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EXHIBIT 4.1
INDENTURE
between
FIRSTPLUS HOME LOAN OWNER TRUST 1997-1,
as Issuer
and
FIRST BANK NATIONAL ASSOCIATION,
as Indenture Trustee
Dated as of February 1, 1997
FIRSTPLUS HOME LOAN OWNER TRUST 1997-1
Asset Backed Securities, Series 1997-1
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE......................................................2
SECTION 1.1 (a) Definitions...........................................................2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act........................12
SECTION 1.3 Rules of Construction....................................................12
ARTICLE II THE NOTES......................................................................................13
SECTION 2.1 Form.....................................................................13
SECTION 2.2 Execution, Authentication, Delivery and Dating...........................13
SECTION 2.3 Registration; Registration of Transfer and Exchange......................14
SECTION 2.4 Mutilated, Destroyed, Lost or Stolen Notes...............................15
SECTION 2.5 Persons Deemed Owner.....................................................16
SECTION 2.6 Payment of Principal and Interest; Defaulted Interest....................16
SECTION 2.7 Cancellation.............................................................17
SECTION 2.8 Authentication of Notes..................................................17
SECTION 2.9 Release of Collateral....................................................20
SECTION 2.10 Book-Entry Notes.........................................................21
SECTION 2.11 Notices to Clearing Agency...............................................22
SECTION 2.12 Definitive Notes.........................................................22
SECTION 2.13 Tax Treatment............................................................22
ARTICLE III COVENANTS......................................................................................22
SECTION 3.1 Payment of Principal and Interest........................................22
SECTION 3.2 Maintenance of Office or Agency..........................................23
SECTION 3.3 Money for Payments To Be Held in Trust...................................23
SECTION 3.4 Existence................................................................25
SECTION 3.5 Protection of Collateral.................................................25
SECTION 3.6 Annual Opinions as to Collateral.........................................26
SECTION 3.7 Performance of Obligations; Servicing of Home Loans......................26
SECTION 3.8 Negative Covenants......................................................28
SECTION 3.9 Annual Statement as to Compliance........................................29
SECTION 3.10 Covenants of the Issuer..................................................30
SECTION 3.11 Servicer's Obligations...................................................30
SECTION 3.12 Restricted Payments......................................................30
SECTION 3.13 Treatment of Notes as Debt for Tax Purposes..............................30
SECTION 3.14 Notice of Events of Default..............................................30
SECTION 3.15 Further Instruments and Acts.............................................31
ARTICLE IV SATISFACTION AND DISCHARGE.....................................................................31
SECTION 4.1 Satisfaction and Discharge of Indenture..................................31
SECTION 4.2 Application of Trust Money...............................................32
SECTION 4.3 Repayment of Moneys Held by Paying Agent.................................32
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TABLE OF CONTENTS -- (Cont'd)
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ARTICLE V REMEDIES.......................................................................................33
SECTION 5.1 Events of Default........................................................33
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.......................34
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee........................................................35
SECTION 5.4 Remedies; Priorities.....................................................37
SECTION 5.5 Optional Preservation of the Collateral..................................39
SECTION 5.6 Limitation of Suits......................................................40
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal
and Interest............................................................40
SECTION 5.8 Restoration of Rights and Remedies.......................................41
SECTION 5.9 Rights and Remedies Cumulative...........................................41
SECTION 5.10 Delay or Omission Not a Waiver...........................................41
SECTION 5.11 Control by Noteholders...................................................41
SECTION 5.12 Waiver of Past Defaults..................................................42
SECTION 5.13 Undertaking for Costs....................................................42
SECTION 5.14 Waiver of Stay or Extension Laws.........................................42
SECTION 5.15 Action on Notes..........................................................43
SECTION 5.16 Performance and Enforcement of Certain Obligations.......................43
ARTICLE VI THE INDENTURE TRUSTEE..........................................................................44
SECTION 6.1 Duties of Indenture Trustee..............................................44
SECTION 6.2 Rights of Indenture Trustee..............................................45
SECTION 6.3 Individual Rights of Indenture Trustee...................................46
SECTION 6.4 Indenture Trustee's Disclaimer...........................................46
SECTION 6.5 Notice of Defaults.......................................................46
SECTION 6.6 Reports by Indenture Trustee to Holders..................................46
SECTION 6.7 Compensation and Indemnity...............................................46
SECTION 6.8 Replacement of Indenture Trustee.........................................47
SECTION 6.9 Successor Indenture Trustee by Merger....................................48
SECTION 6.10 Appointment of Co-Indenture Trustee or
Separate Indenture Trustee...............................................48
SECTION 6.11 Eligibility; Disqualification............................................49
SECTION 6.12 Preferential Collection of Claims Against Issuer.........................50
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.......................................................................50
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders...........................................................50
SECTION 7.2 Preservation of Information; Communications
to Noteholders...........................................................50
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TABLE OF CONTENTS -- (Cont'd)
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SECTION 7.3 Reports by Issuer........................................................50
SECTION 7.4 Reports by Indenture Trustee.............................................51
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES................................................................51
SECTION 8.1 Collection of Money......................................................51
SECTION 8.2 Trust Accounts; Distributions............................................52
SECTION 8.3 General Provisions Regarding Accounts....................................54
SECTION 8.4 Servicer's Monthly Statements............................................55
SECTION 8.5 Release of Collateral....................................................55
SECTION 8.6 Opinion of Counsel.......................................................56
ARTICLE IX SUPPLEMENTAL INDENTURES........................................................................56
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders...................56
SECTION 9.2 Supplemental Indentures with Consent of Noteholders......................57
SECTION 9.3 Execution of Supplemental Indentures.....................................59
SECTION 9.4 Effect of Supplemental Indenture........................................59
SECTION 9.5 Conformity with Trust Indenture Act......................................59
SECTION 9.6 Reference in Notes to Supplemental Indentures............................59
SECTION 9.7 Amendments to Trust Agreement............................................59
ARTICLE X REDEMPTION OF NOTES............................................................................60
SECTION 10.1 Redemption...............................................................60
SECTION 10.2 Form of Redemption Notice................................................61
SECTION 10.3 Notes Payable on Redemption Date; Provision for
Payment of Indenture Trustee and Securities Insurer......................61
ARTICLE XI MISCELLANEOUS..................................................................................62
SECTION 11.1 Compliance Certificates and Opinions, etc................................62
SECTION 11.2 Form of Documents Delivered to Indenture Trustee.........................63
SECTION 11.3 Acts of Noteholders......................................................64
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer, Rating Agencies
and Securities Insurer...................................................65
SECTION 11.5 Notices to Noteholders; Waiver...........................................65
SECTION 11.6 [RESERVED]...............................................................66
SECTION 11.7 Conflict with Trust Indenture Act........................................66
SECTION 11.8 Effect of Headings and Table of Contents.................................66
SECTION 11.9 Successors and Assigns...................................................66
SECTION 11.10 Separability.............................................................66
SECTION 11.11 Benefits of Indenture....................................................66
SECTION 11.12 Legal Holidays...........................................................67
SECTION 11.13 GOVERNING LAW............................................................67
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TABLE OF CONTENTS -- (Cont'd)
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SECTION 11.14 Counterparts.............................................................67
SECTION 11.15 Recording of Indenture...................................................67
SECTION 11.16 Trust Obligation.........................................................67
SECTION 11.17 No Petition..............................................................68
SECTION 11.18 Inspection...............................................................68
SECTION 11.19 Grant of Noteholder Rights to Securities Insurer.........................68
SECTION 11.20 Third Party Beneficiary..................................................68
SECTION 11.21 Suspension and Termination of Securities
Insurer's Rights.........................................................68
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EXHIBITS
--------
SCHEDULE A - Schedule of Home Loans
EXHIBIT A-1 - Form of Class A-1 Note
EXHIBIT A-2 - Form of Class A-2 Note
EXHIBIT A-3 - Form of Class A-3 Note
EXHIBIT A-4 - Form of Class A-4 Note
EXHIBIT A-5 - Form of Class A-5 Note
EXHIBIT A-6 - Form of Class A-6 Note
EXHIBIT A-7 - Form of Class A-7 Note
EXHIBIT A-8 - Form of Class A-8 Note
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INDENTURE dated as of February 1, 1997, between FIRSTPLUS HOME LOAN
OWNER TRUST 1997-1, a Delaware business trust (the "Issuer"), and FIRST BANK
NATIONAL ASSOCIATION, a banking corporation, as trustee and not in its
individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Issuer's Class A-1
6.05% Asset Backed Notes (the "Class A-1 Notes"), Class A-2 6.28% Asset Backed
Notes (the "Class A-2 Notes"), Class A-3 6.45% Asset Backed Notes (the "Class
A-3 Notes"), Class A-4 6.60% Asset Backed Notes (the "Class A-4 Notes"), Class
A-5 6.70% Asset Backed Notes (the "Class A-5 Notes"), Class A-6 6.95% Asset
Backed Notes (the "Class A-6 Notes"), Class A-7 7.16% Asset Backed Notes (the
"Class A-7 Notes") and Class A-8 7.33% Asset Backed Notes (the "Class A-8
Notes") and, together with the Class A-1, Class A-2 , Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7 and Class A-8 Notes, the "Notes"):
GRANTING CLAUSE
Subject to the terms of this Indenture, the Issuer hereby Grants to
the Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit
of the holders of the Notes, all of the Issuer's right, title and interest in
and to: (i) the Trust Estate (as defined in the Sale and Servicing Agreement);
(ii) all right, title and interest of the Issuer in the Sale and Servicing
Agreement (including the Issuer's right to cause the Transferor and/or the
Seller to repurchase Home Loans from the Issuer under certain circumstances
described therein); (iii) all present and future claims, demands, causes of
action 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, including all proceeds of the
conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, 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; (iv) all funds on deposit from time to time in the Trust Accounts
(including the Certificate Distribution Account) and (v) all other property of
the Trust from time to time (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in
this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the holders
of the Notes, acknowledges such Grant, accepts the trusts hereunder and agrees
to perform its duties required in this Indenture to the best of its ability to
the end that the interests of the holders of the Notes may be adequately and
effectively protected. The Indenture Trustee agrees and acknowledges that the
Indenture Trustee's Home Loan Files will be held by the Custodian for the
benefit of the Indenture Trustee in Dallas, Texas. The Indenture Trustee
further agrees and acknowledges that each other
INDENTURE (SERIES 1997-1) -- PAGE 1
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item of Collateral that is physically delivered to the Indenture Trustee will be
held by the Indenture Trustee in St. ▇▇▇▇, Minnesota.
I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 (a) Definitions. Except as otherwise specified herein or
as the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.3(a).
"Administration Agreement" means the Administration Agreement dated as
of February 1, 1997, among the Administrator, the Issuer and the Indenture
Trustee.
"Administrator" means First Bank National Association, a national
banking association, or any successor Administrator under the Administration
Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter) and, so
long as the Administration Agreement is in effect, any Vice President or more
senior officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is identified on
the list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"Available Collection Amount" means, an amount equal to the sum of:
(i) all amounts received on the Home Loans or required to be paid by the
Servicer, the Transferor or the Seller during the related Due Period (exclusive
of amounts not required to be deposited in the Collection Account and amounts
permitted to be withdrawn by the Indenture Trustee from the Collection Account
pursuant to Section 5.01(d) of the Sale and Servicing Agreement) as reduced by
any portion thereof that may not be withdrawn therefrom pursuant to an order of
a United States bankruptcy court of competent jurisdiction imposing a stay
pursuant to ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code; (ii) in the case
of a Distribution Date relating to a Due Period that occurs prior
INDENTURE (SERIES 1997-1) -- PAGE 2
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to the end of the Funding Period, an amount from the Capitalized Interest
Account sufficient to fund any shortfall in the Interest Distribution Amount
attributable to the amounts in the Pre-Funding Account; (iii) in the case of
the Pre-Funding Termination Distribution Date, amounts, if any, remaining in
the Pre-Funding Account at the end of the Funding Period (net of reinvestment
income, which shall be transferred to the Capitalized Interest Account); (iv)
with respect to the final Distribution Date or an early redemption or
termination of the Offered Securities pursuant to Section 11.02 of the Sale and
Servicing Agreement, the Termination Price, and (v) any and all income or gain
from investments in the Collection Account.
"Basic Documents" means the Certificate of Trust, the Trust Agreement,
this Indenture, the Sale and Servicing Agreement, the Loan Sale Agreement, the
Administration Agreement, the Insurance Agreement, the Custodial Agreement, the
Note Depository Agreement, the Certificate Depository Agreement and other
documents and certificates delivered in connection therewith.
"Book-Entry Notes" means a beneficial interest in the Class A-1 Notes,
the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class A-5
Notes, the Class A-6 Notes, the Class A-7 Notes and the Class A-8 Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.10.
"Business Day" means any day other than (i) a Saturday or a Sunday, or
(ii) a day on which banking institutions in New York City or the city in which
the Securities Insurer or the corporate trust office of the Indenture Trustee
is located are authorized or obligated by law or executive order to be closed.
"Certificate Depository Agreement" has the meaning specified in Section
1.1 of the Trust Agreement.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Class A-1 Final Scheduled Distribution Date" means the Distribution
Date occurring in January, 2004.
"Class A-1 Interest Rate" means 6.05% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
"Class A-1 Notes" means the Class A-1 6.05% Asset Backed Notes,
substantially in the form of Exhibit A-1.
"Class A-2 Final Scheduled Distribution Date" means the Distribution
Date occurring in September, 2006.
"Class A-2 Interest Rate" means 6.28% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
INDENTURE (SERIES 1997-1) -- PAGE 3
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"Class A-2 Notes" means the Class A-2 6.28% Asset Backed Notes,
substantially in the form of Exhibit A-2.
"Class A-3 Final Scheduled Distribution Date" means the Distribution
Date occurring in February, 2009.
"Class A-3 Interest Rate" means 6.45% per annum (computed on the basis
of a 360 day year consisting of twelve 30-day months).
"Class A-3 Notes" means the Class A-3 6.45% Asset Backed Notes,
substantially in the form of Exhibit A-3.
"Class A-4 Final Scheduled Distribution Date" means the Distribution
Date occurring in July, 2010.
"Class A-4 Interest Rate" means 6.60% per annum (computed on the basis
of a 360 day year consisting of twelve 30-day months).
"Class A-4 Notes" means the Class A-4 6.60% Asset Backed Notes,
substantially in the form of Exhibit A-4.
"Class A-5 Final Scheduled Distribution Date" means the Distribution
Date occurring in November, 2011.
"Class A-5 Interest Rate" means 6.70% per annum (computed on the basis
of a 360 day year consisting of twelve 30-day months).
"Class A-5 Notes" means the Class A-5 6.70% Asset Backed Notes,
substantially in the form of Exhibit A-5.
"Class A-6 Final Scheduled Distribution Date" means the Distribution
Date occurring in December, 2015.
"Class A-6 Interest Rate" means 6.95% per annum (computed on the basis
of a 360 day year consisting of twelve 30-day months).
"Class A-6 Notes" means the Class A-6 6.95% Asset Backed Notes,
substantially in the form of Exhibit A-6.
"Class A-7 Final Scheduled Distribution Date" means the Distribution
Date occurring in September, 2018.
"Class A-7 Interest Rate" means 7.16% per annum (computed on the basis
of a 360 day year consisting of twelve 30-day months).
