Exhibit 4.1
NOVUS HELOC TRUST 1999-1
Issuer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Indenture Trustee
INDENTURE
Dated as of May 1, 1999
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HELOC ASSET-BACKED NOTES
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TABLE OF CONTENTS
PAGE
ARTICLE I.
Definitions
Section 1.01. Definitions...................................................2
Section 1.02. Incorporation by Reference of Trust Indenture Act.............2
Section 1.03. Rules of Construction.........................................2
ARTICLE II.
Original Issuance of Notes
Section 2.01. Form..........................................................4
Section 2.02. Execution, Authentication and Delivery........................4
ARTICLE III.
Covenants
Section 3.01. Collection of Payments with respect to the Revolving
Credit Loans..................................................5
Section 3.02. Maintenance of Office or Agency...............................5
Section 3.03. Money for Payments to Be Held in Trust; Paying Agent..........5
Section 3.04. Existence.....................................................6
Section 3.05. Payment of Principal and Interest; Defaulted Interest.........7
Section 3.06. Protection of Trust Estate....................................8
Section 3.07. Opinions as to Trust Estate...................................9
Section 3.08. Performance of Obligations; Servicing Agreement..............10
Section 3.09. Negative Covenants...........................................10
Section 3.10. Annual Statement as to Compliance............................11
Section 3.11. Recording of Assignments.....................................11
Section 3.12. Representations and Warranties Concerning the
Revolving Credit Loans.. .............................11
Section 3.13. Assignee of Record of the Revolving Credit Loans.............11
Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee........12
Section 3.15. Investment Company Act.......................................12
Section 3.16. Issuer May Consolidate, etc..................................12
Section 3.17. Successor or Transferee......................................14
Section 3.18. No Other Business............................................14
Section 3.19. No Borrowing.................................................14
Section 3.20. Guarantees, Loans, Advances and Other Liabilities............14
Section 3.21. Capital Expenditures.........................................14
Section 3.22. Owner Trustee Not Liable for Certificates or Related
Documents....................................................14
Section 3.23. Restricted Payments..........................................15
Section 3.24. Notice of Events of Default..................................15
Section 3.25. Further Instruments and Acts.................................15
Section 3.26. Statements to Noteholders....................................15
Section 3.27. Determination of Note Rate...................................15
Section 3.28. Payments under the Credit Enhancement Instrument.............15
Section 3.29. Treatment of the Notes as Debt for All Purposes..............16
ARTICLE IV.
The Notes; Satisfaction and Discharge of Indenture
Section 4.01. The Notes....................................................17
Section 4.02. Registration of and Limitations on Transfer and Exchange
of Notes; Appointment of Certificate Registrar...............17
Section 4.03. ▇▇▇▇▇▇▇▇▇, Destroyed, Lost or Stolen Notes...................18
Section 4.04. Persons Deemed Owners........................................19
Section 4.05. Cancellation.................................................19
Section 4.06. Book-Entry Notes.............................................20
Section 4.07. Notices to Depository........................................20
Section 4.08. Definitive Notes.............................................20
Section 4.09. Tax Treatment................................................21
Section 4.10. Satisfaction and Discharge of Indenture......................21
Section 4.11. Application of Trust Money...................................22
Section 4.12. Subrogation and Cooperation..................................22
Section 4.13. Repayment of Monies Held by Paying Agent.....................23
Section 4.14. Temporary Notes..............................................23
ARTICLE V.
Default and Remedies
Section 5.01. Events of Default............................................24
Section 5.02. Acceleration of Maturity; Rescission and Annulment...........24
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee............................................24
Section 5.04. Remedies; Priorities.........................................26
Section 5.05. Optional Preservation of the Trust Estate....................28
Section 5.06. Limitation of Suits..........................................28
Section 5.07. Unconditional Rights of Noteholders to Receive
Principal and Interest.......................................29
Section 5.08. Restoration of Rights and Remedies...........................29
Section 5.09. Rights and Remedies Cumulative...............................29
Section 5.10. Delay or Omission Not a Waiver...............................29
Section 5.11. Control by Credit Enhancer or Noteholders....................30
Section 5.12. Waiver of Past Defaults......................................30
Section 5.13. Undertaking for Costs........................................31
Section 5.14. Waiver of Stay or Extension Laws.............................31
Section 5.15. Sale of Trust Estate.........................................31
Section 5.16. Action on Notes..............................................33
Section 5.17. Performance and Enforcement of Certain Obligations...........33
ARTICLE VI.
The Indenture Trustee
Section 6.01. Duties of Indenture Trustee..................................34
Section 6.02. Rights of Indenture Trustee..................................35
Section 6.03. Individual Rights of Indenture Trustee.......................35
Section 6.04. Indenture Trustee's Disclaimer...............................35
Section 6.05. Notice of Event of Default...................................35
Section 6.06. Reports by Indenture Trustee to Holders......................36
Section 6.07. Tax..........................................................36
Section 6.08. Compensation and Indemnity...................................36
Section 6.09. Replacement of Indenture Trustee.............................37
Section 6.10. Successor Indenture Trustee by ▇▇▇▇▇▇........................37
Section 6.11. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee............................................38
Section 6.12. Eligibility; Disqualification................................39
Section 6.13. Preferential Collection of Claims Against Issuer.............39
Section 6.14. Representations and Warranties...............................39
Section 6.15. Directions to Indenture Trustee..............................40
Section 6.16. Indenture Trustee May Own Securities.........................40
ARTICLE VII.
Noteholders' Lists and Reports
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders..................................................41
Section 7.02. Preservation of Information; Communications to Noteholders...41
Section 7.03. Reports by Issuer............................................41
Section 7.04. Reports by Indenture Trustee.................................42
ARTICLE VIII.
Accounts, Disbursements and Releases
Section 8.01. Collection of Money..........................................43
Section 8.02. Trust Accounts...............................................43
Section 8.03. Officer's Certificate........................................43
Section 8.04. Termination Upon Distribution to Noteholders.................43
Section 8.05. Release of Trust Estate......................................44
Section 8.06. Surrender of Notes Upon Final Payment........................44
ARTICLE IX.
Supplemental Indentures
Section 9.01. Supplemental Indentures Without Consent of Noteholders.......45
Section 9.02. Supplemental Indentures With Consent of Noteholders..........46
Section 9.03. Execution of Supplemental Indentures.........................47
Section 9.04. Effect of Supplemental Indenture.............................47
Section 9.05. Conformity with Trust Indenture Act..........................48
Section 9.06. Reference in Notes to Supplemental Indentures................48
ARTICLE X.
Miscellaneous
Section 10.01. Compliance Certificates and Opinions, etc...................49
Section 10.02. Form of Documents Delivered to Indenture Trustee............50
Section 10.03. Acts of Noteholders.........................................51
Section 10.04. Notices, etc., to Indenture Trustee, Issuer, Credit
Enhancer and Rating Agencies................................52
Section 10.05. Notices to Noteholders; Waiver..............................52
Section 10.06. Alternate Payment and Notice Provisions.....................53
Section 10.07. Conflict with Trust Indenture Act...........................53
Section 10.08. Effect of Headings..........................................53
Section 10.09. Successors and Assigns......................................53
Section 10.10. Separability................................................53
Section 10.11. Benefits of Indenture.......................................53
Section 10.12. Legal Holidays..............................................54
Section 10.13. GOVERNING LAW...............................................54
Section 10.14. Counterparts................................................54
Section 10.15. Recording of Indenture......................................54
Section 10.16. Issuer Obligation...........................................54
Section 10.17. No Petition.................................................54
Section 10.18. Inspection..................................................55
Signatures and Seals .......................................................
Acknowledgments ............................................................
EXHIBITS
Exhibit A - Form of Notes
Appendix A Definitions
This Indenture, dated as of May 1, 1999, between NOVUS HELOC TRUST
1999-1, a Delaware business trust, as Issuer (the "Issuer"), and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as Indenture
Trustee (the "Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Issuer's Series
1999-1 Home Equity Loan-Backed Notes (the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Holders of the Notes, all of the Issuer's
right, title and interest in and to whether now existing or hereafter created
(a) the Revolving Credit Loans, (b) all funds on deposit from time to time in
the Payment Account and in all proceeds thereof; (c) the Credit Enhancement
Instrument; and (d) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or under,
and all proceeds of every kind and nature whatsoever in respect of, any or all
of the foregoing and all payments on or under, and all proceeds of every kind
and nature whatsoever in the conversion thereof, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing (collectively, the "Trust Estate" or the
"Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The foregoing Grant shall inure to the benefit of the Credit Enhancer
in respect of draws made on the Credit Enhancement Instrument and amounts owing
from time to time pursuant to the Insurance Agreement (regardless of whether
such amounts relate to the Notes), and such Grant shall continue in full force
and effect for the benefit of the Credit Enhancer until all such amounts owing
to it have been repaid in full.
The Indenture Trustee, as trustee on behalf of the Holders of the
Notes, acknowledges such ▇▇▇▇▇, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
ARTICLE I.
Definitions
Section 1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the Trust Indenture Act (the "TIA"), the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by
Commission rule have the meaning assigned to them by such
definitions.
Section 1.03. Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles as in
effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II.
Original Issuance of Notes
Section 2.01. Form. The Notes, together with the Indenture Trustee's
certificate of authentication, shall be in substantially the form set forth in
Exhibit A, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved
or produced by any combination of these methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibit A are part of the
terms of this Indenture.
Section 2.02. Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and
deliver Notes for original issue in an aggregate initial principal amount of
$335,668,538.
Each Note shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes and shall be issuable in the minimum
initial Security Balances of $1,000 and in integral multiples of $1,000 in
excess thereof, except for one Note, evidencing the sum of an authorized
denomination thereof and the remainder of the aggregate Security Balance of the
Notes.
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.
ARTICLE III.
Covenants
Section 3.01. Collection of Payments with respect to the Revolving Credit
Loans. The Indenture Trustee shall establish and maintain with itself the
Payment Account in which the Indenture Trustee shall, subject to the terms of
this paragraph, deposit, on the same day as it is received from the Servicer,
each remittance received by the Indenture Trustee with respect to the Revolving
Credit Loans. The Indenture Trustee shall make all payments of principal of and
interest on the Notes, subject to Section 3.03 as provided in Section 3.05
herein from monies on deposit in the Payment Account.
Section 3.02. Maintenance of Office or Agency. The Issuer will maintain in
the City of New York, an office or agency where, subject to satisfaction of
conditions set forth herein, Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. 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 Indenture Trustee's Corporate Trust Office, and the
Issuer hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands at the Indenture Trustee's Corporate Trust
Office.
Section 3.03. Money for Payments to Be Held in Trust; Paying Agent. As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture
Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment
Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee and the Credit Enhancer written
notice of any default by the Issuer of which it has actual knowledge in the
making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes, if at
any time it ceases to meet the standards required to be met by a Paying Agent at
the time of its appointment;
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith; and
(vi) deliver to the Indenture Trustee a copy of the report to
Noteholders prepared with respect to each Payment Date by the Servicer pursuant
to Section 4.01 of the Servicing Agreement.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper, 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 may also adopt and employ,
at the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
Section 3.04. Existence. The Issuer will keep in full effect its existence,
rights and franchises as a business trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Revolving Credit Loans and each
other instrument or agreement included in the Trust Estate.
Section 3.05. Payment of Principal and Interest; Defaulted Interest.
(a) On each Payment Date from amounts on deposit in the Payment
Account, the Paying Agent shall pay to the Noteholders, the Certificate Paying
Agent, on behalf of the Certificateholders, and to other Persons the amounts to
which they are entitled, as set forth in the statements delivered to the
Indenture Trustee pursuant to Section 4.01 of the Servicing Agreement, as set
forth below in the following order of priority:
(i) to the Indenture Trustee, the Indenture Trustee Fee and to
the Owner Trustee, its fee for services rendered pursuant to the Trust
Agreement, each for such Payment Date;
(ii) to the Credit Enhancer, the premium for the Credit
Enhancement Instrument and any such premium remaining unpaid for any prior
Payment Date (with interest thereon as provided in the Insurance Agreement) for
such Payment Date;
(iii) to the Noteholders, interest accrued during the related
Interest Period at the Note Rate on the Security Balance of the Notes
immediately prior to such Payment Date, other than Interest Shortfalls;
(iv) to the Noteholders, principal equal to the Principal
Collection Distribution Amount for such Payment Date less the Principal
Reduction Amount for such Payment Date;
(v) to the Noteholders, an amount equal to (A) the Investor
Liquidation Loss Amounts on such Payment Date, plus (B) any Investor Liquidation
Loss Amounts remaining undistributed from any preceding Payment Date (together
with interest thereon from the date initially payable to the date paid),
provided that any Investor Liquidation Loss Amount shall not be required to be
paid to the extent that such Investor Liquidation Loss Amount was paid on the
Notes by means of a draw on the Credit Enhancement Instrument;
(vi) to the Noteholders, an amount equal to the
Overcollateralization Deficit for such Payment Date;
(vii) to the Credit Enhancer, reimbursement for prior draws made
under the Credit Enhancement Instrument and any other amounts owed to the Credit
Enhancer pursuant to the Insurance Agreement (with interest thereon as provided
in the Insurance Agreement);
(viii) to the Noteholders, principal in the amount of the
Accelerated Principal Payment Amount for such Payment Date;
(ix) to the Noteholders, an amount equal to Interest Shortfalls
not previously paid (together with interest thereon at the Note Rate, to the
extent permitted by law);
(x) to the Indenture Trustee for any other amounts owing it
pursuant to Section 6.08 hereof and Section 7.02 of the Servicing Agreement and
remaining unpaid or to the Owner Trustee for any other expenses due it under the
Trust Agreement; and
(xi) any remaining amount to the Certificate Paying Agent, on
behalf of the holders of the Certificates;
PROVIDED, HOWEVER, that on the Final Scheduled Payment Date or other final
Payment Date, the amount to be paid pursuant to clause (iv) above shall be equal
to the Security Balances of the Notes immediately prior to such Payment Date.
For purposes of the foregoing, required payments of principal on the Notes on
each Payment Date will include the Investor Liquidation Loss Amounts for such
Payment Date and for all previous Collection Periods until paid or covered in
full, to the extent not otherwise covered by a Liquidation Loss Distribution
Amount, a reduction of the Overcollateralization Amount or a draw on the Credit
Enhancement Instrument (up to the outstanding Security Balance thereof).
