Successor Indenture Trustee by ▇▇▇▇▇▇. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation, without any further act, shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11 hereof. The Indenture Trustee shall
provide the Rating Agencies with prior written notice of any such transaction.
If at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture and any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee and deliver such Notes so
authenticated; and if at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is in the Notes or in this Indenture provided
that the certificate of the Indenture Trustee shall have.
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate
49
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.11 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11 Representations and Warranties. The Indenture Trustee hereby
represents that:
(i) The Indenture Trustee is duly organized and validly existing as
an banking corporation in good standing under the laws of the New York
with power and authority to
50
own its properties and to conduct its business as such properties are currently
owned and such business is presently conducted;
(ii) The Indenture Trustee has the power and authority to execute
and deliver this Indenture and to carry out its terms; and the execution,
delivery and performance of this Indenture have been duly authorized by
the Indenture Trustee by all necessary corporate action;
(iii) The consummation of the transactions contemplated by this
Indenture and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Indenture Trustee or any agreement or other
instrument to which the Indenture Trustee is a party or by which it is
bound; and
(iv) To the Indenture Trustee's knowledge, there are no proceedings
or investigations pending or threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Indenture Trustee or its properties: (A) asserting
the invalidity of this Indenture (B) seeking to prevent the consummation
of any of the transactions contemplated by this Indenture or (C) seeking
any determination or ruling that might materially and adversely affect the
performance by the Indenture Trustee of its obligations under, or the
validity or enforceability of, this Indenture.
Section 6.12 Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the assets of the
Trust Estate in trust for the Noteholders;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibits A-1 through A-3 to this Indenture in accordance with the
terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture and the Sale and Servicing Agreement.
Section 6.13 The Agents. The provisions of this Indenture relating to the
limitations of the Indenture Trustee's liability and to its indemnity, rights
and protections shall inure also to the Paying Agent and Note Registrar.
Section 6.14 Eligibility; Disqualification. The Indenture Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of Baa3 or better by ▇▇▇▇▇'▇ and BBB or
better by Standard & Poor's. The Indenture Trustee shall comply with TIA Section
310(b), including the optional provision permitted by the second sentence of TIA
Section 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities of the Issuing Entity are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
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Section 6.15 Preferential Collection of Claims Against Issuing Entity. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01 Issuing Entity To Furnish Indenture Trustee Names and
Addresses of Noteholders. The Issuing Entity will furnish or cause to be
furnished to the Indenture Trustee (a) not more than five days after each Record
Date, a list, in such form as the Indenture Trustee may reasonably require, of
the names and addresses of the Holders of Notes as of such Record Date, (b) at
such other times as the Indenture Trustee may request in writing, within 30 days
after receipt by the Issuing Entity of any such request, a list of similar form
and content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished to the Indenture
Trustee.
Section 7.02 Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.01
hereof and the names and addresses of Holders of Notes received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.
(b) Noteholders may communicate with other Noteholders with respect to
their rights under this Indenture or under the Notes.
Section 7.03 [Reserved].
Section 7.04 [Reserved].
Section 7.05 Monthly Statements to Noteholders. (a) Not later than each
Payment Date, the Indenture Trustee shall prepare and cause to be forwarded by
first class mail to each Holder of Notes, the Master Servicer and the Depositor
a statement setting forth for the Notes:
(i) the amount of the related payment to Holders of each Class
allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein and (B) the aggregate of all
scheduled payments of principal included therein;
(ii) the amount of such payment to Holders of each Class allocable
to interest;
(iii) the Note Rate on each Class of Notes for that Payment Date;
(iv) [reserved];
(v) the Note Principal Balance of each Class after giving effect (i)
to all payments allocable to principal on such Payment Date and (ii) the
allocation of any Applied Realized Loss Amounts or Realized Loss Excess
Coverage Amounts for such Payment Date;
53
(vi) the aggregate of the Stated Principal Balance of the Mortgage
Loans;
(vii) the related amount of the Servicing Fees paid to or retained
by the Master Servicer for the related Due Period;
(viii) the Net Rate Carryover Amount paid on any Class of Notes on
such Payment Date and any Net Rate Carryover Amounts remaining unpaid on
any Class of Notes on such Payment Date;
(ix) the amount of Advances for each Loan Group included in the
payment on such Payment Date;
(x) the amount of Applied Realized Loss Amounts or Realized Loss
Excess Coverage Amounts applied to the Notes for such Payment Date and in
the aggregate;
(xi) the cumulative amount of Applied Realized Loss Amounts or
Realized Loss Excess Coverage Amounts applied to the Notes to date;
(xii) the number and aggregate principal amounts of Mortgage Loans:
(A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 30 to 59
days, (2) 60 to 89 days and (3) 90 or more days, and (B) in foreclosure
and Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more
days, in each case as of the close of business on the last day of the
calendar month preceding such Payment Date;
(xiii) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan and the date of acquisition thereof;
(xiv) the aggregate Stated Principal Balances of any Mortgage Loans
converted to REO Properties as of the close of business on the
Determination Date preceding such Payment Date;
(xv) the aggregate Stated Principal Balances of all Liquidated
Loans;
(xvi) with respect to any Liquidated Loan, the loan number and
Stated Principal Balance relating thereto;
(xvii) [reserved];
(xviii) all payments made by the Master Servicer in respect of
Prepayment Interest Shortfalls for such Payment Date;
(xix) [reserved];
(xx) the amount remaining in the Pre-Funding Account as of such
Payment Date;
(xxi) the number of Mortgage Loans with respect to which (i) a
reduction in the Mortgage Rate has occurred or (ii) the related borrower's
obligation to repay principal and interest on a monthly basis has been
suspended or reduced pursuant to the Servicemembers Civil Relief Act, as
amended, or the California Military and Veterans Code, as amended; and the
amount of interest and principal not required to be paid with respect to
any such Mortgage Loans during the related Due Period as a result of such
reductions;
(xxii) the number and the principal balance of Mortgage Loans with
respect to any real estate acquired through foreclosure or grant of a deed
in lieu of foreclosure;
(xxiii) the aggregate amount of all Advances recovered during the
related Due Period
(xxiv) Number and amount of pool assets at the beginning and ending
of each period, and updated pool composition information, such as weighted
average coupon, weighted average life, weighted average remaining term,
pool factors and prepayment amounts.
(xxv) In addition, describe any material changes to methodology
regarding calculations of delinquencies and charge-offs.
(xxvi) Information on the amount, terms and general purpose of any
advances made or reimbursed during the period, including the general use
of funds advanced and the general source of funds for reimbursements.
(xxvii) Any material modifications, extensions or waivers to pool
asset terms, fees, penalties or payments during the distribution period or
that have cumulatively become material over time.
(xxviii) Material breaches of pool asset representations or
warranties or transaction covenants.
(xxix) Information on ratio, coverage or other tests used for
determining any early amortization, liquidation or other performance
trigger and whether the trigger was met.
(xxx) Information regarding any new issuance of asset-backed
securities backed by the same asset pool, any pool asset changes (other
than in connection with a pool asset converting into cash in accordance
with its terms), such as additions or removals in connection with a
prefunding or revolving period and pool asset substitutions and
repurchases (and purchase rates, if applicable), and cash flows available
for future purchases, such as the balances of any prefunding or revolving
accounts, if applicable. Disclose any material changes in the
solicitation, credit-granting, underwriting, origination, acquisition or
pool selection criteria or procedures, as applicable, used to originate,
acquire or select the new pool assets.
54
(b) The Indenture Trustee's responsibility for disbursing the above
information to the Noteholders is limited to the availability, timeliness and
accuracy of the information derived from the Master Servicer. The Indenture
Trustee will send a copy of each statement provided pursuant to this Section
4.05 to each Rating Agency. The Indenture Trustee may make the above information
available to Noteholders via the Indenture Trustee's website at ▇▇▇▇://▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
(c) Within a reasonable period of time after the end of each calendar
year, the Indenture Trustee shall cause to be furnished to each Person who at
any time during the calendar year was a Noteholder, a statement containing the
information set forth in clauses (a)(i), (a)(ii) and (a)(vi) of this Section
4.05 aggregated for such calendar year or applicable portion thereof during
which such Person was a Noteholder. Such obligation of the Indenture Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Indenture Trustee pursuant to
any requirements of the Code as from time to time in effect.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01 Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02 [Reserved].
Section 8.03 Officer's Certificate. The Indenture Trustee shall receive at
least seven Business Days' notice when requested by the Issuing Entity to take
any action pursuant to Section 8.05(a) hereof, accompanied by copies of any
instruments to be executed, and the Indenture Trustee shall also require, as a
condition to such action, an Officer's Certificate, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding that
all conditions precedent to the taking of such action have been complied with.
Section 8.04 Termination Upon Distribution to Noteholders. Prior to a TMP
Trigger Event this Indenture and the respective obligations and responsibilities
of the Issuing Entity and the Indenture Trustee created hereby shall terminate
upon the distribution to Noteholders, the Certificate Paying Agent on behalf of
the Certificateholders and the Indenture Trustee of all amounts required to be
distributed pursuant to Article III; provided, however, that in no event shall
the trust created hereby continue beyond the expiration of 21 years from the
death of the survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late
ambassador of the United States to the Court of St. ▇▇▇▇▇, living on the date
hereof. Subsequent to a TMP Trigger Event, the Indenture Trustee shall comply
with Article XII.
Section 8.05 Release of Trust Estate. (a) Subject to the payment of its
fees and expenses, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture, including for the purposes of any repurchase by
the Master Servicer of a Mortgage Loan pursuant to Section 2.03 of the Sale and
Servicing Agreement. No party relying upon an instrument executed by the
Indenture Trustee as provided in Article VIII hereunder shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent, or see to the application of any monies.
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(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding and (ii) all sums due to the Indenture Trustee pursuant to this
Indenture have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuing Entity accompanied by an Officers' Certificate and an Opinion of Counsel
stating that all applicable requirements have been satisfied.
Section 8.06 Surrender of Notes Upon Final Payment. By acceptance of any
Note, the Holder thereof agrees to surrender such Note to the Indenture Trustee
promptly, prior to such Noteholder's receipt of the final payment thereon.
Section 8.07 Optional Redemption of the Notes. (a) The Majority Holder of
the Trust Certificates shall have the option to redeem the Notes in whole, but
not in part, on any Payment Date on or after the Payment Date on which the
aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
prior Due Period is less than or equal to 10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of Cut-off Date, plus the Original Pre-Funded
Amount. The aggregate redemption price for the Notes will be equal to the unpaid
Note Principal Balance of the Notes as of the Payment Date on which the proposed
redemption will take place in accordance with the foregoing, together with
accrued and unpaid interest thereon at the applicable Note Rate through such
Payment Date (including any related Interest Carry-Forward Amount), plus an
amount sufficient to pay in full all amounts owing to the Indenture Trustee
under this Indenture (which amounts shall be specified in writing upon request
of the Issuing Entity by the Indenture Trustee).
(b) In order to exercise the foregoing option, the Majority Holder of the
Owner Trust Certificates shall provide written notice of its exercise of such
option to the Indenture Trustee and the Owner Trustee at least 15 days prior to
its exercise. Following receipt of the notice, the Indenture Trustee shall
provide notice to the Noteholders of the final payment on the Notes. In
addition, the Master Servicer shall, not less than one Business Day prior to the
proposed Payment Date on which such redemption is to be made, deposit the
aggregate redemption price specified in (a) above with the Indenture Trustee,
who shall deposit the aggregate redemption price into the Payment Account and
shall, on the Payment Date after receipt of the funds, apply such funds to make
final payments of principal and interest on the Notes in accordance with Section
4.02 hereof and payment in full to the Indenture Trustee, and this Indenture
shall be discharged subject to the provisions of Section 4.12 hereof. If for any
reason the amount deposited by the Issuing Entity is not sufficient to make such
redemption or such redemption cannot be completed for any reason, the amount so
deposited by the Master Servicer with the Indenture Trustee shall be promptly
returned to the Master Servicer in full and shall not be used for any other
purpose or be deemed to be part of the Trust Estate. Subsequent to a TMP Trigger
Event and any REMIC Elections made pursuant to Article XI hereunder, the
Additional Termination Requirements in Article XII shall apply.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of Noteholders. (a)
Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies, the Issuing Entity and the Indenture Trustee, when authorized
by an Issuing Entity Request, 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:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required to
be subjected to the lien of this Indenture, or to subject to the lien of
this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuing Entity, and the
assumption by any such successor of the covenants of the Issuing Entity
herein and in the Notes contained;
(iii) to add to the covenants of the Issuing Entity, for the benefit
of the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuing Entity;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture that may be inconsistent with any
other provision herein or in any supplemental indenture;
(vi) to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental indenture;
provided, that such action shall not materially and adversely affect the
interests of the Holders of the Notes;
(vii) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI hereof; or
(viii) subsequent to a TMP Trigger Event, to correct or add any
provisions to this Indenture to comply with the REMIC Provisions or to
prevent the imposition of any tax on any REMIC created hereunder;
and provided, further, that such action shall not, as evidenced by an
Opinion of Counsel, cause the Issuing Entity to be subject to an entity level
tax or cause any Class of Offered Notes currently outstanding to cease to be
qualified as indebtedness.
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The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuing Entity and the Indenture Trustee, when authorized by an
Issuing Entity Request, may, also without the consent of any of the Holders of
the Notes and prior notice to the Rating Agencies, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action as evidenced by an Opinion of
Counsel, (i) is permitted by this Indenture, and shall not (ii) adversely affect
in any material respect the interests of any Noteholder (without that
Noteholder's consent) and cause the Issuing Entity to be subject to an entity
level tax for federal income tax purposes.
Section 9.02 Supplemental Indentures With Consent of Noteholders. The
Issuing Entity and the Indenture Trustee, when authorized by an Issuing Entity
Request, also may, with prior notice to the Rating Agencies and, with the
consent of the Holders of not less than a majority of the Note Principal Balance
of each Class of Offered Notes affected thereby, by Act (as defined in Section
10.03 hereof) of such Holders delivered to the Issuing Entity and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Note affected thereby:
(i) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof or the
interest rate thereon, change the provisions of this Indenture relating to
the application of collections on, or the proceeds of the sale of, the
Trust Estate to payment of principal of or interest on the Notes, or
change any place of payment where, or the coin or currency in which, any
Note or the interest thereon is payable, or impair the right to institute
suit for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to the
payment of any such amount due on the Notes on or after the respective due
dates thereof;
(ii) reduce the percentage of the Note Principal Balances of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception in
the definition of the term "Holder";
(iv) reduce the percentage of the Note Principal Balances of the
Notes required to direct the Indenture Trustee to direct the Issuing
Entity to sell or liquidate the Trust Estate pursuant to Section 5.04
hereof;
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(v) modify any provision of this Section 9.02 except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified or
waived without the consent of the Holder of each Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation
of any of the individual components of such calculation); or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture;
and provided, further, that such action shall not, as evidenced by an
Opinion of Counsel, cause the Issuing Entity to be subject to an entity level
tax.
Any such action shall not adversely affect in any material respect the
interest of any Holder (other than a Holder who shall consent to such
supplemental indenture) as evidenced by an Opinion of Counsel (provided by the
Person requesting such supplemental indenture) delivered to the Indenture
Trustee.
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 Issuing Entity and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.02, the
Indenture Trustee shall mail to the Holders of the Notes to which such amendment
or supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 9.03 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02 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, liabilities or
immunities under this Indenture or otherwise.
Section 9.04 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected
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thereby, and the respective rights, limitations of rights, obligations, duties,
liabilities and immunities under this Indenture of the Indenture Trustee, the
Issuing Entity and the Holders of the Notes shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
Section 9.05 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 Issuing Entity or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuing Entity, to any such
supplemental indenture may be prepared and executed by the Issuing Entity and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding
Notes.
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ARTICLE X
MISCELLANEOUS
Section 10.01 Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuing Entity to the Indenture Trustee to take
any action under any provision of this Indenture, the Issuing Entity shall
furnish to the Indenture Trustee (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and (ii) an Opinion of Counsel 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, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with;
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with; and
(5) if the signatory of such certificate or opinion is required to
be Independent, the statement required by the definition of the term
"Independent".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuing Entity shall, in addition to any obligation imposed in Section 10.01 (a)
or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days prior to such deposit) to the
Issuing Entity of the Collateral or other property or securities to be so
deposited and a report from a nationally recognized accounting firm verifying
such value.
(ii) Whenever the Issuing Entity is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the
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matters described in clause (i) above, the Issuing Entity shall also
deliver to the Indenture Trustee an Independent Certificate from a
nationally recognized accounting firm as to the same matters, if the fair
value of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then current fiscal year of the Issuing Entity, as set
forth in the certificates delivered pursuant to clause (i) above and this
clause (ii), is 10% or more of the Note Principal Balances of the Offered
Notes, but such a certificate need not be furnished with respect to any
securities so deposited, if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the Note Principal Balances of the Offered Notes.
(iii) Whenever any property or securities are to be released from
the lien of this Indenture, the Issuing Entity shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days prior to such release) of the property or securities
proposed to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuing Entity is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuing Entity shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property or securities released
from the lien of this Indenture since the commencement of the then-current
calendar year, as set forth in the certificates required by clause (iii)
above and this clause (iv), equals 10% or more of the Note Principal
Balances of the Offered Notes, but such certificate need not be furnished
in the case of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the then Note Principal Balances of
the Offered Notes.
Section 10.02 Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuing Entity
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller or the Issuing Entity, stating that the information with respect to
such factual matters is in the possession of the Seller or the Issuing
63
Entity, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuing
Entity shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuing Entity'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 Issuing Entity to have
such application granted or to the sufficiency of such certificate or report.
The foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained
in any such document as provided in Article VI.
Section 10.03 Acts of Noteholders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuing Entity. 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 Issuing Entity, if
made in the manner provided in this Section 10.03 hereof.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuing Entity in reliance thereon, whether or not notation of
such action is made upon such Note.
Section 10.04 Notices etc., to Indenture Trustee Issuing Entity and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or act of Noteholders is to be made upon, given or
furnished to or filed with:
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(i) the Indenture Trustee by any Noteholder or by the Issuing Entity
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Indenture Trustee at the Corporate
Trust Office. The Indenture Trustee shall promptly transmit any notice
received by it from the Noteholders to the Issuing Entity; or
(ii) the Issuing Entity by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in writing
and mailed first-class, postage prepaid to the Issuing Entity addressed
to: _____________________________, or at any other address previously
furnished in writing to the Indenture Trustee by the Issuing Entity. The
Issuing Entity shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuing Entity,
the Indenture Trustee or the Owner Trustee shall be in writing, mailed
first-class postage pre-paid, to (i) in the case of [RATING AGENCY], at the
following address: _______________ and (ii) in the case of [RATING AGENCY, at
the following address: ___________________; or as to each of the foregoing, at
such other address as shall be designated by written notice to the other
parties.
Section 10.05 Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Person's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of Default.
Section 10.06 Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
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Section 10.07 Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuing Entity shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
Section 10.08 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 10.09 [Reserved].
Section 10.10 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 10.11 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAWS), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.12 Counterparts. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 10.13 Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuing Entity and at its expense accompanied by an Opinion of
Counsel at its expense (which may be counsel to the Indenture Trustee or any
other counsel reasonably acceptable to the Indenture Trustee) to the effect that
such recording is necessary either for the protection of the Noteholders or any
other Person secured hereunder or for the enforcement of any right or remedy
granted to the Indenture Trustee under this Indenture.
Section 10.14 Issuing Entity Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuing Entity,
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 Issuing
Entity 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 Issuing Entity,
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
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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 Issuing Entity
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
Section 10.15 No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time prior to one year from the date of termination
hereof, institute against the Depositor or the Issuing Entity, or join in any
institution against the Depositor or the Issuing Entity of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
Section 10.16 Inspection. The Issuing Entity agrees that, at its expense,
on reasonable prior notice, it shall permit any representative of the Indenture
Trustee, during the Issuing Entity's normal business hours, to examine all the
books of account, records, reports and other papers of the Issuing Entity, to
make copies and extracts therefrom, to cause such books to be audited by
Independent certified public accountants, and to discuss the Issuing Entity's
affairs, finances and accounts with the Issuing Entity's officers, employees,
and Independent certified public accountants, all at such reasonable times and
as often as may be reasonably requested. The Indenture Trustee shall cause its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
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ARTICLE XI
REMIC ELECTIONS AND ADMINISTRATION
Section 11.01 Indenture Trustee to Administer REMICs.
(a) This Article XI shall only apply subsequent to a TMP Trigger Event.
(b) Prior to any REMIC Elections being made with respect to the Trust, the
Master Servicer shall dispose of any REO Property in a manner that maximizes the
Liquidation Proceeds. In no event shall any REO Property be included as an asset
of any REMIC.
(c) Subsequent to a TMP Trigger Event, the Indenture Trustee shall make or
cause to be made two REMIC Elections, such REMICs to be designated as REMIC I
and REMIC II as set forth in this Indenture and the Appendix on Forms 1066 or
other appropriate federal tax or information return for the taxable year ending
on the last day of the calendar year in which the TMP Trigger Event occurs. The
regular interests and residual interest in each REMIC shall be as designated in
Section 11.04.
(d) The Indenture Trustee shall designate the REMIC Closing Date as the
"Startup Day" of each REMIC within the meaning of Section 860G(a)(9) of the
Code.
(e) With respect to any Mortgage Loans that are 60 or more days Delinquent
as of the "Startup Day", the following restrictions on foreclosure shall apply:
In connection with the servicing of any Mortgage Loan, the Master Servicer shall
not acquire any Mortgaged Property on behalf of any REMIC created hereunder in
connection with a default or imminent default on a Foreclosure Restricted Loan,
if acquiring title to the Mortgaged Property underlying the loan would cause the
adjusted basis, for federal income tax purposes, of these Mortgaged Properties
owned by the related REMIC after foreclosure, along with any other assets owned
by the related REMIC other than "qualified mortgages" and "permitted
investments" within the meaning of Section 860G of the Code, to exceed 0.75% of
the adjusted basis of the assets of the related REMIC. If the adjusted basis of
such Mortgaged Properties in foreclosure, along with any other assets owned by
the related REMIC, other than "qualified mortgages" and "permitted investments"
with the meaning of Section 860G of the Code, exceed 1.0% of the adjusted basis
of the assets of the related REMIC immediately after the distribution of
principal and interest on any Distribution Date, the Master Servicer will
dispose of enough of such Mortgaged Properties in foreclosure, for cash or
otherwise, so that the adjusted basis of such Mortgaged Properties in
foreclosure, along with any other assets owned by the related REMIC, other than
"qualified mortgages" and "permitted investments" within the meaning of Section
860G of the Code, will be less than 1.0% of the adjusted basis of the assets of
the related REMIC.
(f) The Master Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including, but not limited to, any professional
fees or expenses related to audits or any administrative or judicial proceedings
with respect to such REMIC that involve the Internal Revenue Service or state
tax authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are
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attributable to the negligence or willful misconduct of the Master Servicer in
fulfilling its duties hereunder. The Master Servicer shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Collection Account.
(g) The Indenture Trustee shall prepare or cause to be prepared, sign and
file or cause to be filed, each REMIC's federal and state tax and information
returns as such REMIC's direct representative. The expenses of preparing and
filing such returns shall be borne by the Indenture Trustee.
(h) The Holder of the Owner Trust Certificates holding the largest
Percentage Interest shall be the "tax matters person" as defined in the REMIC
Provisions (the "Tax Matters Person") with respect to each of REMIC I and REMIC
II. The Indenture Trustee is irrevocably designated as and shall act as
attorney-in-fact and agent for each Tax Matters Person for each REMIC. The
Indenture Trustee, as agent for the Tax Matters Person, shall perform, on behalf
of each REMIC, all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Indenture Trustee, as agent for the Tax
Matters Person, shall provide (i) to the Treasury or other governmental
authority such information as is necessary for the application of any tax
relating to the transfer of an Class R Certificate to any disqualified person or
organization and (ii) to the Noteholders such information or reports as are
required by the Code or REMIC Provisions.
(i) The Indenture Trustee, the Master Servicer, and the Holders of Notes
shall take any action or cause any REMIC to take any action necessary to create
or maintain the status of such REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. Neither
the Indenture Trustee, the Master Servicer, nor the Holder of any Owner Trust
Certificate shall take any action or cause any REMIC to take any action or fail
to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of such REMIC as a REMIC or (ii) result in the imposition of a tax upon
such REMIC (including, but not limited to, the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions set
forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Indenture Trustee and the Master Servicer have received an
Opinion of Counsel (at the expense of the party seeking to take such action) to
the effect that the contemplated action will not endanger such status or result
in the imposition of such a tax. In addition, prior to taking any action with
respect to any REMIC or the assets therein, or causing such REMIC to take any
action, which is not expressly permitted under the terms of this Agreement, any
Holder of the Owner Trust Certificates will consult with the Indenture Trustee
and the Master Servicer, or their respective designees, in writing, with respect
to whether such action could cause an Adverse REMIC Event to occur with respect
to such REMIC, and no such Person shall take any such action or cause such REMIC
to take any such action as to which the Indenture Trustee or the Master Servicer
has advised it in writing that an Adverse REMIC Event could occur.
(j) The Holder of the Owner Trust Certificates shall pay when due its pro
rata share of any and all taxes imposed on any REMIC by federal or state
governmental authorities. To the
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extent that such REMIC taxes are not paid by the holder of the Owner Trust
Certificates, the Indenture Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise payable to the Holder of the Owner Trust
Certificates or, if no such amounts are available, out of other amounts held in
the Collection Account, and shall reduce amounts otherwise payable to Holders of
the REMIC Regular Interests or the Notes, as the case may be.
(k) The Indenture Trustee, shall, for federal income tax purposes,
maintain or cause to be maintained books and records with respect to each REMIC
on a calendar year and on an accrual basis.
(l) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in the Sale and Servicing Agreement with respect to
Replacement Mortgage Loans.
(m) Neither the Indenture Trustee nor the Master Servicer shall enter into
any arrangement by which any REMIC will receive a fee or other compensation for
services.
(n) On or before April 15th of each calendar year beginning in the year
after any REMIC Elections are made, the Master Servicer shall deliver to the
Indenture Trustee and each Rating Agency an Officer's Certificate stating the
Master Servicer's compliance with the provisions of this Section 11.01.
Section 11.02 Carryover Reserve Fund.
(a) On the REMIC Closing Date, the Indenture Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the Notes, the
Carryover Reserve Fund. The Carryover Reserve Fund shall have five sub-accounts,
beneficially owned by the Holders of the Class IO-1 Notes, Class IO-2 Notes,
Class IO-3 notes, Class IO-4 Notes and Class IO-5 Notes, respectively. On the
REMIC Closing Date, the Depositor will deposit, or cause to be deposited, into
the Carryover Reserve Fund $5,000. On each Distribution Date as to which there
is Net Rate Carryover payable to the Class A or Class M-1 Notes, the Indenture
Trustee shall deposit the amounts pursuant to paragraphs [____] of Section 4.02
into the Carryover Reserve Fund and the Indenture Trustee has been directed by
the Class IO Noteholders to distribute such amounts to the Holders of the Class
A and Class M-1 Notes in the amounts and priorities set forth in clause [___]of
Section [___]. For federal income tax purposes, such amounts shall be deemed
paid to the Holders of the Class IO Notes and from the Class IO Notes to the
Carryover Reserve Fund.
(b) The Carryover Reserve Fund shall be an Eligible Account, and funds on
deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including without limitation, other moneys
held by the Indenture Trustee pursuant to this Indenture.
(c) Funds in the Carryover Reserve Fund may be invested in Permitted
Investments. Any earnings on such amounts shall be payable to the Class IO-1
Notes, Class IO-2 Notes, Class IO-3 notes, Class IO-4 Notes and Class IO-5
Notes. The Class IO-1 Notes, Class IO-2 Notes, Class IO-3 notes, Class IO-4
Notes and Class IO-5 Notes shall evidence ownership of the related sub-accounts
of the Carryover Reserve Fund for federal tax purposes and the
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Holders thereof evidencing not less than 50% of the Voting Rights of such
Classes, in the aggregate, shall direct the Trustee in writing as to the
investment of amounts therein. In the absence of such written direction, all
funds in the Carryover Reserve Fund shall be invested by the Trustee in [___].
(d) Upon termination of the Trust, any amounts remaining in the Carryover
Reserve Fund shall be distributed to the Holders of the Class IO Notes [divided
how?]
(e) The Indenture Trustee shall treat the Carryover Reserve Fund as an
outside reserve fund within the meaning of Treasury Regulation Section
1.860G-2(h) that is owned by the Holders of the Class IO Notes and that is not
an asset of any REMIC. The Indenture Trustee shall treat the rights of the Class
A and Class M-1 Notes to receive payments from the Carryover Reserve Fund in
respect of Net Rate Carryover as a right in interest rate cap contracts written
by the Holders of the Class IO Notes, in favor of the Notes (other than the
Class IO Notes), and the Indenture Trustee shall account for such as property
held separate and apart from the regular interests it holds in the REMICs
created hereunder. This provision is intended to satisfy the requirements of
Treasury Regulation Section 1.860G-2(i) for the treatment of property rights
coupled with regular interests to be separately respected and shall be
interpreted consistent with such regulation.
Section 11.03 Prohibited Transactions and Activities.
Neither the Seller, the Depositor, the Master Servicer nor the Indenture
Trustee shall sell, dispose of, or substitute for any of the Mortgage Loans,
except in a disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii)
the bankruptcy of the Trust Estate, (iii) the termination of any REMIC pursuant
to Section [11.??] of this Agreement, (iv) a substitution pursuant to the Sale
and Servicing Agreement or (v) a repurchase of Mortgage Loans pursuant to the
Sale and Servicing Agreement, nor acquire any assets for any REMIC, nor sell or
dispose of any investments in the Payment Account for gain, nor accept any
contributions to any REMIC after the Startup Date, unless it has received an
Opinion of Counsel (at the expense of the party causing such sale, disposition,
or substitution) that such disposition, acquisition, substitution, or acceptance
will not (a) affect adversely the status of any REMIC as a REMIC or of the
interests therein other than the Owner Trust Certificates as the regular
interests therein, (b) affect the payment of interest or principal on the Notes,
(c) result in the encumbrance of the assets transferred or assigned to the Trust
Estate (except pursuant to the provisions of this Agreement) or (d) cause such
REMIC to be subject to a tax on prohibited transactions or prohibited
contributions pursuant to the REMIC Provisions.
Section 11.04 Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.
In the event that any REMIC formed hereunder fails to qualify as a REMIC,
loses its status as a REMIC, or incurs federal, state or local taxes as a result
of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Master Servicer of its duties
and obligations set forth herein, the Master Servicer shall indemnify the Holder
of the Owner Trust Certificates against any and all losses, claims, damages,
liabilities or expenses ("Losses") resulting from such negligence; provided,
however, that the Master Servicer shall not be liable for any such Losses
attributable to the action or inaction of the
71
Indenture Trustee, the Depositor or the Holder of such Owner Trust Certificate,
as applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Owner Trust Certificate on which the Master Servicer has
relied. The foregoing shall not be deemed to limit or restrict the rights and
remedies of the Holder of such Owner Trust Certificate now or hereafter existing
at law or in equity. Notwithstanding the foregoing, however, in no event shall
the Master Servicer have any liability (1) for any action or omission that is
taken in accordance with and in compliance with the express terms of, or which
is expressly permitted by the terms of, this Agreement, (2) for any Losses other
than arising out of a negligent performance by the Master Servicer of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Noteholders (in addition to payment of principal and interest on the
Notes).
Section 11.05 REMIC Payment Rules.
REMIC I
As provided herein, subsequent to a TMP Trigger Event, the Indenture
Trustee will make an election to treat the segregated pool of assets consisting
of the Mortgage Loans and certain other related assets (excluding the Carryover
Reserve Fund and any REO Property) subject to this Agreement as a real estate
mortgage investment conduit (a "REMIC") for federal income tax purposes, and
such segregated pool of assets will be designated as "REMIC I." The Class R-I
Interest will represent the sole class of "residual interests" in REMIC I for
purposes of the REMIC Provisions (as defined herein) under federal income tax
law. The following table irrevocably sets forth the designation, remittance rate
(the "Uncertificated REMIC I Pass-Through Rate") and initial Uncertificated
Principal Balance for each of the "regular interests" in REMIC I (the "REMIC I
Regular Interests"). The "latest possible maturity date" (determined for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each
REMIC I Regular Interest shall be the 360th distribution date. None of the REMIC
I Regular Interests will be certificated.
UNCERTIFICATED REMIC I UNCERTIFICATED PRINCIPAL LATEST POSSIBLE MATURITY
DESIGNATION PASS-THROUGH RATE BALANCE DATE
--------------- ---------------------- ------------------------ ------------------------
LT-1SUB Variable(1) (6)
LT-1ZZZ Variable(1) (7)
LT-2SUB Variable(2) (6)
LT-2ZZZ Variable(2) (8)
LT-3SUB Variable(3) (6)
LT-3ZZZ Variable(3) (9)
LT-4SUB Variable(4) (6)
LT-4ZZZ Variable(4) (10)
LT-5SUB Variable(5) (6)
LT-5ZZZ Variable(5) (11)
---------------
(1) The Uncertificated REMIC I Pass-Through Rate shall be the weighted average
of the Net Mortgage Rates for the Group 1 Mortgage Loans.
(2) The Uncertificated REMIC I Pass-Through Rate shall be the weighted average
of the Net Mortgage Rates for the Group 2 Mortgage Loans.
(3) The Uncertificated REMIC I Pass-Through Rate shall be the weighted average
of the Net Mortgage Rates for the Group 3 Mortgage Loans.
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(4) The Uncertificated REMIC I Pass-Through Rate shall be the weighted average
of the Net Mortgage Rates for the Group 4 Mortgage Loans.
(5) The Uncertificated REMIC I Pass-Through Rate shall be the weighted average
of the Net Mortgage Rates for the Group 5 Mortgage Loans.
(6) The initial Uncertificated Principal Balance of each such REMIC I Regular
Interest shall equal 1% of the Subordinated Portion for the related Loan
Group for month in which any REMIC Elections are made.
(7) The initial Uncertificated Principal Balance of such REMIC I Regular
Interest shall equal excess of (i) the aggregate Stated Principal Balance
of the Mortgage Loans in the related Loan Group over (ii) Uncertificated
Principal Balance of REMIC I Regular Interest LT-1SUB.
(8) The initial Uncertificated Principal Balance of such REMIC I Regular
Interest shall equal excess of (i) the aggregate Stated Principal Balance
of the Mortgage Loans in the related Loan Group over (ii) Uncertificated
Principal Balance of REMIC I Regular Interest LT-2SUB.
(9) The initial Uncertificated Principal Balance of such REMIC I Regular
Interest shall equal excess of (i) the aggregate Stated Principal Balance
of the Mortgage Loans in the related Loan Group over (ii) Uncertificated
Principal Balance of REMIC I Regular Interest LT-3SUB.