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"Class A-7 Notes" means the Class A-7 7.16% Asset Backed Notes,
substantially in the form of Exhibit A-7.
"Class A-8 Final Scheduled Distribution Date" means the Distribution
Date occurring in August, 2020.
"Class A-8 Interest Rate" means 7.33% per annum (computed on the basis
of a 360 day year consisting of twelve 30-day months).
"Class A-8 Notes" means the Class A-8 7.33% Asset Backed Notes,
substantially in the form of Exhibit A-8.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means February 27, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Company" means FIRSTPLUS RESIDUAL HOLDINGS, INC., a Nevada
corporation or any successor in interest thereto.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Agreement is located at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: Corporate Trust
Department, or at such other address as the Indenture Trustee may designate
from time to time by notice to the Noteholders and the Issuer, or the principal
corporate trust office of any successor Indenture Trustee at the address
designated by such successor Indenture Trustee by notice to the Noteholders and
the Issuer.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.12.
"Depository Institution" means any depository institution or trust
company, including the Indenture Trustee, that (a) is incorporated under the
laws of the United States of America or any
INDENTURE (SERIES 1997-1) -- PAGE 5
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State thereof, (b) is subject to supervision and examination by federal or
state banking authorities and (c) has outstanding unsecured commercial paper or
other short-term unsecured debt obligations that are rated A-1 by S&P and P-1
by Moody's (or comparable ratings if S&P and Moody's are not the Rating
Agencies).
"Distribution Date" means the 10th day of any month or if such 10th
day is not a Business Day, the first Business Day immediately following such
day, commencing in March 1997.
"Due Period" means, with respect to any Distribution Date and any
class of Notes, the calendar month immediately preceding the month of such
Distribution Date.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
"Final Scheduled Distribution Date" means with respect to a Class of
Notes the respective Class A-1 Final Scheduled Distribution Date, Class A-2
Final Scheduled Distribution Date, Class A-3 Final Scheduled Distribution Date,
Class A-4 Final Scheduled Distribution Date, Class A-5 Final Scheduled
Distribution Date, Class A-6 Final Scheduled Distribution Date, Class A-7 Final
Scheduled Distribution Date, or Class A-8 Final Scheduled Distribution Date.
"Grant" means mortgage, 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 this 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 the Collateral 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.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register; provided that the exercise of any rights of
such Holder or Noteholder under this Indenture shall at all times be subject to
Section 11.19 hereto.
"Indenture Trustee" means First Bank National Association, a national
banking corporation, as Indenture Trustee under this Indenture, or any
successor Indenture Trustee under this Indenture.
INDENTURE (SERIES 1997-1) -- PAGE 6
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"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor on
the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1, made by
an Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Interest Distribution Amount" means, on any Distribution Date, the
sum of the Noteholders' Interest Distributable Amount for each Class of Notes
and the Certificateholders' Interest Distributable Amount for such Distribution
Date.
"Interest Rate" means the Class A-1 Interest Rate, the Class A-2
Interest Rate, the Class A-3 Interest Rate, the Class A-4 Interest Rate, the
Class A-5 Interest Rate, the Class A-6 Interest Rate, the Class A-7 Interest
Rate or the Class A-8 Interest Rate, as applicable.
"Issuer" means FIRSTPLUS HOME LOAN OWNER TRUST 1997-1 until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the Notes.
"Issuer Order" and "Issuer Request" mean a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Moody's" means ▇▇▇▇▇'▇ Investor Service, Inc., or any successor
thereto.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a
Class A-4 Note, a Class A-5 Note, a Class A-6 Note, a Class A-7 Note or a Class
A-8 Note, as applicable.
"Note Depository Agreement" means the agreement dated February 27,
1997, among the Issuer, the Administrator, the Indenture Trustee and The
Depository Trust Company, as the initial Clearing Agency, relating to the Book
Entry Notes.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).
INDENTURE (SERIES 1997-1) -- PAGE 7
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"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.3.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer or the Administrator, under the circumstances described
in, and otherwise complying with, the applicable requirements of Section 11.1,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in this Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer or the
Administrator.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be employees of
or counsel to the Issuer and who shall be satisfactory to the Indenture Trustee
and the Securities Insurer, and which opinion or opinions shall be addressed to
the Indenture Trustee, as Indenture Trustee, and the Securities Insurer and
shall comply with any applicable requirements of Section 11.1 and shall be in
form and substance satisfactory to the Indenture Trustee and the Securities
Insurer.
"Outstanding" means, with respect to any Note and as of the date of
determination, any Note theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which
money in the necessary amount has been theretofore
deposited with the Indenture Trustee or any Paying
Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be
redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision for
such notice has been made, satisfactory to the
Indenture Trustee); and
(iii) Notes in exchange for or in lieu of which other
Notes have been authenticated and delivered
pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented
that any such Notes are held by a bona fide
purchaser; provided, that in determining whether
the Holders of the requisite Outstanding Amount of
the Notes have given any request, demand,
authorization, direction, notice, consent, or
waiver hereunder or under any Basic Document, Notes
owned by the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed
not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in
relying upon any such request, demand,
authorization, direction, notice, consent, or
waiver, only Notes that the Indenture Trustee knows
to be so owned shall be so disregarded. Notes so
owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes
to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such
Notes and
INDENTURE (SERIES 1997-1) -- PAGE 8
15
that the pledgee is not the Issuer, any other
obligor upon the Notes, the Seller or any Affiliate
of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all
Notes, or Class of Notes, as applicable, Outstanding at the date of
determination.
"Owner Trustee" means Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, or any
successor Owner Trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 and is authorized by the Issuer to make payments to and distributions from
the Note Distribution Account, including payment of principal of or interest on
the Notes on behalf of the Issuer.
"Payment Date" means a Distribution Date.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization, or government or any agency or political
subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.4 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Rating Agency Condition" means, with respect to any action to which a
Rating Agency Condition applies, that each Rating Agency shall have been given
10 days (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each of the Rating Agencies shall have notified the
Seller, the Servicer and the Issuer in writing that such action will not result
in a reduction or withdrawal of the then current rating of the Notes.
"Rating Agency" means either or both of (i) Standard & Poor's or (ii)
Moody's. If no such organization or successor is any longer in existence,
"Rating Agency" shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Securities Insurer,
notice of which designation shall be given to the Issuer, the Indenture
Trustee, the Owner Trustee and the Servicer.
"Record Date" means, as to each Distribution Date, the last Business
Day of the month immediately preceding the month in which such Distribution
Date occurs.
INDENTURE (SERIES 1997-1) -- PAGE 9
16
"Redemption Date" means in the case of a redemption of the Notes
pursuant to Section 10.1 or a payment to Noteholders pursuant to Section 10.3,
the Distribution Date specified by the Affiliated Holder pursuant to Section
10.1.
"Redemption Price" means in the case of a redemption of the Notes
pursuant to Section 10.1, an amount equal to the unpaid principal amount of the
Notes redeemed plus accrued and unpaid interest thereon at the respective
Interest Rates for each Class of Notes being so redeemed to but excluding the
Redemption Date, plus any unpaid Trust Fees and Expenses and all other amounts
owed to the Securities Insurer pursuant to the Insurance Agreement.
"Registered Holder" means the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Regular Principal Distribution Amount" means, on each Distribution
Date, an amount equal to the lesser of:
(A) the sum of the aggregate Class Principal Balance of the
Notes and the Certificate Principal Balance of the Certificates
immediately prior to such Distribution Date; and
(B) the greater of (1) the sum of (i) each scheduled payment
of principal collected by the Servicer in the related Due Period, (ii)
all partial and full principal prepayments applied by the Servicer
during such related Due Period, (iii) the principal portion of all Net
Liquidation Proceeds, Insurance Proceeds and Released Mortgaged
Property Proceeds received during the related Due Period, (iv) (a)
that portion of the purchase price of any repurchased Home Loan which
represents principal and (b) the principal portion of any Substitution
Adjustments required to be deposited in the Collection Account as of
the related Determination Date, (v) the amount of any Net Loan Losses
for the preceding Due Period equal to the amount on deposit in the
Reserve Account until such amount is reduced to zero, and (vi) if the
Overcollateralization Amount is zero, the amount of any Net Loan
Losses for the preceding Due Period minus the sum of (a) the amount
included in clause (v) above for such Distribution Date and (b) the
amount of Net Loan Losses for the preceding Due Period allocated to
reduce the Overcollateralization Amount to zero on such Distribution
Date pursuant to Section 5.09 of the Sale & Servicing Agreement; and
(2) the amount by which (i) the aggregate principal balance of the
Securities as of the preceding Distribution Date (after giving effect
to all payments of principal on such preceding Distribution Date)
exceeds (ii) the Pool Principal Balance plus funds on deposit in the
Pre-Funding Account, each as of the immediately preceding
Determination Date; provided, however, that if such Distribution Date
is an Overcollateralization Stepdown Date, then with respect to the
distribution of principal to the Noteholders and Certificateholders
the foregoing amount in each case, will be reduced (but not less than
zero) by the Overcollateralization Reduction Amount, if any, for such
Distribution Date.
INDENTURE (SERIES 1997-1) -- PAGE 10
17
"Reserve Account" means, the account established and maintained
pursuant to Section 5.07 of the Sale and Servicing Agreement.
"Responsible Officer" means, with respect to the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
dated as of February 1, 1997, among the Issuer, FIRSTPLUS INVESTMENT
CORPORATION, as Seller, and, FIRSTPLUS FINANCIAL, INC., as Transferor and
Servicer, and the Indenture Trustee, as Indenture Trustee and Co-Owner Trustee.
"Schedule of Home Loans" means the listing of the Home Loans set forth
in Schedule A, as supplemented as of each Subsequent Transfer Date and as of
any date on which a Deleted Home Loan has been repurchased from the Trust or
substituted with a Qualified Home Loan pursuant to Section 3.05 of the Sale and
Servicing Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" shall mean FIRSTPLUS INVESTMENT CORPORATION, in its capacity
as seller under the Sale and Servicing Agreement, and its successor in
interest.
"Servicer" shall mean FIRSTPLUS FINANCIAL, INC. in its capacity as
servicer under the Sale and Servicing Agreement, and any Successor Servicer
thereunder.
"Standard & Poor's means Standard & Poor's Ratings Group, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"State" means any one of the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
or the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.7(e).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from
time to time.
INDENTURE (SERIES 1997-1) -- PAGE 11
18
(b) Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein have
the respective meanings set forth in the Sale and Servicing Agreement for all
purposes of this Indenture.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined in the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.3 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 (as
provided in such agreements) and includes (in the
case of
INDENTURE (SERIES 1997-1) -- PAGE 12
19
agreements or instruments) references to all
attachments thereto and instruments incorporated
therein; references to a Person are also to its
permitted successors and assigns.
II
THE NOTES
SECTION 2.1 Form. The Notes shall be designated as the "FIRSTPLUS HOME
LOAN OWNER TRUST 1997-1 Asset Backed Notes, Series 1997-1". The Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class
A-5 Notes, the Class A-6 Notes, the Class A-7 Notes and the Class A-8 Notes, in
each case together with the Indenture Trustee's certificate of authentication,
shall be in substantially the form set forth in Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇,
Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit A-7 and Exhibit
A-8, respectively, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution thereof. Any
portion of the text of any Note may be set forth on the reverse thereof, with
an appropriate reference thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the officers executing such Notes, as evidenced by their execution of such
Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇,
Exhibit A-5, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ and Exhibit A-8 are part of the terms of
this Indenture.
SECTION 2.2 Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Issuer by an Authorized Officer of the Owner
Trustee or the Administrator. 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 Owner Trustee or the Administrator
shall bind the Issuer, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Notes or did not hold such offices at the date of such Notes.
Subject to the satisfaction of the conditions set forth in Section
2.8, the Indenture Trustee shall authenticate and deliver Class A-1 Notes for
original issue in an aggregate principal amount of $139,980,000, Class A-2
Notes for original issue in an aggregate principal amount of $64,680,000, Class
A-3 Notes for original issue in an aggregate principal amount of $65,160,000,
Class A-4 Notes for original issue in an aggregate principal amount of
$49,750,000, Class A-5 Notes for original issue in an aggregate principal
amount of $49,170,000, Class A-6 Notes for original
INDENTURE (SERIES 1997-1) -- PAGE 13
20
issue in an aggregate principal amount of $93,110,000, Class A-7 Notes for
original issue in an aggregate principal amount of $61,330,000 and Class A-8
Notes for original issue in an aggregate principal amount of $37,570,000. The
aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes, Class A-5 Notes, Class A-6 Notes, Class A-7 Notes and
Class A-8 Notes outstanding at any time may not exceed such respective amounts.
The Notes that are authenticated and delivered by the Indenture
Trustee to or upon the order of the Issuer on the Closing Date shall be dated
February 27, 1997. All other Notes that are authenticated after the Closing
Date for any other purpose under the Indenture shall be dated the date of their
authentication. The Notes shall be issuable as registered Notes in the minimum
denomination $100,000 and integral multiples of $1,000 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 a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.3 Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee initially shall be the "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon
any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties
of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and
to obtain copies thereof, and the Indenture Trustee shall have the right to
rely upon a certificate executed on behalf of the Note Registrar by an
Executive Officer thereof as to the names and addresses of the Holders of the
Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.2, the Issuer
shall execute, and the Indenture Trustee shall authenticate and the Noteholder
shall obtain from the Indenture Trustee, in the name of the designated
transferee or transferees, one or more new Notes of the same Class in any
authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of
the same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
INDENTURE (SERIES 1997-1) -- PAGE 14
21
from the Indenture Trustee, the Notes which the Noteholder making the exchange
is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.4 or Section 9.6 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to such
Note.
SECTION 2.4 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Indenture Trustee such security
or indemnity as may be required by it to hold the Issuer and the Indenture
Trustee harmless, then, in the absence of notice to the Issuer, the Note
Registrar or the Indenture Trustee that such Note has been acquired by a bona
fide purchaser, and the Issuer shall execute, and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Note, a replacement Note of the
same Class; provided, however, that if any such destroyed, lost or stolen Note,
but not a mutilated Note, shall have become or within seven days shall be due
and payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when
so due or payable or upon the Redemption Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such replacement Note was
issued presents for payment such original Note, the Issuer and the Indenture
Trustee shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Note from such Person to whom such replacement Note was delivered or any
assignee of such Person, except a bona fide purchaser, and shall be entitled to
recover upon the
INDENTURE (SERIES 1997-1) -- PAGE 15
22
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note, other than the
Securities Insurer, 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 in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.5 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Securities Insurer, the
Indenture Trustee and any agent of the Issuer, the Securities Insurer 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 none of
the Issuer, the Securities Insurer, the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.6 Payment of Principal and Interest; Defaulted Interest.