On each Payment Date, the Certificate Paying Agent shall deposit in
the Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of distributing such funds to the
Certificateholders.
The amounts paid to Noteholders shall be paid in accordance with the
applicable percentage as set forth in paragraph (b) below. Interest will accrue
on the Notes during an Interest Period on the basis of the actual number of days
in such Interest Period and a year assumed to consist of 360 days.
Any installment of interest or principal, if any, payable on any Note
that is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall be paid to each Holder of record on the preceding Record
Date, by wire transfer to an account specified in writing by such Holder
reasonably satisfactory to the Indenture Trustee as of the preceding Record Date
or in all other cases or if no such instructions have been delivered to the
Indenture Trustee, by check to such Noteholder mailed to such Holder's address
as it appears in the Note Register the amount required to be distributed to such
Holder on such Payment Date pursuant to such Holder's Securities; PROVIDED,
HOWEVER, that the Indenture Trustee shall not pay to such Holders any amount
required to be withheld from a payment to such Holder by the Code.
(b) The principal of each Note shall be due and payable in full on the
Final Scheduled Payment Date for such Note as provided in the related form of
Note set forth in Exhibit A. All principal payments on each of the Notes shall
be made to the Noteholders entitled thereto in accordance with the Percentage
Interests represented by such Notes. Upon written notice to the Indenture
Trustee by the Issuer, the Indenture Trustee shall notify the Person in whose
name a Note is registered at the close of business on the Record Date preceding
the Final Scheduled Payment Date or other final Payment Date. Such notice shall
be mailed no later than five Business Days prior to such Final Scheduled Payment
Date or other final Payment Date and shall specify that payment of the principal
amount and any interest due with respect to such Note at the Final Scheduled
Payment Date or other final Payment Date will be payable only upon presentation
and surrender of such Note and shall specify the place where such Note may be
presented and surrendered for such final payment.
Section 3.06. Protection of Trust Estate.
(a) The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the purposes
hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) cause the Trust to enforce any of the Revolving Credit
Loans; or
(iv) preserve and defend title to the Trust Estate and the rights
of the Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture
Trustee shall not remove any portion of the Trust Estate that consists of money
or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the most recent Opinion of
Counsel delivered pursuant to Section 3.07 (or from the jurisdiction in which it
was held as described in the Opinion of Counsel delivered at the Closing Date
pursuant to Section 3.07(a), if no Opinion of Counsel has yet been delivered
pursuant to Section 3.07(b)) unless the Trustee shall have first received an
Opinion of Counsel to the effect that the lien and security interest created by
this Indenture with respect to such property will continue to be maintained
after giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.06.
Section 3.07. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee and the Owner Trustee an Opinion of Counsel at the expense of the Issuer
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements, as
are necessary to perfect and make effective the lien and security interest in
the Revolving Credit Loans and reciting the details of such action, or stating
that, in the opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) On or before May 31st in each calendar year, beginning in 2000,
the Issuer shall furnish to the Indenture Trustee and the Credit Enhancer an
Opinion of Counsel at the expense of the Issuer either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, 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 in the Revolving
Credit Loans and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and the execution and
filing of any financing statements and continuation statements that will, in
the opinion of such counsel, be required to maintain the lien and security
interest in the Revolving Credit Loans until December 31 in the following
calendar year.
Section 3.08. Performance of Obligations; Servicing Agreement.
(a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any of the documents relating to the Revolving
Credit Loans or under any instrument included in the Trust Estate, or which
would result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any of the documents
relating to the Revolving Credit Loans or any such instrument, except such
actions as the Servicer is expressly permitted to take pursuant to the Servicing
Agreement.
(d) The Issuer may retain an administrator and may enter into
contracts with other Persons for the performance of the Issuer's obligations
hereunder, and performance of such obligations by such Persons shall be deemed
to be performance of such obligations by the Issuer.
Section 3.09. Negative Covenants. So long as any Notes are Outstanding, the
Issuer shall not:
(i) except as expressly permitted by this Indenture, sell,
transfer, exchange or otherwise dispose of the Trust Estate, unless directed to
do so by the Indenture Trustee or the Credit Enhancer pursuant to Section 5.04
or 8.05 hereof or as may be permitted or required pursuant to the Servicing
Agreement or the Revolving Credit Loan Purchase Agreement;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than amounts
properly withheld from such payments under the Code) or assert any claim against
any present or former Noteholder by reason of the payment of the taxes levied or
assessed upon any part of the Trust Estate;
(iii) (A) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance (other
than the lien of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Trust Estate or any part thereof or any interest
therein or the proceeds thereof or (C) permit the lien of this Indenture not to
constitute a valid first priority security interest in the Trust Estate; or
(iv) impair or cause to be impaired the Issuer's interest in the
Revolving Credit Loans, the Revolving Credit Loan Purchase Agreement or in any
Basic Document, if any such action would materially and adversely affect the
interests of the Noteholders.
Section 3.10. Annual Statement as to Compliance. The Issuer will deliver to
the Indenture Trustee and the Credit Enhancer, within 120 days after the end of
each fiscal year (which currently ends November 30) of the Issuer (commencing
with the fiscal year 1999), 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 and the Trust Agreement 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 and the provisions of the Trust Agreement 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 3.11. Recording of Assignments. The Issuer shall enforce the
obligation of the Seller under the Revolving Credit Loan Purchase Agreement to
submit or cause to be submitted for recording all Assignments of Mortgages
within 90 days of receipt of recording information by the Servicer to the extent
required by the Revolving Credit Loan Purchase Agreement.
Section 3.12. Representations and Warranties Concerning the Revolving
Credit Loans. The Indenture Trustee, as pledgee of the Revolving Credit Loans,
has the benefit of the representations and warranties made by the Seller in
Section 3.1(a) and Section 3.1(b) of the Revolving Credit Loan Purchase
Agreement concerning the Revolving Credit Loans and the right to enforce the
remedies against the Seller provided in such Section 3.1(a) or Section 3.1(b) to
the same extent as though such representations and warranties were made directly
to the Indenture Trustee.
Section 3.13. Assignee of Record of the Revolving Credit Loans. As pledgee
of the Revolving Credit Loans, the Indenture Trustee shall hold record title to
the Revolving Credit Loans by being named as payee in the endorsements of the
Mortgage Notes and assignee in the Assignments of Mortgage as provided under
Section 2.1 of the Revolving Credit Loan Purchase Agreement. Except as expressly
provided in the Revolving Credit Loan Purchase Agreement or in the Servicing
Agreement with respect to any specific Revolving Credit Loan, the Indenture
Trustee shall not execute any endorsement or assignment or otherwise release or
transfer such record title to any of the Revolving Credit Loans until such time
as the remaining Trust Estate may be released pursuant to Section 8.05(b).
Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee. Solely
for purposes of perfection under Section 9-305 of the Uniform Commercial Code or
other similar applicable law, rule or regulation of the state in which such
property is held by the Servicer, the Issuer and the Indenture Trustee hereby
acknowledge that the Servicer is acting as agent and bailee of the Indenture
Trustee in holding amounts on deposit in the Collection Account pursuant to
Section 3.02 of the Servicing Agreement that are allocable to the Revolving
Credit Loans, as well as the agent and bailee of the Indenture Trustee in
holding any Related Documents released to the Servicer pursuant to Section
3.06(b) of the Servicing Agreement, and any other items constituting a part of
the Trust Estate which from time to time come into the possession of the
Servicer. It is intended that, by the Servicer's acceptance of such agency
pursuant to Section 3.02 of the Servicing Agreement, the Indenture Trustee, as a
pledgee of the Revolving Credit Loans, will be deemed to have possession of such
Related Documents, such monies and such other items for purposes of Section
9-305 of the Uniform Commercial Code of the state in which such property is held
by the Servicer.
Section 3.15. Investment Company Act. The Issuer shall not become an
"investment company" or under the "control" of an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
provided, however, that the Issuer shall be in compliance with this Section 3.15
if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions imposed
in such order.
Section 3.16. Issuer May Consolidate, etc.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any state or the District of Columbia
and shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form reasonably satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of and interest
on all Notes and to the Certificate Paying Agent, on behalf of the
Certificateholders and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
(iii) the Issuer receives prior written consent of the Credit
Enhancer and the Rating Agencies shall have notified the Issuer that such
transaction shall not cause the rating of the Notes or the Certificates to be
reduced, suspended or withdrawn or to be considered by either Rating Agency to
be below investment grade without taking into account the Credit Enhancement
Instrument;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the Credit
Enhancer) to the effect that such transaction will not have any material adverse
tax consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this Article
III and that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act).
(b) Except as otherwise provided in the Servicing Agreement or the
Revolving Credit Loan Purchase Agreement, the Issuer shall not convey or
transfer any of its properties or assets, including those included in the Trust
Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any state, (B)
expressly assumes, by an indenture supplemental hereto, executed and delivered
to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture on
the part of the Issuer to be performed or observed, all as provided herein, (C)
expressly agrees by means of such supplemental indenture that all right, title
and interest so conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and hold harmless
the Issuer against and from any loss, liability or expense arising under or
related to this Indenture and the Notes and (E) expressly agrees by means of
such supplemental indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Issuer receives consent of the Credit Enhancer and the
Rating Agencies shall have notified the Issuer that such transaction shall not
cause the rating of the Notes or the Certificates to be reduced, suspended or
withdrawn, if determined without regard to the Credit Enhancement Instrument;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this Article
III and that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act).
Section 3.17. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.16(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.16(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.
Section 3.18. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Revolving Credit Loans and the issuance of the Notes and Certificates in the
manner contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.
Section 3.19. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.20. Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by this Indenture or the Basic Documents, the Issuer shall not make
any loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
Section 3.21. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.22. Owner Trustee Not Liable for Certificates or Related
Documents. The recitals contained herein shall be taken as the statements of the
Depositor, and the Owner Trustee assumes no responsibility for the correctness
thereof. The Owner Trustee and the Indenture Trustee make no representations as
to the validity or sufficiency of this Indenture, of any Basic Document or of
the Certificates (other than the signatures of the Owner Trustee on the
Certificates) or the Notes, or of any Related Documents. The Owner Trustee and
the Indenture Trustee shall at no time have any responsibility or liability with
respect to the sufficiency of the Owner Trust Estate or its ability to generate
the payments to be distributed to Certificateholders under the Trust Agreement
or the Noteholders under this Indenture, including, the compliance by the
Depositor or the Seller with any warranty or representation made under any Basic
Document or in any related document or the accuracy of any such warranty or
representation, or any action of the Certificate Paying Agent, the Certificate
Registrar or the Indenture Trustee taken in the name of the Owner Trustee.
Section 3.23. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; PROVIDED, HOWEVER, that
the Issuer may make, or cause to be made, (x) distributions to the Owner Trustee
and the Certificateholders as contemplated by, and to the extent funds are
available for such purpose under the Trust Agreement and (y) payments to the
Servicer pursuant to the terms of the Servicing Agreement. The Issuer will not,
directly or indirectly, make payments to or distributions from the Collection
Account except in accordance with this Indenture and the Basic Documents.
Section 3.24. Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Credit Enhancer and the Rating Agencies prompt written
notice of each Event of Default hereunder and under the Trust Agreement.
Section 3.25. Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
Section 3.26. Statements to Noteholders. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall provide by mail to DTC and
the Rating Agencies and shall provide to each Noteholder and Certificateholder,
respectively, the Statement prepared by the Indenture Trustee and based on the
Servicing Reports provided to the Indenture Trustee by the Servicer pursuant to
Section 4.01 of the Servicing Agreement.
The Indenture Trustee may make available each month, to any interested
party, the monthly statements to Noteholders and Certificateholders via the
Indenture Trustee's website, electronic bulletin board and its fax-on-demand
service. The Indenture Trustee's website will be located at "▇▇▇.▇▇▇▇▇▇▇.▇▇▇".
The Indenture Trustee's electronic bulletin board may be accessed by calling
(▇▇▇) ▇▇▇-▇▇▇▇, and its fax-on-demand service may be accessed by calling (301)
▇▇▇-▇▇▇▇.
Section 3.27. Determination of Note Rate. On the second LIBOR Business Day
immediately preceding (i) the Closing Date in the case of the first Interest
Period and (ii) the first day of each succeeding Interest Period, the Indenture
Trustee shall determine LIBOR and the Note Rate for such Interest Period and
shall provide the Issuer, the Servicer and the Depositor with the rates of LIBOR
and the Note Rate by making such rates available on the Indenture trustee's
website, electronic bulletin board and fax-on-demand service, as set forth in
Section 3.26.
Section 3.28. Payments under the Credit Enhancement Instrument.
(a) If necessary, on any Payment Date, the Indenture Trustee shall
make a draw on the Credit Enhancement Instrument in an amount, if any, equal to
the Credit Enhancement Draw Amount. On any Dissolution Payment Date, the
Indenture Trustee shall make a draw on the Credit Enhancement Instrument in an
amount, if any, equal to the Dissolution Draw. In addition, on the Final
Scheduled Payment Date, the Indenture Trustee shall make a draw on the Credit
Enhancement Instrument in the amount by which the Security Balances on the Notes
exceeds the payments otherwise available to be made to the Holders thereof on
the Final Scheduled Payment Date.
(b) The Indenture Trustee shall submit, if a Credit Enhancement Draw
Amount or Dissolution Draw is specified in any Servicing Report prepared by the
Servicer pursuant to Section 4.01 of the Servicing Agreement, the Notice of
NonPayment and Demand for Payment of Insured Amounts (in the form attached as
Exhibit A to the Credit Enhancement Instrument) in the amount of the Credit
Enhancement Draw Amount or Dissolution Draw to the Credit Enhancer no later than
12:00 noon, New York City time, on the second Business Day prior to the
applicable Payment Date. Upon receipt of such Credit Enhancement Draw Amount or
Dissolution Draw in accordance with the terms of the Credit Enhancement
Instrument, the Indenture Trustee shall deposit such Credit Enhancement Draw
Amount or Dissolution Draw in the Payment Account for distribution to
Noteholders pursuant to Section 3.05.
Section 3.29. Treatment of the Notes as Debt for All Purposes. The Issuer
and each Holder shall treat the Notes as indebtedness for all purposes.
ARTICLE IV.