(10) The initial Uncertificated Principal Balance of such REMIC I Regular
Interest shall equal excess of (i) the aggregate Stated Principal Balance
of the Mortgage Loans in the related Loan Group over (ii) Uncertificated
Principal Balance of REMIC I Regular Interest LT-4SUB.
(11) The initial Uncertificated Principal Balance of such REMIC I Regular
Interest shall equal excess of (i) the aggregate Stated Principal Balance
of the Mortgage Loans in the related Loan Group over (ii) Uncertificated
Principal Balance of REMIC I Regular Interest LT-5SUB.
REMIC II
As provided herein, the Indenture Trustee will make an election to treat
the segregated pool of assets consisting of the REMIC I Regular Interests
subject to this Agreement as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC II." The Class R-II Interest will represent the
sole class of "residual interests" in REMIC II for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, remittance rate (the "Uncertificated
REMIC II Pass-Through Rate") and initial Uncertificated Principal Balance for
each of the "regular interests" in REMIC II (the "REMIC II Regular Interests").
The "latest possible maturity date" (determined for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii)) for each REMIC II Regular
Interest shall be the 360th distribution date. None of the REMIC II Regular
Interests will be certificated.
UNCERTIFICATED REMIC II UNCERTIFICATED PRINCIPAL LATEST POSSIBLE MATURITY
DESIGNATION PASS-THROUGH RATE BALANCE DATE
LT-1A1 Variable(1) (7)
LT-1A2 Variable(1) (7)
LT-1SUB Variable(2) (8)
LT-2A1 Variable(3) (7)
LT-2A2 Variable(3) (7)
LT-2SUB Variable(2) (9)
LT-3A1A Variable(4) (7)
LT-3A1B Variable(4) (7)
LT-3A2A Variable(4) (7)
LT-3A2B Variable(4) (7)
LT-3SUB Variable(2) (10)
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LT-4A1 Variable(5) (7) November 2035
LT-4A2 Variable(5) (7) November 2035
LT-4SUB Variable(2) (11) November 2035
LT-5A1 Variable(6) (7) November 2035
LT-5A2 Variable(6) (7) November 2035
LT-5SUB Variable(2) (12) November 2035
---------------
(1) The Uncertificated REMIC II Pass-Through Rate shall be the weighted average
of Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LT-1ZZZ.
(2) The Uncertificated REMIC II Pass-Through Rate shall be the weighted average
of the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest
LT-1SUB, REMIC I Regular Interest LT-2SUB, REMIC I Regular Interest 3SUB, REMIC
I Regular Interest 4SUB and REMIC I Regular Interest LT-5SUB, weighted on the
basis of the Uncertificated Balance of each such REMIC I Regular Interest.
(3) The Uncertificated REMIC II Pass-Through Rate shall be the weighted average
of Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LT-2ZZZ.
(4) The Uncertificated REMIC II Pass-Through Rate shall be the weighted average
of Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LT-3ZZZ.
(5) The Uncertificated REMIC II Pass-Through Rate shall be the weighted average
of Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LT-4ZZZ.
(6) The Uncertificated REMIC II Pass-Through Rate shall be the weighted average
of Uncertificated REMIC I Pass-Through Rate on REMIC I Regular Interest LT-5ZZZ.
(7) The initial Uncertificated Principal Balance of each such REMIC I Regular
Interest shall equal the Note Principal Balance for the Corresponding Class for
month in which any REMIC Elections are made.
(8) The initial Uncertificated Principal Balance of each such REMIC I Regular
Interest shall equal excess of (i) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group over (ii) the Note Principal Balance of
the related Senior Notes for month in which any REMIC Elections are made.
REMIC III
As provided herein, the Indenture Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as REMIC III. The Class R-III Interest will represent the sole class
of "residual interests" in REMIC III for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, Note Rate, aggregate Initial Note Principal Balance and the Latest
Possible Maturity Date for each Class of Notes comprising the interests
representing "regular interests" in REMIC III. The "latest possible maturity
date" (determined solely for purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii)) for each Class of REMIC III Notes shall be the 360th
Distribution Date.
AGGREGATE INITIAL NOTE
PRINCIPAL BALANCE OR LATEST POSSIBLE MATURITY
DESIGNATION NOTE RATE NOTIONAL AMOUNT DATE
-------------------- ----------- ---------------------- ------------------------
Class 1-A-1 5.1500%(1) (12)
Class 1-A-2 5.1500%(1) (12)
Class 2-A-1 5.3300%(2) (12)
Class 2-A-2 5.3300%(2) (12)
Class 3-A-1-A 5.3100%(3) (12)
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Class 3-A-1-B 5.3100%(3) (12)
Class 3-A-2-A 5.2500%(3) (12)
Class 3-A-2-B 5.2500%(3) (12)
Class 4-A-1 5.5200%(4) (12)
Class 4-A-2 5.5200%(4) (12)
Class 5-A-1 5.2500%(5) (12)
Class 5-A-2 5.2500%(5) (12)
Class I-IO (6) (13)
Class 2-IO (7) (14)
Class 3-IO (8) (15)
Class 4-IO (9) (16)
Class 5-IO (10) (17)
Class M-1 5.3800%(11) (12)
Class M-2 5.3800%(11) (12)
Class B-1 5.3800%(11) (12)
Class B-2 5.3800%(11) (12)
Class B-3 5.3800%(11) (12)
Class B-4 5.3800%(11) (12)
Class B-5 5.3800%(11) (12)
---------------
(1) On or prior to the related note rate change date, the note rates will be
equal to the lesser of (i) the fixed rate set forth above and (2) the weighted
average of the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular
Interest LT-1A1 and REMIC II Regular Interest LT-1A2. After the related note
rate change date, the note rates will be equal to the least of (i) One-Year
LIBOR plus ______%, (ii) 11.00% per annum and (iii) the weighted average of the
Uncertificated REMIC II Pass-Through Rate on REMIC II Regular Interest LT-1A1
and REMIC II Regular Interest LT-1A2.
(2) On or prior to the related note rate change date, the note rates will be
equal to the lesser of (i) the fixed rate set forth above and (2) the weighted
average of the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular
Interest LT-2A and REMIC II Regular Interest LT-2A2. After the related note rate
change date, the note rates will be equal to the least of (i) One-Year LIBOR
plus ______%, (ii) 11.00% per annum and (iii) the weighted average of the
Uncertificated REMIC II Pass-Through Rate on REMIC II Regular Interest LT-2A1
and REMIC II Regular Interest LT-2A2.
(3) On or prior to the related note rate change date, the note rates will be
equal to the lesser of (i) the fixed rate set forth above and (2) the weighted
average of the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular
Interest LT-3A1A, REMIC II Regular Interest LT-3A1B, REMIC II Regular Interest
LT-3A2A and REMIC II Regular Interest LT-3A2B. After the related note rate
change date, the note rates will be equal to the least of (i) One-Year LIBOR
plus _____%, (ii) 11.00% per annum and (iii) the weighted average of the
Uncertificated REMIC II Pass-Through Rate on REMIC II Regular Interest LT-3A1A,
REMIC II Regular Interest LT-3A1B, REMIC II Regular Interest LT-3A2A and REMIC
II Regular Interest LT-3A2B.
(4) On or prior to the related note rate change date, the note rates will be
equal to the lesser of (i) the fixed rate set forth above and (2) the weighted
average of the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular
Interest LT-4A1 and REMIC II Regular Interest LT-4A2. After the related note
rate change date, the note rates will be equal to the least of (i) One-Year
LIBOR plus _____%, (ii) 11.00% per annum and (iii) the weighted average of the
Uncertificated REMIC II Pass-Through Rate on REMIC II Regular Interest LT-4A1
and REMIC II Regular Interest LT-4A2.
(5) On or prior to the related note rate change date, the note rates will be
equal to the lesser of (i) the fixed rate set forth above and (2) the weighted
average of the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular
Interest LT-5A1 and REMIC II Regular Interest LT-5A2. After the related note
rate change date, the note rates will be equal to the least of (i) One-Year
LIBOR plus _____%, (ii) 11.00% per annum and (iii) the weighted average of the
Uncertificated REMIC II Pass-Through Rate on REMIC II Regular Interest LT-5A1
and REMIC II Regular Interest LT-5A2.
(6) The note rate will be equal to (1) the excess, if any, of (i) the
Uncertificated REMIC II Pass-through Rate on REMIC II Regular Interest LT-1A1
over (2) the note rate on the Class 1-A-1 Notes, (2) the excess, if any, of (i)
the Uncertificated REMIC II Pass-through Rate on REMIC II Regular Interest
LT-1A2 over (2) the note rate on the Class 1-A-2 Notes and (3) the excess, if
any, of (i) the Uncertificated REMIC II Pass-through Rate on REMIC II Regular
Interest LT-1SUB over (2) the note rate on the Class M-1 Notes.
(7) The note rate will be equal to (1) the excess, if any, of (i) the
Uncertificated REMIC II Pass-through Rate on REMIC II Regular Interest LT-2A1
over (2) the note rate on the Class 2-A-1 Notes, (2) the excess, if any, of (i)
the Uncertificated REMIC II Pass-through Rate on REMIC II Regular Interest
LT-2A2 over (2) the note rate on the Class 2-A-2 Notes and (3) the excess, if
any, of (i) the Uncertificated REMIC II Pass-through Rate on REMIC II Regular
Interest LT-2SUB over (2) the note rate on the Class M-1 Notes.
75
(8) The note rate will be equal to (1) the excess, if any, of (i) the
Uncertificated REMIC II Pass-through Rate on REMIC II Regular Interest LT-3A1A
over (2) the note rate on the Class 3-A-1-A Notes, (2) the excess, if any, of
(i) the Uncertificated REMIC II Pass-through Rate on REMIC II Regular Interest
LT-3A1B over (2) the note rate on the Class 3-A-1-B Notes, (3) the excess, if
any, of (i) the Uncertificated REMIC II Pass-through Rate on REMIC II Regular
Interest LT-3A2A over (2) the note rate on the Class 3-A-2-A Notes, (4) the
excess, if any, of (i) the Uncertificated REMIC II Pass-through Rate on REMIC II
Regular Interest LT-3A2B over (2) the note rate on the Class 3-A-2-B Notes and
(5) the excess, if any, of (i) the Uncertificated REMIC II Pass-through Rate on
REMIC II Regular Interest LT-3SUB over (2) the note rate on the Class M-1 Notes.
(9) The note rate will be equal to (1) the excess, if any, of (i) the
Uncertificated REMIC II Pass-through Rate on REMIC II Regular Interest LT-4A1
over (2) the note rate on the Class 4-A-1 Notes, (2) the excess, if any, of (i)
the Uncertificated REMIC II Pass-through Rate on REMIC II Regular Interest
LT-4A2 over (2) the note rate on the Class 4-A-2 Notes and (3) the excess, if
any, of (i) the Uncertificated REMIC II Pass-through Rate on REMIC II Regular
Interest LT-4SUB over (2) the note rate on the Class M-1 Notes.
(10) The note rate will be equal to (1) the excess, if any, of (i) the
Uncertificated REMIC II Pass-through Rate on REMIC II Regular Interest LT-5A1
over (2) the note rate on the Class 5-A-1 Notes, (2) the excess, if any, of (i)
the Uncertificated REMIC II Pass-through Rate on REMIC II Regular Interest
LT-5A2 over (2) the note rate on the Class 5-A-2 Notes and (3) the excess, if
any, of (i) the Uncertificated REMIC II Pass-through Rate on REMIC II Regular
Interest LT-5SUB over (2) the note rate on the Class M-1 Notes.
(11) On or prior to the related note rate change date, the note rates will be
equal to the lesser of (i) the fixed rate set forth above and (2) the weighted
average of the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular
Interest LT-1SUB, REMIC II Regular Interest LT-2SUB, REMIC II Regular Interest
LT-3SUB, REMIC II Regular Interest LT-4SUB and REMIC II Regular Interest
LT-5SUB, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC II Regular Interest. After the related note rate change date, the
note rates will be equal to the least of (i) One-Year LIBOR plus _____%, (ii)
____% per annum and (iii) ) the weighted average of the Uncertificated REMIC II
Pass-Through Rate on REMIC II Regular Interest LT-1SUB, REMIC II Regular
Interest LT-2SUB, REMIC II Regular Interest LT-3SUB, REMIC II Regular Interest
LT-4SUB and REMIC II Regular Interest LT-5SUB, weighted on the basis of the
Uncertificated Principal Balance of each such REMIC II Regular Interest.
(12) The Initial Note Balance shall equal the Note Principal Balance for the
month in which any REMIC Elections are made.
(13) The Class 1-IO Notes shall not have a Note Principal Balance, but shall
accrue interest on a Notional Amount equal to (1) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-1A1, (2) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-IA2 and (3) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-1SUB.
(14) The Class 2-IO Notes shall not have a Note Principal Balance, but shall
accrue interest on a Notional Amount equal to (1) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-2A1, (2) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-2A2 and (3) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-2SUB.
(15) The Class 3-IO Notes shall not have a Note Principal Balance, but shall
accrue interest on a Notional Amount equal to (1) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-3A1A, (2) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-3A1B, (3) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-3A2A, (4) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-3A2B and (5) the Uncertificated
Principal Balance of REMIC II Regular Interest LT-3SUB.
(16) The Class 4-IO Notes shall not have a Note Principal Balance, but shall
accrue interest on a Notional Amount equal to (1) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-4A1, (2) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-4A2 and (3) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-4SUB.
(17) The Class 5-IO Notes shall not have a Note Principal Balance, but shall
accrue interest on a Notional Amount equal to (1) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-5A1, (2) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-5A2 and (3) the Uncertificated Principal
Balance of REMIC II Regular Interest LT-5SUB.
(a) On each Payment Date, the following amounts, in the following order of
priority, shall be distributed by REMIC I to REMIC II on account of the REMIC I
Regular Interests or withdrawn from the Payment Account and distributed to the
holders of the Owner Trust Certificates (in respect of the Class R-I Interest),
as the case may be:
(1) Interest shall be payable to each REMIC I Regular Interest at the
related Uncertificated REMIC I Pass-Through Rate on each such REMIC I Regular
Interest's Uncertificated Principal Balance
(2) Principal shall be payable first, to REMIC I Regular Interest LT-1SUB,
REMIC I Regular Interest LT-2SUB, REMIC I Regular Interest LT-3SUB, REMIC I
Regular Interest LT-4SUB and REMIC I Regular Interest LT-5SUB, as applicable, so
that the Uncertificated
76
Principal Balance of each such REMIC I Regular Interest is equal to 1.00% of the
excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in
the related Loan Group over (y) the current Note Principal Balance of the
related Senior Notes (except that if any such excess is a larger number than in
the preceding distribution period, the least amount of principal shall be
distributed to such REMIC I Regular Interests such that the REMIC I Subordinated
Balance Ratio is maintained); and second, any remaining principal in each Loan
Group to REMIC I Regular Interest LT-1ZZZ, REMIC I Regular Interest LT-2ZZZ,
REMIC I Regular Interest LT-3ZZZ, REMIC I Regular Interest LT-4ZZZ and REMIC I
Regular Interest LT-5ZZZ, as applicable.
(3) Realized Losses from Mortgage Loans shall be applied after all
distributions have been made on each Distribution Date, first, to REMIC I
Regular Interest LT-1SUB, REMIC I Regular Interest LT-2SUB, REMIC I Regular
Interest LT-3SUB, REMIC I Regular Interest LT-4SUB and REMIC I Regular Interest
LT-5SUB, as applicable, so that the Uncertificated Principal Balance of each
such REMIC I Regular Interest is equal to 1.00% of the excess of (x) the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group over (y) the current Note Principal Balance of the related Senior Notes
(except that if any such excess is a larger number than in the preceding
distribution period, the least amount of Realized Losses shall be applied to
such REMIC I Regular Interests such that the REMIC I Subordinated Balance Ratio
is maintained); and second, any remaining Realized Losses shall be allocated to
REMIC I Regular Interest LT-1ZZZ, REMIC I Regular Interest LT-2ZZZ, REMIC I
Regular Interest LT-3ZZZ, REMIC I Regular Interest LT-4ZZZ and REMIC I Regular
Interest LT-5ZZZ.
(4) any remaining amount to the Holders of the Owner Trust Certificates
(in respect of the Class R-I Interest); and
(b) On each Payment Date, the following amounts, in the following order of
priority, shall be distributed by REMIC II to REMIC III on account of the REMIC
II Regular Interests or withdrawn from the Payment Account and distributed to
the holders of the Owner Trust Certificates (in respect of the Class R-II
Interest), as the case may be:
(1) Interest shall be payable to each REMIC II Regular Interest at the
related Uncertificated REMIC II Pass-Through Rate on each such REMIC II Regular
Interest's Uncertificated Principal Balance.
(2) Distributions of principal from the Loans shall be deemed to be made
to the REMIC II Regular Interests, in each case from the related Loan Group,
first, to REMIC II Regular Interest LT-1A1, REMIC II Regular Interest LT-1A2,
REMIC II Regular Interest LT-2A1, REMIC II Regular Interest LT-2A2, REMIC II
Regular Interest LT-3A1A, REMIC II Regular Interest LT-3A1B, REMIC II Regular
Interest LT-3A2A, REMIC II Regular Interest LT-3A2B, REMIC II Regular Interest
LT-4A1, REMIC II Regular Interest LT-4A2, REMIC II Regular Interest LT-5A1 and
REMIC II Regular Interest LT-5A2, in the same manner and priority as
distributions are made to the Corresponding Class, and second, any remaining
principal in each Loan Group to REMIC II Regular Interest LT-1SUB, REMIC II
Regular Interest LT-2SUB, REMIC II Regular Interest LT-3SUB, REMIC II Regular
Interest LT-4SUB, and REMIC II Regular Interest LT-5SUB, from the related Loan
Group.