(a) The Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes, the Class A-4 Notes, the Class A-5
Notes, the Class A-6 Notes, the Class A-7 Notes and
the Class A-8 Notes shall accrue interest at the
Class A-1 Interest Rate, the Class A-2 Interest
Rate, the Class A-3 Interest Rate, the Class A-4
Interest Rate, the Class A-5 Interest Rate, the
Class A-6 Interest Rate, the Class A-7 Interest
Rate and the Class A-8 Interest Rate, respectively,
as set forth in Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇,
▇-▇, A-7 and A-8, respectively, and such interest
shall be payable on each Distribution Date as
specified therein, subject to Section 3.1. Any
installment of interest or principal, if any,
payable on any Note that is punctually paid or duly
provided for by the Issuer on the applicable
Distribution Date shall be paid to the Person in
whose name such Note (or one or more Predecessor
Notes) is registered on the Record Date by check
mailed first-class postage prepaid to such Person's
address as it appears on the Note Register on such
Record Date, except that, unless Definitive Notes
have been
INDENTURE (SERIES 1997-1) -- PAGE 16
23
issued pursuant to Section 2.12, with respect to
Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payment will be made by
wire transfer in immediately available funds to the
account designated by such nominee and except for
the final installment of principal payable with
respect to such Note on a Distribution Date or on
the applicable Final Scheduled Distribution Date
for such Class of Notes (and except for the
Redemption Price for any Note called for redemption
pursuant to Section 10.1), which shall be payable
as provided below. The funds represented by any
such checks returned undelivered shall be held in
accordance with Section 3.3.
(b) The principal of each Note shall be payable in
installments on each Distribution Date as provided
in the forms of the Notes set forth in Exhibit ▇-▇,
▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇,
▇▇▇▇▇▇▇ ▇-▇, Exhibit A-7 and Exhibit A-8.
Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes of a Class of Notes
shall be due and payable, if not previously paid,
on the earlier of (i) the respective Final
Scheduled Distribution Date of such Class, (ii) the
Redemption Date or (iii) the date on which an Event
of Default shall have occurred and be continuing,
if the Indenture Trustee or the Holders of Notes
representing not less than a majority of the
Outstanding Amount of the Notes have declared the
Notes to be immediately due and payable in the
manner provided in Section 5.2. All principal
payments on each Class of Notes shall be made pro
rata to the Noteholders of such Class entitled
thereto. The Indenture Trustee shall notify the
Person in whose name a Note is registered at the
close of business on the Record Date preceding the
Distribution Date on which the Issuer expects that
the final installment of principal of and interest
on such Note will be paid. Such notice shall be
mailed or transmitted by facsimile prior to such
final Distribution Date and shall specify that such
final installment will be payable only upon
presentation and surrender of such Note and shall
specify the place where such Note may be presented
and surrendered for payment of such installment. A
copy of such form of notice shall be sent to the
Securities Insurer by the Indenture Trustee.
Notices in connection with redemptions of Notes
shall be mailed to Noteholders as provided in
Section 10.2.
SECTION 2.7 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 canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner
INDENTURE (SERIES 1997-1) -- PAGE 17
24
whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange
for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Order that they be destroyed or returned to it; provided, that such Issuer
Order is timely and the Notes have not been previously disposed of by the
Indenture Trustee.
SECTION 2.8 Authentication of Notes. The Notes may be authenticated by
the Indenture Trustee, upon Issuer Request and upon receipt by the Indenture
Trustee of the following:
(a) An Issuer Order authorizing the execution and authentication
of such Notes by the Issuer.
(b) All of the items of Collateral which shall be delivered to the
Indenture Trustee or its designee.
(c) An executed counterpart of the Trust Agreement.
(d) Opinions of Counsel addressed to the Indenture Trustee and the
Securities Insurer to the effect that:
(i) all instruments furnished to the Indenture
Trustee as conditions precedent to the
authentication of the Notes by the
Indenture Trustee pursuant to the Indenture
conform to the requirements of this
Indenture and constitute all the documents
required to be delivered hereunder for the
Indenture Trustee to authenticate the
Notes;
(ii) all conditions precedent provided for in
this Indenture relating to the
authentication of the Notes have been
complied with;
(iii) the Owner Trustee has power and authority to
execute, deliver and perform its obligations
under the Trust Agreement;
(iv) the Issuer has been duly formed is validly
existing as a business trust under the laws
of the State of Delaware, 12 Del. C. Section
3801, et seq., and has power, authority and
legal right to execute and deliver this
Indenture, the Administration Agreement, the
Insurance Agreement and the Sale and
Servicing Agreement;
(v) assuming due authorization, execution and
delivery thereof by the Indenture Trustee,
the Indenture is the valid, legal and
binding obligation of the Issuer,
enforceable in accordance with its terms,
subject to bankruptcy, insolvency,
reorganization, arrangement, moratorium,
fraudulent or preferential conveyance and
other similar
INDENTURE (SERIES 1997-1) -- PAGE 18
25
laws of general application affecting the
rights of creditors generally and to
general principles of equity (regardless of
whether such enforcement is considered in a
proceeding in equity or at law);
(vi) the Notes, when executed and authenticated
as provided herein and delivered against
payment therefor, will be the valid, legal
and binding obligations of the Issuer
pursuant to the terms of this Indenture,
entitled to the benefits of this Indenture,
and will be enforceable in accordance with
their terms, subject to bankruptcy,
insolvency, reorganization, arrangement,
moratorium, fraudulent or preferential
conveyance and other similar laws of general
application affecting the rights of
creditors generally and to general
principles of equity (regardless of whether
such enforcement is considered in a
proceeding in equity or at law);
(vii) the Trust Agreement authorizes the Issuer
to Grant the Collateral to the Indenture
Trustee as security for the Notes and the
Owner Trustee has taken all necessary
action under the Trust Agreement to Grant
the Collateral to the Indenture Trustee;
(viii) this Indenture has been duly qualified under
the Trust Indenture Act of 1939;
(ix) this Indenture, together with the Grant of
the Collateral to the Indenture Trustee,
creates a valid security interest in the
Collateral in favor of the Indenture
Trustee for the benefit of the Noteholders;
(x) such action has been taken with respect to
delivery of possession of the Collateral,
and with respect to the execution and filing
of this Indenture and any financing
statements as are necessary to make
effective and to perfect a first priority
security interest created by this Indenture
in the Collateral in favor of the Indenture
Trustee, except that with respect to the
Debt Instruments, possession of such Debt
Instruments must be maintained by the
Indenture Trustee or an agent of the
Indenture Trustee (other than the Issuer, an
Affiliate of the Issuer, or a "securities
intermediary," as defined in Section 8.102
of the UCC, an agent of the Indenture
Trustee; and
(xi) no authorization, approval or consent of
any governmental body having jurisdiction
in the premises which has not been obtained
by the Issuer is required to be obtained by
the Issuer for the valid issuance and
delivery of the Notes, except that no
opinion need be expressed with respect to
any such authorizations, approvals or
INDENTURE (SERIES 1997-1) -- PAGE 19
26
consents as may be required under any state
securities "blue sky" laws.
(e) An Officer's Certificate complying with the requirements of
Section 11.1 and stating that:
(i) the Issuer is not in Default under this Indenture
and the issuance of the Notes applied for will not
result in any breach of any of the terms,
conditions or provisions of, or constitute a
default under, the Trust Agreement, any indenture,
mortgage, deed of trust or other agreement or
instrument to which the Issuer is a party or by
which it is bound, or any order of any court or
administrative agency entered in any proceeding to
which the Issuer is a party or by which it may be
bound or to which it may be subject, and that all
conditions precedent provided in this Indenture
relating to the authentication and delivery of the
Notes applied for have been complied with;
(ii) the Issuer is the owner of all of the Home Loans,
has not assigned any interest or participation in
the Home Loans (or, if any such interest or
participation has been assigned, it has been
released) and has the right to Grant all of the Home
Loans to the Indenture Trustee;
(iii) the Issuer has Granted to the Indenture Trustee all
of its right, title, and interest in the Collateral,
and has delivered or caused the same to be delivered
to the Indenture Trustee;
(iv) attached thereto are true and correct copies of
letters signed by ▇▇▇▇▇'▇ and S&P confirming that
each Class of the Notes and the Certificates have
been rated "Aaa" and "AAA" by ▇▇▇▇▇'▇ and S&P,
respectively; and
(v) all conditions precedent provided for in this
Indenture relating to the authentication of the
Notes have been complied with.
(f) A fair value certificate from the Servicer, as agent of the Trust,
pursuant to Section 2(a)M of the Administration Agreement.
SECTION 2.9 Release of Collateral.
(a) Subject to subsections (b) and (c) hereof
and Section 11.1 and the terms of the Basic
Documents, the Indenture Trustee shall
release property from the lien of this
Indenture only upon receipt of an Issuer
Request accompanied by an Officer's
Certificate, an Opinion of Counsel and
Independent Certificates in accordance with
TIA Sections 314(c) and 314(d)(l) or an
Opinion of Counsel in lieu of
INDENTURE (SERIES 1997-1) -- PAGE 20
27
such Independent Certificates to the effect
that the TIA does not require any such
Independent Certificates.
(b) The Servicer, on behalf of the Issuer,
shall be entitled to obtain a release from
the lien of this Indenture for any Home
Loan and the related Mortgaged Property at
any time (i) after a payment by the
Transferor or the Issuer of the Purchase
Price of the Home Loan, (ii) after a
Qualified Substitute Home Loan is
substituted for such Home Loan and payment
of the Substitution Adjustment, if any,
(iii) after liquidation of the Home Loan in
accordance with Section 4.02 of the Sale
and Servicing Agreement and the deposit of
all Recoveries thereon in the Collection
Account, or (iv) upon the termination of a
Home Loan (due to, among other causes, a
prepayment in full of the Home Loan and
sale or other disposition of the related
Mortgaged Property), if the Issuer delivers
to the Indenture Trustee and the Securities
Insurer an Issuer Request (A) identifying
the Home Loan and the related Mortgaged
Property to be released, (B) requesting the
release thereof, (C) setting forth the
amount deposited in the Collection Account
with respect thereto, and (D) certifying
that the amount deposited in the Collection
Account (x) equals the Purchase Price of
the Home Loan, in the event a Home Loan and
the related Mortgaged Property are being
released from the lien of this Indenture
pursuant to item (i) above, (y) equals the
Substitution Adjustment related to the
Qualified Substitute Home Loan and the
Deleted Home Loan released from the lien of
the Indenture pursuant to item (ii) above,
or (z) equals the entire amount of
Recoveries received with respect to such
Home Loan and the related Mortgaged
Property in the event of a release from the
lien of this Indenture pursuant to items
(iii) or (iv) above.
(c) The Indenture Trustee shall, if requested
by the Servicer, temporarily release or
cause the Custodian to temporarily release
to the Servicer the Indenture Trustee's
Home Loan File pursuant to the provisions
of Section 7.02 of the Sale and Servicing
Agreement upon compliance by the Servicer
of the provisions thereof provided that the
Indenture Trustee's Home Loan File shall
have been stamped to signify the Issuer's
pledge to the Indenture Trustee under the
Indenture.
SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance, will
be issued in the form of typewritten Notes representing the Book-Entry Notes,
to be delivered to The Depository Trust Company, the initial Clearing Agency,
by, or on behalf of, the Issuer. The Book-Entry Notes shall be registered
initially on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Owner thereof will receive a definitive Note
representing such Note Owner's interest in such Note, except as provided in
Section 2.12. Unless and until definitive, fully
INDENTURE (SERIES 1997-1) -- PAGE 21
28
registered Notes (the "Definitive Notes") have been issued to such Note Owners
pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force
and effect;
(ii) the Note Registrar and the Indenture Trustee shall
be entitled to deal with the Clearing Agency 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 Note Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this
Indenture, the provisions of this Section shall
control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to
those established by law and agreements between such
Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note
Depository Agreement. Unless and until Definitive
Notes are issued pursuant to Section 2.12, the
initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and
receive and transmit payments of principal of and
interest on the Notes to such Clearing Agency
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 Outstanding Amount of the Notes, the Clearing
Agency shall be deemed to represent such percentage
only to the extent that it has received instructions
to such effect from Note Owners and/or Clearing
Agency 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 2.11 Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to such Note Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to such Note Owners.
SECTION 2.12 Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Book-Entry
Notes and the Administrator is unable to locate a qualified successor, (ii) the
Administrator at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default, Owners of the Book-Entry Notes
representing beneficial interests aggregating at least a
INDENTURE (SERIES 1997-1) -- PAGE 22
29
majority of the Outstanding Amount of such Notes advise the Clearing Agency in
writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interests of such Note Owners, then the
Clearing Agency shall notify all Note Owners and the Indenture Trustee of the
occurrence of such event and of the availability of Definitive Notes to Note
Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with
the instructions of the Clearing Agency. None of the Issuer, the Note Registrar
or the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Notes, the Indenture
Trustee shall recognize the Holders of the Definitive Notes as Noteholders.
SECTION 2.13 Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Notes
will qualify as indebtedness of the Issuer secured by the Collateral. The
Issuer, by entering into this Indenture, and each Noteholder, by its acceptance
of a Note (and each Note Owner by its acceptance of an interest in the
applicable Book-Entry Note), agree to treat the Notes for federal, state and
local income, single business and franchise tax purposes as indebtedness of the
Issuer.
III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer will duly
and punctually pay (or will cause to be duly and punctually paid) the principal
of and interest, if any, on the Notes in accordance with the terms of the Notes
and this Indenture. Without limiting the foregoing, subject to and in
accordance with Section 8.2(c), the Issuer will cause to be distributed all
amounts on deposit in the Note Distribution Account on a Distribution Date
deposited therein pursuant to the Sale and Servicing Agreement (i) for the
benefit of the Class A-1 Notes, to the Class A-1 Noteholders, (ii) for the
benefit of the Class A-2 Notes, to the Class A-2 Noteholders, (iii) for the
benefit of the Class A-3 Notes, to the Class A-3 Noteholders, (iv) for the
benefit of the Class A-4 Notes, to the Class A-4 Noteholders, (v) for the
benefit of the Class A-5 Notes, to the Class A-5 Noteholders, (vi) for the
benefit of the Class A-6 Notes, to the Class A-6 Noteholders, (vii) for the
benefit of the Class A-7 Notes, to the A-7 Noteholders, and (viii) for the
benefit of the Class A-8 Notes, to the Class A-8 Noteholders. Amounts properly
withheld under the Code by any Person from a payment to any Noteholder of
interest and/or principal shall be considered as having been paid by the Issuer
to such Noteholder for all purposes of this Indenture.
The Notes shall be non-recourse obligations of the Issuer and shall be
limited in right of payment to amounts available from the Collateral and any
amounts received by the Indenture Trustee under the Guaranty Policy in respect
of the Notes, as provided in this Indenture. The Issuer shall not otherwise be
liable for payments on the Notes. If any other provision of this Indenture
shall be
INDENTURE (SERIES 1997-1) -- PAGE 23
30
deemed to conflict with the provisions of this Section 3.1, the provisions of
this Section 3.1 shall control.
SECTION 3.2 Maintenance of Office or Agency. The Issuer will or will
cause the Administrator to maintain in the Borough of Manhattan, The City of
New York, an office or agency where Notes may be surrendered for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Administrator to serve as its agent for the foregoing
purposes and to serve as Paying Agent with respect to the Certificates. The
Issuer will give prompt written notice to the Indenture Trustee of the
location, and of any change in the location, of any such office or agency. If
at any time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Indenture Trustee with the address thereof, such
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Issuer hereby appoints the Indenture Trustee as its agent to
receive all such surrenders, notices and demands.
SECTION 3.3 Money for Payments To Be Held in Trust. As provided in
Section 8.2(a ) and (b), all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Collection
Account and the Note Distribution Account pursuant to Section 8.2(c) shall be
made on behalf of the Issuer by the Indenture Trustee or by the Paying Agent,
and no amounts so withdrawn from the Collection Account and the Note
Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section.