The Notes; Satisfaction and Discharge of Indenture
Section 4.01. The Notes. The Notes shall be registered in the name of a
nominee designated by the Depository. Beneficial Owners will hold interests in
the Notes through the book-entry facilities of the Depository in minimum initial
Security Balances of $1,000 and integral multiples of $1,000 in excess thereof,
except for one Note, evidencing the sum of an authorized denomination thereof
and the remainder of the aggregate Security Balance of the Notes.
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Notes for the
purposes of exercising the rights of Holders of Notes hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive certificates for the Notes
as to which they are the Beneficial Owners. Requests and directions from, and
votes of, the Depository as Holder of the Notes shall not be deemed inconsistent
if they are made with respect to different Beneficial Owners. The Indenture
Trustee may establish a reasonable record date in connection with solicitations
of consents from or voting by Noteholders and give notice to the Depository of
such record date. Without the consent of the Issuer and the Indenture Trustee,
no Note may be transferred by the Depository except to a successor Depository
that agrees to hold such Note for the account of the Beneficial Owners.
In the event The Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Notes it
beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the
Issuer by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Note Registrar and delivered by the Indenture
Trustee to or upon the order of the Issuer.
Section 4.02. Registration of and Limitations on Transfer and Exchange of
Notes; Appointment of Certificate Registrar. The Issuer shall cause to be kept
at the Indenture Trustee's Corporate Trust Office a Note Register in which,
subject to such reasonable regulations as it may prescribe, the Note Registrar
shall provide for the registration of Notes and of transfers and exchanges of
Notes as herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office, the Issuer shall execute and the Note Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes in authorized initial Security Balances evidencing the same aggregate
Percentage Interests.
Subject to the foregoing, at the option of the Noteholders, Notes may
be exchanged for other Notes of like tenor, in each case in authorized initial
Security Balances evidencing the same aggregate Percentage Interests upon
surrender of the Notes to be exchanged at the Corporate Trust Office of the Note
Registrar. Whenever any Notes are so surrendered for exchange, the Indenture
Trustee shall execute and the Note Registrar shall authenticate and deliver the
Notes which the Noteholder making the exchange is entitled to receive. Each Note
presented or surrendered for registration of transfer or exchange shall (if so
required by the Note Registrar) be duly endorsed by, or be accompanied by a
written instrument of transfer in form reasonably satisfactory to the Note
Registrar duly executed by, the Holder thereof or his attorney duly authorized
in writing with such signature guaranteed by a commercial bank or trust company
located or having a correspondent located in the city of New York. Notes
delivered upon any such transfer or exchange will evidence the same obligations,
and will be entitled to the same rights and privileges, as the Notes
surrendered.
Any Noteholder using the assets of (i) an employee benefit plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) that is subject to the provisions of Title I of ERISA,
(ii) a plan described in Section 4975(e)(1) of the Internal Revenue Code of
1986, as amended, or (iii) any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity to purchase the Notes, or
to whom the Notes are transferred, will be deemed to have represented that the
acquisition and continued holding of the Notes will be covered by a class or
individual exception under Section 406 of ERISA or Section 4975 of the Internal
Revenue Code or that the acquisition of the Notes does not constitute or give
rise to a prohibited transaction under Section 406 of ERISA, and the Indenture
Trustee shall be entitled to conclusively rely upon such representation without
any independent investigation.
No service charge shall be imposed for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall
be cancelled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges thereof pursuant to
Section 3.05 of the Trust Agreement. The Indenture Trustee hereby accepts such
appointment.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same class; provided,
however, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven days shall be due and payable, instead
of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 4.05. Cancellation. All Notes surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section 4.05, except as expressly permitted by
this Indenture. All cancelled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Request that they
be destroyed or returned to it; provided however, that such Issuer Request is
timely and the Notes have not been previously disposed of by the Indenture
Trustee.
Section 4.06. Book-Entry Notes. The Notes, upon original issuance, will be
issued in the form of typewritten Notes representing the Book-Entry Notes, to be
delivered to The Depository Trust Company, the initial Depository, by, or on
behalf of, the Issuer. Such Notes shall initially be registered on the Note
Register in the name of Cede & Co., the nominee of the initial Depository, and
no Beneficial Owner will receive a Definitive Note representing such Beneficial
Owner's interest in such Note, except as provided in Section 4.08. Unless and
until definitive, fully registered Notes (the "Definitive Notes") have been
issued to Beneficial Owners pursuant to Section 4.08:
(i) the provisions of this Section 4.06 shall be in full force
and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Depository for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the giving
of instructions or directions hereunder) as the sole holder of the Notes, and
shall have no obligation to the Owners of Notes;
(iii) to the extent that the provisions of this Section 4.06
conflict with any other provisions of this Indenture, the provisions of this
Section 4.06 shall control;
(iv) the rights of Beneficial Owners shall be exercised only
through the Depository and shall be limited to those established by law and
agreements between such Owners of Notes and the Depository and/or the Depository
Participants. Unless and until Definitive Notes are issued pursuant to Section
4.08, the initial Depository will make book-entry transfers among the Depository
Participants and receive and transmit payments of principal of and interest on
the Notes to such Depository Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Security Balances of the Notes, the Depository shall
be deemed to represent such percentage only to the extent that it has received
instructions to such effect from Beneficial Owners and/or Depository
Participants owning or representing, respectively, such required percentage of
the beneficial interest in the Notes and has delivered such instructions to the
Indenture Trustee.
Section 4.07. Notices to Depository. Whenever a notice or other
communication to the Note Holders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Beneficial Owners pursuant to
Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08. Definitive Notes. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Owners of Notes representing beneficial interests aggregating
at least a majority of the Security Balances of the Notes advise the Depository
in writing that the continuation of a book-entry system through the Depository
is no longer in the best interests of the Beneficial Owners, then the Depository
shall notify all Beneficial Owners and the Indenture Trustee of the occurrence
of any such event and of the availability of Definitive Notes to Beneficial
Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Depository,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Depository. None of the Issuer, the Note Registrar or the
Indenture Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Indenture Trustee shall
recognize the Holders of the Definitive Notes as Noteholders.
Section 4.09. Tax Treatment. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness of the Issuer. The Issuer, by entering into this Indenture, and
each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness.
Section 4.10. Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect with respect to the Notes except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.11) and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than (i)
Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 4.03 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation
a. have become due and payable,
b. will become due and payable at the Final Scheduled Payment
Date within one year, or
c. have been declared immediately due and payable pursuant to
Section 5.02.
and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or
direct obligations of or obligations guaranteed by the United States of
America (which will mature prior to the date such amounts are payable), in
trust for such purpose, in an amount sufficient to pay and discharge the
entire indebtedness on such Notes and Certificates then outstanding not
theretofore delivered to the Indenture Trustee for cancellation when due on
the Final Scheduled Payment Date;
(B) the Issuer has paid or caused to be paid all other sums payable
hereunder and under the Insurance Agreement by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee and the Credit
Enhancer an Officer's Certificate and an Opinion of Counsel, each
meeting the applicable requirements of Section 10.01 and each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with
and, if the Opinion of Counsel relates to a deposit made in connection
with Section 4.10(A)(2)b. above, such opinion shall further be to the
effect that such deposit will not have any material adverse tax
consequences to the Issuer, any Noteholders or any Certificateholders.
Section 4.11. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the Holders
of Securities, of all sums due and to become due thereon for principal and
interest; but such monies need not be segregated from other funds except to the
extent required herein or required by law.
Section 4.12. Subrogation and Cooperation. The Issuer and the Indenture
Trustee acknowledge that (i) to the extent the Credit Enhancer makes payments
under the Credit Enhancement Instrument, the Credit Enhancer will be fully
subrogated to the rights of the Noteholders to receive such principal and
interest from the Owner Trust Estate, and (ii) the Credit Enhancer shall be paid
such principal and interest but only from the sources and in the manner provided
herein and in the Insurance Agreement for the payment of such principal and
interest.
The Indenture Trustee shall cooperate in all respects with any
reasonable request by the Credit Enhancer for action to preserve or enforce the
Credit Enhancer's rights or interest under this Indenture or the Insurance
Agreement, consistent with this Indenture and without limiting the rights of the
Noteholders as otherwise set forth in the Indenture, including, without
limitation, upon the occurrence and continuance of a default under the Insurance
Agreement, a request (which request shall be in writing) to take any one or more
of the following actions:
(i) institute Proceedings for the collection of all amounts then
payable on the Notes or under this Indenture in respect to the Notes and all
amounts payable under the Insurance Agreement and to enforce any judgment
obtained and collect from the Issuer monies adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private Sales (as defined in Section
5.15 hereof) called and conducted in any manner permitted by law;
(iii) file or record all assignments that have not previously
been recorded;
(iv) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and enforce the
rights and remedies of the Credit Enhancer hereunder.
Following the payment in full of the Notes, the Credit Enhancer shall
continue to have all rights and privileges provided to it under this Section and
in all other provisions of this Indenture, until all amounts owing to the Credit
Enhancer hereunder and under the Insurance Agreement have been paid in full.
Section 4.13. Repayment of Monies Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
Section 4.14. Temporary Notes. Pending the preparation of any Definitive
Notes, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Notes that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of the
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the office or agency of the Indenture
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Issuer shall execute and the Indenture Trustee
shall authenticate and make available for delivery, in exchange therefor,
Definitive Notes of authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
ARTICLE V.
Default and Remedies
Section 5.01. Events of Default. The Issuer shall deliver to the Indenture
Trustee and the Credit Enhancer, within five days after learning of the
occurrence any event which with the giving of notice and the lapse of time would
become an Event of Default under clause (iii) of the definition of "Event of
Default" written notice in the form of an Officer's Certificate of its status
and what action the Issuer is taking or proposes to take with respect thereto.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur, then and in every such case the Indenture Trustee
or the Holders of Notes representing not less than a majority of the Security
Balances of all Notes with the prior written consent of the Credit Enhancer, or
the Credit Enhancer may declare the Notes to be immediately due and payable, by
a notice in writing to the Issuer (and to the Indenture Trustee if given by
Noteholders), and upon any such declaration the unpaid principal amount of such
class of Notes, together with accrued and unpaid interest thereon through the
date of acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Holders of Notes representing a
majority of the Security Balances of all Notes, by written notice to the Issuer
and the Indenture Trustee with the written consent of the Credit Enhancer, or
the Credit Enhancer, may in writing waive the related Event of Default and
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on the Notes
and all other amounts that would then be due hereunder or upon the
Notes if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration, have
been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if default in the payment of (i) any
interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) the principal of or any installment
of the principal of any Note when the same becomes due and payable, the Issuer
shall, upon demand of the Indenture Trustee, pay to it, for the benefit of the
Holders of Notes, the whole amount then due and payable on the Notes for
principal and interest, with interest upon the overdue principal, and in
addition thereto such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.17 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor upon the Notes, wherever
situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee subject to the provisions of Section 10.17 hereof may, as more
particularly provided in Section 5.04, in its discretion, proceed to protect and
enforce its rights and the rights of the Noteholders, by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for reasonable compensation
to the Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances made, by the Indenture Trustee and
each predecessor Indenture Trustee, except as a result of negligence, willful
misconduct or bad faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on their
behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Indenture
Trustee or the Holders of Notes allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence, willful
misconduct or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
Section 5.04. Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee subject to the provisions of Section 10.17 hereof may with the
prior written consent of the Credit Enhancer, or shall at the written direction
of the Credit Enhancer do one or more of the following (subject to Section
5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes or
under this Indenture with respect thereto, whether by declaration or otherwise,
and all amounts payable under the Insurance Agreement, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such Notes
monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and conducted in
any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Security Balances of the Notes and the Credit Enhancer, which consent will not
be unreasonably withheld, (B) the proceeds of such sale or liquidation
distributable to Holders are sufficient to discharge in full all amounts then
due and unpaid upon the Notes for principal and interest and to reimburse the
Credit Enhancer for any amounts drawn under the Credit Enhancement Instrument
and any other amounts due the Credit Enhancer under the Insurance Agreement or
(C) the Indenture Trustee determines that the Revolving Credit Loans 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 the
Credit Enhancer, which consent will not be unreasonably withheld, and of the
Holders of 66 2/3% of the aggregate Security Balances of the Notes. In
determining such sufficiency or insufficiency with respect to clause (B) and
(C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of
an Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose. Notwithstanding the foregoing, so long as a
Servicing Default has not occurred, any Sale of the Trust Estate shall be made
subject to the continued servicing of the Revolving Credit Loans by the Servicer
as provided in the Servicing Agreement.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to Holders of the Notes for amounts due and unpaid on the
related Notes for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Notes for
interest from amounts available in the Trust Estate for such
Noteholders;
THIRD: to Holders of the Notes for amounts due and unpaid on the
related Notes for principal, ratably, without preference or priority
of any kind, according to the amounts due and payable on such Notes
for principal, from amounts available in the Trust Estate for such
Noteholders, until the Security Balances of the Notes have been
reduced to zero;
FOURTH: [reserved];
FIFTH: to the payment of all amounts due and owing to the Credit
Enhancer under the Insurance Agreement;
SIXTH: to the Certificate Paying Agent for amounts due under Article
VIII of the Trust Agreement; and
SEVENTH: to the payment of the remainder, if any, to the Issuer or any
other person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05. Optional Preservation of the Trust Estate. If the Notes have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may (with the prior written consent of the
Credit Enhancer), but need not, (but shall at the written direction of the
Credit Enhancer) elect to take and maintain possession of the Trust Estate. It
is the desire of the parties hereto and the Noteholders that there be at all
times sufficient funds for the payment of principal of and interest on the Notes
and other obligations of the Issuer including payment to the Credit Enhancer,
and the Indenture Trustee shall take such desire into account when determining
whether or not to take and maintain possession of the Trust Estate. In
determining whether to take and maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
Section 5.06. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 10.17 hereof:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Security Balances of
the Notes have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such Proceedings;
and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of a
majority of the Security Balances of the Notes or by the Credit Enhancer.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Security Balances of the Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07. Unconditional Rights of Noteholders to Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture Trustee
or any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Credit Enhancer 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 Credit Enhancer or any Holder of any Note to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the
Indenture Trustee or to the Noteholders may be exercised from time to time, and
as often as may be deemed expedient, by the Indenture Trustee or by the
Noteholders, as the case may be.