77
(3) Realized Losses from the Mortgage Loans shall be applied after all
distributions have been made on each Distribution Date, first, to REMIC II
Regular Interest LT-1SUB, REMIC II Regular Interest LT-2SUB, REMIC II Regular
Interest LT-3SUB, REMIC II Regular Interest LT-4SUB, and REMIC II Regular
Interest LT-5SUB, as applicable, and second, any remaining Realized Losses from
each Loan Group shall be allocated REMIC II Regular Interest LT-1A1, REMIC II
Regular Interest LT-1A2, REMIC II Regular Interest LT-2A1, REMIC II Regular
Interest LT-2A2, REMIC II Regular Interest LT-3A1A, REMIC II Regular Interest
LT-3A1B, REMIC II Regular Interest LT-3A2A, REMIC II Regular Interest LT-3A2B,
REMIC II Regular Interest LT-4A1, REMIC II Regular Interest LT-4A2, REMIC II
Regular Interest LT-5A1 and REMIC II Regular Interest LT-5A2, as applicable, in
the same manner and priority as Realized Losses are allocated to the
Corresponding Class.
Notwithstanding the priorities and amounts of distribution of funds
pursuant to this Section 11.04, actual distributions of the Available
Distribution Amount shall be made only in accordance with Section 4.02.
Section 11.06 Notification of a TMP Trigger Event.
[to come]
78
ARTICLE XII
REMIC TERMINATION REQUIREMENTS
In the event the Majority Holder of the Owner Trust Certificates exercises
the Optional Redemption of the Notes pursuant to Section 8.07 hereunder and
REMIC Elections have been made pursuant to Article XI hereunder, the Trust shall
be terminated in accordance with the following additional requirements, unless
the Indenture Trustee has been supplied with an Opinion of Counsel, at the
expense of the Majority Holder of the Owner Trust Certificates, to the effect
that the failure of the Trust to comply with the requirements of this Section
12.01 will not (i) result in the imposition of taxes on "prohibited
transactions" of a REMIC, or (ii) cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that any Notes are outstanding:
(1) The Majority Holder of the Owner Trust Certificates shall establish a
90 day liquidation period and notify the Indenture Trustee thereof, which shall
in turn specify the first day of such period in a statement attached to the
Trust's final Tax Return pursuant to Treasury Regulation Section 1.860F 1. The
Majority Holder of the Owner Trust Certificates shall prepare or cause to be
prepared a plan of complete liquidation and shall otherwise satisfy all the
requirements of a qualified liquidation under Section 860F of the Code and any
regulations thereunder;
(2) During such 90 day liquidation period, and at or prior to the time of
making the final payment on the Notes, the Master Servicer as agent of the
Indenture Trustee shall sell all of the assets of the Trust for cash; and
(3) After making the final payment on the Notes, the Indenture Trustee
shall distribute or credit, or cause to be distributed or credited, to the
Holder of the Owner Trust Certificates all cash on hand (other than cash
retained to meet claims) related to such Certificates, and the Trust shall
terminate at that time.
By their acceptance of the Notes, the Holders thereof hereby authorize the
Majority Holder of the Owner Trust Certificates to specify the 90 day
liquidation period for the Trust, which authorization shall be binding upon all
successor Noteholders.
The Indenture Trustee as agent for each REMIC created hereunder ▇▇▇▇▇▇
agrees to adopt and sign such a plan of complete liquidation upon the written
request of the Majority Holder of the Owner Trust Certificates, and agrees to
take such other action in connection therewith as may be reasonably requested by
the Majority Holder of the Owner Trust Certificates.
79
IN WITNESS WHEREOF, the Issuing Entity and the Indenture Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
[ISSUING ENTITY], as Issuing Entity
By: [OWNER TRUSTEE], not in its individual
capacity, but solely as Owner Trustee
By: _______________________________________
Name:
Title:
[INDENTURE TRUSTEE], as Indenture Trustee
By: _______________________________________
Name:
Title:
STATE OF __________ )
) ss.:
COUNTY OF __________ )
On this ___ day of ___________, before me personally appeared
_____________ to me known, who being by me duly sworn, did depose and say, that
s/he is a(n) ______________ of the Indenture Trustee, one of the corporations
described in and which executed the above instrument; and that he signed his
name thereto by like order.
Notary Public
_____________________________________
NOTARY PUBLIC
[NOTARIAL SEAL]
STATE OF DELAWARE )
) ss.:
COUNTY OF __________ )
On this ____ day of ____________, before me personally appeared
________________ to me known, who being by me duly sworn, did depose and say,
that s/he is a(n) _______________________ of the Owner Trustee, one of the
entities described in and which executed the above instrument; and that she
signed her name thereto by like order.
Notary Public
_____________________________________
NOTARY PUBLIC
[NOTARIAL SEAL]
EXHIBIT A-1
Exhibit A-1
through A-3
A-1-1
EXHIBIT B
MORTGAGE LOAN SCHEDULE
B-1
EXHIBIT C
FORM OF SUBSEQUENT TRANSFER AGREEMENT
C-1
EXHIBIT D
FORM OF TRANSFEROR CERTIFICATE FOR PRIVATE CERTIFICATES
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
Re: Proposed Transfer of [Class __] Notes] [TRUST NAME]
Gentlemen:
This certification is being made by ____________________ (the
"Transferor") in connection with the proposed Transfer to _____________________
(the "Transferee") of the [Class [__] Notes] (the "Notes") issued pursuant to
the Indenture, dated _________, being referred to herein as the "Indenture")
between [ISSUING ENTITY], as issuing entity, and [INDENTURE TRUSTEE] as
indenture trustee (the "Indenture"). Initially capitalized terms used but not
defined herein have the meanings assigned to them in the Indenture. The
Transferor hereby certifies, represents and warrants to, and covenants with, the
Owner Trustee and the Indenture Trustee that:
Neither the Transferor nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Note, any interest in
any Note or any other similar security to any person in any manner, (b) has
solicited any offer to buy or to accept a pledge, disposition or other transfer
of any Note, any interest in any Note or any other similar security from any
person in any manner, (c) has otherwise approached or negotiated with respect to
any Note, any interest in any Note or any other similar security with any person
in any manner, (d) has made any general solicitation by means of general
advertising or in any other manner, or (e) has taken any other action, that (as
to any of (a) through (e) above) would constitute a distribution of the Notes
under the Securities Act of 1933 (the "Act"), that would render the disposition
of any Note a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The
Transferor will not act in any manner set forth in the foregoing sentence with
respect to any Note. The Transferor has not and will not sell or otherwise
transfer any of the Notes, except in compliance with the provisions of the
Indenture.
D-1
Date: ___________________________ __________________________________
Authorized Officer
__________________________________
Signature
__________________________________
Name
__________________________________
Title
D-2
EXHIBIT E
FORM OF RULE 144A INVESTMENT LETTER
Description of Rule 144A Securities, including numbers:
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer (the
"Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 1933 Act.
2. The Buyer warrants and represents to, and covenants with, the
Indenture Trustee pursuant to Section 4.03 of the Indenture (the "Indenture"),
dated as of ________, between [ISSUING ENTITY], as Issuing Entity, and
[INDENTURE TRUSTEE], as Indenture Trustee, as follows:
a. The Buyer understands that the Rule 144A Securities have not been
registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
E-1
c. The Buyer has been furnished with all information regarding the
Rule 144A Securities that it has requested from the Seller, the Indenture
Trustee, the Owner Trustee, the Master Servicer or the Servicer.
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security from, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security with,
any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action,
that would constitute a distribution of the Rule 144A Securities under the
1933 Act or that would render the disposition of the Rule 144A Securities
a violation of Section 5 of the 1933 Act or require registration pursuant
thereto, nor will it act, nor has it authorized or will it authorize any
person to act, in such manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the 1933 Act and has completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex
2. The Buyer is aware that the sale to it is being made in reliance on
Rule 144A. The Buyer is acquiring the Rule 144A Securities for its own
account or the accounts of other qualified institutional buyers,
understands that such Rule 144A Securities may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account
of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the 1933 Act.
3. The Buyer warrants and represents to, and covenants with, the
Seller, the Indenture Trustee, Owner Trustee, the Certificate Registrar, Master
Servicer, the Servicer and the Depositor that either (1) the Buyer is (A) not an
employee benefit plan (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), or a plan (within
the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
("Code")), which (in either case) is subject to ERISA or Section 4975 of the
Code (both a "Plan"), and (B) is not directly or indirectly purchasing the Rule
144A Securities on behalf of, as investment manager of, as named fiduciary of,
as trustee of, or with "plan assets" of a Plan, or (2) the Buyer understands
that registration of transfer of any Rule 144A Securities to any Plan, or to any
Person acting on behalf of any Plan, will not be made unless such Plan delivers
an opinion of its counsel, addressed and satisfactory to the Certificate
Registrar, the Owner Trustee, the Indenture Trustee, the Master Servicer, the
Servicer and the Depositor, to the effect that the purchase and holding of the
Rule 144A Securities by, on behalf of or with "plan assets" of any Plan is
permissible under applicable law, would not constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code, and would not subject the
Depositor, the Owner Trustee, the Indenture Trustee, the Certificate Registrar,
the Seller or the Master Servicer to any obligation or liability (including
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Agreement, which Opinion of Counsel shall not be
E-2
an expense of the Depositor, the Owner Trustee, the Indenture Trustee, the
Certificate Registrar, the Seller or the Master Servicer.
E-3
4. This document may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as of
the date set forth below.
_______________________________ ___________________________________________
Print Name of Seller Print Name of Buyer
By: ___________________________ By: ___________________________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No:____________________________ No: ___________________________________________
Date:__________________________ Date: _________________________________________
E-4
ANNEX 1 TO EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $_________(1) in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A) and (ii) the
Buyer satisfies the criteria in the category marked below.
_____ Corporation, etc. The Buyer is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code.
_____ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is supervised
by the State or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited net worth
of at least
_____ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has
an audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements.
_____ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
_____ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar official
or agency of a State or territory or the District of Columbia.
---------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
E-5
_____ State or Local Plan. The Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
_____ ERISA Plan. The Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
_____ Investment Adviser. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
_____ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
_____ Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
_____ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established
and maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, but is not a trust fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit Notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
E-6
[ ] [ ] WILL THE BUYER BE PURCHASING THE RULE 144A SECURITIES ONLY FOR
YES NO THE BUYER'S OWN ACCOUNT?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
________________________________________
Print Name of Buyer
___________________________________
By:
___________________________________
Name
Title
Date:
E-7
ANNEX 2 TO EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because Buyer is part of a Family of Investment
Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
_____ The Buyer owned $___________________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
_____ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) bank deposit Notes and certificates of deposit, (iii)
loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
5. The Buyer is familiar with Rule 144A and understands that each of the
parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
E-8
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
__________________________________________
Print Name of Buyer
By: ______________________________________
Name
Title
IF AN ADVISER:
__________________________________________
Print Name of Buyer
Date:_____________________________________
E-9
EXHIBIT F
FORM OF INVESTMENT LETTER
[NON-RULE 144A]
[DATE]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
Re: [TRUST NAME], Asset-Backed Notes, Series [_____], Class
[___] (the "Notes")
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Notes, we
certify that (a) we understand that the Notes are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Notes, (c) we have had
the opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Notes and all matters relating thereto or any
additional information deemed necessary to our decision to purchase the Notes,
(d) we are not an employee benefit plan that is subject to the Employee
Retirement Income Security Act of 1974, as amended, or a plan that is subject to
Section 4975 of the Internal Revenue Code of 1986, as amended, nor are we acting
on behalf of any such plan, (e) we are acquiring the Notes for investment for
our own account and not with a view to any distribution of such Notes (but
without prejudice to our right at all times to sell or otherwise dispose of the
Notes in accordance with clause (g) below), (f) we have not offered or sold any
Notes to, or solicited offers to buy any Notes from, any person, or otherwise
approached or negotiated with any person with respect thereto, or taken any
other action which would result in a violation of Section 5 of the Act, and (h)
we will not sell, transfer or otherwise dispose of any Notes unless (1) such
sale, transfer or other disposition is made pursuant to an effective
registration statement under the Act or is exempt from such registration
requirements, and if requested, we will at our expense provide an Opinion of
Counsel satisfactory to the addressees of this certificate that such sale,
transfer or other disposition may be made pursuant to an exemption from the Act,
(2) the purchaser or transferee of such Note has executed and delivered to you a
certificate to substantially the same effect as this certificate, and (3) the
purchaser or transferee has otherwise complied with any conditions for transfer
set forth in the Indenture.
F-1
Very truly yours,
[TRANSFEREE]
By: ________________________________
Authorized Officer
F-2
EXHIBIT G
FORM OF TRANSFEREE CERTIFICATE
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
Re: Proposed Transfer of Class [___] Notes, [TRUST NAME]
Gentlemen:
This certification is being made by _________ (the "Transferee") in
connection with the proposed transfer (the "Transfer") by _________ of a Class
[___] Note issued pursuant to the Indenture, dated as of ____________ (the
"Indenture"), among [ISSUING ENTITY], as issuing entity, and [INDENTURE
TRUSTEE], as indenture trustee (the "Indenture Trustee"). Initially capitalized
terms used but not defined herein have the meanings assigned to them in the
Indenture. The Transferee hereby certifies, represents and warrants to, and
covenants with, the Owner Trustee, the Note Registrar and the Indenture Trustee
that:
(a) The Transferee is a REIT or a QRS within the meaning of Section 856(a)
or Section 856(i) of the Code or an entity disregarded as an entity separate
from a REIT or a QRS.
(b) Following the Transfer, 100% of the Equity Securities will be owned by
a REIT, directly or indirectly through one or more QRSs of such REIT or one or
more entities disregarded as entities separate from such REIT or such QRS.
G-1
Date: ___________________________ __________________________________
Authorized Officer
__________________________________
Signature
__________________________________
Name
__________________________________
Title
G-2
APPENDIX A
DEFINITIONS
Accepted Master Servicing Practices: With respect to any Mortgage
Loan, those customary mortgage servicing practices of prudent mortgage servicing
institutions that master service mortgage loans of the same type and quality as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property is
located, to the extent applicable to the Indenture Trustee or the Master
Servicer.
Accrual Period: With respect to any Payment Date and the Notes, the
calendar month preceding the month in which such Payment Date occurs. All
calculations of interest on the Notes will be made on the basis of a 360-day
year consisting of twelve 30-day months.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage
Rate less the Expense Fee Rate.
Adjustment Date: As to each Mortgage Loan, each date on which the
related Mortgage Rate is subject to adjustment, as provided in the related
Mortgage Note.
Advance: The aggregate of the advances required to be made by the
Master Servicer with respect to any Payment Date pursuant to Section 4.01 of the
Sale and Servicing Agreement, the amount of any such advances being equal to the
aggregate of payments of principal and interest on the Mortgage Loans (net of
the Servicing Fees) on the Mortgage Loans that were due on the related Due Date
and not received as of the close of business on the related Determination Date;
provided, however, with respect to each REO Property that has not been
liquidated, that the net monthly rental income (if any) from such REO Property
deposited in the Collection Account for such Payment Date pursuant to Section
3.11 of the Sale and Servicing Agreement may be used to offset such advance for
the related REO Property.
Aggregate Subordinated Percentage: As to any Payment Date, the
fraction, expressed as a percentage, the numerator of which is equal to the
aggregate Note Principal Balance of the Subordinated Notes immediately prior to
such Payment Date and the denominator of which is the aggregate Stated Principal
Balance of all the Mortgage Loans as of the Due Date in the month preceding the
month of such Payment Date.
Amount Held for Future Payment: As to any Payment Date and Mortgage
Loans in a Loan Group, the aggregate amount held in the Collection Account at
the close of business on the related Determination Date on account of (i)
Principal Prepayments received after the related Prepayment Period and
Liquidation Proceeds and Subsequent Recoveries received in the month of such
Payment Date relating to that Loan Group and (ii) all Scheduled Payments due
after the related Due Date relating to that Loan Group.
Applicable Credit Support Percentage: As defined in Section 4.02(e).
1
Applicable Fraction: For any Loan Group, a fraction the numerator of
which is the excess of the aggregate Stated Principal Balance of the related
Mortgage Loans and any amounts related to such Loan Group in the Pre-Funding
Account over the aggregate Note Principal Balance of the related Senior Notes
and the denominator of which is the aggregate Note Principal Balance of the
Subordinated Notes.
Applied Realized Loss Amount: With respect to any Payment Date, the
sum of the Realized Losses with respect to the Mortgage Loans which are to be
applied in reduction of the Note Principal Balances of Notes pursuant to this
Indenture, which shall equal the amount, if any, by which, Note Principal
Balance of the Notes (after all payments of principal on such Payment Date)
exceeds the aggregate Stated Principal Balance of the Mortgage Loans and the
amount on deposit in the Pre-Funding Account (if any) for such Payment Date.
Appraised Value: The appraised value of the Mortgaged Property based
upon the appraisal made for the originator by an independent fee appraiser at
the time of the origination of the related Mortgage Loan, or the sales price of
the Mortgaged Property at the time of such origination, whichever is less, or
with respect to any Mortgage Loan originated in connection with a refinancing,
the appraised value of the Mortgaged Property based upon the appraisal made at
the time of such refinancing.
Assumed Interest Amount: With respect to any Payment Date, any Class
of Subordinated Notes and any Loan Group, one month's interest accrued during
the related Interest Accrual Period at the Note Rate on the related Subordinated
Portion immediately prior to that Payment Date.