On or before the third Business Day preceding each Distribution Date
and Redemption Date, the Indenture Trustee shall deposit or cause to be
deposited in the Note Distribution Account an aggregate sum sufficient to pay
the amounts due on such Distribution Date or Redemption Date under the Notes,
such sum to be held in trust for the benefit of the Persons entitled thereto,
and (unless the Paying Agent is the Indenture Trustee) shall promptly notify
the Indenture Trustee of its action or failure so to act.
Any Paying Agent shall be appointed by Issuer Order with written
notice thereof to the Indenture Trustee and the Securities Insurer. Any Paying
Agent appointed by the Issuer shall be a Person who would be eligible to be
Indenture Trustee hereunder as provided in Section 6.11. The Issuer shall not
appoint any Paying Agent (other than the Indenture Trustee) which is not, at
the time of such appointment, a Depository Institution.
The Issuer will cause each Paying Agent other than the Administrator
to execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section, that such Paying Agent will:
(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;
INDENTURE (SERIES 1997-1) -- PAGE 24
31
(ii) give the Indenture Trustee and the Securities
Insurer notice of any default by the Issuer (or any
other obligor upon the Notes) 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 a Paying Agent and forthwith
pay to the Indenture Trustee all sums held by it in
trust for the payment of Notes if at any time it
ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by
it on any Notes of any applicable withholding taxes
imposed thereon and with respect to any applicable
reporting requirements in connection therewith;
provided, however, that with respect to withholding
and reporting requirements applicable to original
issue discount (if any) on the Notes, the Issuer
shall have first provided the calculations
pertaining thereto to the Indenture Trustee.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order 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 or
abandoned property, any money held by the Indenture Trustee or any Paying Agent
in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for two years after such amount has become due and payable
shall be discharged from such trust and be paid to the Issuer on Issuer
Request; and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the extent
of the amounts so paid to the Issuer), and all liability of the Indenture
Trustee or such Paying Agent with respect to such trust money shall thereupon
cease; provided, however, that the Indenture Trustee or such Paying Agent,
before being required to make any such repayment, shall at the expense and
direction of the Issuer cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The City of New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Issuer. The Indenture Trustee shall also adopt
and employ, at the expense and direction of the Issuer, any other reasonable
INDENTURE (SERIES 1997-1) -- PAGE 25
32
means of notification of such repayment (including, but not limited to, mailing
notice of such repayment to Holders whose Notes have been called but have not
been surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
SECTION 3.4 Existence.
(a) Subject to Section 3.4(b), the Issuer will
keep in full effect its existence, rights
and franchises as a business trust under
the laws of the State of Delaware (unless
it becomes, or any successor Issuer
hereunder is or becomes, organized under
the laws of any other State or of the
United States of America, in which case the
Issuer will keep in full effect its
existence, rights and franchises under the
laws of such other jurisdiction) and will
obtain and preserve its qualification to do
business in each jurisdiction in which such
qualification is or shall be necessary to
protect the validity and enforceability of
this Indenture, the Notes and the
Collateral.
(b) Any successor to the Owner Trustee
appointed pursuant to Section 10.2 of the
Trust Agreement shall be the successor
Owner Trustee under this Indenture without
the execution or filing of any paper,
instrument or further act to be done on the
part of the parties hereto.
(c) Upon any consolidation or merger of or
other succession to the Owner Trustee, the
Person succeeding to the Owner Trustee
under the Trust Agreement may exercise
every right and power of the Owner Trustee
under this Indenture with the same effect
as if such Person had been named as the
Owner Trustee herein.
SECTION 3.5 Protection of Collateral. The Issuer will from time to
time and upon the direction of the Securities Insurer execute and deliver all
such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(i) provide further assurance with respect to
the Grant of all or any portion of the
Collateral;
(ii) maintain or preserve the lien and security
interest (and the priority thereof) of this
Indenture or carry out more effectively the
purposes hereof;
(iii) perfect, publish notice of or protect the
validity of any Grant made or to be made by
this Indenture;
INDENTURE (SERIES 1997-1) -- PAGE 26
33
(iv) enforce any rights with respect to the
Collateral; or
(v) preserve and defend title to the Collateral
and the rights of the Indenture Trustee,
the Noteholders and the Securities Insurer
in such Collateral against the claims of
all persons and parties.
The Issuer hereby designates the Administrator its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.5.
SECTION 3.6 Annual Opinions as to Collateral.
On or before February 15 in each calendar year, beginning in 1998, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until February 15th of the following
calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Home Loans.
(a) The Issuer will not take any action and will
use its best efforts not to permit any
action to be taken by others that would
release any Person from any of such
Person's material covenants or obligations
under any instrument or agreement included
in the Collateral or that would result in
the amendment, hypothecation,
subordination, termination or discharge of,
or impair the validity or effectiveness of,
any such instrument or agreement, except as
expressly provided in this Indenture, the
Sale and Servicing Agreement or such other
instrument or agreement.
(b) The Issuer may contract with or otherwise
obtain the assistance of other Persons
(including, without limitation, the
Administrator under the Administration
Agreement) to assist it in performing its
duties under this Indenture, and any
performance of such duties by a Person
identified to the Indenture Trustee and the
Securities Insurer in an Officer's
Certificate of the Issuer shall be deemed
to be action taken
INDENTURE (SERIES 1997-1) -- PAGE 27
34
by the Issuer. Initially, the Issuer has
contracted with the Servicer and the
Administrator to assist the Issuer in
performing its duties under this Indenture.
The Administrator must at all times be the
same person as the Indenture Trustee.
(c) The Issuer will punctually perform and
observe all of its obligations and
agreements contained in this Indenture, the
Basic Documents and in the instruments and
agreements included in the Collateral,
including but not limited to (i) filing or
causing to be filed all UCC financing
statements and continuation statements
required to be filed by the terms of this
Indenture and the Sale and Servicing
Agreement and (ii) recording or causing to
be recorded all Mortgages, Assignments of
Mortgage, all intervening Assignments of
Mortgage and all assumption and
modification agreements required to be
recorded by the terms of the Sale and
Servicing Agreement, in accordance with and
within the time periods provided for in
this Indenture and/or the Sale and
Servicing Agreement, as applicable. Except
as otherwise expressly provided therein,
the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document
or any provision thereof without the
consent of the Indenture Trustee, the
Securities Insurer, and the Holders of at
least a majority of the Outstanding Amount
of the Notes.
(d) If the Issuer shall have knowledge of the
occurrence of an Event of Default under the
Sale and Servicing Agreement, the Issuer
shall promptly notify the Indenture
Trustee, the Securities Insurer and the
Rating Agencies thereof, and shall specify
in such notice the action, if any, the
Issuer is taking with respect of such
default. If such an Event of Default shall
arise from the failure of the Servicer to
perform any of its duties or obligations
under the Sale and Servicing Agreement with
respect to the Home Loans, the Issuer shall
take all reasonable steps available to it
to remedy such failure.
(e) As promptly as possible after the giving of
notice of termination to the Servicer of
the Servicer's rights and powers pursuant
to Section 10.01 of the Sale and Servicing
Agreement, the Issuer, upon the prior
written consent of or upon the direction of
the Securities Insurer, shall appoint a
successor servicer (the "Successor
Servicer"), and such Successor Servicer
shall accept its appointment by a written
assumption in a form acceptable to the
Indenture Trustee. In the event that a
Successor Servicer has not been appointed
and accepted its appointment at the time
when the Servicer ceases to act as
Servicer, the Indenture Trustee without
further action shall automatically be
appointed the Successor Servicer. The
Indenture
INDENTURE (SERIES 1997-1) -- PAGE 28
35
Trustee may resign as the Servicer by
giving written notice of such resignation
to the Issuer and in such event will be
released from such duties and obligations,
such release not to be effective until the
date a new servicer enters into a servicing
agreement with the Issuer as provided
below. Upon delivery of any such notice to
the Issuer, the Issuer shall obtain a new
servicer as the Successor Servicer under
the Sale and Servicing Agreement. Any
Successor Servicer other than the Indenture
Trustee shall (i) satisfy the criteria
specified in Section 9.04(b) of the Sale
and Servicing Agreement and (ii) enter into
a servicing agreement with the Issuer
having substantially the same provisions as
the provisions of the Sale and Servicing
Agreement applicable to the Servicer. If
within 30 days after the delivery of the
notice referred to above, the Issuer shall
not have obtained such a new servicer, the
Indenture Trustee may appoint, or may
petition a court of competent jurisdiction
to appoint, a Successor Servicer. In
connection with any such appointment, the
Indenture Trustee may make such
arrangements for the compensation of such
successor as it and such successor shall
agree, subject to the limitations set forth
below and in the Sale and Servicing
Agreement, and in accordance with Section
10.02 of the Sale and Servicing Agreement,
the Issuer shall enter into an agreement
with such successor for the servicing of
the Home Loans (such agreement to be in
form and substance satisfactory to the
Indenture Trustee and the Securities
Insurer). If the Indenture Trustee shall
succeed to the Servicer's duties as
servicer of the Home Loans as provided
herein, it shall do so in its individual
capacity and not in its capacity as
Indenture Trustee and, accordingly, the
provisions of Article VI hereof shall be
inapplicable to the Indenture Trustee in
its duties as successor Servicer and the
servicing of the Home Loans. In case the
Indenture Trustee shall become successor
Servicer under the Sale and Servicing
Agreement, the Indenture Trustee shall be
entitled to appoint as Servicer any one of
its Affiliates, provided that it shall be
fully liable for the actions and omissions
of such Affiliate in such capacity as
Successor Servicer.
(f) Upon any termination of the Servicer's
rights and powers pursuant to the Sale and
Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee and
the Securities Insurer. As soon as a
successor Servicer is appointed and
approved by the Securities Insurer, the
Issuer shall notify the Indenture Trustee
of such appointment, specifying in such
notice the name and address of such
successor Servicer.
(g) Without derogating from the absolute nature
of the assignment granted to the Indenture
Trustee under this Indenture or the rights
of
INDENTURE (SERIES 1997-1) -- PAGE 29
36
the Indenture Trustee hereunder, the Issuer
agrees (i) that it will not, without the
prior written consent of the Indenture
Trustee and the Securities Insurer, or, if
a Securities Insurer Default has occurred
and is continuing, the Holders of at least
a majority in Outstanding Amount of the
Notes, amend, modify, waive, supplement,
terminate or surrender, or agree to any
amendment, modification, supplement,
termination, waiver or surrender of, the
terms of any Collateral (except to the
extent otherwise provided in the Sale and
Servicing Agreement) or the Basic
Documents, or waive timely performance or
observance by the Servicer or the Seller
under the Sale and Servicing Agreement; and
(ii) that any such amendment shall not (A)
increase or reduce in any manner the amount
of, or accelerate or delay the timing of,
distributions that are required to be made
for the benefit of the Noteholders or (B)
reduce the aforesaid percentage of the
Notes that is required to consent to any
such amendment, without the consent of the
Holders of all the outstanding Notes. If
any such amendment, modification,
supplement or waiver shall be so consented
to by the Indenture Trustee and the
Securities Insurer or, if a Securities
Insurer Default has occurred and is
continuing, such Holders, the Issuer
agrees, promptly following a request by the
Indenture Trustee or the Securities Insurer
to do so, to execute and deliver, in its
own name and at its own expense, such
agreements, instruments, consents and other
documents as the Indenture Trustee may deem
necessary or appropriate in the
circumstances.
SECTION 3.8 Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, the
Loan Sale Agreement or the Sale and Servicing
Agreement, sell, transfer, exchange or otherwise
dispose of any of the properties or assets of the
Issuer, including those included in the Collateral,
unless directed to do so by the Indenture Trustee or
the Securities Insurer;
(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 Collateral;
(iii) engage in any business or activity other than as
permitted by the Trust Agreement or other than in
connection with, or relating to, the issuance of
Notes pursuant to this Indenture, or amend the Trust
Agreement as in effect on the Closing Date other
than in accordance with Section 11.1 thereof,
INDENTURE (SERIES 1997-1) -- PAGE 30
37
(iv) issue debt obligations under any other indenture;
(v) incur or assume any indebtedness or guaranty any
indebtedness of any Person, except for such
indebtedness as may be incurred by the Issuer in
connection with the issuance of the Notes pursuant
to this Indenture;
(vi) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person;
(vii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this
Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be
released from any covenants or obligations with
respect to the Notes under this Indenture except as
may be expressly permitted hereby, (B) permit any
lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien
of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Collateral or any
part thereof or any interest therein or the proceeds
thereof (other than tax liens, mechanics' liens and
other liens that arise by operation of law, in each
case on any of the Mortgaged Properties and arising
solely as a result of an action or omission of the
related Obligor) or (C) permit the lien of this
Indenture not to constitute a valid first priority
(other than with respect to any such tax, mechanics'
or other lien) security interest in the Collateral;
(viii) remove the Administrator without cause unless the
Rating Agency Condition shall have been satisfied in
connection with such removal; or
(ix) take any other action or fail to take any action
which may cause the Issuer to be taxable as (a) an
association pursuant to Section 7701 of the Code and
the corresponding regulations or (b) as a taxable
mortgage pool pursuant to Section 7701(i) of the
Code and the corresponding regulations.
SECTION 3.9 Annual Statement as to Compliance. The Issuer will deliver
to the Indenture Trustee and the Securities Insurer, within 120 days after the
end of each fiscal year of the Issuer (commencing with the fiscal year 1997),
an Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that:
(i) a review of the activities of the Issuer during such
year and of its performance under this Indenture has
been made under such Authorized Officer's
supervision; and
(ii) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied with
all conditions and covenants under this
INDENTURE (SERIES 1997-1) -- PAGE 31
38
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 Covenants of the Issuer. All covenants of the Issuer in
this Indenture are covenants of the Issuer and are not covenants of the Owner
Trustee. The Owner Trustee is, and any successor Owner Trustee under the Trust
Agreement will be, entering into this Indenture solely as Owner Trustee under
the Trust Agreement and not in its respective individual capacity, and in no
case whatsoever shall the Owner Trustee or any such successor Owner Trustee be
personally liable on, or for any loss in respect of, any of the statements,
representations, warranties or obligations of the Issuer hereunder, as to all
of which the parties hereto agree to look solely to the property of the Issuer.
SECTION 3.11 Servicer's Obligations. The Issuer shall cause the
Servicer to comply with Sections 5.01, 6.01, 7.07 and Article IX of the Sale
and Servicing Agreement.
SECTION 3.12 Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Issuer may make, or cause to be made, (x)
distributions to the Servicer, the Indenture Trustee, the Owner Trustee, the
Securityholders and the holders of the Residual Interest as contemplated by,
and to the extent funds are available for such purpose under, the Sale and
Servicing Agreement or the Trust Agreement and (y) payments to the Indenture
Trustee pursuant to Section 1(a)(ii) of the Administration Agreement. The
Issuer will not, directly or indirectly, make or cause to be made payments to
or distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.
SECTION 3.13 Treatment of Notes as Debt for Tax Purposes. The Issuer
shall, and shall cause the Administrator to, treat the Notes as indebtedness
for all federal and state tax purposes.
SECTION 3.14 Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Securities Insurer and the Rating Agencies prompt
written notice of each Event of Default hereunder, each default on the part of
the Servicer or the Seller of its obligations under the Sale and Servicing
Agreement and each default on the part of the Transferor or the Seller of its
obligations under the Loan Sale Agreement.
SECTION 3.15 Further Instruments and Acts. Upon request of the
Indenture Trustee or the Securities Insurer, the Issuer will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this
Indenture.