Section 5.11. Control by Credit Enhancer or Noteholders. The Holders of a
majority of the Security Balances of Notes with the prior written consent of the
Credit Enhancer, or the Credit Enhancer (so long as no Credit Enhancer Default
exists) shall have the right to direct the time, method and place of conducting
any Proceeding for any remedy available to the Indenture Trustee with respect to
the Notes or exercising any trust or power conferred on the Indenture Trustee;
provided that:
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction
to the Indenture Trustee to sell or liquidate the Trust Estate shall be by
Holders of Notes representing not less than 100% of the Security Balances of
Notes with the consent of the Credit Enhancer, or the Credit Enhancer (so long
as no Credit Enhancer Default exists);
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant
to such Section, then any direction to the Indenture Trustee by Holders of Notes
representing less than 100% of the Security Balances of Notes to sell or
liquidate the Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines
in its discretion might involve it in liability or might materially adversely
affect the rights of any Noteholders not consenting to such action.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Security Balances of the
Notes with the prior written consent of the Credit Enhancer, or the Credit
Enhancer (so long as no Credit Enhancer Default exists) may waive any past Event
of Default and its consequences except an Event of Default (a) with respect to
payment of principal of or interest on any of the Notes or (b) in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the Holder of each Note. In the case of any such waiver, the Issuer,
the Indenture Trustee and the Holders of the Notes shall be restored to their
respective former positions and rights hereunder; but no such waiver shall
extend to any subsequent or other Event of Default or impair any right
consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Section 5.13. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such ▇▇▇▇▇▇'s acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the Security
Balances of the Notes or (c) any suit instituted by any Noteholder for the
enforcement of the payment of principal of or interest on any Note on or after
the respective due dates expressed in such Note and in this Indenture.
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
Section 5.15. Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a "Sale") of
any portion of the Trust Estate pursuant to Section 5.04 is expressly subject to
the provisions of Section 5.05 and this Section 5.15. The power to effect any
such Sale shall not be exhausted by any one or more Sales as to any portion of
the Trust Estate remaining unsold, but shall continue unimpaired until the
entire Trust Estate shall have been sold or all amounts payable on the Notes and
under this Indenture and under the Insurance Agreement shall have been paid. The
Indenture Trustee may from time to time postpone any public Sale by public
announcement made at the time and place of such Sale. The Indenture Trustee
hereby expressly waives its right to any amount fixed by law as compensation for
any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless:
(1) the Holders of all Notes (with the prior written consent of
the Credit Enhancer) or the Credit Enhancer may consent to, or direct the
Indenture Trustee to make or the Indenture Trustee may make (with the consent of
the Credit Enhancer and all Holders of the Notes), such Sale, or
(2) the proceeds of such Sale would be not less than the entire
amount which would be payable to the Noteholders under the Notes, the
Certificateholders under the Certificates and the Credit Enhancer in respect of
amounts drawn under the Credit Enhancement Instrument and any other amounts due
the Credit Enhancer under the Insurance Agreement, in full payment thereof in
accordance with Section 5.02, on the Payment Date next succeeding the date of
such Sale, or
(3) the Indenture Trustee determines, in its sole discretion,
that the conditions for retention of the Trust Estate set forth in Section 5.05
cannot be satisfied (in making any such determination, the Indenture Trustee may
rely upon an opinion of an Independent investment banking firm obtained and
delivered as provided in Section 5.05), and the Credit Enhancer consents in
writing to such Sale, which consent will not be unreasonably withheld and the
Holders representing at least 66-2/3% of the Security Balances of the Notes
consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) Unless the Holders and the Credit Enhancer have otherwise
consented or directed the Indenture Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater than the
amount described in paragraph (2) of subsection (b) of this Section 5.15 has not
been established by the Indenture Trustee and no Person bids an amount equal to
or greater than such amount, the Indenture Trustee shall bid an amount at least
$1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(1) any Holder or Holders of Notes may bid for and with the consent of
the Credit Enhancer purchase the property offered for sale, and upon compliance
with the terms of sale may hold, retain and possess and dispose of such
property, without further accountability, and may, in paying the purchase money
therefor, deliver any Notes or claims for interest thereon in lieu of cash up to
the amount which shall, upon distribution of the net proceeds of such sale, be
payable thereon, and such Notes, in case the amounts so payable thereon shall be
less than the amount due thereon, shall be returned to the Holders thereof after
being appropriately stamped to show such partial payment;
(2) the Indenture Trustee may bid for and acquire the property offered
for Sale in connection with any Sale thereof, and, subject to any requirements
of, and to the extent permitted by, applicable law in connection therewith, may
purchase all or any portion of the Trust Estate in a private sale, and, in lieu
of paying cash therefor, may make settlement for the purchase price by crediting
the gross Sale price against the sum of (A) the amount which would be
distributable to the Holders of the Notes and Holders of Certificates and
amounts owing to the Credit Enhancer as a result of such Sale in accordance with
Section 5.04(b) on the Payment Date next succeeding the date of such Sale and
(B) the expenses of the Sale and of any Proceedings in connection therewith
which are reimbursable to it, without being required to produce the Notes in
order to complete any such Sale or in order for the net Sale price to be
credited against such Notes, and any property so acquired by the Indenture
Trustee shall be held and dealt with by it in accordance with the provisions of
this Indenture;
(3) the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the Trust
Estate in connection with a Sale thereof;
(4) the Indenture Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the Trust Estate in connection with a Sale thereof, and to take all
action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any monies.
Section 5.16. Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b).
Section 5.17. Performance and Enforcement of Certain Obligations.
(a) Promptly following a written direction from (a) the Credit
Enhancer or (b) the Indenture Trustee with the written consent of the Credit
Enhancer, the Issuer, in its capacity as holder of the Revolving Credit Loans,
shall, with the written consent of the Credit Enhancer, take all such lawful
action as the Indenture Trustee may request to cause the Issuer 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 Revolving Credit Loan Purchase Agreement and the Servicing Agreement,
and to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Revolving Credit Loan
Purchase Agreement and the Servicing Agreement to the extent and in the manner
directed by the Indenture Trustee, as pledgee of the Revolving Credit Loans,
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 Revolving Credit Loan Purchase Agreement and
the Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee, as pledgee of the Revolving Credit Loans, subject to the
rights of the Credit Enhancer under the Servicing Agreement may, and at the
direction (which direction shall be in writing or by telephone (confirmed in
writing promptly thereafter)) of the Holders of 66-2/3% of the Security Balances
of the Notes shall, exercise all rights, remedies, powers, privileges and claims
of the Issuer against the Seller or the Servicer under or in connection with the
Revolving Credit Loan Purchase Agreement and the Servicing Agreement, including
the right or power to take any action to compel or secure performance or
observance by the Seller or the 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 Revolving Credit Loan
Purchase Agreement and the Servicing Agreement, as the case may be, and any
right of the Issuer to take such action shall not be suspended. In connection
therewith, as determined by the Indenture Trustee, the Issuer shall take all
actions necessary to effect the transfer of the Revolving Credit Loans to the
Indenture Trustee.
ARTICLE VI.
The Indenture Trustee
Section 6.01. Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the Indenture
Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates, reports or
opinions furnished to the Indenture Trustee and conforming to the requirements
of this Indenture; however, the Indenture Trustee shall examine the certificates
and opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved that
the Indenture Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it (A) pursuant to Section 5.11 or (B) from the Credit
Enhancer, which it is entitled to give under any of the Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
Section 6.02. Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Indenture Trustee
must comply with Sections 6.11 and 6.12.
Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be (i) responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, (ii) accountable for the Issuer's use
of the proceeds from the Notes or (iii) responsible for any statement of the
Issuer in the Indenture or in any document issued in connection with the sale of
the Notes or in the Notes other than the Indenture Trustee's certificate of
authentication.
Section 6.05. Notice of Event of Default. If an Event of Default occurs and
is continuing and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall give notice thereof to the Credit Enhancer.
The Indenture Trustee shall mail to each Noteholder notice of the Event of
Default within 90 days after it occurs.
Section 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns. In
addition, upon the Issuer's written request, the Indenture Trustee shall
promptly furnish information reasonably requested by the Issuer that is
reasonably available to the Indenture Trustee to enable the Issuer to perform
its federal and state income tax reporting obligations.
Section 6.07. Tax. The Indenture Trustee shall prepare and deliver the
income tax returns, tax elections, financial statements, and such annual or
other reports of the Trust pursuant to Section 2.06 of the Trust Agreement;
provided, however, that the Indenture Trustee shall not be required to compute
the Trust's gross income except to the extent it can do so without unreasonable
effort or expense based upon income statements furnished to it; and provided,
further, that the Indenture Trustee shall not be required to prepare and file
partnership tax returns on behalf of the Trust unless it receives an Opinion of
Counsel (which shall not be at the Indenture Trustee's expense, but shall be at
the expense of the Seller or other party furnishing such opinion) as to the
necessity of such filings.
Section 6.08. Compensation and Indemnity. The Issuer shall pay the
Indenture Trustee Fee to the Indenture Trustee on each Payment Date as
compensation for its services. The Indenture Trustee shall be compensated and
indemnified by the Servicer in accordance with Section 6.06 of the Servicing
Agreement, and all amounts owing to the Indenture Trustee hereunder in excess of
such amount shall be paid solely as provided in Section 3.05 hereof (subject to
the priorities set forth therein). The Indenture Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust. The
Issuer shall reimburse the Indenture Trustee for all reasonable out-of-pocket
expenses incurred or made by it, including Transition Costs, costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer shall 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 promptly of any claim
for which it may seek indemnity. Failure by the Indenture Trustee to so notify
the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer
shall defend any such claim, and the Indenture Trustee may have separate counsel
and the Issuer shall pay the fees and expenses of such counsel. The Issuer is
not obligated to reimburse any expense or indemnify against any loss, liability
or expense incurred by the Indenture Trustee through the Indenture Trustee's own
willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of an Event of Default
specified in clause (iv) or (v) of the definition thereof 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 6.09. Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may
resign at any time by so notifying the Issuer and the Credit Enhancer. The
Holders of a majority of Security Balances of the Notes or the Credit Enhancer
may remove the Indenture Trustee by so notifying the Indenture Trustee and the
Credit Enhancer and may appoint a successor Indenture Trustee. The Issuer shall
remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
fulfilling its duties under the Basic Documents.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee with the prior
written consent of the Credit Enhancer which consent will not be unreasonably
withheld. In addition, the Indenture Trustee will resign to avoid being directly
or indirectly controlled by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer. Thereupon,
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights, powers
and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of Security Balances
of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.10. Successor Indenture Trustee by ▇▇▇▇▇▇. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies written notice of any such transaction after the Closing Date.
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 6.11. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Owner Trust, and to vest
in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part thereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Indenture Trustee may consider necessary or desirable.
No co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Indenture Trustee joining in
such act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed the Indenture Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust Estate or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but solely at the
direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.12. Eligibility; Disqualification. The Indenture Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of A or better by ▇▇▇▇▇'▇. The Indenture
Trustee shall comply with TIA ss. 310(b), including the optional provision
permitted by the second sentence of TIA ss. 310(b)(9); provided, however, that
there shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.
Section 6.13. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.14. Representations and Warranties. The Indenture Trustee hereby
represents that:
(i) The Indenture Trustee is duly organized, validly existing and
in good standing under the laws of the United States of America with power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted.
(ii) The Indenture Trustee has the power and authority to execute
and deliver this Indenture and to carry out its terms; and the execution,
delivery and performance of this Indenture have been duly authorized by the
Indenture Trustee by all necessary corporate action.
(iii) The consummation of the transactions contemplated by this
Indenture and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles of organization
or bylaws of the Indenture Trustee or any agreement or other instrument to which
the Indenture Trustee is a party or by which it is bound.
(iv) To the Indenture Trustee's best knowledge, there are no
proceedings or investigations pending or threatened before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Indenture Trustee or its properties: (A) asserting the
invalidity of this Indenture (B) seeking to prevent the consummation of any of
the transactions contemplated by this Indenture or (C) seeking any determination
or ruling that might materially and adversely affect the performance by the
Indenture Trustee of its obligations under, or the validity or enforceability
of, this Indenture.
(v) The Indenture Trustee does not have notice of any adverse
claim (as such terms are used in Delaware UCC Section 8-302) with respect to the
Revolving Credit Loans.
Section 6.15. Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Revolving Credit Loans and hold the
assets of the Trust in trust for the Noteholders and the Credit Enhancer;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibit A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
Section 6.16. Indenture Trustee May Own Securities. The Indenture Trustee,
in its individual or any other capacity may become the owner or pledgee of
Securities with the same rights it would have if it were not Indenture Trustee.
ARTICLE VII.
Noteholders' Lists and Reports
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Notes as of such Record Date and, (b) at such other times as the
Indenture Trustee and the Credit Enhancer may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.
Section 7.02. Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01 upon receipt
of a new list so furnished.
(i) Noteholders may communicate pursuant to TIA ss. 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(b) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss. 312(c).
Section 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) prepare or cause to be prepared the initial current reports
on Form 8-K to be filed prior to the first Payment Date and thereafter the
Indenture Trustee will prepare or cause to be prepared Form 10-Ks and form 10-Qs
(if necessary), or monthly current reports on Form 8-K, on behalf of the Trust,
as may be required by applicable law, for filing with the Securities and
Exchange Commission (the "SEC"). The Owner Trustee will sign each such report on
behalf of the Trust. The Indenture Trustee will forward a copy of such report to
the Issuer promptly after such report has been filed with the SEC. The Indenture
Trustee agrees to use its best efforts to seek to terminate such filing
obligation after the period during which such filings are required under the
Exchange Act. Promptly after filing a Form 15 or other applicable form with the
SEC in connection with such termination, the Indenture Trustee shall deliver to
the Issuer a copy of such form together with copies of confirmations of receipt
by the SEC of each report filed therewith on behalf of the Trust.
(ii) file with the Indenture Trustee, and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this Indenture as
may be required from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA ss. 313(c)) such
summaries of any information, documents and reports required to be filed by the
Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and by rules and
regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.04. Reports by Indenture Trustee. If required by TIA ss. 313(a),
within 60 days after each May 1 beginning with May 1, 1999, the Indenture
Trustee shall mail to each Noteholder as required by TIA ss. 313(c) and to the
Credit Enhancer a brief report dated as of such date that complies with TIA ss.