Authorized Newspaper: A newspaper of general circulation in the
Borough of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
Available Funds: As to any Payment Date and each Loan Group, the sum
of (a) the aggregate amount held in the Collection Account at the close of
business on the related Determination Date in respect of the related Mortgage
Loans pursuant to Section 3.05(b) net of the related Amount Held for Future
Payment and net of amounts permitted to be withdrawn from the Collection Account
pursuant to clauses (i) - (ix), inclusive, of Section 3.08(a) in respect of the
Mortgage Loans in that Loan Group and amounts permitted to be withdrawn from the
Payment Account pursuant to clauses (i) - (iv), inclusive, of Section 3.08(b) in
respect of the Mortgage Loans in that Loan Group, (b) the amount of the related
Advance, (c) in connection with Defective Mortgage Loans in such Loan Group, as
applicable, the aggregate of the Purchase Prices and Substitution Adjustment
Amounts deposited on the related Payment Account Deposit Date, (d) the Transfer
Payment Received for such Loan Group less the Transfer Payment Made for such
Loan Group, (e) the related Seller Shortfall Interest Requirement, if any, and
(f) on the first Payment Date after the termination of the Funding Period, any
related amounts remaining in the Pre-Funding Account (net of investment income);
provided, however, that on the Senior Termination Date, Available Funds with
respect to the Loan Group
2
relating to the remaining Senior Note Group shall include the Available Funds
from the other Loan Groups after all distributions are made on the Senior Notes
of the other Senior Note Groups and on any Payment Date thereafter, Available
Funds shall be calculated based on all the Mortgage Loans in the Mortgage Pool,
as opposed to the Mortgage Loans in the related Loan Group.
Available Funds Rate: With respect to the Senior Notes and for each
Loan Group and any Payment Date means a per annum rate equal the product of (a)
a fraction, expressed as a percentage, the numerator of which is the amount of
interest which accrued on the related Mortgage Loans in the prior calendar month
for such Payment Date minus the Expense Fee and the denominator of which is the
sum of (i) the aggregate Stated Principal Balance of the related Mortgage Loans
as of the beginning of the related Due Period and (ii) any amount on deposit in
the Pre-Funding Account relating to such Loan Group and (b) 12. With respect to
the Subordinated Notes (other than the Class IO Notes) on any Payment Date means
the per annum rate equal to the weighted average of he Available Funds Rate for
each Loan Group with respect to the Senior Notes (as described above) weighted
on the basis of the results of subtracting from the aggregate Stated Principal
Balance of the Mortgage Loans each Loan Group, the aggregate Note Principal
Balance of the related Senior Notes, respectively.
Bankruptcy Code: Title 11 of the United States Code.
Basic Documents: The Trust Agreement, the Certificate of Trust, the
Indenture, the Sale and Servicing Agreement and any Subsequent Transfer
Agreement and the other documents and certificates delivered in connection with
any of the above.
Blanket Mortgage: The mortgage or mortgages encumbering the
Cooperative Property.
Book-Entry Notes: Any of the Notes that shall be registered in the
name of the Depository or its nominee, the ownership of which is reflected on
the books of the Depository or on the books of a person maintaining an account
with the Depository (directly, as a "Depository Participant", or indirectly, as
an indirect participant in accordance with the rules of the Depository and as
described in Section 4.07 the Indenture). As of the Closing Date, each Class of
Offered Notes constitutes a Class of Book-Entry Notes.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
a day on which banking institutions in the State of California, the State of New
York or the city in which the Corporate Trust Office of the Indenture Trustee is
located are authorized or obligated by law or executive order to be closed.
Certificate of Trust: The Certificate of Trust filed for the Trust
pursuant to Section 3810(a) of the Statutory Trust Statute.
Certificateholder or Holder: The Person in whose name a Certificate
is registered in the Certificate Register. Owners of Certificates that have been
pledged in
3
good faith may be regarded as Holders if the pledgee establishes to the
satisfaction of the Indenture Trustee or the Owner Trustee, as the case may be,
the pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Issuing Entity, any other obligor upon the Certificates or
any Affiliate of any of the foregoing Persons.
Certificates, Owner Trust Certificates or Trust Certificates: The
[TRUST NAME], Owner Trust Certificates, Series [______], evidencing the
beneficial ownership interest in the Trust and executed by the Owner Trustee in
substantially the form set forth in Exhibit A to the Trust Agreement.
Class: All Notes bearing the same Class designation as set forth in
Section 2.02 of this Indenture.
Class A Note: Any Note designated as a "Class 1--1 Note", "Class
1-A-2 Note", "Class 2-A-1 Note", "Class 2-A-2 Note", "Class 3-A-1-A Note",
"Class 3-A-1-B Note", "Class 3-A-2-A Note", "Class 3-A-2-B Note", "Class 4-A-1
Note", "Class 4-A-2 Note" or "Class 5-A-1 Note", "Class 5-A-2 Note" on the face
thereof, in the form of Exhibit A-1 hereto, representing the right to payments
as set forth herein.
Class 1-A Notes: The Class 1-A-1 Notes and Class 1-A-2 Notes.
Class 2-A Notes: The Class 2-A-1 Notes and Class 2-A-2 Notes.
Class 3-A Notes: The Class 3-A-1-A, Class 3-A-1-B, Class 3-A-2-A and
Class 3-A-2-B Notes.
Class 4-A Notes: The Class 4-A-1 Notes and Class 4-A-2 Notes.
Class 5-A Notes: The Class 4-A-1 Notes and Class 5-A-2 Notes.
Class B Note: Any Note designated as a "Class B Note" on the face
thereof, in the form of Exhibit A-3 hereto, representing the right to payments
as set forth herein.
Class Interest Shortfall: As to any Payment Date and Class, the
amount by which the amount described in clause (i) of the definition of Class
Optimal Interest Distribution Amount for such Class exceeds the amount of
interest actually distributed on such Class on such Payment Date pursuant to
such clause (i).
Class IO Notes: The Class 1-IO, Class 2-IO, Class 3-IO, Class 4-IO
and Class 5-IO Notes.
Class M Notes: The Class M-1 Notes and Class M-2 Notes.
Class M-1 Note: Any Note designated as a "Class M-1 Note" on the
face thereof, in the form of Exhibit A-2 hereto, representing the right to
payments as set forth herein.
4
Class M-2 Note: Any Note designated as a "Class M-2 Note" on the
face thereof, in the form of Exhibit A-2 hereto, representing the right to
payments as set forth herein.
Class Optimal Interest Distribution Amount: With respect to any
Payment Date and Class, the sum of (i) one month's interest accrued during the
related Interest Accrual Period at the Note Rate for such Class on the related
Note Principal Balance or Notional Amount as of the last day of the related
Interest Accrual Period, subject to reduction as provided in Section 4.02(d)and
(ii) any Class Unpaid Interest Amounts for such Class and, in the case of the
Class IO Notes, less (c) any Realized Loss Excess Coverage Amount for such Class
for such Payment Date.
Class Subordination Percentage: With respect to any Payment Date and
each Class of Subordinated Notes (other than the Class IO Notes), the quotient
(expressed as a percentage) of (a) the Note Principal Balance of such Class of
Notes immediately prior to such Payment Date divided by (b) the aggregate of the
Note Principal Balances of all Classes of Notes immediately prior to such
Payment Date.
Class Unpaid Interest Amounts: As to any Payment Date and Class of
Notes, the amount by which the aggregate Class Interest Shortfalls for such
Class on prior Payment Dates exceeds the amount distributed on such Class on
prior Payment Dates pursuant to clause (ii) of the definition of Class Optimal
Interest Distribution Amount.
Closing Date: ____________.
Code: The Internal Revenue Code of 1986, as amended.
Collection Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) of the
Servicing Agreement, in the name of the Master Servicer for the benefit of the
Indenture Trustee on behalf of the Noteholders and designated "[MASTER SERVICER]
in trust for registered holders of [TRUST NAME]". Funds in the Collection
Account shall be held in trust for the Noteholders for the uses and purposes set
forth in this Agreement.
Combined Loan-to-Value Ratio: The fraction, expressed as a
percentage, the numerator of which is the sum of (x) the principal balance of
the related Mortgage Loan at origination and (y) the outstanding principal
balance at the date of determination of the Mortgage Loan of any senior mortgage
loan, and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Compensating Interest: With respect to any Mortgage Loan, an amount
to be applied to the interest portion of a Prepayment Interest Shortfall on such
Mortgage Loan pursuant to Section 4.02 of the Sale and Servicing Agreement which
amount in the aggregate in any month shall not exceed one half of the Servicing
Fee.
5
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
Coop Shares: Shares issued by a Cooperative Corporation.
Cooperative Loan: Any Mortgage Loan secured by Coop Shares and a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by
the Cooperative Corporation, including the allocation of individual dwelling
units to the holders of the Coop Shares of the Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Corporate Trust Office: With respect to the Indenture Trustee, the
designated office of the Indenture Trustee in the State of _______ where at any
particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at ___________, telephone: ________, facsimile: _________
and with respect to the Owner Trustee, the designated office of the Owner
Trustee in the State of Delaware where at any particular time its corporate
trust business with respect to the Basic Documents shall be administered, which
office at the date of the execution of this Agreement is located at:
________________________.
Cut-off Date: In the case of any Initial Mortgage Loan, the later of
(x) _________ and (y) the date of origination of such Mortgage Loan (the
"Initial Cut-off Date"), and in the case of any Subsequent Mortgage Loan, the
later of (x) the first day of the month of the related Subsequent Transfer Date
and (y) the date of origination of such Subsequent Mortgage Loan (the related
"Subsequent Cut-off Date"). When used with respect to any Mortgage Loans "the
Cut-off Date" shall mean the related Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all payments of principal due on or prior to the Cut-off Date,
whether or not received, and all Principal Prepayments received on or prior to
the Cut-off Date, without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan that became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any other reduction that results in a permanent forgiveness of
principal.
6
Defective Mortgage Loan: Any Mortgage Loan that is required to be
repurchased pursuant to Section 2.02 or 2.03 of the Sale and Servicing
Agreement.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.
Definitive Notes: As defined in Section 4.09 of this Indenture.
Delay Delivery Mortgage Loans: The Mortgage Loans identified on the
schedule of Mortgage Loans set forth on Exhibit A-2 to the Sale and Servicing
Agreement for which certain of the related Mortgage Note or lost note affidavit
is not delivered to the Indenture Trustee on or prior to the Closing Date. The
Depositor shall deliver (or cause delivery of) the Mortgage Notes to the
Indenture Trustee: (A) with respect to at least ___% of the Mortgage Loans, not
later than the Closing Date, (B) with respect to at least an additional ___% of
the Mortgage Loans, not later than 20 days after the Closing Date, and (C) with
respect to the remaining Mortgage Loans, not later than thirty days after the
Closing Date. To the extent that the Seller shall be in possession of any
Mortgage Note with respect to any Delay Delivery Loan, until delivery of such
Mortgage Note to the Indenture Trustee as provided in Section 2.01 of the Sale
and Servicing Agreement, the Seller shall hold such Mortgage Notes as agent and
in trust for the Indenture Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by
a Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is not made pursuant to the terms of such Mortgage Loan by the close of
business on the day such payment is scheduled to be due. A Mortgage Loan is "30
days delinquent" if such payment has not been received by the close of business
on the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Note, the amount set forth on the
face thereof as the "Initial Note Balance of this Note" or the "Initial Notional
Amount of this Note" or, if neither of the foregoing, the Percentage Interest
appearing on the face thereof.
Depositor: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., a Delaware
corporation, or any successor in interest.
7
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Notes. The Depository shall at all times be
a "clearing corporation" as defined in Section 8-102(a)(5) of the Uniform
Commercial Code of the State of New York.
Depository Participant: A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: As to any Payment Date, the 15th day of each
month or, if such 15th day is not a Business Day, the preceding Business Day;
provided, however, that if such 15th day or such Business Day, whichever is
applicable, is less than two Business Days prior to the related Payment Date,
the Determination Date shall be the first Business Day that is two Business Days
preceding such Payment Date.
Due Date: With respect to any Mortgage Loan and Due Period, the due
date for scheduled payments of interest and/or principal on that Mortgage Loan
occurring in such Due Period as provided in the related Mortgage Note.
Due Period: With respect to any Payment Date, the period beginning
on the second day of the calendar month preceding the month in which such
Payment Date occurs and ending on the first day of the calendar month in which
such Payment Date occurs
Eligible Account: Any of (i) an account or accounts maintained with
a federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company) are rated by each Rating Agency in one of its two highest
long-term and its highest short-term rating respectively, at the time any
amounts are held on deposit therein, or (ii) an account or accounts in a
depository institution or trust company in which such accounts are insured by
the FDIC (to the limits established by the FDIC) and the uninsured deposits in
which accounts are otherwise secured such that, as evidenced by an Opinion of
Counsel delivered to the Indenture Trustee and to each Rating Agency, the
Noteholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution or
trust company in which such account is maintained, or (iii) a trust account or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company having capital and surplus of
not less than $50,000,000, acting in its fiduciary capacity or (iv) any other
account acceptable to the Rating Agencies. Eligible Accounts may bear interest,
and may include, if otherwise qualified under this definition, accounts
maintained with the Indenture Trustee.
8
Equity Securities: The Owner Trust Certificates, Class IO, Class M-2
and Class B Notes.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default: With respect to the Indenture, 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):
(i) a failure by the Issuing Entity to pay interest and principal on
any Class of Offered Notes or the Principal Distribution Amount with
respect to a Payment Date on such Payment Date; or
(ii) the failure by the Issuing Entity on the final Payment Date to
(i) reduce the Note Principal Balance of any of the Offered Notes to zero
(ii) to pay the interest due to each Class of Offered Notes; or
(iii) there occurs a default in the observance or performance of any
covenant or agreement of the Issuing Entity made in the Indenture, or any
representation or warranty of the Issuing Entity made in the Indenture or
in any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material respect
as of the time when the same shall have been made, and such default shall
continue or not be cured, or the circumstance or condition in respect of
which such representation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of 30 days after there shall
have been given, by registered or certified mail, to the Issuing Entity by
the Indenture Trustee, the Holders of at least 25% of the aggregate Note
Principal Balance of the Outstanding Offered Notes, a written notice
specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a notice of
default hereunder; or
(iv) there occurs the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the Issuing Entity
or any substantial part of the Trust Estate in an involuntary case under
any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuing Entity or for any substantial part of the Trust Estate, or
ordering the winding-up or liquidation of the Issuing Entity's affairs,
and such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or
(v) there occurs the commencement by the Issuing Entity of a
voluntary case under any applicable federal or state bankruptcy,
insolvency or
9
other similar law now or hereafter in effect, or the consent by the
Issuing Entity to the entry of an order for relief in an involuntary case
under any such law, or the consent by the Issuing Entity to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuing Entity
or for any substantial part of the assets of the Trust Estate, or the
making by the Issuing Entity of any general assignment for the benefit of
creditors, or the failure by the Issuing Entity generally to pay its debts
as such debts become due, or the taking of any action by the Issuing
Entity in furtherance of any of the foregoing.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the sum of any Liquidation Proceeds of such Mortgage
Loan received in the calendar month in which such Mortgage Loan became a
Liquidated Mortgage Loan plus any Subsequent Recoveries received with respect to
such Mortgage Loan, net of any amounts previously reimbursed to the Master
Servicer as Nonrecoverable Advance(s) with respect to such Mortgage Loan
pursuant to Section 3.08(a)(iv) of the Sale and Servicing Agreement, exceeds (i)
the unpaid principal balance of such Liquidated Mortgage Loan as of the Due Date
in the month in which such Mortgage Loan became a Liquidated Mortgage Loan plus
(ii) accrued interest at the Mortgage Rate from the Due Date as to which
interest was last paid or advanced (and not reimbursed) to Noteholders up to the
Due Date applicable to the Payment Date immediately following the calendar month
during which such liquidation occurred.
Expense Fee Rate: The sum of (i) the Master Servicing Fee Rate, (ii)
the Lender-Paid PMI Fee Rate, if applicable, and (iii) the Indenture Trustee Fee
Rate.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Certification: The final certification delivered by the
Indenture Trustee pursuant to Section 2.02 of the Sale and Servicing Agreement
in the form attached thereto as Exhibit B-3.
Foreclosure Restricted Loan: Any Mortgage Loan that is contractually
more than 89 days delinquent as of the REMIC Closing Date which will be
identified on Schedule [___] hereto.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Funding Period: The period from and after the Closing Date to and
including __________.
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▇▇▇▇▇: Pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a security interest
in and right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
Gross Margin: The percentage set forth in the related Mortgage Note
for the Mortgage Loans to be added to the Index for use in determining the
Mortgage Rate on each Adjustment Date, and which is set forth in the Mortgage
Loan Schedule for the Mortgage Loans.
Group 1 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 1 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 1 Senior Notes: Class 1-A-1 Notes and Class 1-A-2 Notes.
Group 2 Mortgage Loans: The group of Mortgage Loans identified
in the related Mortgage Loan Schedule as "Group 2 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 2 Senior Notes: Class 2-A-1 Notes and Class 2-A-2 Notes.
Group 3 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 3 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 3 Senior Notes: Class 3-A-1-A, Class 3-A-1-B, Class 3-A-2-A
and Class 3-A-2-B Notes.
Group 4 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 4 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 4 Senior Notes: Class 4-A-1 Notes and Class 4-A-2 Notes.
Group 5 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 5 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 5 Senior Notes: Class 5-A-1 Notes and Class 5-A-2 Notes.
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Indenture: The indenture, dated as of ____________, between the
Issuing Entity and the Indenture Trustee, relating to the [TRUST NAME] Notes.
Indenture Trustee: [INDENTURE TRUSTEE], not in its individual
capacity, but solely in its capacity as trustee for the benefit of the
Noteholders under this Agreement, and any successor thereto, and any corporation
or national banking association resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee as
may from time to time be serving as successor trustee hereunder.