INDENTURE (SERIES 1997-1) -- PAGE 32
39
IV
SATISFACTION AND DISCHARGE
SECTION 4.1 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 3.3,
3.4, 3.5, 3.8 and 3.10 hereof, (v) the rights, obligations and immunities of
the Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.7 and the obligations of the Indenture Trustee under Section
4.2) and (vi) the rights of Noteholders as beneficiaries hereof with respect to
the property so deposited with the Indenture Trustee payable to all or any of
them), and the Indenture Trustee, on demand of and at the expense of the
Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when all of the
following have occurred:
(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 2.4
and (ii) Notes for whose
payment money has
theretofore been deposited
in trust or segregated and
held in trust by the
Issuer and thereafter
repaid to the Issuer or
discharged from such
trust, as provided in
Section 3.3) 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 Class A-8
Final Scheduled Distribution Date within one
year, or
c. are to be called for redemption within one
year under arrangements satisfactory to the
Indenture Trustee for the giving of notice
of redemption by the Indenture Trustee in
the name, and at the expense, of the Issuer,
and the Issuer, in the case of a., b. or c.
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
INDENTURE (SERIES 1997-1) -- PAGE 33
40
amount sufficient to pay and discharge the
entire indebtedness on such Notes not
theretofore delivered to the Indenture
Trustee for cancellation when due to the
applicable Final Scheduled Distribution
Date of such Class of Notes or Redemption
Date (if Notes shall have been called for
redemption pursuant to Section 10.1), as
the case may be;
(B) the later of (a) eighteen months
after payment in full of all
outstanding obligations under the
Securities, (b) the payment in full
of all unpaid Trust Fees and
Expenses and all sums owing to the
Securities Insurer under the
Insurance Agreement and (c) the
date on which the Issuer has paid
or caused to be paid all other sums
payable hereunder by the Issuer;
and
(C) the Issuer has delivered to the
Indenture Trustee an Officer's
Certificate, an Opinion of Counsel
and (if required by the TIA or the
Indenture Trustee) an Independent
Certificate from a firm of certified
public accountants, each meeting
the applicable requirements of
Section 11.1(a) and, subject to
Section 11.2, each stating that all
conditions precedent herein
provided for relating to the
satisfaction and discharge of this
Indenture with respect to the Notes
have been complied with.
SECTION 4.2 Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Sections 3.3 and 4.1 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment, either directly or through any Paying Agent, as
the Indenture Trustee may determine, to the Holders of the particular Notes for
the payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.3 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.3 and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
INDENTURE (SERIES 1997-1) -- PAGE 34
41
V
REMEDIES
SECTION 5.1 Events of Default. "Event of Default,"wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(a) default in the payment of any interest on
any Note when the same becomes due and
payable; or
(b) default in the payment of the principal of
or any installment of the principal of any
Note when the same becomes due and payable;
or
(c) default in the observance or performance of
any covenant or agreement of the Issuer
made in this Indenture (other than a
covenant or agreement, a default in the
observance or performance of which is
elsewhere in this Section specifically
dealt with), or any representation or
warranty of the Issuer made in this
Indenture, the Insurance Agreement, the
Sale and Servicing Agreement 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 misrepresentation 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 Issuer by the Indenture Trustee or to
the Issuer and the Indenture Trustee by the
Holders of at least 25% of the Outstanding
Amount of the 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
(d) default in the observance or performance of
any covenant or agreement of the Company
made in the Trust Agreement or any
representation or warranty of the Company
made in the Trust Agreement, 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
misrepresentation 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,
INDENTURE (SERIES 1997-1) -- PAGE 35
42
to the Issuer by the Indenture Trustee or
to the Issuer and the Indenture Trustee by
the Holders of at least 25% of the
Outstanding Amount of the 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;
(e) the filing of a decree or order for relief
by a court having jurisdiction in the
premises in respect of the Issuer or any
substantial part of the Collateral 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
Issuer or for any substantial part of the
Collateral, or ordering the winding-up or
liquidation of the Issuer's affairs, and
such decree or order shall remain unstayed
and in effect for a period of 60
consecutive days; or
(f) the commencement by the Issuer of a
voluntary case under any applicable federal
or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or
the consent by the Issuer to the entry of
an order for relief in an involuntary case
under any such law, or the consent by the
Issuer to the appointment or taking
possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator
or similar official of the Issuer or for
any substantial part of the Collateral, or
the making by the Issuer of any general
assignment for the benefit of creditors, or
the failure by the Issuer generally to pay
its debts as such debts become due, or the
taking of any action by the Issuer in
furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee and the Securities
Insurer, within five days after the occurrence thereof, 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 clauses (c) and
(d) above, its status and what action the Issuer is taking or proposes to take
with respect thereto.
SECTION 5.2 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 direction or upon the prior written consent of
the Securities Insurer or the Holders of Notes representing not less than a
majority of the Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
unpaid principal amount of such 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 has
been made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as
INDENTURE (SERIES 1997-1) -- PAGE 36
43
hereinafter in this Article V provided, the Holders of Notes representing a
majority of the Outstanding Amount of the Notes, by written notice to the
Issuer and the Indenture Trustee, may rescind and annul such declaration and
its consequences if:
(a) the Issuer has paid or deposited with the
Indenture Trustee a sum sufficient to pay:
(i) all payments of principal of and interest on
all Notes and all other amounts that would
then be due hereunder or upon such Notes if
the Event of Default giving rise to such
acceleration had not occurred; and
(ii) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable
compensation, expenses, disbursements and
advances of the Indenture Trustee and its
agents and counsel; and
(iii) all Events of Default, other than the
nonpayment of the principal of the Notes
that has become due solely by such
acceleration, have been cured or waived as
provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if (i) default is
made in the payment of any interest on any
Note when the same becomes due and payable,
and such default continues for a period of
five days, or (ii) default is made in the
payment of the principal of or any
installment of the principal of any Note
when the same becomes due and payable, the
Issuer will, upon demand of the Indenture
Trustee and at the direction of the
Securities Insurer, pay to the Indenture
Trustee, for the benefit of the Holders of
the Notes and the Securities Insurer, the
whole amount then due and payable on such
Notes for principal and interest, with
interest upon the overdue principal and, to
the extent payment at such rate of interest
shall be legally enforceable, upon overdue
installments of interest at the rate borne
by the Notes 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 the Securities
Insurer and their respective agents and
counsel.
(b) In case the Issuer shall fail forthwith to
pay such amounts upon such demand, the
Indenture Trustee, in its own name and as
trustee of an express trust, shall at the
direction of the Securities Insurer, and if
a Securities Insurer Default has occurred
and is continuing, the
INDENTURE (SERIES 1997-1) -- PAGE 37
44
Indenture Trustee may and shall at the
direction of the majority of the Holders of
the Notes, institute a Proceeding for the
collection of the sums so due and unpaid,
and may prosecute such Proceeding to
judgment or final decree, and may enforce
the same against the Issuer or other
obligor upon such Notes and collect in the
manner provided by law out of the property
of the Issuer or other obligor upon such
Notes, wherever situated, the moneys
adjudged or decreed to be payable.
(c) If an Event of Default occurs and is
continuing, the Indenture Trustee shall, at
the direction of the Securities Insurer,
and if a Securities Insurer Default has
occurred and is continuing, the Indenture
Trustee may and shall at the direction of
the majority of the Holders of the Notes, as
more particularly provided in Section 5.4,
in its discretion, proceed to to protect
and enforce its rights and the rights of
the Securities Insurer and the Noteholders,
by such appropriate Proceedings as the
Indenture Trustee shall deem most effective
to protect and enforce any such rights,
whether for the specific enforcement of any
covenant or agreement in this Indenture or
in aid of the exercise of any power granted
herein, or to enforce any other proper
remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture
or by law.
(d) In case there shall be pending, relative to
the Issuer or any other obligor upon the
Notes or any Person having or claiming an
ownership interest in the Collateral,
Proceedings under Title 11 of the United
States Code or any other applicable federal
or state bankruptcy, insolvency or other
similar law, or in case a receiver,
assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or
similar official shall have been appointed
for or taken possession of the Issuer or
its property or such other obligor or
Person, or in case of any other comparable
judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the
creditors or property of the Issuer or such
other obligor, the Indenture Trustee,
irrespective of whether the principal of
any Notes shall then be due and payable as
therein expressed or by declaration or
otherwise and irrespective of whether the
Indenture Trustee shall have made any
demand pursuant to the provisions of this
Section, shall be entitled and empowered,
upon the direction of the Securities
Insurer, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee
INDENTURE (SERIES 1997-1) -- PAGE 38
45
(including any claim for reasonable compensation to the Indenture
Trustee, each predecessor Indenture Trustee and the Securities
Insurer, 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), the
Securities Insurer and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all
amounts received with respect to the claims of the Noteholders, the
Securities Insurer and 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, the Securities Insurer or the Holders of
Notes allowed in any judicial proceedings relative to the Issuer, its
creditors and its property; and any trustee, receiver, liquidator,
custodian or other similar official in any such Proceeding is hereby
authorized by each of such Noteholders and the Securities Insurer 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 and the Securities Insurer, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee except as a
result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to
authorize the Indenture Trustee to
authorize or consent to or vote for or
accept or adopt on behalf of any Noteholder
or the Securities Insurer any plan of
reorganization, arrangement, adjustment or
composition affecting the Notes or the
rights of any Holder thereof or the
Securities Insurer 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
INDENTURE (SERIES 1997-1) -- PAGE 39
46
compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their
respective agents and attorneys, shall be
for the ratable benefit of the Holders of
the Notes and the Securities Insurer.
(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
Noteholders, and it shall not be necessary
to make any Noteholder a party to any such
Proceedings.
SECTION 5.4 Remedies; Priorities.
(a) If an Event of Default shall have occurred
and be continuing, the Indenture Trustee
shall, at the direction of the Securities
Insurer, and if a Securities Insurer
Default has occurred and is continuing, the
Indenture Trustee may and at the direction
of a majority of the Holders of the Notes
shall do one or more of the following
(subject to Section 5.5):
(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 Issuer and any other obligor upon such Notes moneys adjudged
due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Collateral;
(iii) exercise any remedies of a secured party under the
UCC and take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee, the Securities Insurer
or the Noteholders; and
(iv) sell the Collateral or any portion thereof or rights
or interest therein in a commercially reasonable manner, 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 Collateral following an Event of
Default, unless (A) the Holders of 100% of the Outstanding Amount of
the Notes consent thereto, (B) the proceeds of such sale or
liquidation distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon such Notes for
principal and interest or (C) the Indenture Trustee determines that
the Collateral will not continue to provide sufficient funds for the
payment of principal of and interest on the Notes as they would have
become due if the Notes had not been declared due and payable, and the
Indenture Trustee obtains the consent of Holders of 66-2/3% of the
Outstanding Amount of the Notes. In determining such sufficiency or
insufficiency with respect to clause (B) and (C), the Indenture
Trustee may,
INDENTURE (SERIES 1997-1) -- PAGE 40
47
but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose.
(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 the Indenture Trustee Fee
then due and any costs or expenses incurred by it in connection with
the enforcement of the remedies provided for in this Article V and to
the Owner Trustee for the Owner Trustee Fee then due;
SECOND: to the Securities Insurer for the Guaranty Insurance
Premium then due and unpaid;
THIRD: to the Servicer for the Servicing Fee then due and
unpaid;
FOURTH: to Noteholders for amounts due and unpaid on the Notes
for interest (including any premium), pro rata, according to the
amounts due and payable on the Notes for interest (including any
premium);
FIFTH: to Holders of the Class A-1 Notes for amounts due and
unpaid on the Class A-1 Notes for principal, pro rata, according to
the amounts due and payable on the Class A-1 Notes for principal,
until the Outstanding Amount of the Class A-1 Notes is reduced to
zero;
SIXTH: to Holders of the Class A-2 Notes for amounts due and
unpaid on the Class A-2 Notes for principal, pro rata, according to
the amounts due and payable on the Class A-2 Notes for principal,
until the Outstanding Amount of the Class A-2 Notes is reduced to
zero;
SEVENTH: to Holders of the Class A-3 Notes for amounts due and
unpaid on the Class A-3 Notes for principal, pro rata, according to
the amounts due and payable on the Class A-3 Notes for principal,
until the Outstanding Amount of the Class A-3 Notes is reduced to
zero;
EIGHTH: to Holders of the Class A-4 Notes for amounts due and
unpaid on the Class A-4 Notes for principal, pro rata, according to
the amounts due and payable on the Class A-4 Notes for principal,
until the Outstanding Amount of the Class A-4 Notes is reduced to
zero;
NINTH: to Holders of the Class A-5 Notes for amounts due and
unpaid on the Class A-5 Notes for principal, pro rata, according to
the amounts due and payable on the Class A-5 Notes for principal,
until the Outstanding Amount of the Class A-5 Notes is reduced to
zero;
INDENTURE (SERIES 1997-1) -- PAGE 41
48
TENTH: to Holders of the Class A-6 Notes for amounts due and
unpaid on the Class A-6 Notes for principal, pro rata, according to
the amounts due and payable on the Class A-6 Notes for principal,
until the Outstanding Amount of the Class A-6 Notes is reduced to
zero;
ELEVENTH: to Holders of the Class A-7 Notes for amounts due
and unpaid on the Class A-7 Notes for principal, pro rata, according
to the amounts due and payable on the Class A-7 Notes for principal,
until the Outstanding Amount of the Class A-7 Notes is reduced to
zero;
TWELFTH: to Holders of the Class A-8 Notes for amounts due
and unpaid on the Class A-8 Notes for principal, pro rata, according
to the amounts due and payable on the Class A-8 Notes for principal,
until the Outstanding Amount of the Class A-8 Notes is reduced to
zero;
THIRTEENTH: to the Owner Trustee or Co-Owner Trustee, as
applicable, for amounts required to be distributed to the
Certificateholders pursuant to the Trust Agreement;
FOURTEENTH: to the Securities Insurer for any amounts then
due and payable under the Insurance Agreement;
FIFTEENTH: to the Servicer for any amounts then due and
payable as the Servicing Advance Reimbursement Amount under the Sale
and Servicing Agreement; and
SIXTEENTH: to the Owner Trustee or Co-Owner Trustee, as
applicable, for any amounts to be distributed, pro rata, to the
holders of the Residual Interest.
The Indenture Trustee may fix a record date and payment date for any
payment to be made to the Noteholders pursuant to this Section. At least 15
days before such record date, the Indenture Trustee shall mail to each
Noteholder, the Securities Insurer and the Issuer a notice that states the
record date, the payment date and the amount to be paid.
SECTION 5.5 Optional Preservation of the Collateral. If the Notes have
been declared to be due and payable under Section 5.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain possession
of the Collateral. 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 Notes, and the Indenture Trustee shall take such desire into
account when determining whether or not to maintain possession of the
Collateral. In determining whether to maintain possession of the Collateral,
the Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose.
INDENTURE (SERIES 1997-1) -- PAGE 42
49
SECTION 5.6 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 for so long as a Securities Insurer Default has not occurred
or is not continuing and if a Securities Insurer Default has occurred and is
continuing, unless:
(a) such Holder has previously given written
notice to the Indenture Trustee of a
continuing Event of Default;
(b) the Holders of not less than 25% of the
Outstanding Amount of the Notes have made
written request to the Indenture Trustee to
institute such Proceeding in respect of
such Event of Default in its own name as
Indenture Trustee hereunder;
(c) 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;
(d) the Indenture Trustee for 60 days after its
receipt of such notice, request and offer
of indemnity has failed to institute such
Proceedings; and
(e) 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 Outstanding
Amount of the Notes.