313(a). The Indenture Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission, if required, and each
stock 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 stock exchange.
ARTICLE VIII.
Accounts, Disbursements and Releases
Section 8.01. Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02. Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause the
Indenture Trustee to establish and maintain, in the name of the Indenture
Trustee, for the benefit of the Noteholders and the Certificate Paying Agent, on
behalf of the Certificateholders and the Credit Enhancer, the Payment Account as
provided in Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Payment Account
pursuant to the Servicing Agreement and all deposits therein pursuant to this
Indenture are for the benefit of the Noteholders and the Certificate Paying
Agent, on behalf of the Certificateholders and all investments made with such
monies including all income or other gain from such investments are for the
benefit of the Indenture Trustee.
On each Payment Date, the Indenture Trustee shall distribute all
amounts on deposit in the Payment Account to Noteholders in respect of the Notes
and in its capacity as Certificate Paying Agent to Certificateholders in the
order of priority set forth in Section 3.05 (except as otherwise provided in
Section 5.04(b).
The Indenture Trustee may invest any funds in the Payment Account in
its sole discretion, but only in Permitted Investments, as provided in Section
5.01 of the Servicing Agreement.
Section 8.03. Officer's Certificate. The Indenture Trustee shall receive at
least seven days notice when requested by the Issuer to take any action pursuant
to Section 8.05(a), accompanied by copies of any instruments to be executed, and
the Indenture Trustee shall also require, as a condition to such action, an
Officer's Certificate, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with.
Section 8.04. Termination Upon Distribution to Noteholders. This Indenture
and the respective obligations and responsibilities of the Issuer and the
Indenture Trustee created hereby shall terminate upon the distribution to the
Noteholders, the Certificate Paying Agent (on behalf of the Certificateholders)
and the Indenture Trustee of all amounts required to be distributed pursuant to
Article III; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to
the Court of St. James's, living on the date hereof.
Section 8.05. Release of Trust Estate.
(a) Subject to the payment of its fees and expenses, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in Article VIII hereunder shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent,
or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no
Notes Outstanding, (ii) all sums due the Indenture Trustee pursuant to this
Indenture have been paid, and (iii) all sums due the Credit Enhancer have been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuer accompanied by an Officers' Certificate and a letter from the Credit
Enhancer, stating that the Credit Enhancer has no objection to such request from
the Issuer.
(d) The Indenture Trustee shall, at the request of the Issuer or the
Depositor, surrender the Credit Enhancement Instrument to the Credit Enhancer
for cancellation, upon final payment of principal and interest on the Notes.
Section 8.06. Surrender of Notes Upon Final Payment. By acceptance of any
Note, the Holder thereof agrees to surrender such Note to the Indenture Trustee
promptly, prior to such Noteholder's receipt of the final payment thereon.
ARTICLE IX.
Supplemental Indentures
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies and with the prior written consent of the Credit
Enhancer, the Issuer and the Indenture Trustee, when authorized by an Issuer
Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein and in
the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes or the Credit Enhancer, 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;
(vi) to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental indenture;
provided, that such action shall not materially and adversely affect the
interests of the Holders of the Notes;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes and to
add to or change any of the provisions of this Indenture as shall be necessary
to facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI;
(viii) Reserved: or
(ix) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be expressly
required by the TIA;
provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
entering into such indenture supplement will not have any material adverse tax
consequences to the Noteholders.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies and the Credit Enhancer, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided, however, that such action shall not,
as evidenced by an Opinion of Counsel, (i) adversely affect in any material
respect the interests of any Noteholder or the Credit Enhancer or (ii) cause the
Issuer to be subject to an entity level tax.
Section 9.02. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and with the consent of the
Holders of not less than a majority of the Security Balances of the Notes
affected thereby and the prior written consent of the Credit Enhancer, by Act of
such Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Note affected
thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof or the interest
rate thereon, change the provisions of this Indenture relating to the
application of collections on, or the proceeds of the sale of, the Trust Estate
to payment of principal of or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the interest
thereon is payable, or impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such amount due on the
Notes on or after the respective due dates thereof;
(ii) reduce the percentage of the Security Balances of the Notes,
the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception in the
definition of the term "Holder";
(iv) reduce the percentage of the Security Balances of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section 9.02 except to increase
any percentage specified herein or to provide that certain additional provisions
of this Indenture or the Basic Documents cannot be modified or waived without
the consent of the Holder of each Note affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation of any
of the individual components of such calculation); or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the Trust
Estate or, except as otherwise permitted or contemplated herein, terminate the
lien of this Indenture on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the lien of this Indenture; and
provided, further, that such action shall not, as evidenced by an Opinion of
Counsel, cause the Issuer to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders (as defined in
Section 10.03) under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section 9.02, the Indenture
Trustee shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.05. Conformity with Trust Indenture Act. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X.
Miscellaneous
Section 10.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee and to the Credit Enhancer (i) an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and (ii) an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that, in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with; and
(5) if the Signer of such Certificate or Opinion is required
to be Independent, the Statement required by the definition of the
term "Independent".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (i) above, the Issuer
shall also deliver to the Indenture Trustee an Independent Certificate as
to the same matters, if the fair value to the Issuer of the securities to
be so deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then-current fiscal
year of the Issuer, as set forth in the certificates delivered pursuant to
clause (i) above and this clause (ii), is 10% or more of the Security
Balances of the Notes, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the Security Balances of the Notes.
(iii) Whenever any property or securities are to be released from
the lien of this Indenture, the Issuer shall also furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of
such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will not
impair the security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (iii) above, the
Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than property as contemplated
by clause (v) below or securities released from the lien of this Indenture
since the commencement of the then-current calendar year, as set forth in
the certificates required by clause (iii) above and this clause (iv),
equals 10% or more of the Security Balances of the Notes, but such
certificate need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the then
Security Balances of the Notes.
(v) Notwithstanding any provision of this Indenture, the Issuer
may, without compliance with the requirements of the other provisions of
this Section 10.01, (A) collect, sell or otherwise dispose of the Revolving
Credit Loans as and to the extent permitted or required by the Basic
Documents or (B) make cash payments out of the Payment Account as and to
the extent permitted or required by the Basic Documents, so long as the
Issuer shall deliver to the Indenture Trustee every six months, commencing
November 30, 1999, an Officer's Certificate of the Issuer stating that all
the dispositions of Collateral described in clauses (A) or (B) above that
occurred during the preceding six calendar months were in the ordinary
course of the Issuer's business and that the proceeds thereof were applied
in accordance with the Basic Documents.
Section 10.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Seller or the Issuer, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 10.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section 10.03.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
Section 10.04. Notices, etc., to Indenture Trustee, Issuer, Credit Enhancer
and Rating Agencies. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or permitted
by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or Act of Noteholders is to be
made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention NOVUS 1999-1 with a copy to the Indenture
Trustee's Corporate Trust Office. The Indenture Trustee shall promptly transmit
any notice received by it from the Noteholders to the Issuer, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to: NOVUS HELOC Trust
1999-1, in care of Wilmington Trust Company, or at any other address previously
furnished in writing to the Indenture Trustee by the Issuer. The Issuer shall
promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee, or
(iii) the Credit Enhancer by the Issuer, the Indenture Trustee or
by any Noteholders shall be sufficient for every purpose hereunder to in writing
and mailed, first-class postage pre-paid, or personally delivered or telecopied
to: Ambac Assurance Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Structured Finance - Mortgage Backed Securities, telecopier
number (▇▇▇) ▇▇▇-▇▇▇▇, Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇. The Credit Enhancer shall
promptly transmit any notice received by it from the Issuer, the Indenture
Trustee or the Noteholders to the Issuer or Indenture Trustee, as the case may
be.
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., ABS
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (ii) in
the case of Standard & Poor's, at the following address: Standard & Poor's
Ratings Services, ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention
of Asset Backed Surveillance Department; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
Section 10.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Person's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
Section 10.06. Alternate Payment and Notice Provisions. Notwithstanding any
provision of this Indenture or any of the Notes to the contrary, the Issuer may
enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee to such Holder, that is different
from the methods provided for in this Indenture for such payments or notices.
The Issuer shall furnish to the Indenture Trustee a copy of each such agreement
and the Indenture Trustee shall cause payments to be made and notices to be
given in accordance with such agreements.
Section 10.07. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA ▇▇.▇▇. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 10.08. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
Section 10.09. Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents.
Section 10.10. 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 10.11. 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, the Credit Enhancer,
and any other party secured hereunder, and any other Person with an ownership
interest in any part of the Trust Estate, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 10.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 10.13. 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 10.14. 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 10.15. 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 10.16. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
Section 10.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Depositor or the Issuer, or
join in any institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
Section 10.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
NOVUS HELOC TRUST 1999-1,
as Issuer
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By:/s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Trust Officer
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, ▇▇▇▇▇▇
accepts the appointment as
Paying Agent pursuant to
Section 3.03 hereof and as
Note Registrar pursuant to
Section 4.02 hereof.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Trust Officer
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __th day of May, 1999, before me personally appeared
[_______________], to me known, who being by me duly sworn, did depose and say,
that he resides at [__________________________________], that he is the Vice
President of the Owner Trustee, one of the corporations described in and which
executed the above instrument; that he knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.
----------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __th day of May, 1999, before me personally appeared
[_______________], to me known, who being by me duly sworn, did depose and say,
that he resides at [__________________________], that he is the Vice President
of Norwest Bank Minnesota, National Association, as Indenture Trustee, one of
the corporations described in and which executed the above instrument; that she
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation; and that he signed his name thereto by like order.
----------------------
Notary Public
NOTORIAL SEAL
EXHIBIT A
FORM OF NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN AND IN THE INDENTURE. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER TRUSTEE
OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE
INDENTURE OR THE BASIC DOCUMENTS.
NOVUS HELOC TRUST 1999-1
HELOC Asset -Backed Note
Registered Principal Amount: $___________
No. _ Note Rate: Floating
CUSIP NO. ___________
NOVUS HELOC Trust 1999-1, a business trust duly organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of $___________, payable on each Payment Date in an amount
equal to the Percentage Interest specified above of the aggregate amount, if
any, payable from the Payment Account in respect of principal on the Notes
pursuant to Section 3.05 of the Indenture dated as of May 1, 1999 (the
"Indenture") between the Issuer, as Issuer, and Norwest Bank Minnesota, National
Association, as Indenture Trustee (the "Indenture Trustee"); PROVIDED, HOWEVER,
that the entire unpaid principal amount of this Note shall be due and payable on
the Payment Date in __________, to the extent not previously paid on a prior
Payment Date. Capitalized terms used but not defined herein are defined in
Appendix A of the Indenture.
Interest on the Notes will be paid monthly on each Payment Date at the
Note Rate for the related Interest Period subject to limitations which may
result in Interest Shortfalls (as further described in the Indenture). The Note
Rate for each Interest Period will be a floating rate equal to the lesser of (i)
LIBOR plus ____% per annum (or ___% on or after the Optional Redemption Date and
(ii) the Maximum Net Loan Rate. LIBOR for each applicable Interest Period will
be determined on the second LIBOR Business Day immediately preceding (i) the
Closing Date in the case of the first Interest Period and (ii) the first day of
each succeeding Interest Period by the Indenture Trustee as set forth in the
Indenture. All determinations of LIBOR by the Indenture Trustee shall, in the
absence of manifest error, be conclusive for all purposes, and each holder of
this Note, by accepting this Note, agrees to be bound by such determination.
Interest on this Note will accrue for each Payment Date from the most recent
Payment Date on which interest has been paid (in the case of the first Payment
Date, from the Closing Date) to but excluding such Payment Date. Interest will
be computed on the basis of the actual number of days in each Interest Period
and a year assumed to consist of 360 days. Principal of and interest on this
Note shall be paid in the manner specified on the reverse hereof.
Principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Home Equity Loan-Backed Notes (herein called the "Notes"), all
issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be secured by the collateral pledged as
security therefor as provided in the Indenture.
This Note is entitled to the benefits of an irrevocable and
unconditional financial guaranty insurance policy issued by Ambac Assurance
Corporation.
Principal of and interest on this Note will be payable on each Payment
Date, commencing on June 25, 1999, as described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
then the next Business Day.
The entire unpaid principal amount of this Note shall be due and
payable in full on the Payment Date in [__________] pursuant to the Indenture,
to the extent not previously paid on a prior Payment Date. Notwithstanding the
foregoing, if an Event of Default shall have occurred and be continuing, then
the Indenture Trustee or the holders of Notes representing not less than a
majority of the Security Balances of all Notes with the consent of the Credit
Enhancer, or the Credit Enhancer may declare the Notes to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Notes shall be made pro rata to the holders of Notes entitled
thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by wire transfer or check mailed to the
Person whose name appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date in
the name of the nominee of the Depository Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Payment Date shall be binding upon all future holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Payment Date, then the
Indenture Trustee, in the name of and on behalf of the Issuer, will notify the
Person who was the Registered Holder hereof as of the Record Date preceding such
Payment Date by notice mailed or transmitted by facsimile prior to such Payment
Date, and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the address specified in such notice
of final payment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the Corporate Trust
Office, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee duly executed by, the holder hereof
or such holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes
in authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the Note
Registrar shall require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any registration of
transfer or exchange of this Note.
Each holder or Beneficial Owner of a Note, by acceptance of a Note,
or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the 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 and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a Note or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees by accepting the benefits of the Indenture that such holder
or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer.
Each holder of a Note, by acceptance of a Note (and each Beneficial Owner of a
Note by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the holders of the Notes
under the Indenture at any time by the Issuer and the Indenture Trustee with the
consent of the holders of Notes representing a majority of the Security Balances
of all Notes at the time Outstanding and the Credit Enhancer and with prior
notice to the Rating Agencies. The Indenture also contains provisions permitting
the holders of Notes representing specified percentages of the Security Balances
of all Notes, on behalf of the holders of all the Notes, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
holder of this Note (or any one of more Predecessor Notes) shall be conclusive
and binding upon such holder and upon all future holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the Issuer and the Indenture Trustee to amend
or waive certain terms and conditions set forth in the Indenture without the
consent of holders of the Notes issued thereunder but with prior notice to the
Rating Agencies and the Credit Enhancer.