Indenture Trustee Fee: As to any Payment Date, an amount equal to
one-twelfth of the Indenture Trustee Fee Rate multiplied by the Pool Stated
Principal Balance with respect to such Payment Date.
Indenture Trustee Fee Rate: With respect to each Mortgage Loan, the
per annum rate agreed upon in writing on or prior to the Closing Date by the
Indenture Trustee and the Depositor, which is ____% per annum.
Index: As to any Mortgage Loan on any Adjustment Date related
thereto, the index for the adjustment of the Mortgage Rate set forth as such in
the related Mortgage Note.
Initial Adjustment Date: As to any Mortgage Loan, the first
Adjustment Date following the origination of such Mortgage Loan.
Initial Certification: The initial certification delivered by the
Indenture Trustee to Section 2.02 of the Sale and Servicing Agreement in the
form attached thereto as Exhibit B-1.
Initial Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid principal balance thereof as of the close of business on the Cut-off Date
after application of all payments of principal due on or prior to the Cut-off
Date, whether or not received, and all Principal Prepayments received on or
prior to the Cut-off Date, without giving effect to any installments of
principal received in respect of Due Dates after the Cut-off Date.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trust on the
Closing Date pursuant to the Mortgage Loan Purchase Agreement as identified on
the Mortgage Loan Schedule delivered to the Indenture Trustee on the Closing
Date.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
in effect prior to the Initial Adjustment Date.
Initial Note Principal Balance: With respect to any Note, the Note
Principal Balance of such Note or any predecessor Note on the Closing Date.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Estate, any insurance policy, including all riders and endorsements
thereto in effect
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with respect to such Mortgage Loan, including any replacement policy, any
lender-paid mortgage insurance policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Master Servicer, the Servicer or the trustee under the deed of
trust and are not applied to the restoration of the related Mortgaged Property
or released to the Mortgagor in accordance with the procedures that the Master
Servicer or the Servicer would follow in servicing mortgage loans held for its
own account, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Interest Determination Date: Beginning on the initial Note Rate
Change Date, the second LIBOR Business Day preceding the commencement of the
related Accrual Period for that Payment Date for the Notes (other than the Class
IO Notes) and each anniversary thereafter.
Interim Certification: The interim certification delivered by the
Indenture Trustee pursuant to Section 2.02 of the Sale and Servicing Agreement
in the form attached thereto as Exhibit B-2.
Issuing Entity Request: A written order or request signed in the
name of the Issuing Entity by any one of its Authorized Officers and delivered
to the Indenture Trustee.
Issuing Entity: [ISSUING ENTITY], a Delaware statutory trust, or its
successor in interest.
Lender-Paid PMI Fee: The fee paid in connection with any lender-paid
primary mortgage insurance policy paid to any primary mortgage insurance
provider for any Mortgage Loan.
Lender-Paid PMI Fee Rate: The weighted average Lender-Paid PMI Fee
for those Mortgage Loans with lender paid primary mortgage insurance is
approximately ___% per annum.
Last Scheduled Payment Date: The Payment Date in _________.
LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
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Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan (including any REO Property) that was liquidated in the calendar
month preceding the month of such Distribution Date and as to which the Master
Servicer has determined (in accordance with this Agreement) that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan, including the final disposition of an REO Property.
Liquidated Mortgage Loan: With respect to any Payment Date, a
defaulted Mortgage Loan (including any REO Property) that was liquidated in the
calendar month preceding the month of such Payment Date and as to which the
Master Servicer has determined (in accordance with this Agreement) that it has
received all amounts it expects to receive in connection with the liquidation of
such Mortgage Loan, including the final disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property, less the sum of related unreimbursed Master Servicing Fees, Servicing
Advances and Advances.
Loan Group: Any of Loan Group 1, Loan Group 2, Loan Group 3, Loan
Group 4 or Loan Group 5, as applicable.
Loan Group 1: All Mortgage Loans identified as Loan Group 1 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group 2: All Mortgage Loans identified as Loan Group 2 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group 3: All Mortgage Loans identified as Loan Group 3 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group 4: All Mortgage Loans identified as Loan Group 4 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group 5: All Mortgage Loans identified as Loan Group 5 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group Characteristics: The characteristics for each Loan Group
identified under the caption "The Mortgage Pool" in the Prospectus Supplement.
Loan Number and Borrower Identification Mortgage Loan Schedule: With
respect to any Subsequent Transfer Date, the Loan Number and Borrower
Identification Mortgage Loan Schedule delivered in connection with such
Subsequent Transfer Date pursuant to Section 2.05(d) of this Indenture. Each
Loan Number and Borrower Identification Mortgage Loan Schedule shall contain the
information specified
14
in the definition of "Mortgage Loan Schedule" with respect to the Subsequent
Mortgage Loans conveyed on such Subsequent Transfer Date, and each Loan Number
and Borrower Identification Mortgage Loan Schedule shall be deemed to be
included in the Mortgage Loan Schedule.
Loan-to-Value Ratio: For any first lien Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the principal balance of
the related Mortgage Loan at origination and the denominator of which is the
Appraised Value of the related Mortgaged Property.
Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Maintenance: With respect to any Cooperative Unit, the rent paid by
the Mortgagor to the Cooperative Corporation pursuant to the Proprietary Lease.
Majority Holder: The Holders of Notes evidencing at least 51% of the
Note Principal Balance of the Offered Notes.
Master Servicer: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors and assigns, in its capacity as master
servicer hereunder.
Master Servicer Advance Date: As to any Payment Date, 1:00 p.m.
Pacific time on the Business Day immediately preceding such Payment Date.
Master Servicing Fee: As to each Mortgage Loan and any Payment Date,
an amount equal to one month's interest at the Master Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan or, in the event of any payment
of interest that accompanies a Principal Prepayment in full made by the
Mortgagor, interest at the Master Servicing Fee Rate on the Stated Principal
Balance of such Mortgage Loan for the period covered by such payment of
interest.
Master Servicing Fee Rate: With respect to each Mortgage Loan and
Due Date, the amount set forth in the Mortgage Loan Schedule for such Due Date.
Maximum Mortgage Rate: With respect to each Mortgage Loan, the
Maximum Note Rate of interest set forth as such in the related Mortgage Note.
Maximum Note Rate: With respect to any Payment Date and the Notes
(other than the Class IO Notes), ____% per annum.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
15
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Mortgage Rate: With respect to each Mortgage Loan, the
minimum rate of interest set forth as such in the related Mortgage Note.
MOM Loan: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) except for any Mortgage Loans with Arrearages, without giving
effect to any extension granted or agreed to by the Master Servicer pursuant to
Section 3.05 of the Sale and Servicing Agreement; and (c) on the assumption that
all other amounts, if any, due under such Mortgage Loan are paid when due.
Monthly Statement: The statement delivered to the Noteholders
pursuant to Section 7.05 of the Indenture.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on or first priority ownership interest, or creating a second lien on
or second priority ownership interest, as applicable, in an estate in fee simple
in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.1(b) of
the Mortgage Loan Purchase Agreement pertaining to a particular Mortgage Loan
and any additional documents delivered to the Indenture Trustee to be added to
the Mortgage File pursuant to the Sale and Servicing Agreement and this
Indenture.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the Master Servicer to reflect the deletion of Deleted Mortgage
Loans and the addition of (x) Replacement Mortgage Loans pursuant to the
provisions of the Sale and Servicing Agreement and (y) Subsequent Mortgage Loans
pursuant to the provisions of this Indenture and any Subsequent Transfer
Agreement)) transferred to the Indenture Trustee as part of the Trust Estate and
from time to time subject to the Indenture, attached as Exhibit A-1 to the Sale
and Servicing Agreement, setting forth in the following information with respect
to each Mortgage Loan:
16
(i) the loan number;
(ii) the Appraised Value;
(iii) the Initial Mortgage Rate;
(iv) the maturity date;
(v) the original principal balance;
(vi) the Cut-off Date Principal Balance;
(vii) the first payment date of the Mortgage Loan;
(viii) the Scheduled Payment in effect as of the Cut-off Date;
(ix) the Loan-to-Value Ratio or Combined Loan-to-Value Ratio, as
applicable, at origination;
(x) a code indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(xi) a code indicating whether the residential dwelling is either
(a) a detached single family dwelling, (b) a condominium unit,
(c) a two- to four-unit residential property, or (d) a
Cooperative Unit;
(xii) whether such Mortgage Loan is a Balloon Loan;
(xiii) whether such Mortgage Loan is a Negative Amortization Loan;
(xiv) a code indicating whether such Mortgage Loan is a Performing,
Re-Performing or Sub-Performing Loan; and
(xv) with respect to each Mortgage Loan:
A) the frequency of each Adjustment Date;
B) the next Adjustment Date;
C) the Maximum Mortgage Rate
D) the Minimum Mortgage Rate;
E) the Mortgage Rate as of the Cut-off Date;
F) the related Periodic Rate Cap;
G) the Gross Margin; and
17
(xvi) the purpose of the Mortgage Loan.
Such schedule shall also set forth the total of the amounts described
under (vi) above for all of the Mortgage Loans in the aggregate.
Mortgage Loans: Such of the Group 1, Group 2, Group 3, Group 4 and
Group 5 Mortgage Loans transferred and assigned to the Indenture Trustee
pursuant to the provisions hereof and any Subsequent Transfer Agreement as from
time to time are held as a part of the Trust Fund (including any REO Property),
the mortgage loans so held being identified in the Mortgage Loan Schedule,
notwithstanding foreclosure or other acquisition of title of the related
Mortgaged Property. Any Mortgage Loan subject to repurchase by the Seller or
Master Servicer as provided in Basic Documents, shall continue to be a Mortgage
Loan hereunder until the Purchase Price with respect thereto has been paid to
the Trust.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time.
Mortgagor: The obligors on a Mortgage Note.
Net Interest Shortfalls: The sum of Net Prepayment Interest
Shortfalls, relief Act Reductions and Debt Service Reductions.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the
per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
Net Prepayment Interest Shortfalls: As to any Payment Date and Loan
Group, the amount by which the aggregate of the Prepayment Interest Shortfalls
for such Loan Group during the related Prepayment Period exceeds an amount equal
to the sum of (a) the Compensating Interest for such Loan Group and Payment Date
and (b) the excess, if any, of the Compensating Interest for each other Loan
Group for that Payment Date over the Prepayment Interest Shortfalls experienced
by the Mortgage Loans in each such other Loan Group during such Prepayment
Period.
Net Rate Carryover: For any of the Senior Notes and Subordinate
Notes (other than the Class IO Notes) on any Payment Date is the excess of: (1)
the amount of interest that such Class would have accrued for such Payment Date
had the Note Rate for that Class not been calculated based on the lesser of the
related Maximum Note Rate or the related Available Funds Rate, as applicable,
over (2) the amount of interest accrued on such Class for such Payment Date
based on the lesser of the related Maximum Note
18
Rate or the related Available Funds Rate, as applicable, plus, on any Payment
Date, the unpaid portion of any such excess from prior Payment Dates (and
interest accrued thereon at the then applicable Note Rate, without giving effect
to the related Maximum Note Rate or the related Available Funds Rate, as
applicable).
Net Rate Carryover Amount: With respect to any Class of Notes (other
than the Class IO Notes) and any Payment Date, the sum of (A) the aggregate of
any Net Rate Carryover on such Class of Notes and (B) the Net Rate Carryover
Amount for all previous Payment Dates not previously paid pursuant to Section
4.02 of this Indenture, together with interest thereon at the applicable Note
Rate, without giving effect to the Available Funds Rate, up to but not exceeding
the Maximum Note Rate.
Non-Book-Entry Note: Any Note other than a Book-Entry Note.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not be ultimately recoverable by the Master Servicer
from the related Mortgagor, related Liquidation Proceeds or otherwise.
Non-United States Person : A Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, an estate whose income from sources without
the United States is includible in gross income for United States federal income
tax purposes regardless of its connection with the conduct of a trade or
business within the United States, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have authority to control all
substantial decisions of the trustor.
Note: Any one of the notes of any Class executed and authenticated
by the Indenture Trustee in substantially the forms attached hereto as Exhibits
A-1 through A-3.
Noteholder or Holder: The person in whose name a Note is registered
in the Note Register (initially, Cede & Co., as nominee for the Depository, in
the case of any Class of Offered Notes, except that solely for the purpose of
giving any consent pursuant to this Agreement, any Note registered in the name
of the Depositor or any affiliate of the Depositor shall be deemed not to be
Outstanding and the Note Balance evidenced thereby shall not be taken into
account in determining whether the requisite amount of Note Balance necessary to
effect such consent has been obtained; provided that if any such Person
(including the Depositor) owns 100% of the Note Balance evidenced by a Class of
Notes, such Notes shall be deemed to be Outstanding for purposes of any
provision hereof (other than the second sentence of Section 8.01 of the Sale and
Servicing Agreement) that requires the consent of the Holders of Notes of a
particular Class as a condition to the taking of any action hereunder. The
Indenture Trustee is entitled to rely conclusively on a certification of the
Depositor or any affiliate of the Depositor in determining which Notes are
registered in the name of an affiliate of the Depositor.
19
Note Owner: With respect to a Book-Entry Note, the person that is
the beneficial owner of such Book-Entry Note.
Note Principal Balance: As to any Note and as of any Payment Date,
the Initial Note Principal Balance of such Note (A) less the sum of (i) all
amounts distributed with respect to such Note in reduction of the Note Principal
Balance thereof on previous Payment Dates pursuant to Section 4.02 of this
Indenture and (ii) any Applied Realized Loss Amounts allocated to such Note on
previous Payment Dates pursuant to Section 4.02 of this Indenture and (B)
increased by any Subsequent Recoveries allocated to such Class of Notes pursuant
to Section 4.02 of this Indenture on such Payment Date.
Note Rate: With respect to any Payment Date and the Class 1-A-1,
Class 1-A-2, Class 2-A-1, Class 2-A-2, Class 3-A-1-A, Class 3-A-1-B, Class
3-A-2-A, Class 3-A-2-B, Class 4-A-1, Class 4-A-2, Class 5-A-1 and Class 5-A-2
Notes, on or prior to the related Note Rate Change Date, will be the lesser of
(i) ____%, ____%, ____%, ____%, ____%, ____%, ____%, _____%, ____%, ____%, ____%
and ____% per annum, respectively, and (ii) the related Available Funds Rate;
and after the related Note Rate Change Date, will be the least of (i) One-Year
LIBOR plus ____%, (ii) the related Maximum Note Rate and (iii) the related
Available Funds Rate. With respect to any Payment Date and each Class of Class M
Notes and Class B Notes, on or prior to the related Note Rate Change Date, will
be the lesser of (i) ____% per annum and (ii) the related Available Funds Rate;
and after the related Note Rate Change Date, will be the least of (i) One-Year
LIBOR plus ____%, (ii) the related Maximum Note Rate and (iii) the related
Available Funds Rate. With respect to each Class of Class IO Notes, a variable
per annum rate equal to the product of (i) 12 and (ii) a fraction expressed as a
percentage, (x) the numerator of which is the excess, if any, of (1) the
interest accrued and payable on the related Mortgage Loans for the related Due
Period, over (2) the sum of (a) the amount of any accrued note interest payable
to the related classes of Senior Notes (including any Net Rate Carryover amounts
payable to such classes) for the related Payment Date and (b) the product of (I)
the amount of any accrued note interest payable to the Class M Notes and Class B
Notes (including any Net Rate Carryover amounts payable to such classes) for the
related Payment Date, and (II) the related Applicable Fraction and (y) the
denominator of which is the aggregate Stated Principal Balance of the related
Mortgage Loans and any amounts related to such Loan Group in the Pre-Funding
Account, if any.
Note Rate Change Date: (i) for the Class 1-A Notes, the Payment Date
occurring in ________, (ii) for the Class 2-A Notes, the Payment Date occurring
in _______, (iii) for the Class 3-A Notes, the Payment Date occurring in ____,
(iv) for the Class 4-A Notes, the Payment Date occurring in _____, (v) for the
Class 5-A Notes, the Payment Date occurring in ______ and (vi) for the Class M
Notes and Class B Notes, the Payment Date occurring in ______.
Note Register: The register maintained pursuant to Section 4.03 of
this Indenture.
20
Notes: The Class 1-A, Class 2-A, Class 3-A, Class 4-A, Class 5-A,
Class IO, Class M and Class B Notes.
Notional Amount: With respect to the Class 1-IO, Class 2-IO, Class
3-IO, Class 4-IO and Class 5-IO Notes, $________, $_________, $_________,
$_________ and $_________, respectively.
Offered Notes: The Class 1-A, Class 2-A, Class 3-A, Class 4-A, Class
5-A and Class M-1 Notes.
Officer's Certificate: A certificate (i) in the case of the
Depositor, signed by the Chairman of the Board, the Vice Chairman of the Board,
the President, a Managing Director, a Vice President (however denominated), an
Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant
Treasurers or Assistant Secretaries of the Depositor, the Servicer or the Master
Servicer, (ii) in the case of the Master Servicer, signed by the President, an
Executive Vice President, a Vice President, an Assistant Vice President, the
Treasurer, or one of the Assistant Treasurers or Assistant Secretaries of
Countrywide GP, Inc., its general partner or (iii) if provided for in this
Agreement, signed by a Servicing Officer, as the case may be, and delivered to
the Depositor and the Indenture Trustee, as the case may be, as required by this
Agreement.