It is understood and intended that no one or more Holders of Notes
shall have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the rights of
any other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Outstanding Amount of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7 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 Final Scheduled Distribution Date thereof expressed in
such Note or in this Indenture (or, in the case of redemption, on or after the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
INDENTURE (SERIES 1997-1) -- PAGE 43
50
SECTION 5.8 Restoration of Rights and Remedies. If the Indenture
Trustee, the Securities Insurer or any Noteholder has instituted any Proceeding
to enforce any right or remedy under this Indenture and such Proceeding has
been discontinued or abandoned for any reason or has been determined adversely
to the Indenture Trustee, the Securities Insurer or to such Noteholder, then
and in every such case the Issuer, the Indenture Trustee, the Securities
Insurer and the Noteholders shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee and
the Noteholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.9 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Securities Insurer or
to the Noteholders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 5.10 Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee, the Securities Insurer or any Holder of any Note to
exercise any right or remedy accruing upon any Default or Event of Default
shall impair any such right or remedy or constitute a waiver of any such
Default or Event of Default or an acquiescence therein. Every right and remedy
given by this Article V or by law to the Indenture Trustee, the Securities
Insurer or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee, the Securities Insurer or
by the Noteholders, as the case may be, subject, in each case, however, to the
right of the Securities Insurer to control any such right and remedy, except as
provided in Section 11.21.
SECTION 5.11 Control by Noteholders. The Holders of a majority of the
Outstanding Amount of the Notes shall have the right to direct the time, method
and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with
any rule of law or with this Indenture;
(b) subject to the express terms of Section
5.4, any direction to the Indenture Trustee
to sell or liquidate the Collateral shall
be by Holders of Notes representing not
less than 100% of the Outstanding Amount of
the Notes;
(c) if the conditions set forth in Section 5.5
have been satisfied and the Indenture
Trustee elects to retain the Collateral
pursuant to such Section, then any
direction to the Indenture Trustee by
Holders of
INDENTURE (SERIES 1997-1) -- PAGE 44
51
Notes representing less than 100% of the
Outstanding Amount of the Notes to sell or
liquidate the Collateral shall be of no
force and effect; and
(d) the Indenture Trustee may take any other
action deemed proper by the Indenture
Trustee that is not inconsistent with such
direction.
Notwithstanding the rights of the Securities Insurer and the
Noteholders set forth in this Section, subject to Section 6.1, the Indenture
Trustee need not take any action that it determines might involve it in
liability or might materially adversely affect the rights of any Noteholders
not consenting to such action.
SECTION 5.12 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.2, the
Holders of Notes representing not less than a majority of the Outstanding
Amount of the Notes may waive any past Default or Event of Default and its
consequences except a Default (a) in the payment of principal of or interest on
any of the Notes or (b) in respect of a covenant or provision hereof that
cannot be modified or amended without the consent of the Securities Insurer or
the Holder of each Note, as applicable. In the case of any such waiver, the
Issuer, the Indenture Trustee, the Securities Insurer 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
Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and 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 Default or Event of Default or impair any right consequent
thereto.
SECTION 5.13 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder'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 shall not apply to (a) any suit instituted by the
Indenture Trustee or the Securities Insurer, (b) any suit instituted by any
Noteholder, or group of Noteholders, in each case holding in the aggregate more
than 10% of the Outstanding Amount of the Notes or (c) any suit instituted by
any Noteholder for the enforcement of the payment of principal of or interest
on any Note on or after the respective due dates expressed in such Note and in
this Indenture (or, in the case of redemption, on or after the Redemption
Date).
INDENTURE (SERIES 1997-1) -- PAGE 45
52
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Indenture Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 5.15 Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Collateral or
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.4(b).
SECTION 5.16 Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the
Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall
take all such lawful action as the
Indenture Trustee may request to compel or
secure the performance and observance by
the Seller and the Servicer, as applicable,
of each of their obligations to the Issuer
under or in connection with the Sale and
Servicing Agreement or by the Seller of its
obligations under or in connection with the
Loan Sale Agreement, and to exercise any
and all rights, remedies, powers and
privileges lawfully available to the Issuer
under or in connection with the Sale and
Servicing Agreement to the extent and in
the manner directed by the Indenture
Trustee, including the transmission of
notices of default on the part of the
Seller or the Servicer thereunder and the
institution of legal or administrative
actions or proceedings to compel or secure
performance by the Seller or the Servicer
of each of their obligations under the Sale
and Servicing Agreement.
(b) If an Event of Default has occurred and is
continuing, the Indenture Trustee 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 Outstanding Amount of the
Notes shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer
against the Seller or the Servicer under or
in connection with the Sale and Servicing
Agreement, or against the Seller under or
in connection with the Loan Sale Agreement,
including the right or
INDENTURE (SERIES 1997-1) -- PAGE 46
53
power to take any action to compel or
secure performance or observance by the
Seller or the Servicer, as the case may be,
of each of their obligations to the Issuer
thereunder and to give any consent,
request, notice, direction, approval,
extension, or waiver under the Sale and
Servicing Agreement or the Loan Sale
Agreement, as the case may be, and any
right of the Issuer to take such action
shall be suspended.
VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is
continuing, the Indenture Trustee shall
exercise the rights and powers vested in it
by this Indenture and use the same degree
of care and skill in their exercise as a
prudent person would exercise or use under
the circumstances in the conduct of such
person's own affairs.
(b) Except during the continuance of an Event
of Default:
(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into
this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; however, the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved
from liability for its own negligent
action, its own negligent failure to act or
its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(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
INDENTURE (SERIES 1997-1) -- PAGE 47
54
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in
any way relates to the Indenture Trustee is
subject to paragraphs (a), (b), (c) and (g)
of this Section.
(e) The Indenture Trustee shall not be liable
for interest on any money received by it
except as the Indenture Trustee may agree
in writing with the Issuer.
(f) Money held in trust by the Indenture
Trustee shall be segregated from other
funds except to the extent permitted by law
or the terms of this Indenture or the Sale
and Servicing Agreement.
(g) No provision of this Indenture shall require
the Indenture Trustee to expend or risk its
own funds or otherwise incur financial
liability in the performance of any of its
duties hereunder or in the exercise of any
of its rights or powers, if it shall have
reasonable grounds to believe that
repayment of such funds or adequate
indemnity against such risk or liability is
not reasonably assured to it; provided,
however, that the Indenture
Trustee shall not refuse or fail to perform
any of its duties hereunder solely as a
result of nonpayment of its normal fees and
expenses and further provided that nothing
in this Section 6.1(g) shall be construed
to limit the exercise by the Indenture
Trustee of any right or remedy permitted
under this Indenture or otherwise in the
event of the Issuer's failure to pay the
Indenture Trustee's fees and expenses
pursuant to Section 6.7. In determing that
such repayment or indemnity is not
reasonably assured to it, the Indenture
Trustee must consider not only the
likelihood of repayment or indemnity by or
on behalf of the Issuer but also the
likelihood of repayment or indemnity from
amounts payable to it from the Collateral
pursuant to Section 6.7.
(h) Every provision of this Indenture relating
to the conduct or affecting the liability
of or affording protection to the Indenture
Trustee shall be subject to the provisions
of this Section and to the provisions of
the TIA.
INDENTURE (SERIES 19971) PAGE 48
55
SECTION 6.2 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 (i) 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 such action or
omission by the Indenture Trustee does not
constitute willful misconduct, negligence
or bad faith; or (ii) any willful
misconduct or gross negligence on the part
of the Custodian.
(e) The Indenture Trustee may consult with
counsel, and the advice or opinion of
counsel with respect to legal matters
relating to this Indenture and the Notes
shall be full and complete authorization
and protection from liability in respect to
any action taken, omitted or suffered by it
hereunder in good faith and in accordance
with the advice or opinion of such counsel.
SECTION 6.3 Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, shall not be accountable for the
Issuer's use of the proceeds from the Notes, or responsible for any statement
of the Issuer in the Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Indenture Trustee's
certificate of authentication.
INDENTURE (SERIES 1997-1) -- PAGE 49
56
SECTION 6.5 Notice of Defaults. If a Default occurs and is continuing
and if it is known to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall mail to the Securities Insurer and each Noteholder
notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment of principal of or interest on any Note (including payments
pursuant to the mandatory redemption provisions of such 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 6.6 Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns.
SECTION 6.7 Compensation and Indemnity. As compensation for its
services hereunder, the Indenture Trustee shall be entitled to receive, on each
Distribution Date, the Indenture Trustee's Fee pursuant to Section 8.2(c)
hereof (which compensation shall not be limited by any law on compensation of a
trustee of an express trust) and shall be entitled to reimbursement for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer agrees to cause the Servicer to indemnify the Indenture Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify the
Issuer and the Servicer promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer and the Servicer shall
not relieve the Issuer of its obligations hereunder. The Issuer shall or shall
cause the Servicer to defend any such claim, and the Indenture Trustee may have
separate counsel and the Issuer shall or shall cause the Servicer to pay the
fees and expenses of such counsel. Neither the Issuer nor the Servicer need
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Indenture Trustee through the Indenture Trustee's own willful
misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(e) or (f) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
SECTION 6.8 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. The Indenture Trustee may
resign at any time by so notifying the Issuer and the Securities Insurer. The
Holders of a majority in Outstanding Amount of the Notes may remove the
Indenture Trustee by so notifying the Indenture Trustee and may appoint a
successor Indenture Trustee. The Issuer shall remove the Indenture Trustee upon
the prior written consent of the Securities Insurer if:
INDENTURE (SERIES 1997-1) -- PAGE 50
57
(a) the Indenture Trustee fails to comply with
Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt
or insolvent;
(c) a receiver or other public officer takes
charge of the Indenture Trustee or its
property; or
(d) the Indenture Trustee otherwise becomes
incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee acceptable to the
Securities Insurer.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee, the Securities Insurer and
to the Issuer. Thereupon the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall have
all the rights, powers and duties of the Indenture Trustee under this
Indenture. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.7 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9 Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
the Securities Insurer and the Rating Agencies prior written notice of any such
transaction.
INDENTURE (SERIES 1997-1) -- PAGE 51
58
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
(a) Notwithstanding any other provisions of this
Indenture, at any time, for the purpose of
meeting any legal requirement of any
jurisdiction in which any part of the
Collateral may at the time be located, the
Indenture Trustee shall have the power,
with the prior written consent of the
Securities Insurer, and may execute and
deliver all instruments to appoint one or
more Persons to act as a co-trustee or
co-trustees, or separate trustee or
separate trustees, of all or any part of
the Trust, and to vest in such Person or
Persons, in such capacity and for the
benefit of the Noteholders, such title to
the Collateral, or any part hereof, and,
subject to the other provisions of this
Section, such powers, duties, obligations,
rights and trusts as the Indenture Trustee
may consider necessary or desirable. No
co-trustee or separate trustee hereunder
shall be required to meet the terms of
eligibility as a successor trustee under
Section 6.11 and no notice to Noteholders of
the appointment of any co-trustee or
separate trustee shall be required under
Section 6.8 hereof; provided that the
Indenture Trustee shall deliver notice of
any such co-trustee or separate trustee to
the Securities Insurer.
(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
Collateral or any portion thereof
INDENTURE (SERIES 1997-1) -- PAGE 52
59
in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given
to the Indenture Trustee shall be deemed to
have been given to each of the then
separate trustees and co-trustees, as
effectively as if given to each of them.
Every instrument appointing any separate
trustee or co-trustee shall refer to this
Agreement and the conditions of this
Article VI. Each separate trustee and
and co-trustee, upon its acceptance of the
trusts conferred, shall be vested with the
estates or property specified in its
instrument of appointment, jointly with the
Indenture Trustee, subject to all the
provisions of this Indenture, specifically
including every provision of this Indenture
relating to the conduct of, affecting the
liability of, or affording protection to,
the Indenture Trustee. Every such
instrument shall be filed with the
Indenture Trustee.
(d) Any separate trustee or co-trustee may at
any time constitute the Indenture Trustee
its agent or attorney-in-fact with full
power and authority, to the extent not
prohibited by law, to do any lawful act
under or in respect of this Agreement on
its behalf and in its name. If any separate
trustee or co-trustee shall die, become
incapable of acting, resign or be removed,
all of its estates, properties, rights,
remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the
extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11 Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA 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 A3 or
better by Moody's or shall otherwise be acceptable to Moody'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 Issuer are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
INDENTURE (SERIES 1997-1) -- PAGE 53
60
SECTION 6.12 Preferential Collection of Claims Against Issuer. 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.
VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date, (b) at such other
times as the Indenture Trustee may request in writing, within 30 days after
receipt by the Issuer of any such request, a list of similar form and content
as of a date not more than 10 days prior to the time such list is furnished;
provided, however, that so long as the Indenture Trustee is the Note Registrar,
no such list shall be required to be furnished.
SECTION 7.2 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 7.1 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
7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA
Section 312(b) with other Noteholders with
respect to their rights under this
Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the
Note Registrar shall have the protection of
TIA Section 312(c).
SECTION 7.3 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee and the Securities
Insurer, within 15 days after the Issuer is required to file the same
with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions
of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) that
INDENTURE (SERIES 1997-1) -- PAGE 54
61
the Issuer may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Securities
Insurer and the Commission in accordance with the rules and
regulations prescribed from time to time by the Commission such
additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i) and
(ii) of this Section 7.3(a) and by rules and regulations prescribed
from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the
fiscal year of the Issuer shall end on
December 31 of each year.
SECTION 7.4 Reports by Indenture Trustee. If required by TIA Section
313(a), within 60 days after each February 1, beginning with February 1, 1998,
the Indenture Trustee shall mail to the Securities Insurer and to each
Noteholder as required by TIA Section 313(c) a brief report dated as of such
date that complies with TIA Section 313(a). The Indenture Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each securities
exchange, if any, on which the Notes are listed. The Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any securities exchange.
VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money.
(a) General. 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
INDENTURE (SERIES 1997-1) -- PAGE 55
62
part of the Collateral, the Indenture
Trustee may, and upon written request of
the Securities Insurer shall, take such
action as may be appropriate to enforce
such payment or performance, including the
institution and prosecution of appropriate
Proceedings. Any such action shall be
without prejudice to any right to claim a
Default or Event of Default under this
Indenture and any right to proceed
thereafter as provided in Article V.
(b) Claims Under Guaranty Policy. The Notes and
the Certificates will be insured by the
Guaranty Policy pursuant to the terms set
forth therein, notwithstanding any
provisions to the contrary contained in
this Indenture or the Sale and Servicing
Agreement. All amounts received under the
Guaranty Policy shall be used solely for
the payment to Securityholders of principal
and interest on the Notes and the
Certificates.
SECTION 8.2 Trust Accounts; Distributions.
(a) On or prior to the Closing Date, the Issuer
shall cause the Servicer to establish and
maintain, in the name of the Indenture
Trustee for the benefit of the Noteholders,
or the Co-Owner Trustee for the benefit of
the Certificateholders, the Trust Accounts
as provided in ARTICLE V of the Sale and
Servicing Agreement. The Indenture Trustee
or Co-Owner Trustee shall deposit amounts
into the Trust Accounts in accordance with
the terms hereof, the Sale and Servicing
Agreement and the Servicer's Monthly
Remittance Report.