The term "Issuer" as used in this Note includes any successor or the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair, the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company in its
individual capacity, Norwest Bank Minnesota, National Association, in its
individual capacity, any owner of a beneficial interest in the Issuer, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Note to be duly executed.
NOVUS HELOC TRUST 1999-1
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
Dated:
By
------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within mentioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, not
in its individual capacity
but solely as Indenture
Trustee
Dated:
By
------------------------------------
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:
----------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
----------------------------------------------------------------
-----------------------------------------, attorney, to transfer said Note on
the books kept for registration thereof, with full power of substitution in the
premises.
Dated: __________________________________________
Signature Guaranteed*:
-----------------------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever.
Such signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements
include membership or participation in STAMP or such other "signature
guarantee program" as may be determined by the Note Registrar in addition
to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
APPENDIX A
DEFINITIONS
Accelerated Principal Payment Amount: With respect to any Payment
Date, payment to Noteholders pursuant to Section 3.05(a)(viii) of the Indenture
in an amount equal to the Overcollateralization Shortfall.
Additional Balance: With respect to any Revolving Credit Loan, any
future Draw made by the related Mortgagor pursuant to the related Loan Agreement
after the Cut-off Date.
Additional Balance Differential: With respect to any Payment Date,
unless and until a Rapid Amortization Event occurs, (x) during the Managed
Amortization Period, the amount, if any, by which Additional Balances resulting
from Draws under the Revolving Credit Loans during the related Collection Period
exceed Principal Collections during such Collection Period and (y) on and after
the end of the Managed Amortization Period, the aggregate amount of Additional
Balances conveyed to the Trust during the related Collection Period.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
Aggregate Additional Balance Differential: With respect to any Payment
Date and any Certificate, the sum of Additional Balance Differentials that have
been added to the Security Balance of such Certificate, as the case may be,
prior to such Payment Date.
Aggregate Security Balance: With respect to any date of determination,
the aggregate of the Security Balances of all Securities as of such date.
Appraised Value: With respect to any Mortgaged Property, either (x)
the value as generally set forth in an appraisal of such Mortgaged Property used
to establish compliance with the underwriting criteria then in effect in
connection with the later of the application for the Revolving Credit Loan
secured by such Mortgaged Property or any subsequent increase or decrease in the
related Credit Limit or to reduce or eliminate the amount of any primary
insurance, or (y) if the sales price of the Mortgaged Property is considered in
accordance with the underwriting criteria applicable to the Revolving Credit
Loan, the lesser of (i) the appraised value referred to in (x) above and (ii)
the sales price of such Mortgaged Property.
Assignment of Mortgage: With respect to any Mortgage, an assignment,
notice of transfer or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction in which the related Mortgaged Property is
located to reflect the conveyance of the Mortgage, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering the Revolving Credit Loans secured by Mortgaged Properties
located in the same jurisdiction.
Authorized Newspaper: A newspaper of general circulation in the
Borough of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
Authorized Officer: 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).
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basic Documents: The Trust Agreement, the Indenture, the Revolving
Credit Loan Purchase Agreement, the Insurance Agreement, the Credit Enhancement
Instrument, the Servicing Agreement, the Custodial Agreement and the other
documents and certificates delivered in connection with any of the above.
Beneficial Owner: With respect to any Note, the Person who is the
beneficial owner of such Note as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).
Billing Cycle: With respect to any Revolving Credit Loan and Due Date,
the period from the preceding Due Date through the day immediately prior to such
Due Date.
Book-Entry Notes: Beneficial interests in the Notes, ownership and
transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the States of New York, Maryland,
Minnesota, Utah or Delaware are required or authorized by law to be closed.
Business Trust Statute: Chapter 38 of Title 12 of the Delaware Code,
12 Del. Codess.ss.3801 et seq., as the same may
be amended from time to time.
Calculated Principal Balance: With respect to a Collection Period, the
amount equal to (i) Interest Collections for such Collection Period, divided by
(ii) the product of (a) the average Loan Rate on the Revolving Credit Loans (net
of the Servicing Fee Rate) on the first day of such Collection Period, weighted
on the basis of the Loan Balances of the Revolving Credit Loans on the first day
of the Collection Period, and (b) one-twelfth.
Certificate Distribution Account: The account or accounts created and
maintained by the Certificate Paying Agent pursuant to Section 3.09(c) of the
Trust Agreement. The Certificate Paying Agent will make all distributions on the
Certificates from money on deposit in the Certificate Distribution Account.
Certificate Distribution Amount: For any Payment Date, the amount
remaining in the Payment Account following distributions pursuant to clauses (i)
through (x) of Section 3.05 of the Indenture.
Certificate Paying Agent: The meaning specified in Section 3.09(a) of
the Trust Agreement.
Certificate Percentage Interest: With respect to any Payment Date, the
Certificate Percentage Interest as stated on the face of such Certificate, which
percentage may be recalculated in accordance with Section 3.03 of the Trust
Agreement.
Certificate Principal Balance: As of any Payment Date, with respect to
any Certificate, an amount equal to the excess of the Pool Balance over the
Investor Amount.
Certificate Register: The register maintained by the Certificate
Registrar in which the Certificate Registrar shall provide for the registration
of Certificates and of transfers and exchanges of Certificates.
Certificate Registrar: Initially, the Indenture Trustee, in its
capacity as Certificate Registrar.
Certificate of Trust: The Certificate of Trust filed for the Trust
pursuant to Section 3810(a) of the Business Trust Statute.
Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register except that, any Certificate registered
in the name of the Issuer, the Owner Trustee or the Indenture Trustee or any
Affiliate of any of them shall be deemed not to be outstanding and the
registered holder will not be considered a Certificateholder or a holder for
purposes of giving any request, demand, authorization, direction, notice,
consent or waiver under the Indenture or the Trust Agreement provided that, in
determining whether the Indenture Trustee or the Owner Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that the Indenture Trustee or the
Owner Trustee knows to be so owned shall be so disregarded. Owners of
Certificates that have been pledged in good faith may be regarded as Holders if
the pledgee establishes to the satisfaction of the Indenture Trustee or the
Owner Trustee, as the case may be, the pledgee's right so to act with respect to
such Certificates and that the pledgee is not the Issuer, any other obligor upon
the Certificates or any Affiliate of any of the foregoing Persons.
Certificateholder Interest: With respect to any Payment Date, the
excess of the Pool Balance as of the end of the related Collection Period over
the Investor Amount for such Payment Date.
Certificates: The Certificates in substantially the form set forth in
Exhibit A to the Trust Agreement.
Closing Date: May 27, 1999.
Code: The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
Collateral: The meaning specified in the Granting Clause of the
Indenture.
Collection Account: The account or accounts created and maintained by
the Servicer pursuant to Section 3.02(b) of the Servicing Agreement, in which
the Servicer shall deposit or cause to be deposited certain amounts in respect
of the Revolving Credit Loans.
Collection Period: With respect to any Revolving Credit Loan and any
Payment Date except the first Payment Date, the calendar month preceding any
such Payment Date, and with respect to the first Payment Date, the period from
May 1, 1999 to May 31, 1999.
Combined Loan-to-Value Ratio: With respect to any Revolving Credit
Loan and any date, the percentage equivalent of a fraction, the numerator of
which is the sum of (i) the Credit Limit and (ii) the outstanding principal
balance as of the date of the origination of such Revolving Credit Loan (or any
subsequent date as of which such outstanding principal balance may be determined
in connection with an increase or decrease in the Credit Limit or to reduce the
amount of primary insurance for such Revolving Credit Loan) of any mortgage loan
or mortgage loans that are secured by liens on the Mortgaged Property that are
senior or subordinate to the Mortgage and the denominator of which is the
Appraised Value of the related Mortgaged Property.
Corporate Trust Office: With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Note Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at Sixth
Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate
Trust Services-NOVUS 1999-1. With respect to the Owner Trustee, the principal
corporate trust office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date of the
execution of this Trust Agreement is located at ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Administration.
Credit Enhancement Draw Amount: With respect to any Payment Date, an
amount, if any, equal to the sum of (x) the amount by which accrued interest on
the Notes, at the Note Rate on such Payment Date (exclusive of any Interest
Shortfalls) exceeds the amount on deposit in the Payment Account available for
interest distributions on such Payment Date and, (y) the Guaranteed Principal
Distribution Amount.
Credit Enhancement Instrument: The Financial Guaranty Insurance Policy
number AB0251BE, dated as of the Closing Date, issued by the Credit Enhancer to
the Indenture Trustee on behalf of the Noteholders.
Credit Enhancer: Ambac Assurance Corporation, a Wisconsin-domiciled
stock insurance corporation, any successor thereto.
Credit Enhancer Default: If the Credit Enhancer fails to make a
payment required under the Credit Enhancement Instrument in accordance with its
terms.
Credit Enhancer Premium Rate: The "Premium Percentage" as defined in
the Insurance Agreement.
Credit Limit: With respect to any Revolving Credit Loan, the maximum
Loan Balance permitted under the terms of the related Loan Agreement.
Credit Limit Utilization Rate: With respect to any Revolving Credit
Loan and date of determination, the fraction expressed as a percentage, the
numerator of which is the Loan Balance of such Revolving Credit Loan on that
date and the denominator of which is the Credit Limit for such Revolving Credit
Loan.
Credit Line Agreement or Mortgage Note: With respect to a Revolving
Credit Loan, the Loan Agreement pursuant to which the related ▇▇▇▇▇▇▇▇▇ agrees
to pay the indebtedness evidenced thereby and secured by the related Mortgage as
modified or amended.
Credit Score: With respect to any Revolving Credit Loan, the numerical
designation obtained from credit reports provided by any credit reporting
organization used to assess a borrower's credit-worthiness and the relative
degree of risk a borrower represents to a lender.
Cumulative Net Losses: As of any date of determination and period, the
aggregate of the Liquidation Loss Amounts incurred during such period. For
purposes of this calculation, Revolving Credit Loans which have been repurchased
by the Seller or Servicer shall not be included.
Custodial Agreement: The Custodial Agreement dated as of May 1, 1999
among the Custodian, the Indenture Trustee and the Servicer relating to the
custody of the Revolving Credit Loans and the Related Documents.
Custodian: Norwest Bank Minnesota, National Association, a national
banking association, and its successors and assigns.
Cut-off Date: May 1, 1999.
Cut-off Date Loan Balance: With respect to any Revolving Credit Loan,
the unpaid principal balance thereof as of the close of business on the last day
of the Billing Cycle immediately prior to the Cut-off Date.
Cut-off Date Pool Balance: $335,659,538.88.
Default: Any occurrence which is or with notice or the lapse of time
or both would become an Event of Default.
Deleted Loan: A Revolving Credit Loan replaced or to be replaced with
an Eligible Substitute Loan.
Definitive Notes: The meaning specified in Section 4.06 of the
Indenture.
Depositor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., a Delaware corporation,
or its successor in interest.
Depository or Depository Agency: The Depository Trust Company or a
successor appointed by the Indenture Trustee with the approval of the Depositor.
Any successor to the Depository shall be an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act and the
regulations of the Securities and Exchange Commission thereunder.
Depository Participant: A Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.
Determination Date: With respect to any Payment Date, the 18th day of
the month in which such Payment Date occurs or if such day is not a Business
Day, the next preceding Business Day.
Dissolution Draw: Following an Event of Liquidation, the Business Day
following the date on which the proceeds of the sale or liquidation of the Trust
Estate are to be distributed to the Securityholders, the amount, if any, by
which the aggregate amount available for distribution to Securityholders is less
than the sum of (1) an amount equal to all accrued and unpaid interest on the
Notes through such Dissolution Payment Date and (2) 100% of the aggregate
Security Balance outstanding immediately prior to such Dissolution Payment Date.
Dissolution Payment Date: Following an Event of Liquidation, the
Business Day following the date on which the proceeds of the sale of the Trust
Estate are paid to Securityholders.
Draw: With respect to any Revolving Credit Loan, a borrowing by the
Mortgagor under the related Loan Agreement.
Draw Period: With respect to each Revolving Credit Loan, the period
consisting of nine years and eleven months after the date of origination of such
Revolving Credit Loan, during which the related Mortgagor is permitted to make
Draws.
Due Date: With respect to the Revolving Credit Loans, the date on
which payments thereunder are due, as specified in the related Credit Loan
Agreement.
Eligible Account: An account that is any of the following: (i)
maintained with a depository institution the short-term debt obligations of
which have been rated by each Rating Agency in its highest rating category
available, or (ii) an account or accounts in a depository institution in which
such accounts are fully insured to the limits established by the FDIC, provided
that any deposits not so insured shall, to the extent acceptable to each Rating
Agency, as evidenced in writing, be maintained such that (as evidenced by an
Opinion of Counsel delivered to the Indenture Trustee and each Rating Agency)
the Indenture Trustee have a claim with respect to the funds in such account or
a perfected first security interest against any collateral (which shall be
limited to Permitted Investments) securing such funds that is superior to claims
of any other depositors or creditors of the depository institution with which
such account is maintained, or (iii) in the case of the Collection Account,
either (A) a trust account or accounts maintained at the corporate trust
department of the Indenture Trustee or (B) an account or accounts maintained at
a depository institution for which the short term debt obligations are rated
"P-1" by ▇▇▇▇▇'▇ and "A-1+" by Standard & Poor's (or the equivalent) or better
by each Rating Agency and its long term debt obligations are rated "A2" by
▇▇▇▇▇'▇ and "AA-" by Standard & Poor's (or the equivalent) or better by each
Rating Agency, or (iv) in the case of the Collection Account, the Certificate
Distribution Account and the Payment Account, a trust account or accounts
maintained in the corporate trust division of the Indenture Trustee, or (v) an
account or accounts of a depository institution acceptable to each Rating Agency
(as evidenced in writing by each Rating Agency that use of any such account as
the Collection Account or the Payment Account will not reduce the rating
assigned to any of the Securities by such Rating Agency (if determined without
regard to the Credit Enhancement Instrument) below the lower of the then-current
rating or the rating assigned to such Securities (if determined without regard
to the Credit Enhancement Instrument) as of the Closing Date by such Rating
Agency).