One-Year LIBOR: With respect to any Accrual Period, the rate
determined by the Indenture Trustee on the related Interest Determination Date
on the basis of the rate for U.S. dollar deposits for one year that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date. If such ate does not appear on such page (or such other page
as may replace that page on that service, or if such service is no longer
offered, such other service for displaying One-Month LIBOR or comparable rates
as may be reasonably selected by the Indenture Trustee), One-Year LIBOR for the
applicable Accrual Period will be the Reference Bank Rate. If no such quotations
can be obtained by the Indenture Trustee and no Reference Bank Rate is
available, One-Year LIBOR will be One-Year LIBOR applicable to the preceding
Accrual Period.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 5.04 or 8.01 of
the Sale and Servicing Agreement, or the interpretation or application of the
REMIC Provisions such counsel must (i) in fact be independent of the Depositor
and the Master Servicer, (ii) not have any direct financial interest in the
Depositor or the Master Servicer or in any affiliate of either, and (iii) not be
connected with the Depositor or the Master Servicer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
Optional Termination: The termination of the Trust Estate provided
hereunder pursuant to the purchase of the Mortgage Loans pursuant to Section
8.07 of this Indenture.
21
Optional Termination Date: The termination of the Trust Estate
provided hereunder pursuant to the purchase of the Mortgage Loans pursuant to
Section 8.07 of this Indenture.
Original Applicable Credit Support Percentage: With respect to each
of the following Classes of Subordinated Notes, the corresponding percentage
described below, as of the Closing Date:
Class M-1 ___%
Class M-2 ___%
Class B-1 ___%
Class B-2 ___%
Class B-3 ___%
Class B-4 ___%
Class B-5 ___%
Original Mortgage Loan: The mortgage loan refinanced in connection
with the origination of a Refinancing Mortgage Loan.
Original Pre-Funded Amount: The amount deposited in the Pre-Funding
Account on the Closing Date, which Original Pre-Funded Amount is $_______ for
Loan Group 1, $________ for Loan Group 2, $_______ for Loan Group 3, $_________
for Loan Group 4 and approximately $_________ for Loan Group 5.
Original Subordinate Principal Balance: On or prior to the Senior
Termination Date, the Subordinated Percentage for a Loan Group of the aggregate
Stated Principal Balances of the Mortgage Loans in such Loan Group, in each case
as of the Cut-off Date or, if such date is after the Senior Termination Date,
the aggregate of the Note Principal Balances of the Subordinated Notes as of the
Closing Date.
Original Value: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal satisfactory to the Master Servicer or the sales price of
such property or, in the case of a refinancing, on an appraisal satisfactory to
the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Notes as of any date of
determination, all Notes theretofore executed and authenticated under this
Agreement except:
(i) Notes theretofore canceled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation; and
(ii) Notes in exchange for which or in lieu of which other
Notes have been executed and delivered by the Indenture Trustee pursuant
to this Agreement.
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Outstanding Mortgage Loan: As of any Payment Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Prepayment Period.
Overcollateralized Group: As defined in Section 4.02.
Owner Trust Estate: The corpus of the Issuing Entity created by the
Trust Agreement which consists of items referred to in Section 3.01 of the Trust
Agreement.
Owner Trustee: [OWNER TRUSTEE] and its successors and assigns or any
successor owner trustee appointed pursuant to the terms of the Trust Agreement.
Owner Trustee's Fee: An annual fee equal to $_____, payable on each
anniversary of the first Payment Date, commencing in _________.
Ownership Interest: As to any Note, any ownership interest in such
Note including any interest in such Note as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial.
Paying Agent: Any paying agent or co-paying agent appointed pursuant
to Section 3.03 of the Indenture, which initially shall be the Indenture
Trustee.
Payment Account: The separate Eligible Account created and
maintained by the Indenture Trustee pursuant to Section 3.05 of the Sale and
Servicing Agreement in the name of the Indenture Trustee for the benefit of the
Noteholders and designated "[INDENTURE TRUSTEE], in trust for registered holders
of [TRUST NAME]". Funds in the Payment Account shall be held in trust for the
Noteholders for the uses and purposes set forth in this Agreement.
Payment Account Deposit Date: As to any Payment Date, 1:00 p.m.
Pacific time on the Business Day immediately preceding such Payment Date.
Payment Date: The 20th day of each calendar month after the initial
issuance of the Notes, or if such 20th day is not a Business Day, the next
succeeding Business Day, commencing in December 2005.
Percentage Interest: With respect to any Note, a fraction, expressed
as a percentage, the numerator of which is the Note Principal Balance
represented by such Note and the denominator of which is the aggregate Note
Principal Balance of the related Class.
Periodic Rate Cap: As to any Mortgage Loans and the related Mortgage
Notes, the provision therein that limits permissible increases and decreases in
the Mortgage Rate on any Adjustment Date.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
23
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of the
United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating and highest short-term debt rating of each
Rating Agency, or such lower rating as each Rating Agency has confirmed in
writing will not result in the downgrading or withdrawal of the ratings
then assigned to the Notes by such Rating Agency;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of each
Rating Agency, or such lower rating as each Rating Agency has confirmed in
writing will not result in the downgrading or withdrawal of the ratings
then assigned to the Notes by such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state thereof
and subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long term unsecured
debt obligations of such depository institution or trust company (or in
the case of the principal depository institution in a holding company
system, the commercial paper or long-term unsecured debt obligations of
such holding company) are then rated one of the two highest long-term and
the highest short-term ratings of each such Rating Agency for such
securities, or such lower ratings as each Rating Agency has confirmed in
writing will not result in the downgrading or withdrawal of the rating
then assigned to the Notes by such Rating Agency;
(v) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into with
a depository institution or trust company (acting as principal) described
in clause (iv) above;
(vi) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any state
thereof which, at the time of such investment, have one of the two highest
long term ratings of each Rating Agency (such rating shall be the highest
commercial paper rating of S&P for any such securities) and (y), or such
lower rating as each Rating Agency has confirmed in writing will not
result in the downgrading or withdrawal of the rating then assigned to the
Notes by such Rating Agency;
(vii) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable long term and
short term rating by
24
each Rating Agency or such lower rating as each Rating Agency has
confirmed in writing will not result in the downgrading or withdrawal of
the ratings then assigned to the Notes by such Rating Agency;
(viii) short term investment funds sponsored by any trust
company or national banking association incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by each Rating Agency in their respective highest applicable
rating category or such lower rating as each Rating Agency has confirmed
in writing will not result in the downgrading or withdrawal of the ratings
then assigned to the Notes by such Rating Agency; and
(ix) such other relatively risk free investments having a
specified stated maturity and bearing interest or sold at a discount
acceptable to each Rating Agency as will not result in the downgrading or
withdrawal of the rating then assigned to the Notes by any Rating Agency,
as evidenced by a signed writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above)
provided that, subsequent to any REMIC Elections made pursuant to Article XI of
this Indenture, no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC (including, without limitation, any
amounts collected by the Master Servicer but not yet deposited in the Collection
Account) may be invested in investments (other than money market funds) treated
as equity interests for Federal income tax purposes, unless the Master Servicer
shall receive an Opinion of Counsel, at the expense of Master Servicer, to the
effect that such investment will not adversely affect the status of any such
REMIC as a REMIC under the Code or result in imposition of a tax on any such
REMIC.
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Permitted Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Plan: Any employee benefit plan or certain other retirement plans
and arrangements, including individual retirement accounts and annuities, ▇▇▇▇▇
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.
Plan Assets: Assets of a Plan within the meaning of Department of
Labor regulation 29 C.F.R. Section 2510.3-101.
Pool Stated Principal Balance: $1,142,358,928.
Pre-Funding Account: The separate Eligible Account created and
maintained by the Indenture Trustee pursuant to Section 3.30 of this Indenture
in the name of the Trustee for the benefit of the Noteholders and designated
"[INDENTURE TRUSTEE], solely as Trustee, in trust for registered holders of
[TRUST NAME]." Funds in the Pre-Funding Account shall be held in trust for the
Noteholders for the uses and purposes set forth in this Agreement.
Pre-Funding Amount: The amount deposit in the Pre-Funding Account as
of any Date of Determination.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the Notes.
Prepayment Interest Excess: With respect to any Payment Date, for
each Mortgage Loan that was the subject of a Principal Prepayment during the
portion of a Prepayment Period from the related Due Date to the end of such
Prepayment Period, any payment of interest received in connection therewith (net
of any applicable Servicing Fee) representing interest accrued for any portion
of such month of receipt.
Prepayment Interest Shortfall: As to any Payment Date, any Mortgage
Loan and any Principal Prepayment received during the related Prepayment Period,
the amount, if any, by which one month's interest at the related Mortgage Rate,
net of the related Master Servicing Fee Rate, on such Principal Prepayment
exceeds the amount of interest paid in connection with such Principal
Prepayment.
Prepayment Period: As to any Payment Date and Mortgage Loan, the
calendar month immediately preceding the month in which that Distribution Date
occurs.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage Loan.
26
Prime Rate: The prime commercial lending rate of The Bank of New
York, as publicly announced to be in effect from time to time. The Prime Rate
shall be adjusted automatically, without notice, on the effective date of any
change in such prime commercial lending rate. The Prime Rate is not necessarily
The Bank of New York's lowest rate of interest.
Principal Amount: As to any Payment Date and any Loan Group, the sum
of (a) the principal portion of each Scheduled Payment (without giving effect to
any reductions thereof caused by any Debt Service Reductions or Deficient
Valuations) due on each Mortgage Loan (other than a Liquidated Mortgage Loan) in
such Loan Group on the related Due Date, (b) the principal portion of the
Purchase Price of each Mortgage Loan in such Loan Group that was repurchased by
the Seller or purchased by the Master Servicer pursuant to the Sale and
Servicing Agreement as of such Payment Date, (c) the Substitution Adjustment
Amount in connection with any Deleted Mortgage Loan in such Loan Group received
with respect to such Payment Date, (d) any Insurance Proceeds or Liquidation
Proceeds allocable to recoveries of principal of Mortgage Loans in such Loan
Group that are not yet Liquidated Mortgage Loans received during the calendar
month preceding the month of such Payment Date plus any Realized Loss Excess
Coverage Amounts, (e) with respect to each Mortgage Loan in a Loan Group that
became a Liquidated Mortgage Loan during the calendar month preceding the month
of such Payment Date, the amount of the Liquidation Proceeds allocable to
principal received during the calendar month preceding the month of such Payment
Date with respect to such Mortgage Loan, (f) all Principal Prepayments for such
Loan Group received during the related Prepayment Period, (g) the principal
portion of any Transfer Payments Received for such Loan Group, minus the
principal portion of any Transfer Payments Made for such Loan Group and Payment
Date in accordance with Section 4.02 and (h) any Subsequent Recoveries on the
Mortgage Loans in such Loan Group received during the calendar month preceding
the month of such Payment Date.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 of the Sale and
Servicing Agreement and Section 11.01 hereof) that is received in advance of its
scheduled Due Date and is not accompanied by an amount as to interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment. Partial Principal Prepayments shall be
applied by the Master Servicer in accordance with the terms of the related
Mortgage Note.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Private Notes: The Class M-2, Class B-1, Class B-2, Class B-3, Class
B-4 and Class B-5 Notes.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Coop Shares.
27
Pro Rata Share: As to any Payment Date, the Subordinated Principal
Distribution Amount and any Class of Subordinated Notes, the portion of the
Subordinated Principal Distribution Amount allocable to such Class, equal to the
product of the Subordinated Principal Distribution Amount on such Payment Date
and a fraction, the numerator of which is the related Note Principal Balance
thereof and the denominator of which is the aggregate of the Note Principal
Balances of the Subordinated Notes.
Pro Rata Subordinated Percentage: As to any Payment Date and Loan
Group, 100% minus the related Senior Percentage for such Payment Date.
Prospectus Supplement: The Prospectus Supplement dated __________,
relating to the public offering of the Offered Notes offered thereby.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to be
(1) repurchased by the Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 of the Sale and Servicing
Agreement or (2) repurchased by the Depositor pursuant to Section 2.04 of the
Sale and Servicing Agreement, or (y) that the Master Servicer has a right to
purchase pursuant to Section 3.11 of the Sale and Servicing Agreement, an amount
equal to the sum of (i) 100% of the unpaid principal balance (or, if such
purchase or repurchase, as the case may be, is effected by the Master Servicer,
the Stated Principal Balance) of the Mortgage Loan as of the date of such
purchase, (ii) accrued interest thereon at the applicable Mortgage Rate (or, if
such purchase or repurchase, as the case may be, is effected by the Master
Servicer, at the Net Mortgage Rate) from (a) the date through which interest was
last paid by the Mortgagor (or, if such purchase or repurchase, as the case may
be, is effected by the Master Servicer, the date through which interest was last
advanced and not reimbursed by the Master Servicer) to (b) the first day of the
month in which the Purchase Price is to be distributed to Noteholders, and (iii)
any costs, expenses and damages incurred by the Trust Fund resulting from any
violation of any predatory or abusive lending law in connection with such
Mortgage Loan.
QRS: A Qualified REIT Subsidiary within the meaning of Section
856(i) of the Code.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
FNMA-approved mortgage insurer and having a claims paying ability rating of at
least "AA" or equivalent rating by a nationally recognized statistical rating
organization. Any replacement insurer with respect to a Mortgage Loan must have
at least as high a claims paying ability rating as the insurer it replaces had
on the Closing Date.
28
Rating Agency: [RATING AGENCY] and [RATING AGENCY]. If any such
organization or its successor is no longer in existence, "Rating Agency" shall
be a nationally recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation shall be given
to the Indenture Trustee. References herein to a given rating category of a
Rating Agency shall mean such rating category without giving effect to any
modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the Adjusted Net Mortgage Rate from the Due
Date as to which interest was last paid or advanced (and not reimbursed) to
Noteholders up to the Due Date in the month in which Liquidation Proceeds are
required to be distributed on the Stated Principal Balance of such Liquidated
Mortgage Loan from time to time, minus (iii) the Liquidation Proceeds, if any,
received during the month in which such liquidation occurred, to the extent
applied as recoveries of interest at the Adjusted Net Mortgage Rate and to
principal of the Liquidated Mortgage Loan. With respect to each Mortgage Loan
that has become the subject of a Deficient Valuation, if the principal amount
due under the related Mortgage Note has been reduced, the difference between the
principal balance of the Mortgage Loan outstanding immediately prior to such
Deficient Valuation and the principal balance of the Mortgage Loan as reduced by
the Deficient Valuation. With respect to each Mortgage Loan that has become the
subject of a Debt Service Reduction and any Payment Date, the amount, if any, by
which the principal portion of the related Scheduled Payment has been reduced.
To the extent the Master Servicer receives Subsequent Recoveries
with respect to any Mortgage Loan, the amount of Realized Losses with respect to
that Mortgage Loan will be reduced by the amount of those Subsequent Recoveries.
Realized Loss Excess Coverage Amount: With respect to any Payment
Date and the Class IO Notes, the sum of the Realized Losses with respect to the
Mortgage Loans which are to be applied in reduction of the related Class Optimal
Interest Distribution Amount of the related Class of Class IO Notes pursuant to
this Indenture, which shall equal the amount, if any, by which, Note Principal
Balance of the Notes (after all payments of principal on such Payment Date)
exceeds the aggregate Stated Principal Balance of the Mortgage Loans and the
amount on deposit in the Pre-Funding Account (if any) for such Payment Date.
Record Date: With respect to any Payment Date and the Notes, the
close of business on the last Business Day of the month preceding the month in
which such Payment Date occurs.
Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of
0.03125%) of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest
29
Determination Date to prime banks in the London interbank market for a period of
one month in amounts approximately equal to the aggregate outstanding Note
Principal Balance of the Notes on such Interest Determination Date, provided
that at least two such Reference Banks provide such rate. If fewer than two
offered rates appear, the Reference Bank Rate will be the arithmetic mean
(rounded upwards, if necessary, to the nearest whole multiple of 0.03125%) of
the rates quoted by one or more major banks in New York City, selected by the
Indenture Trustee, as of 11:00 a.m., New York City time, on such date for loans
in U.S. dollars to leading European banks for a period of one month in amounts
approximately equal to the aggregate outstanding Note Principal Balance of the
Notes on such Interest Determination Date.
Reference Banks: [Barclays Bank PLC, Deutsche Bank and NatWest,
N.A.,] provided that if any of the foregoing banks are not suitable to serve as
a Reference Bank, then any leading banks selected by the Indenture Trustee which
are engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London,
England, (ii) not controlling, under the control of or under common control with
the Depositor, the Seller or the Master Servicer and (iii) which have been
designated as such by the Indenture Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
REGULATION AB: Regulation AB promulgated under the Securities Act
and the Exchange Act, as the same may be amended from time to time; and all
references to any rule, item, section or subsection of, or definition or term
contained in, Regulation AB mean such rule, item, section, subsection,
definition or term, as the case may be, or any successor thereto, in each case
as the same may be amended from time to time.
REIT: A Real Estate Investment Trust within the meaning of Section
856(a) of the Code.
Related Documents: With respect to each Mortgage Loan, the documents
specified in Section 2.1(b) of the Sale and Servicing Agreement, with respect to
the Initial Mortgage Loans and the Subsequent Mortgage Loans, and any documents
required to be added to such documents pursuant to the Sale and Servicing
Agreement, the Subsequent Transfer Agreement, the Trust Agreement, Indenture or
the Servicing Agreement.
Relief Act: The Servicemembers Civil Relief Act, formerly known as
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
Relief Act Reductions: With respect to any Payment Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act or any similar law, the amount, if any, by
which (i) interest collectible on such Mortgage Loan for the most recently ended
calendar month is less than (ii) interest accrued thereon for such month
pursuant to the Mortgage Note.
REMIC Closing Date: The Date on which Indenture Trustee is notified
of a TMP Trigger Event Pursuant to Section 11.[__] of this Indenture.
REMIC Election: Any REMIC election made with respect to the Issuing
Entity subsequent to a TMP Trigger Event.
30
Remittance Report: A report prepared by the Master Servicer and
delivered to the Indenture Trustee in accordance with Section 4.02 of the
Indenture.