(b) On or before the third Business Day prior to
each Distribution Date, the Indenture
Trustee shall withdraw from the Collection
Account, the Pre-Funding Account, the
Capitalized Interest Account and the
Reserve Account, as applicable, the
Available Collection Amount and the Reserve
Account Withdrawal Amount, if any, with
respect to the preceding Due Period
pursuant to Section 5.01(b)(2) of the Sale
and Servicing Agreement and will deposit
such amount into the Note Distribution
Account. No later than the second Business
Day prior to each Distribution Date, to the
extent funds are available in the Note
Distribution Account, the Indenture Trustee
shall either retain funds in the Note
Distribution Account or make the
withdrawals from the Note Distribution
Account and deposits into the other Trust
Accounts for distribution on such
Distribution Date as required pursuant to
Section 5.01(c) of the Sale and Servicing
Agreement.
(c) On each Distribution Date and Redemption
Date, to the extent funds are available in
the Note Distribution Account, the
Indenture Trustee
INDENTURE (SERIES 1997-1) -- PAGE 56
63
shall make the following distributions from
the amounts on deposit in the Note
Distribution Account in the following order
of priority (except as otherwise provided
in Section 5.4(b)):
(i) (A) to the Servicer, an amount equal to the
Servicing Compensation (net of any amounts
retained prior to deposit into the
Collection Account pursuant to Section
5.01(b)(1) of the Sale and Servicing
Agreement) and all unpaid Servicing
Compensation from prior due periods, (B) to
the Securities Insurer, an amount equal to
the Guaranty Insurance Premium and all
unpaid Guaranty Insurance Premiums from
prior Due Periods, (C) to the Indenture
Trustee, an amount equal to the Indenture
Trustee Fee and all unpaid Indenture
Trustee Fees from prior Due Periods, and
(D) to the Owner Trustee, an amount equal
to the Owner Trustee Fee and all unpaid
Owner Trustee Fees from prior Due Periods;
(ii) only to the extent of funds withdrawn from
the Pre-Funding Account and deposited in
the Note Distribution Account by the
Indenture Trustee pursuant to Section
5.03(c) of the Sale and Servicing Agreement
(net of any amount deposited in the
Certificate Distribution Account from the
Note Distribution Account for distribution
to Certificateholders pursuant to
Subsection 5.01(c)(ii) of the Sale and
Servicing Agreement), pro rata, to the
Holders of the Class A-1 Notes, the Holders
of the Class A-2 Notes, the Holders of the
Class A-3 Notes, the Holders of the Class
A-4 Notes, the Holders of the Class A-5
Notes, the Holders of the Class A-6 Notes,
the Holders of the Class A-7 Notes and the
Holders of the Class A-8 Notes based on the
Class Principal Balance of each such Class,
in each case to reduce the Class Principal
Balance of each such Class; provided that
if the amount of such funds equals or is
less than $50,000, then such amount shall
be distributed sequentially to the Holders
of each Class of Notes, in ascending order
of their respective Class designations, to
reduce the respective Class Principal
Balances thereof;
(iii) to the Holders of each Class of the Notes,
the Noteholders' Interest Distributable
Amount for such Distribution Date;
provided, that if there are not sufficient
funds in the Note Distribution Account to
pay the entire amount of accrued and unpaid
interest then due on the Notes, the amount
in the Note Distribution Account shall be
applied to the payment of such interest on
the Notes pro rata on the basis of the
total such interest due on the Notes;
INDENTURE (SERIES 1997-1) -- PAGE 57
64
(iv) to the Holders of the Class A-1 Notes, the
Noteholders' Principal Distributable Amount
until the Outstanding Amount of the Class
A-1 Notes is reduced to zero;
(v) to the Holders of the Class A-2 Notes, the
remaining Noteholders' Principal
Distributable Amount after distributions
pursuant to clause (iv) above until the
Outstanding Amount of the Class A-2 Notes
is reduced to zero;
(vi) to the Holders of the Class A-3 Notes, the
remaining Noteholders' Principal
Distributable Amount after distributions
pursuant to clauses (iv) and (v) above
until the Outstanding Amount of the Class
A-3 Notes is reduced to zero;
(vii) to the Holders of the Class A-4 Notes, the
remaining Noteholders' Principal
Distributable Amount after distributions
pursuant to clauses (iv) through (vi) above
until the Outstanding Amount of the Class
A-4 Notes is reduced to zero;
(viii) to the Holders of the Class A-5 Notes, the
remaining Noteholders' Principal
Distributable Amount after distributions
pursuant to clauses (iv) through (vii)
above until the Outstanding Amount of the
Class A-5 Notes is reduced to zero;
(ix) to the Holders of the Class A-6 Notes, the
remaining Noteholders' Principal
Distributable Amount after distributions
pursuant to clauses (iv) through (viii)
above until the Outstanding Amount of the
Class A-6 Notes is reduced to zero;
(x) to the Holders of the Class A-7 Notes, the
remaining Noteholders' Principal
Distributable Amount after distributions
pursuant to clauses (iv) through (ix) above
until the Outstanding Amount of the Class
A-7 Notes is reduced to zero; and
(xi) to the Holders of the Class A-8 Notes, the
remaining Noteholders' Principal
Distributable Amount after distributions
pursuant to clauses (iv) through (x) above
until the Outstanding Amount of the Class
A-8 Notes is reduced to zero.
(d) On each Distribution Date and each Redemption Date, to the extent
of the interest of the Indenture Trustee in the Certificate Distribution
Account (as described in Section 5.08(a) of the Sale and Servicing Agreement),
the Indenture Trustee hereby authorizes the Owner Trustee, the Co- Owner
Trustee or the Paying Agent, as applicable, to make the distributions from the
Certificate Distribution Account as required pursuant to Section 5.06(c) of the
Sale and Servicing Agreement.
INDENTURE (SERIES 1997-1) -- PAGE 58
65
(e) The Indenture Trustee shall make claims under the Guaranty Policy
pursuant to Section 5.02 of the Sale and Servicing Agreement and in accordance
with the Guaranty Policy. The Indenture Trustee shall deposit any Guaranteed
Payment received from the Security Insurer in the Note Distribution Account for
the portion of the Guaranteed Payment payable on the related Class of Notes or
in the Certificate Distribution Account for the portion of the Guaranteed
Payment payable on the related Certificate. For claims under the Guaranty
Policy for a Deficiency Amount, on the related Distribution Date, the Indenture
Trustee shall distribute such amount based upon the portion of the Interest
Distribution Amount and the portion of the Regular Distribution Amount payable
on the related Class of Note to the Holders of such Class of Note and payable
on the related Certificate to such Certificateholders in accordance with the
terms of the Sale and Servicing Agreement. For claims under the Guaranty Policy
for a Preference Amount, the Indenture Trustee shall distribute such amount in
accordance with the terms of the Guaranty Policy. All amounts received under
the Guaranty Policy shall be used solely for the payment to Securityholders of
principal and interest on the related Class of Notes and the Certificates, as
applicable.
SECTION 8.3 General Provisions Regarding Accounts.
(a) So long as no Default or Event of Default
shall have occurred and be continuing, all
or a portion of the funds in the Trust
Accounts shall be invested in Permitted
Investments and reinvested by the Indenture
Trustee at the direction of the Affiliated
Holder in accordance with the provisions of
ARTICLE V of the Sale and Servicing
Agreement. All income or other gain from
investments of moneys deposited in the
Trust Accounts shall be deposited by the
Indenture Trustee into the Note
Distribution Account, and any loss
resulting from such investments shall be
charged to such account. The Issuer will
not direct the Indenture Trustee to make
any investment of any funds or to sell any
investment held in any of the Trust
Accounts unless the security interest
Granted and perfected in such account will
continue to be perfected in such investment
or the proceeds of such sale, in either
case without any further action by any
Person, and, in connection with any
direction to the Indenture Trustee to make
any such investment or sale, if requested
by the Indenture Trustee, the Issuer shall
deliver to the Indenture Trustee an Opinion
of Counsel, acceptable to the Indenture
Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture
Trustee shall not in any way be held liable
by reason of any insufficiency in any of
the Trust Accounts resulting from any loss
on any Eligible Investment included therein
except for losses attributable to the
Indenture Trustee's failure to make
payments on such Eligible Investments
issued by the Indenture Trustee, in its
commercial capacity as principal obligor
and not as trustee, in accordance with
their terms.
INDENTURE (SERIES 1997-1) -- PAGE 59
66
(c) If (i) the Issuer shall have failed to give
investment directions for any funds on
deposit in the Trust Accounts to the
Indenture Trustee by 11:00 a.m. Eastern
Time (or such other time as may be agreed
by the Issuer and Indenture Trustee) on any
Business Day or (ii) a Default or Event of
Default shall have occurred and be
continuing with respect to the Notes but
the Notes shall not have been declared due
and payable pursuant to Section 5.2 or
d(iii) if such Notes shall been declared
due and payable following an Event of
Default, amounts collected or receivable
from the Collateral are being applied in
accordance with Section 5.5 as if there had
not been such a declaration, then the
Indenture Trustee shall, to the fullest
extent practicable, invest and reinvest
funds in the Trust Accounts in one or more
Eligible Investments.
SECTION 8.4 Servicer's Monthly Statements. On each Distribution Date,
the Indenture Trustee shall deliver the Servicer's Monthly Statement (as
defined in the Sale and Servicing Agreement) with respect to such Distribution
Date to the DTC, the Rating Agencies, and the Securities Insurer.
SECTION 8.5 Release of Collateral.
(a) Subject to the payment of its fees and
expenses pursuant to Section 6.7, the
Indenture Trustee may, and when required by
the provisions of this Indenture shall,
execute instruments to release property from
the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, in
a manner and under circumstances that are not
inconsistent with the provisions of this
Indenture. No party relying upon an
instrument executed by the Indenture Trustee
as provided in this Article VIII shall be
bound to ascertain the Indenture Trustee's
authority, inquire into the satisfaction of
any conditions precedent or see to the
application of any moneys.
(b) The Indenture Trustee shall, at such time as
there are no Notes Outstanding and all sums
due to (i) the Certificateholders pursuant
to Section 5.06(c) of the Sale and Servicing
Agreement, (ii) the Servicer pursuant to
Section 8.2(c)(i)(A) hereof, (iii) the
Securities Insurer pursuant to Section
8.2(c)(i)(B) hereof, the Indenture Trustee
pursuant to Section 8.2(c)(i)(C) hereof, the
Owner Trustee pursuant to Section
8.2(c)(i)(D) hereof, and the Custodian
pursuant to Section 8.2(c)(i)(E) hereof have
been paid, release any remaining portion of
the Collateral that secured the Notes from
the lien of this Indenture and release to the
Issuer or any other Person entitled thereto
any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release
property from the lien of this Indenture
pursuant
INDENTURE (SERIES 19971) PAGE 60
67
to this Subsection (b) only upon receipt of
an Issuer Request accompanied by an
Officer's Certificate, an Opinion of
Counsel and (if required by the TIA)
Independent Certificates in accordance with
TIA Sections 314(c) and 314(d)(1) meeting
the applicable requirements of Section 11.1.
SECTION 8.6 Opinion of Counsel. The Indenture Trustee and the
Securities Insurer shall receive at least seven days notice when requested by
the Issuer to take any action pursuant to Section 8.5(a), accompanied by copies
of any instruments involved, and the Indenture Trustee shall also require, as a
condition to such action, an Opinion of Counsel, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding that
all conditions precedent to the taking of such action have been complied with
and such action will not materially and adversely impair the security for the
Notes or the rights of the Noteholders in contravention of the provisions of
this Indenture; provided, however, that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Collateral. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action.
IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any
Notes but with prior notice to the Rating
Agencies and with the prior written consent
of the Securities Insurer, the Issuer and
the Indenture Trustee, when authorized by
an Issuer Order, at any time and from time
to time, may enter into one or more
indentures supplemental hereto (which shall
conform to the provisions of the Trust
Indenture Act as in force at the date of
the execution thereof), in form
satisfactory to the Indenture Trustee, for
any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
INDENTURE (SERIES 1997-1) PAGE 61
68
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any right or
power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided, that such action shall not adversely affect the
interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, with
the prior written consent of the Securities Insurer, when authorized
by an Issuer Order, may, also without the consent of any of the
Holders of the Notes but with prior consent of 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 shall not, as evidenced
by (i) an Opinion of Counsel or (ii) satisfaction of the Rating Agency
Condition, adversely affect in any material respect the interests of
any Noteholder.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior consent of the Rating Agencies, the Securities Insurer and with the
consent of the Holders of not less than a majority of the Outstanding Amount of
the Notes, by Act of such Holders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this
INDENTURE (SERIES 1997-1) -- PAGE 62
69
Indenture or of modifying in any manner the rights of the Holders of the Notes
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Note affected
thereby and the Securities Insurer if affected thereby:
(a) change the date of payment of any installment
of principal of or interest on any Note, or
reduce the principal amount thereof, the
interest rate thereon or the Redemption
Price with respect thereto, change the
provisions of this Indenture relating to
the application of collections on, or the
proceeds of the sale of, the Collateral 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 (or, in the
case of redemption, on or after the
Redemption Date);
(b) reduce the percentage of the Outstanding
Amount 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;
(c) modify or alter the provisions of the proviso
to the definition of the term "Outstanding";
(d) reduce the percentage of the Outstanding
Amount of the Notes required to direct the
Indenture Trustee to direct the Issuer to
sell or liquidate the Collateral pursuant
to Section 5.4;
(e) modify any provision of this Section 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
Outstanding Note affected thereby;
(f) 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
Distribution Date (including the
calculation of any of the individual
components of such calculation) or to
affect the rights of the Holders of Notes
to the benefit of any
INDENTURE (SERIES 1997-1) -- PAGE 63
70
provisions for the mandatory redemption of
the Notes contained herein; or
(g) 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 Collateral 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.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
In connection with requesting the consent of the Noteholders pursuant
to this Section, 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. It shall
not be necessary for any Act of Noteholders under this Section to approve the
particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 9.3 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 6.1 and 6.2, 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 9.4 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the
Notes shall thereafter be determined, exercised and enforced hereunder subject
in all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.5 Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
INDENTURE (SERIES 1997-1) -- PAGE 64
71
SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
SECTION 9.7 Amendments to Trust Agreement.
Subject to Section 11.1 of the Trust Agreement, the Indenture Trustee
shall, upon Issuer Order, consent to any proposed amendment to the Trust
Agreement or an amendment to or waiver of any provision of any other document
relating to the Trust Agreement, such consent to be given without the necessity
of obtaining the consent of the Holders of any Notes upon satisfaction of the
requirements under Section 11.1 of the Trust Agreement.
Nothing in this Section shall be construed to require that any Person
obtain the consent of the Indenture Trustee to any amendment or waiver or any
provision of any document where the making of such amendment or the giving of
such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the
subject of the proposed amendment or waiver.
X
REDEMPTION OF NOTES
SECTION 10.1 Redemption.