Eligible Substitute Loan: A Revolving Credit Loan substituted by the
Seller for a Deleted Loan which must, on the date of such substitution, as
confirmed in an Officer's Certificate delivered to the Indenture Trustee, (i)
have an outstanding principal balance, after deduction of the principal portion
of the monthly payment due in the month of substitution (or in the case of a
substitution of more than one Revolving Credit Loan for a Deleted Loan, an
aggregate outstanding principal balance, after such deduction), not in excess of
the outstanding principal balance of the Deleted Loan (the amount of any
shortfall to be deposited by the Seller in the Collection Account in the month
of substitution); (ii) comply with each representation and warranty set forth in
clauses (ii) through (xxxiii) of Section 3.1(b) of the Revolving Credit Loan
Purchase Agreement other than clauses (viii)(A), (xiii), (xiv), (xxiv)(B),
(xxv)(B), (xxvi) and (xxvii) as of the date of substitution; (iii) have a Loan
Rate, Net Loan Rate and Gross Margin no lower than and not more than 1% per
annum higher than the Loan Rate, Net Loan Rate and Gross Margin, respectively,
of the Deleted Loan as of the date of substitution; (iv) have a Combined
Loan-to-Value Ratio at the time of substitution no higher than that of the
Deleted Loan at the time of substitution; (v) have a remaining term to stated
maturity not greater than (and not more than one year less than) that of the
Deleted Loan and (vi) not be 30 days or more delinquent.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default: With respect to the Indenture, any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) a default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of
five days; or
(ii) a default in the payment of the principal of or any installment
of the principal of any Note when the same becomes due and payable, and
such default shall continue for a period of five days; or
(iii) there occurs a default in the observance or performance of any
covenant or agreement of the Issuer made in the Indenture, or any
representation or warranty of the Issuer made in the Indenture or in any
certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the
time when the same shall have been made which has a material adverse effect
on Securityholders, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such representation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or the Credit
Enhancer or to the Issuer and the Indenture Trustee by the Holders of at
least 25% of the outstanding Security Balance of the Notes or the Credit
Enhancer, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that
such notice is a notice of default hereunder; or
(iv) there occurs the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Trust Estate in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Estate, 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
(v) there occurs 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 assets of the
Trust Estate, 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.
Event of Liquidation: Following the occurrence of an Event of Default
under the Indenture, the determination by the Indenture Trustee, as evidenced by
a written notice provided to the Owner Trustee, the Depositor and the Credit
Enhancer, that all conditions precedent to the sale or other liquidation of the
Trust Estate pursuant to Section 5.04 of the Indenture have been satisfied.
Event of Servicer Termination: With respect to the Servicing
Agreement, a Servicing Default as defined in Section 7.01 of the Servicing
Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
Expenses: The meaning specified in Section 7.02 of the Trust
Agreement.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Final Scheduled Payment Date: The Payment Date in May 2010.
FNMA: The Federal National Mortgage Association, or any successor
thereto.
Foreclosure Profit: With respect to a Liquidated Revolving Credit
Loan, the amount, if any, by which (i) the aggregate of Liquidation Proceeds net
of Liquidation Expenses and other unreimbursed advances and expenses exceeds
(ii) the related Loan Balance (plus accrued and unpaid interest thereon at the
applicable Loan Rate from the date interest was last paid through the date of
receipt of the final Liquidation Proceeds) of such Liquidated Revolving Credit
Loan immediately prior to the final recovery of its Liquidation Proceeds.
▇▇▇▇▇: Pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a security interest
in and right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
Gross Margin: With respect to any Revolving Credit Loan, the
percentage set forth as the "Margin" for such Revolving Credit Loan on the
Revolving Credit Loan Schedule.
Guaranteed Principal Distribution Amount: With respect to any Payment
Date (other than the Payment Date in May 2010), the amount, if any, by which the
Security Balance of the Notes (after giving effect to all other amounts paid and
allocated to principal on the Notes) exceeds the Investor Amount as of such
Payment Date (after giving effect to all other amounts paid and allocated as
principal on the Notes). With respect to the Payment Date in May 2010 (after
giving effect to all other amounts paid and allocated as principal on the
Notes), any amount necessary to pay in full the outstanding Security Balance of
the Notes on such Payment Date.
Holder: Any of the Noteholders or Certificateholders.
Indemnified Party: The meaning specified in Section 7.02 of the Trust
Agreement.
Indenture: The indenture dated as of May 1, 1999 between the Issuer,
as debtor, and the Indenture Trustee, as indenture trustee.
Indenture Trustee: Norwest Bank Minnesota, National Association, and
its successors and assigns or any successor indenture trustee appointed pursuant
to the terms of the Indenture.
Indenture Trustee Fee: With respect to any Payment Date, one-twelfth
of the product of (i) 0.00375% and (ii) the Pool Balance as of the first day of
the related Collection Period.
Independent: When used with respect to any specified Person, the
Person (i) is in fact independent of the Issuer, any other obligor on the Notes,
the Seller, the Depositor and any Affiliate of any of the foregoing Persons,
(ii) does not have any direct financial interest or any material indirect
financial interest in the Issuer, any such other obligor, the Seller, the
Depositor or any Affiliate of any of the foregoing Persons and (iii) is not
connected with the Issuer, any such other obligor, the Seller, the Depositor 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: 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 10.01 of the Indenture,
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.
Index: With respect to any adjustable-rate Revolving Credit Loan, the
prime rate from time to time for the adjustment of the Loan Rate set forth as
such on the related Credit Line Agreement.
Initial Certificates: The NOVUS HELOC Asset-Backed Certificates,
Series 1999-1, issued on the Closing Date, each evidencing undivided beneficial
interests in the Issuer and executed by the Owner Trustee.
Initial Security Balance: With respect to the Initial Certificates,
$0.00 and the Notes, $335,659,538.88.
Insolvency Event: With respect to a specified Person, (a) the filing
of a decree or order for relief by a court having jurisdiction in the premises
in respect of such Person or any substantial part of its property in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such Person to the
entry of an order for relief in an involuntary case under any such law, or the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture Trustee shall have notice)
of its inability to pay its debts generally, or the adoption by the Board of
Directors or managing member of such Person of a resolution which authorizes
action by such Person in furtherance of any of the foregoing.
Insurance Agreement: The Insurance and Indemnity Agreement dated as of
May 27, 1999 among the Servicer, the Seller, the Depositor, the Issuer, the
Indenture Trustee and the Credit Enhancer, including any amendments and
supplements thereto.
Insurance Proceeds: Proceeds paid by any insurer (other than the
Credit Enhancer) pursuant to any insurance policy covering a Revolving Credit
Loan which are required to be remitted to the Servicer, or amounts required to
be paid by the Servicer pursuant to the next to last sentence of Section 3.04 of
the Servicing Agreement, net of any component thereof (i) covering any expenses
incurred by or on behalf of the Servicer in connection with obtaining such
proceeds, (ii) that is applied to the restoration or repair of the related
Mortgaged Property, (iii) released to the Mortgagor in accordance with the
Servicer's normal servicing procedures or (iv) required to be paid to any holder
of a mortgage senior to such Revolving Credit Loan.
Interest Collections: With respect to any Payment Date, the sum of all
payments by or on behalf of Mortgagors and any other amounts constituting
interest (including without limitation such portion of Insurance Proceeds, Net
Liquidation Proceeds and Repurchase Prices as is allocable to interest on the
applicable Revolving Credit Loan) as is paid by the Seller or the Servicer or is
collected by the Servicer under the Revolving Credit Loans, reduced by the
Servicing Fees for the related Collection Period and by any fees (including
annual fees) or late charges or similar administrative fees paid by Mortgagors
during the related Collection Period. The terms of the related Loan Agreement
shall determine the portion of each payment in respect of such Revolving Credit
Loan that constitutes principal or interest.
Interest Period: With respect to any Payment Date other than the first
Payment Date, the period beginning on the preceding Payment Date and ending on
the day preceding such Payment Date, and in the case of the first Payment Date,
the period beginning on the Closing Date and ending on the day preceding the
first Payment Date.
Interest Rate Adjustment Date: With respect to each Revolving Credit
Loan, the date or dates on which the Loan Rate is adjusted in accordance with
the related Credit Line Agreement.
Interest Shortfall: With respect to the Notes, on any Payment Date an
amount by which interest accrued on the Notes during the related Interest Period
exceeds an amount equal to the product of (A) the ratio of the actual number of
days in the related Interest Period to 365, multiplied by (B) the product of (a)
the Security Balance of the Notes for that Payment Date (before taking into
account payments to be made on such Payment Date) multiplied by (b) the Net Loan
Rate Cap. Interest Shortfalls will not be included as interest payments on the
Notes for such Payment Date and such amount will accrue interest at the Note
Rate (as adjusted from time to time) and will be paid on future Payment Dates
only to the extent funds are available therefor as set forth in Section 3.05(a)
of the Indenture.
Investor Amount: With respect to any Payment Date, the amount equal to
the Original Investor Amount minus (i) the amount of Principal Collections
previously paid to the Noteholders and minus (ii) an amount equal to the product
of the Investor Floating Allocation Percentage and the Liquidation Loss Amounts
for the Revolving Credit Loans.
Investor Floating Allocation Percentage: With respect to any Payment
Date, the percentage equivalent of a fraction, the numerator of which is the
Investor Amount as of the end of the immediately preceding Payment Date and the
denominator of which is the Pool Balance at the beginning of the related
Collection Period.
Investor Liquidation Loss Amounts: With respect to any Payment Date,
the product of the Investor Floating Allocation Percentage and the aggregate of
Liquidation Loss Amounts for the related Collection Period.
Investor P&I Collections: With respect to (i) any Payment Date during
the Managed Amortization Period, the sum of (a) the product of the Investor
Floating Allocation Percentage and Interest Collections, each for such Payment
Date, and (b) the product of the Investor Floating Allocation Percentage and Net
Principal Collections, each for such Payment Date, and (ii) any Payment Date
during the Rapid Amortization Period, the sum of (a) the product of the Investor
Floating Allocation Percentage and Interest Collections, each for such Payment
Date, and (b) Principal Collections for such Payment Date.
Issuer or Trust: The NOVUS HELOC Trust 1999-1, a Delaware business
trust, or its successor in interest.
Issuer Request: 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.
LIBOR: For any Interest Period other than the first Interest Period,
the rate for United States dollar deposits for one month which appears on the
Telerate Screen Page 3750 as of 11:00 A.M., London, England time, on the second
LIBOR Business Day prior to the first day of such Interest Period. With respect
to the first Interest Period, the rate for United States dollar deposits for one
month which appears on the Telerate Screen Page 3750 as of 11:00 A.M., London,
England time, two LIBOR Business Days prior to the Closing Date. If such rate
does not appear on such page (or such other page as may replace that page on
that service, or if such service is no longer offered, such other service for
displaying LIBOR or comparable rates as may be reasonably selected by the
Indenture Trustee after consultation with the Servicer), the rate will be the
Reference Bank Rate. If no such quotations can be obtained and no Reference Bank
Rate is available, LIBOR will be LIBOR applicable to the preceding Payment Date.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the city of London, England are
required or authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.
Liquidated Revolving Credit Loan: With respect to any Payment Date,
any Revolving Credit Loan in respect of which the Servicer has determined, in
accordance with the servicing procedures specified in the Servicing Agreement,
as of the end of the related Collection Period that substantially all
Liquidation Proceeds which it reasonably expects to recover, if any, with
respect to the disposition of the related REO have been recovered.
Liquidation Expenses: Out-of-pocket expenses (exclusive of overhead)
which are incurred by or on behalf of the Servicer in connection with the
liquidation of any Revolving Credit Loan and not recovered under any insurance
policy, such expenses including, without limitation, legal fees and expenses,
any unreimbursed amount expended (including, without limitation, amounts
advanced to correct defaults on any mortgage loan which is senior to such
Revolving Credit Loan and amounts advanced to keep current or pay off a mortgage
loan that is senior to such Revolving Credit Loan) respecting the related
Revolving Credit Loan and any related and unreimbursed expenditures for real
estate property taxes or for property restoration, preservation or insurance
against casualty loss or damage.
Liquidation Loss Amounts: With respect to any Payment Date and any
Revolving Credit Loan that became a Liquidated Revolving Credit Loan during the
related Collection Period, the unrecovered portion of the related Loan Balance
thereof at the end of such Collection Period, after giving effect to the Net
Liquidation Proceeds applied in reduction of the Loan Balance.
Liquidation Loss Distribution Amount: With respect to any Payment
Date, the aggregate of (A) 100% of the Investor Liquidation Loss Amounts on such
Payment Date, plus (B) any such Investor Liquidation Loss Amounts remaining
undistributed from any preceding Payment Date not paid pursuant to the Credit
Enhancement Instrument.
Liquidation Proceeds: Proceeds (including Insurance Proceeds but not
including amounts drawn under the Credit Enhancement Instrument) if any received
in connection with the liquidation of any Revolving Credit Loan or related REO,
whether through trustee's sale, foreclosure sale or otherwise.
Loan Agreement: With respect to any Revolving Credit Loan, the credit
line account agreement executed by the related Mortgagor and any amendment or
modification thereof.
Loan Balance: With respect to any Revolving Credit Loan, other than a
Liquidated Revolving Credit Loan, and as of any day, the related Cut-off Date
Loan Balance, plus (i) any Additional Balances in respect of such Revolving
Credit Loan conveyed to the Trust, minus (ii) all collections credited as
principal in respect of any such Revolving Credit Loan in accordance with the
related Loan Agreement and applied in reduction of the Loan Balance thereof. For
purposes of this definition, a Liquidated Revolving Credit Loan shall be deemed
to have a Loan Balance equal to the Loan Balance of the related Revolving Credit
Loan immediately prior to the final recovery of substantially all related
Liquidation Proceeds and a Loan Balance of zero thereafter.
Loan Rate: With respect to any Revolving Credit Loan and any day, the
per annum rate of interest applicable under the related Loan Agreement.
Lost Note Affidavit: With respect to any Revolving Credit Loan as to
which the original Credit Line Agreement has been permanently lost or destroyed
and has not been replaced, an affidavit from the Seller certifying that the
original Credit Line Agreement has been lost, misplaced or destroyed (together
with a copy of the related Credit Line Agreement).
Managed Amortization Period: The period commencing on the Closing Date
and ending on the earlier of (i) the Payment Date in May 2004 and (ii) the
occurrence of a Rapid Amortization Event.
Maximum Pool Balance: As to any Payment Date the highest Pool Balance
at the end of any Collection Period from the Closing Date up to and including
the related Collection Period.