REO Property: A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit D to
the Sale and Servicing Agreement, (i) have a Stated Principal Balance, after
deduction of the principal portion of the Scheduled Payment due in the month of
substitution, not in excess of, and not less than 90% of the Stated Principal
Balance of the Deleted Mortgage Loan; (ii) have a Mortgage Rate not less than or
no more than 1% per annum higher than the Mortgage Rate of the Deleted Mortgage
Loan and, with respect to any Adjustable Rate Mortgage Loan: (a) have a Maximum
Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (c) have the same Index and Periodic
Rate Cap as that of the Deleted Mortgage Loan; and (d) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate; (iii) have the same or
higher credit quality characteristics than that of the Deleted Mortgage Loan;
(iv) be accruing interest at a rate not more than 1% per annum higher or lower
than that of the Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio or
Combined Loan-to-Value Ratio, as applicable, no higher than that of the Deleted
Mortgage Loan; (vi) not permit conversion of the Mortgage Rate from a fixed rate
to a variable rate or visa versa; (vii) provide for a prepayment charge on terms
substantially similar to those of the Prepayment Charge, if any, of the Deleted
Mortgage Loan; (viii) have the same lien priority as the Deleted Mortgage Loan;
(ix) constitute the same occupancy type as the Deleted Mortgage Loan; (x) have
had an original Stated Principal Balance that conformed to the loan limits of
▇▇▇▇▇▇ ▇▇▇, (xi) not be a Cooperative Loan unless the Deleted Mortgage Loan was
a Cooperative Loan, (xii) [reserved], and (xiii) comply with each representation
and warranty set forth in Section 2.03 of the Sale and Servicing Agreement.
Request for Release: The Request for Release submitted by the Master
Servicer to the Indenture Trustee, substantially in the form of Exhibits C and D
to the Sale and Servicing Agreement, as appropriate.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Responsible Officer: When used with respect to the Indenture
Trustee, any Vice President, any Assistant Vice President, the Secretary, any
Assistant Secretary, any Trust Officer or any other officer of the Indenture
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also to whom, with respect to a particular
matter, such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
31
Rule 144A: Rule 144A under the Securities Act.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. and its successors.
Sale and Servicing Agreement: The Servicing Agreement, dated as of
______________, the Issuing Entity, the Master Servicer, the Indenture Trustee
and the Seller.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified in this Agreement, shall give effect to any
related Debt Service Reduction and any Deficient Valuation that affects the
amount of the monthly payment due on such Mortgage Loan.
SECTION 302 REQUIREMENTS: Any rules or regulations promulgated
pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (as such may be amended from time to
time).
Securities Act: The Securities Act of 1933, as amended.
Seller: [SELLER], and its successors and assigns, in its capacity as
seller of the Mortgage Loans to the Depositor.
Seller Shortfall Interest Requirement: With respect to the Payment
Date in __________ is the product of: (1) the excess of the aggregate Stated
Principal Balance of all the Mortgage Loans as of the Cut-off Date, over the
aggregate Stated Principal Balance of all the Mortgage Loans as of the Cut-off
Date that have a scheduled payment of interest due in the related Due Period,
and (2) a fraction, the numerator of which is the weighted average Net Mortgage
Rate of all the Mortgage Loans (weighted on the basis of the Stated Principal
Balances thereof as of the Cut-off Date) and the denominator of which is 12.
Senior Credit Support Depletion Date: The date on which the Note
Principal Balance of each Class of Subordinated Notes has been reduced to zero.
Senior Notes: Class 1-A, Class 2-A, Class 3-A, Class 4-A and Class
5-A Notes.
Senior Note Group: The Group 1 Senior Notes, Group 2 Senior Notes,
Group 3 Senior Notes, Group 4 Senior Notes and Group 5 Senior Notes, as
applicable
Senior Percentage: As to any Senior Note Group and Payment Date, the
percentage equivalent of a fraction the numerator of which is the aggregate of
the Note Principal Balances of each Class of Senior Notes of such Senior Note
Group immediately prior to such Payment Date and the denominator of which is the
aggregate Stated Principal Balance of Mortgage Loans in the related Loan Group
as of the Due Date in the month preceding the month of such Payment Date;
provided, however, that on any Payment Date after the Senior Termination Date,
the Senior Percentage for the Senior Notes of the remaining Senior Note Group is
the percentage equivalent of a fraction, the numerator of which is the aggregate
of the Note Principal Balances of each such Class of
32
Senior Notes immediately prior to such Payment Date and the denominator of which
is the aggregate of the Note Principal Balances of all Classes of Notes
immediately prior to such Payment Date. In no event will any Senior Percentage
be greater than 100%.
Senior Prepayment Percentage: As to a Senior Note Group and any
Payment Date during the ten years beginning on the first Payment Date, 100%. The
related Senior Prepayment Percentage for any Payment Date occurring on or after
the tenth anniversary of the first Payment Date will, except as provided in this
Agreement, be as follows: for any Payment Date in the first year thereafter, the
related Senior Percentage plus __% of the related Subordinated Percentage for
such Payment Date; for any Payment Date in the second year thereafter, the
related Senior Percentage plus __% of the related Subordinated Percentage for
such Payment Date; for any Payment Date in the third year thereafter, the
related Senior Percentage plus __% of the related Subordinated Percentage for
such Payment Date; for any Payment Date in the fourth year thereafter, the
related Senior Percentage plus __% of the related Subordinated Percentage for
such Payment Date; and for any Payment Date thereafter, the related Senior
Percentage for such Payment Date (unless on any Payment Date the related Senior
Percentage exceeds the Senior Percentage of such Senior Note Group as of the
Closing Date, in which case the Senior Prepayment Percentage for each Senior
Note Group for such Payment Date will once again equal 100%). Notwithstanding
the foregoing, no decrease in the related Senior Prepayment Percentage will
occur unless both of the Senior Step Down Conditions are satisfied with respect
to all Loan Groups. Notwithstanding the foregoing, if the Two Times Test is
satisfied on a Payment Date, the Senior Prepayment Percentage for each Senior
Note Group will equal (x) if such Payment Date is on or prior to the Payment
Date in __________, the related Senior Percentage for such Payment Date plus __%
of the related Subordinated Percentage for that Payment Date and (y) if such
Payment Date is after the Payment Date in ________, the related Senior
Percentage.
Senior Principal Distribution Amount: As to any Payment Date and
Senior Note Group, the sum of (i) the related Senior Percentage of all amounts
described in clauses (a) through (d) of the definition of "Principal Amount"
with respect to the related Loan Group for such Payment Date, (ii) with respect
to any Mortgage Loan in the related Loan Group that became a Liquidated Mortgage
Loan during the calendar month preceding the month of such Payment Date, the
lesser of (x) the related Senior Percentage of the Stated Principal Balance of
such Mortgage Loan as of the Due Date in the month preceding the month of that
Payment Date and (y) the related Senior Prepayment Percentage of the amount of
the Liquidation Proceeds allocable to principal received on the Mortgage Loan,
(iii) the related Senior Prepayment Percentage of the amounts described in
clauses (f) and (h) of the definition of "Principal Amount" with respect to the
related Loan Group for such Payment Date; (iv) the principal portion of any
Transfer Payments Received for that Loan Group and Payment Date and (v) on the
first Payment Date after the termination of the Funding Period, any related
amounts remaining in the Pre-Funding Account (net of investment income);
provided, however, on any Payment Date after the Senior Termination Date, the
Senior Principal Distribution Amount for the remaining Senior Note Group will be
calculated pursuant to the above formula based on all the Mortgage Loans, as
opposed to the Mortgage Loans in the related Loan Group.
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Senior Step Down Conditions: On or prior to the Senior Termination
Date, with respect to the Mortgage Loans in a Loan Group and after the Senior
Termination Date, with respect to all Mortgage Loans: (i) the aggregate Stated
Principal Balance of such Mortgage Loans delinquent 60 days or more (including
Mortgage Loans in foreclosure, REO Property and Mortgage Loans, the Mortgagors
of which are in bankruptcy) (averaged over the preceding six month period), does
not equal or exceed __% of (1) on or prior to the Senior Termination Date, the
Subordinated Percentage for such Loan Group of the aggregate Stated Principal
Balance of the Mortgage Loans in such Loan Group or (2) after the Senior
Termination Date, the aggregate Note Principal Balance of the Subordinated Notes
on the Payment Date and (ii) cumulative Realized Losses on such Mortgage Loans
do not exceed: (a) commencing with the Payment Date on the tenth anniversary of
the first Payment Date, __% of the Original Subordinate Principal Balance, (b)
commencing with the Payment Date on the eleventh anniversary of the first
Payment Date, __% of the Original Subordinate Principal Balance, (c) commencing
with the Payment Date on the twelfth anniversary of the first Payment Date, __%
of the Original Subordinate Principal Balance, (d) commencing the Payment Date
on the thirteenth anniversary of the first Payment Date, __% of the Original
Subordinate Principal Balance and (e) commencing with the Payment Date on the
fourteenth anniversary of the first Payment Date, __% of the Original
Subordinate Principal Balance.
Senior Termination Date: For each Senior Note Group, the Payment
Date on which the aggregate Note Principal Balance of the related Classes of
Senior Notes have been reduced to zero.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations hereunder, including, but not limited to, the cost of
(i) the preservation, restoration and protection of a Mortgaged Property, (ii)
any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.09 of the Sale and Servicing Agreement.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off Date, the unpaid principal balance of
the Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial prepayments or Liquidation Proceeds received prior to such
date and to the payment of principal due on or prior to such date and
irrespective any delinquency in payment by the related mortgagor, and (ii) as of
any Payment Date, the Stated Principal Balance of the Mortgage Loan as of its
Cut-off Date, in each case plus any Deferred Interest added to the principal
balance of such Mortgage Loan, if such Mortgage Loan is a Negative Amortization
Loan, minus the sum of (a) the principal portion of the Scheduled Payments (x)
due with respect to such Mortgage Loan during each Due Period ending prior to
such Payment Date and (y) that were received by the Master Servicer as of the
close of business on the Determination Date related to such Payment Date or with
respect to which Advances were made as of the Master Servicer Advance Date
related to such Payment Date, (b) all
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Principal Prepayments with respect to such Mortgage Loan received by the Master
Servicer during each Prepayment Period ending prior to such Payment Date, and
(c) all Liquidation Proceeds collected with respect to such Mortgage Loan during
each Due Period ending prior to such Payment Date, to the extent applied by the
Master Servicer as recoveries of principal in accordance with Section 3.11 of
the Sale and Servicing Agreement. The Stated Principal Balance of any Mortgage
Loan that becomes a Liquidated Loan will be zero on the Payment Date following
the Due Period in which such Mortgage Loan becomes a Liquidated Loan. References
herein to the Stated Principal Balance of the Mortgage Loans at any time shall
mean the aggregate Stated Principal Balances of all Mortgage Loans in the Trust
Estate as of such time.
Subordinate Notes: The Class M-1, Class M-2, Class B-1, Class B-2,
Class B-3, Class B-4 and Class B-5 Notes.
Subordinated Percentage: As to any Payment Date on or prior to the
Senior Termination Date and Loan Group, 100% minus the Senior Percentage for the
Senior Note Group relating to such Loan Group for such Payment Date. As to any
Payment Date after the Senior Termination Date, 100% minus the Senior Percentage
for such Payment Date.
Subordinated Portion: For any Payment Date and Loan Group, an amount
equal to the aggregate Stated Principal Balance of the Mortgage Loans in that
Loan Group as of the Due Date in the month prior to the month of such Payment
Date, minus the aggregate Note Principal Balance of the related Senior Notes
immediately prior to such Payment Date.
Subordinated Prepayment Percentage: As to any Payment Date and Loan
Group, 100% minus the related Senior Prepayment Percentage for such Payment
Date.
Subordinated Principal Distribution Amount: With respect to any
Payment Date and Loan Group, an amount equal to the excess of (A) the sum, not
less than zero, of the sum of (i) the Subordinated Percentage of all amounts
described in clauses (a) through (d) of the definition of "Principal Amount" for
that Loan Group and that Payment Date, (ii) with respect to each Mortgage Loan
in that Loan Group that became a Liquidated Mortgage Loan during the calendar
month preceding the month of such Payment Date, the Liquidation Proceeds
allocated to principal received with respect thereto remaining after application
thereof pursuant to clause (ii) of the definition of "Senior Principal
Distribution Amount", up to the Subordinated Percentage for such Loan Group of
the Stated Principal Balance of that Mortgage Loan, and (iii) the sum of the
Subordinated Prepayment Percentage for that Loan Group of all amounts described
in clauses (f) and (h) of the definition of "Principal Amount" for such Loan
Group and Payment Date over (B) the principal portion of any Transfer Payments
Made for such Loan Group; provided, however, that on any Payment Date after the
Senior Termination Date, the Subordinated Principal Distribution Amount will not
be calculated by Loan Group but will equal the amount calculated pursuant to the
formula set forth above based on the applicable Subordinated Percentage and
Subordinated Prepayment Percentage for
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the Subordinated Notes for such Payment Date with respect to all of the Mortgage
Loans as opposed to the Mortgage Loans only in the related Loan Group.
Subsequent Collection Account Deposit: With respect to any
Subsequent Transfer Date, an amount equal to the aggregate of all amounts in
respect of (i) principal of the related Subsequent Mortgage Loans due after the
related Subsequent Cut-off Date and received by the Master Servicer on or before
such Subsequent Transfer Date and not applied in computing the Cut-off Date
Principal Balance thereof and (ii) interest on the such Subsequent Mortgage
Loans due after such Subsequent Cut-off Date and received by the Master Servicer
on or before the Subsequent Transfer Date.
Subsequent Cut-off Date: As defined in the definition of Cut-off
Date.
Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the Trust
Fund pursuant to Section 2.05 of the Indenture on a Subsequent Transfer Date,
and listed on the related Loan Number and Borrower Identification Mortgage Loan
Schedule delivered pursuant to Section 2.05(d) of the Indenture. When used with
respect to a single Subsequent Transfer Date, "Subsequent Mortgage Loan" shall
mean a Subsequent Mortgage Loan conveyed to the Trust Fund on such Subsequent
Transfer Date.
Subsequent Recoveries: Unexpected recoveries, net of reimbursable
expenses, with respect to Mortgage Loans that have been previously liquidated
and that resulted in a Realized Loss.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit C to the Indenture, executed and delivered
by the Seller, the Depositor and the Trustee as provided in Section 2.05(b) of
the Indenture.
Subsequent Transfer Date: For any Subsequent Transfer Agreement, the
"Subsequent Transfer Date" identified in such Subsequent Transfer Agreement;
provided, however, the Subsequent Transfer Date for any Subsequent Transfer
Agreement may not be a date earlier than the date on which the Subsequent
Transfer Agreement is executed and delivered by the parties thereto pursuant to
Section 2.05 (b) of the Indenture.
Subsequent Transfer Date Aggregate Purchase Amount: With respect to
any Subsequent Transfer Date, the "Subsequent Transfer Date Aggregate Purchase
Amount" identified in the related Subsequent Transfer Agreement which shall be
an estimate of the aggregate Stated Principal Balances of the Subsequent
Mortgage Loans identified in such Subsequent Transfer Agreement.
Subsequent Transfer Date Aggregate Transfer Amount: With respect to
any Subsequent Transfer Date, the aggregate Stated Principal Balances as of the
related Subsequent Cut-off Dates of the Subsequent Mortgage Loans conveyed on
such Subsequent Transfer Date, as listed on the related Loan Number and Borrower
Identification Mortgage Loan Schedule delivered pursuant to Section 2.05(d) of
the Indenture; provided, however, that such amount shall not exceed the amount
on deposit in the Pre-Funding Account.
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Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03 of the Sale and Servicing Agreement.
Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(d) of the Sale and Servicing Agreement, the excess of
(x) the principal balance of the Mortgage Loan that is substituted for, over (y)
the principal balance of the related substitute Mortgage Loan, each balance
being determined as of the date of substitution.
TMP Trigger Event: The occurrence of any Equity Securities being
transferred to an entity that does not qualify either as a REIT or as a QRS or
the receipt by the indenture trustee of a certification that the entity which
owns the Equity Securities is no longer a REIT or a QRS.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Note.
Transfer Payment Made: As defined in Section 4.02.
Transfer Payment Received: As defined in Section 4.02.
Trust: [TRUST NAME] to be created pursuant to the Trust Agreement.
Trust Agreement: The Amended and Restated Trust Agreement dated as
of __________, among the Owner Trustee, the Depositor and [CERTIFICATE REGISTRAR
AND CERTIFICATE PAYING AGENT], as Certificate Registrar and Certificate Paying
Agent, relating to the Trust.
Trust Estate: The meaning specified in the Granting Clause of the
Indenture.
Two Times Test: As to any Payment Date, if (i) the Aggregate
Subordinated Percentage is at least 200% of the Aggregate Subordinated
Percentage as of the Closing Date, (ii) clause (i) of the Senior Step Down
Conditions is satisfied and (iii) the cumulative Realized Losses on all the
Mortgage Loans do not exceed (x) with respect to any Payment Date on or prior to
________, __% of the aggregate Note Principal Balance of the Subordinated Notes
as of the Closing Date or (y) with respect to any Payment Date after
___________, __% of the aggregate Note Principal Balance of the Subordinated
Notes as of the Closing Date.
Undercollateralized Group: As defined in Section 4.02.
Unpaid Realized Loss Amount: For any Class of Notes (other than the
Class IO Notes), the portion of the aggregate Applied Realized Loss Amount
previously allocated to such Class remaining unpaid from prior Payment Dates,
less the amount of any Subsequent Recoveries added to Note Principal Balance of
such Note.
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