The Affiliated Holder may, at its option, effect an early redemption
of the Notes on or after any Distribution Date on which the Pool Principal
Balance declines to 15% or less of the Pool Principal Balance of the Initial
Home Loans and Subsequent Home Loans conveyed to the Trust as of their
respective Cut-Off Dates. The Affiliated Holder shall effect such early
redemption by directing the Indenture Trustee to sell all of the Home Loans to
a person that is not an Affiliate of the Affiliated Holder, the Seller, or the
Servicer at a price not less than the Redemption Price. In addition, the
Affiliated Holder may, at its option, effect an early redemption of the Notes
on or after any Distribution Date on which the Pool Principal Balance declines
to 10% or less of the Pool Principal Balance of the Initial Home Loans and
Subsequent Home Loan conveyed to the Trust as of their respective Cut-Off
Dates. In connection with any such optional termination, to the extent that
sufficient proceeds are not available from the sale of the Home Loans or the
termination of the Trust, the Affiliated Holder will pay the outstanding fees
and expenses, if any, of the Indenture Trustee, the Issuer, the Securities
Insurer, and the Servicer.
INDENTURE (SERIES 1997-1) -- PAGE 65
72
In addition, subject to Section 11.19, on any date on or after which
(i) 17.5% or more (based on Net Loan Losses) of the Home Loans have become
Defaulted Home Loans on a cumulative basis and (ii) the Overcollateralization
Amount has been reduced to zero or an amount less than zero, then the
Securities Insurer may, at its option, effect an early retirement of the
Securities and termination of this Agreement.
Any such redemption by the Affiliated Holder or the Securities
Insurer, as applicable, shall be accomplished by the Affiliated Holder or the
Securities Insurer, as applicable, depositing or causing to be deposited into
the Collection Account by 10:00 A.M. New York City time on the third Business
Day prior to the Redemption Date the amount of the Redemption Price. On the
same day that the Redemption Price is deposited into the Collection Account,
the Redemption Price and any amounts then on deposit in the Collection Account
(other than any amounts not required to have been deposited therein pursuant to
Section 5.01(b)(1) of the Sale and Servicing Agreement) shall be transferred to
the Note Distribution Account for distribution to the Noteholders on the
Redemption Date; and any amounts received with respect to the Home Loans and
Foreclosure Properties subsequent to such transfer shall belong to the Servicer
or the Securities Insurer, as applicable. For purposes of calculating the
Required Distribution Amount for the Redemption Date, amounts transferred to
the Note Distribution Account pursuant to the immediately preceding sentence on
the Determination Date immediately preceding such final Distribution Date shall
in all cases be deemed to have been received during the related Due Period, and
such transfer shall be made pursuant to Section 5.01(c) of the Sale and
Servicing Agreement.
The Servicer or the Issuer shall furnish the Rating Agencies and the
Securities Insurer notice of any such redemption in accordance with Section
10.2.
SECTION 10.2 Form of Redemption Notice.
(a) Notice of redemption under Section 10.1
shall be given by the Indenture Trustee by
first-class mail, postage prepaid, or by
facsimile mailed or transmitted not later
than 10 days prior to the applicable
Redemption Date to each Holder of Notes, as
of the close of business on the Record Date
preceding the applicable Redemption Date,
at such Holder's address or facsimile
number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency
of the Issuer to be maintained as provided in Section 3.2).
INDENTURE (SERIES 1997-1) -- PAGE 66
73
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name of the Issuer and at the expense of the Servicer. Failure
to give notice of redemption, or any defect therein, to any Holder of any Note
shall not impair or affect the validity of the redemption of any other Note.
SECTION 10.3 Notes Payable on Redemption Date; Provision for Payment
of Indenture Trustee and Securities Insurer. The Notes or portions thereof to
be redeemed shall, following notice of redemption as required by Section 10.2
(in the case of redemption pursuant to Section 10.1), on the Redemption Date
become due and payable at the Redemption Price and (unless the Issuer shall
default in the payment of the Redemption Price) no interest shall accrue on the
Redemption Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Redemption Price. The Issuer may not
redeem the Notes unless, (i) all outstanding obligations under the Notes have
been paid in full and (ii) the Indenture Trustee has been paid all amounts to
which it is entitled hereunder and the Securities Insurer has been paid all
Securities Insurer Reimbursement Amounts to which it is entitled as of the
applicable Redemption Date.
XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the
Issuer to the Indenture Trustee to take any
action under any provision of this
Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officer's
Certificate stating that all conditions
precedent, if any, provided for in this
Indenture relating to the proposed action
have been complied with, (ii) an Opinion of
Counsel stating that in the opinion of such
counsel all such conditions precedent, if
any, have been complied with and (iii) (if
required by the TIA) an Independent
Certificate from a firm of certified public
accountants meeting the applicable
requirements of this Section, 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;
INDENTURE (SERIES 1997-1) -- PAGE 67
74
(2) a brief statement as to the
nature and scope of the
examination or
investigation upon which
the statements or opinions
contained in such
certificate or opinion are
based;
(3) a statement that, in the
opinion of each such
signatory, such signatory
has made such examination
or investigation as is
necessary to enable such
signatory to express an
informed opinion as to
whether or not such
covenant or condition has
been complied with; and
(4) a statement as to whether,
in the opinion of each such
signatory, such condition
or covenant has been
complied with.
(b) (i) Prior to the deposit of any Collateral
or other property or securities with the
Indenture Trustee that is to be made the
basis for the release of any property or
securities subject to the lien of this
Indenture, the Issuer shall, in addition to
any obligation imposed in Section 11.1(a)
or elsewhere in this Indenture, furnish to
the Indenture Trustee an Officer's
Certificate certifying or stating the
opinion of each person signing such
certificate as to the fair value (within 90
days of such deposit) to the Issuer of the
Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(i) above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to
the Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set
forth in the certificates delivered pursuant to clause (i) above and
this clause (ii), is 10% or more of the Outstanding Amount of the
Notes, but such a certificate need not be furnished with respect to
any securities so deposited, if the fair value thereof to the Issuer
as set forth in the related Officer's Certificate is less than $25,000
or less than one percent of the Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person
the proposed release will not impair the security under this Indenture
in contravention of the provisions hereof.
INDENTURE (SERIES 1997-1) -- PAGE 68
75
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of
the property or securities and of all other property, other than
property as contemplated by clause (v) below or securities released
from the lien of this Indenture since the commencement of the
then-current calendar year, as set forth in the certificates required
by clause (iii) above and this clause (iv), equals 10% or more of the
Outstanding Amount of the Notes, but such certificate need not be
furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer's Certificate
is less than $25,000 or less than one percent of the then Outstanding
Amount of the Notes.
SECTION 11.2 Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
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 Servicer, the Seller, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller, the Issuer or the
Administrator, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of
the facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
INDENTURE (SERIES 1997-1) -- PAGE 69
76
SECTION 11.3 Acts of Noteholders.
(a) Any request, demand, authorization,
direction, notice, consent, waiver or other
action provided by this Indenture to be
given or taken by Noteholders may be
embodied in and evidenced by one or more
instruments of substantially similar tenor
signed by such Noteholders in person or by
agents duly appointed in writing; and
except as herein otherwise expressly
provided such action shall become effective
when such instrument or instruments are
delivered to the Indenture Trustee, and,
where it is hereby expressly required, to
the Issuer. Such instrument or instruments
(and the action embodied therein and
evidenced thereby) are herein sometimes
referred to as the "Act" of the Noteholders
signing such instrument or instruments.
Proof of execution of any such instrument
or of a writing appointing any such agent
shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1)
conclusive in favor of of the Indenture
Trustee and the Issuer, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any
person of any such instrument or writing
may be proved in any manner that the
Indenture Trustee deems sufficient.
(c) The ownership of Notes shall be proved by
the Note Register.
(d) Any request, demand, authorization,
direction, notice, consent, waiver or other
action by the Holder of any Notes shall
bind the Holder of every Note issued upon
the registration thereof or in exchange
therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be
done by the Indenture Trustee or the Issuer
in reliance thereon, whether or not
notation of such action is made upon such
Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer, Rating
Agencies and Securities Insurer. 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:
(a) the Indenture Trustee by any Noteholder or
by the Issuer shall be sufficient for every
purpose hereunder if made, given, furnished
or filed in writing to or with the
Indenture Trustee at its Corporate Trust
Office, or
INDENTURE (SERIES 1997-1) -- PAGE 70
77
(b) the Issuer by the Indenture Trustee or by
any Noteholder shall be sufficient for
every purpose hereunder if in writing and
mailed first-class, postage prepaid to the
Issuer addressed to: FIRSTPLUS Home Loan
Owner Trust 1997-1, in care of Wilmington
Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or at
any other address previously furnished in
writing to the Indenture Trustee by the
Issuer or the Administrator. The Issuer
shall promptly transmit any notice received
by it from the Noteholders to the Indenture
Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to (i) in the
case of Moody's, at the following address: ▇▇▇▇▇'▇ Investors Service, Inc.,
Residential Mortgage Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, and (ii) in the case of Standard & Poor's, at the following
address: Standard & Poor's Ratings Group, ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed Surveillance Department; or as to
each of the foregoing, at such other address as shall be designated by written
notice to the other parties.
Notices required to be given to the Securities Insurer by the Issuer,
the Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to the
following address: MBIA Insurance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Insured Portfolio Management - Structured Finance
(IPM-SF), or at such other address as shall be designated by written notice to
the other parties.
SECTION 11.5 Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when
INDENTURE (SERIES 1997-1) -- PAGE 71
78
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 a Default or
Event of Default.
SECTION 11.6 [RESERVED].
SECTION 11.7 Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10 Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.11 Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Collateral, any benefit or any legal or equitable right, remedy or claim
under this Indenture, except that the Securities Insurer is an express third
party beneficiary to this Indenture as provided in Section 11.20.
SECTION 11.12 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
INDENTURE (SERIES 1997-1) -- PAGE 72
79
SECTION 11.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15 Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
SECTION 11.16 Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Article VI, VII and
VIII of the Trust Agreement.
SECTION 11.17 No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Seller, the
Servicer, the Affiliated Holder or the Issuer, or join in any institution
against the Seller, the Servicer, the Affiliated Holder or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Basic Documents.
INDENTURE (SERIES 1997-1) -- PAGE 73
80
SECTION 11.18 Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or the
Securities Insurer, during the Issuer's normal business hours, to examine all
the books of account, records, reports and other papers of the Issuer, to make
copies and extracts therefrom, to cause such books to be audited by Independent
certified public accountants, and to discuss the Issuer's affairs, finances and
accounts with the Issuer's officers, employees, and Independent certified
public accountants, all at such reasonable times and as often as may be
reasonably requested. The Indenture Trustee shall and shall cause its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
SECTION 11.19 Grant of Noteholder Rights to Securities Insurer. In
consideration for the guarantee of the Notes by the Securities Insurer pursuant
to the Guaranty Policy, the Noteholders hereby grant to the Securities Insurer
the right to act as the holder of 100% of the outstanding Notes for the purpose
of exercising the rights of the Holders of the Notes hereunder, including the
voting rights of such Holders, but excluding those rights requiring the consent
of all such Holders under Section 9.2 and any rights of such Holders to
distributions under Section 8.2 hereof; provided that the preceding grant of
rights to the Securities Insurer by the Noteholders shall be subject to Section
11.21 hereof. The rights of the Securities Insurer to direct certain actions
and consent to certain actions of the Noteholders hereunder will terminate at
such time as the Class Principal Balances of all Classes of Notes have been
reduced to zero and the Securities Insurer has been reimbursed for all
Guaranteed Payments and any other amounts owed under the Guaranty Policy and
the Insurance Agreement and the Securities Insurer has no further obligation
under the Guaranty Policy.
SECTION 11.20 Third Party Beneficiary. The parties hereto acknowledge
that the Securities Insurer is an express third party beneficiary hereof
entitled to enforce any rights reserved to it hereunder as if it were actually
a party hereto.
SECTION 11.21 Suspension and Termination of Securities Insurer's
Rights.
(a) During the continuation of a Securities Insurer Default, rights
granted or reserved to the Securities Insurer hereunder shall vest instead in
the Noteholders; provided that the Securities Insurer shall be entitled to any
distributions in reimbursement of the Securities Insurer Reimbursement Amount,
and the Securities Insurer shall retain those rights under Section 9.2 hereof
to consent to any supplement to this Indenture.
(b) At such time as either (i) the Class Principal Balances of each
Class of Notes have been reduced to zero or (ii) the Guaranty Policy has been
terminated following a Securities Insurer Default, and in either case of (i) or
(ii) the Securities Insurer has been reimbursed for all Guaranteed Payments and
any other amounts owed under the Guaranty Policy and the Insurance Agreement
(and the Securities Insurer no longer has any obligation under the Guaranty
Policy, except for breach thereof by the Securities Insurer), then the rights
and benefits granted or reserved to the Securities
INDENTURE (SERIES 1997-1) -- PAGE 74
81
Insurer hereunder (including the rights to direct certain actions and receive
certain notices) shall terminate and the Noteholders shall be entitled to the
exercise of such rights and to receive such benefits of the Securities Insurer
following such termination to the extent that such rights and benefits are
applicable to the Noteholders.
INDENTURE (SERIES 1997-1) -- PAGE 75
82
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
FIRSTPLUS HOME LOAN OWNER TRUST 1997-1
By: Wilmington Trust Company
not in its individual capacity but
solely as Owner Trustee
By:
--------------------------------
Name:
Title:
FIRST BANK NATIONAL ASSOCIATION,
as Indenture Trustee
By:
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
INDENTURE (SERIES 1997-1) -- PAGE 76
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Owner
Trustee on behalf of FIRSTPLUS HOME LOAN OWNER TRUST 1997-1, a Delaware
business trust, and that such person executed the same as the act of said
business trust for the purpose and consideration therein expressed, and in the
capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 27th day of February,
1997.
-----------------------------------------------
Notary Public in and for the State of New York
(Seal)
My commission expires:
--------------------------
INDENTURE (SERIES 1997-1) -- PAGE 77
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, known
to me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of FIRST BANK
NATIONAL ASSOCIATION, a national banking association, and that such person
executed the same as the act of said corporation for the purpose and
consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 27th day of February,
1997.
-----------------------------------------------
Notary Public in and for the State of New York
(Seal)
My commission expires:
-----------------------------
INDENTURE (SERIES 1997-1) -- PAGE 78
85
SCHEDULE A
(To be Provided at the Closing and Supplemented on each Subsequent
Transfer Date on which Subsequent Home Loans are transferred to the Trust)
Available Upon Request to the Indenture Trustee
INDENTURE (SERIES 1997-1) -- PAGE 1
86
EXHIBIT A-1 - Form of Class A-1 Note
INDENTURE (SERIES 1997-1) -- PAGE 2
87
EXHIBIT A-2 - Form of Class A-2 Note
INDENTURE (SERIES 1997-1) -- PAGE 3
88
EXHIBIT A-3 - Form of Class A-3 Note
INDENTURE (SERIES 1997-1) -- PAGE 4
89
EXHIBIT A-4 - Form of Class A-4 Note
INDENTURE (SERIES 1997-1) -- PAGE 5
90
EXHIBIT A-5 - Form of Class A-5 Note
INDENTURE (SERIES 1997-1) -- PAGE 6
91
EXHIBIT A-6 - Form of Class A-6 Note
INDENTURE (SERIES 1997-1) -- PAGE 7
92
EXHIBIT A-7 - Form of Class A-7 Note
INDENTURE (SERIES 1997-1) -- PAGE 8
93
EXHIBIT A-8 - Form of Class A-8 Note
INDENTURE (SERIES 1997-1) -- PAGE 9
94
SEE TAB 10
FOR FORM OF CLASS NOTES
A-1 TO A-8