Maximum Rate: With respect to each Revolving Credit Loan with respect
to which the related Credit Line Agreement provides for a lifetime rate cap, the
maximum Loan Rate permitted over the life of such Revolving Credit Loan under
the terms of such Credit Line Agreement, as set forth on the Revolving Credit
Loan Schedule and initially as set forth on Exhibit A to the Servicing
Agreement.
Minimum Certificateholder Interest: With respect to any Transfer Date,
an amount equal to the lesser of (a) 5% of the Pool Balance on such date and (b)
2% of the Cut-off Date Pool Balance.
Minimum Monthly Payment: With respect to any Revolving Credit Loan and
any month, the minimum amount required to be paid by the related Mortgagor in
that month.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
first or subordinate lien on an estate in fee simple interest in real property
securing a Revolving Credit Loan.
Mortgage File: The file containing the Related Documents pertaining to
a particular Revolving Credit Loan and any additional documents required to be
added to the Mortgage File pursuant to the Revolving Credit Loan Purchase
Agreement or the Servicing Agreement. Mortgaged Property: The underlying
property, including real property and improvements thereon, securing a Revolving
Credit Loan.
Mortgagor: The obligor or obligors under a Loan Agreement.
Net Liquidation Proceeds: With respect to any Liquidated Revolving
Credit Loan, Liquidation Proceeds net of Liquidation Expenses (but not including
the portion, if any, of such amount that exceeds the Loan Balance of the
Revolving Credit Loan at the end of the Collection Period immediately preceding
the Collection Period in which such Revolving Loan became a Liquidated Revolving
Credit Loan plus accrued and unpaid interest and unreimbursed advances and
expenses).
Net Loan Rate: With respect to any Revolving Credit Loan and any day,
the related Loan Rate less the sum of the Servicing Fee Rate, the Indenture
Trustee Fee Rate, the Credit Enhancer Premium Rate, the per annum rate at which
the fee payable to the Owner Trustee is calculated and, after the seventh
Payment Date, 0.50%.
Net Loan Rate Cap: With respect to any Payment Date, the Weighted
Average Net Loan Rate, adjusted to an effective rate reflecting interest
calculated on the basis of the actual number of days in the related Interest
Period and a year assumed to consist of 360 days.
Net Principal Collections: With respect to any Distribution Date, the
excess, if any, of Security Principal Collections for the related Collection
Period over the amount of Additional Balances created during the related
Collection Period.
Note Owner: The Beneficial Owner of a Note.
Note Rate: With respect to any Interest Period, a per annum rate
determined by the Indenture Trustee equal to the lesser of (i) LIBOR for such
Interest Period plus 0.23% (or 0.46% after any Optional Redemption Date) and
(ii) the Net Loan Rate Cap for such Interest Period.
Note Register: The register maintained by the Note Registrar in which
the Note Registrar shall provide for the registration of Notes and of transfers
and exchanges of Notes.
Note Registrar: The Indenture Trustee, in its capacity as Note
Registrar.
Noteholder: The Person in whose name a Note is registered in the Note
Register, except that, any Note registered in the name of the Depositor, the
Issuer or the Indenture Trustee or any Affiliate of any of them shall be deemed
not to be outstanding and the registered holder will not be considered a
Noteholder or holder for purposes of giving any request, demand, authorization,
direction, notice, consent or waiver under the Indenture or the Trust Agreement
provided 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 or the Owner Trustee
knows to be so owned shall be so disregarded. Owners of Notes that have been
pledged in good faith may be regarded as Holders if the pledgee establishes to
the satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes or any Affiliate of any of the
foregoing Persons.
Notes: The Notes issued and outstanding at any time pursuant to the
Indenture.
Officer's Certificate: With respect to the Servicer, a certificate
signed by the President, Managing Director, a Director, a Vice President or an
Assistant Vice President, of the Servicer and delivered to the Indenture
Trustee. With respect to the Issuer, a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.
Opinion of Counsel: A written opinion of counsel [of a law firm
acceptable to the recipient thereof]. Any Opinion of Counsel for the Servicer
may be provided by in-house counsel for the Servicer if reasonably acceptable to
the Indenture Trustee, the Credit Enhancer and the Rating Agencies or counsel
for the Depositor, as the case may be.
Optional Redemption Date: The first Payment Date on which the
outstanding Security Balance of the Notes is reduced to an amount equal to or
less than 10% of the Security Balance of the Notes on the Closing Date.
Original Investor Amount: As of the Closing Date, $335,659,538.88,
which represents 100% of the Cut-off Date Pool Balance.
Original Trust Agreement: The Trust Agreement, dated as of May 1,
1999, between the Owner Trustee and the Depositor.
Outstanding: With respect to the Notes, as of the date of
determination, all Notes theretofore executed, authenticated and delivered under
this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to
the Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes have been
executed, authenticated and delivered pursuant to the Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a holder in due course;
provided, however, that for purposes of effectuating the Credit Enhancer's right
of subrogation as set forth in Section 4.12 of the Indenture only, all Notes
that have been paid with funds provided under the Credit Enhancement Instrument
shall be deemed to be Outstanding until the Credit Enhancer has been reimbursed
with respect thereto.
Overcollateralization Amount: With respect to any date of
determination, the amount, if any, by which the Investor Amount exceeds the
Security Balance of the Notes.
Overcollateralization Deficit: With respect to any Payment Date, the
amount, if any, by which the Security Balance of the Notes immediately prior to
such Payment Date exceeds the Investor Amount as of the end of the related
Collection Period.
Overcollateralization Shortfall: With respect to any Payment Date, the
amount by which (i) the Required Overcollateralization Amount exceeds (ii) the
Overcollateralization Amount for such Payment Date.
Owner Trust : The NOVUS HELOC Trust 1999-1, Series 1999-1 to be
created pursuant to the Trust Agreement.
Owner Trust Estate: The corpus of the Issuer created by the Trust
Agreement which consists of the Revolving Credit Loans and the Credit
Enhancement Instrument.
Owner Trustee: Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee of the Trust, and its successors and
assigns or any successor owner trustee appointed pursuant to the terms of the
Trust Agreement.
Paying Agent: Any paying agent or co-paying agent appointed pursuant
to Section 3.03 of the Indenture, which initially shall be the Indenture
Trustee.
Payment Account: The account established by the Indenture Trustee
pursuant to Section 8.02 of the Indenture and Section 5.01 of the Servicing
Agreement. Amounts deposited in the Payment Account will be distributed by the
Indenture Trustee in accordance with Section 3.05 of the Indenture.
Payment Date: The 25th day of each month, or if such day is not a
Business Day, then the next Business Day.
Percentage Interest: With respect to any Note, the percentage obtained
by dividing the Security Balance of such Note by the aggregate of the Security
Balances of all Notes prior to such Payment Date. With respect to any
Certificate, the percentage obtained by dividing the Security Balance on any
such Certificate by the aggregate of the Security Balances of all Certificates
prior to any Payment Date.
Performance Trigger Event: On any date of determination, a Performance
Trigger Event occurs if any of the following occur:
1. The Six Month Delinquency Rate exceeds 7.00%;
2. The Cumulative Net Losses over any 12-month period for the
Revolving Credit Loans exceed 2.50% of the Cut-off Date Pool Balance;
or
3. The Cumulative Net Losses from the Cut-off Date through the
date of determination exceed 5.00% of the current Pool Balance.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the
United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition thereof,
provided that the unsecured obligations of the party agreeing to repurchase
such obligations are at the time (a) rated by Moody's in its highest
short-term rating category available and (b) "AA" by Standard & Poor's with
respect to its long-term unsecured debt or "A-1+" with respect to its
short-term obligations;
(iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than 365
days or a remaining maturity of more than 30 days) denominated in United
States dollars of any U.S. depository institution or trust company
incorporated under the laws of the United States or any state thereof or
of any domestic branch of a foreign depository institution or trust
company; provided that the debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard &
Poor's, in the case of the principal depository institution in a
depository institution holding company, debt obligations of the
depository institution holding company) at the date of acquisition
thereof have been rated by each Rating Agency in its highest short-term
rating category available; and provided further that, if the only Rating
Agency is Standard & Poor's and if the depository or trust company is a
principal subsidiary of a bank holding company and the debt obligations
of such subsidiary are not separately rated, the applicable rating shall
be that of the bank holding company; and, provided further that, if the
original maturity of such short-term obligations of a domestic branch of
a foreign depository institution or trust company shall exceed 30 days,
the short-term rating of such institution shall be "A-1+" in the case of
Standard & Poor's if Standard & Poor's is the Rating Agency;
(iv) commercial paper (having original maturities of not more than 365
days) of any corporation incorporated under the laws of the United States
or any state thereof which on the date of acquisition has been rated by
each Rating Agency in its highest short-term rating category available;
provided that such commercial paper shall have a remaining maturity of not
more than 30 days;
(v) money market funds having ratings in the highest long-term
available rating category of Moody's and having a rating of at least AAAm
or AAm-G by Standard & Poor's at the time of such investment (any such
money market funds which provide for demand withdrawals being conclusively
deemed to satisfy any maturity requirements for Permitted Investments set
forth in the Servicing Agreement) including money market funds of the
Indenture Trustee and any such funds that are managed by the Indenture
Trustee or its Affiliates or for which the Indenture Trustee or any
Affiliate acts as advisor, as long as such money market funds satisfy the
criteria of this subparagraph; and
(vi) other obligations or securities that are acceptable to each
Rating Agency as an Permitted Investment hereunder and will not reduce
the rating assigned to any Securities by such Rating Agency below the
lower of the then-current rating or the rating assigned to such
Securities as of the Closing Date by such Rating Agency, and which are
acceptable to the Credit Enhancer, as evidenced in writing, provided that
if the Servicer or any other Person controlled by the Servicer is the
issuer or the obligor of any obligation or security described in this
clause (vi) such obligation or security must have an interest rate or
yield that is fixed or is variable based on an objective index that is
not affected by the rate or amount of losses on the Revolving Credit
Loans;
provided, however, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations References herein to the highest rating available on unsecured
long-term debt shall mean "AAA" in the case of Standard & Poor's and "Aaa" in
the case of Moody's, and references herein to the highest rating available on
unsecured commercial paper and short-term debt obligations shall mean "A-1" in
the case of Standard & Poor's and "P-1" in the case of Moody's.
Person: Any legal individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pool Balance: With respect to any date, the aggregate of the Loan
Balances of all Revolving Credit Loans as of such date.
Predecessor Note: 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 4.03 of the Indenture 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.
Premium: As defined in the Insurance Agreement.
Principal Collection Distribution Amount: For any Payment Date, (i) at
any time during the Managed Amortization Period, so long as a Rapid Amortization
Event has not occurred, Net Principal Collections and (ii) following a Rapid
Amortization Event or at any time after the end of the Managed Amortization
Period, Principal Collections.
Principal Collections: With respect to any Payment Date and any
Revolving Credit Loan, the aggregate of the following amounts:
(i) the total amount of payments made by or on behalf of the
Mortgagor, received and applied as payments of principal on the Revolving
Credit Loan during the related Collection Period, as reported by the
related Subservicer;
(ii) any Net Liquidation Proceeds, allocable as a recovery of
principal, received in connection with the Revolving Credit Loan during the
related Collection Period;
(iii) if the Revolving Credit Loan was purchased by the Servicer
pursuant to Section 3.15 or 8.08 of the Servicing Agreement, or was
repurchased by the Seller pursuant to the Revolving Credit Loan Purchase
Agreement, during the related Collection Period, 100% of the Loan Balance
of the Revolving Credit Loan as of the date of such purchase or repurchase;
and
(iv) any other amounts received as payments on or proceeds of the
Revolving Credit Loan during the Collection Period to the extent applied in
reduction of the principal amount thereof;
provided, that Principal Collections shall not include any Foreclosure Profits,
and shall be reduced by any amounts withdrawn from the Collection Account
pursuant to clauses (iii), (vii) and (viii) of Section 3.03 of the Servicing
Agreement other than any portion of such amounts that are attributable to the
Excluded Amount in respect of any Revolving Credit Loan that are allocable to
principal of such Revolving Credit Loan and not otherwise excluded from the
amounts specified in (i) - (iv) above.
Principal Reduction Amount: With respect to any Payment Date, the
lesser of (a) the Principal Collection Distribution Amount and (b) the greater
of (i) the excess, if any, of the Overcollateralization Amount over the Required
Overcollateralization Amount, each for such Payment Date and (ii) zero.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Purchase Price: The meaning specified in Section 2.2(a) of the
Revolving Credit Loan Purchase Agreement.
Purchaser: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Corporation I, Inc., a Delaware
corporation, and its successors and assigns.
Rapid Amortization Event: Any one of the following events:
(a) the failure on the part of the Seller (i) to make any payment or
deposit required to be made under the Revolving Credit Loan Purchase
Agreement within five Business Days after the date such payment or deposit
is required to be made; or (ii) to observe or perform in any material
respect any other covenants or agreements of the Seller set forth in the
Revolving Credit Loan Purchase Agreement, which failure continues
unremedied for a period of 60 days after written notice and such failure
materially and adversely affects the interests of the Securityholders or
the Credit Enhancer;
(b) if any representation or warranty made by the Seller in the
Revolving Credit Loan Purchase Agreement proves to have been incorrect in
any material respect when made and which continues to be incorrect in any
material respect for a period of 60 days with respect to any
representation or warranty of the Seller made in Section 3.1(a) of the
Revolving Credit Loan Purchase Agreement or 90 days with respect to any
representation or warranty made in Section 3.1(b) or 3.2 of the Revolving
Credit Loan Purchase Agreement after written notice and as a result of
which the interests of the Securityholders or the Credit Enhancer are
materially and adversely affected; provided, however, that a Rapid
Amortization Event shall not be deemed to occur if the Seller has
repurchased or caused to be repurchased or substituted for the related
Revolving Credit Loans or all Revolving Credit Loans, if applicable,
during such period (or within an additional 60 days with the consent of
the Indenture Trustee and the Credit Enhancer) in accordance with the
provisions of the Indenture;
(c) the entry against the Seller or the Issuer of a decree or order by
a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership, readjustment
of debt, marshalling of assets and liabilities or similar proceedings, or
for the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60
consecutive days;
(d) the Seller or the Issuer shall voluntarily go into liquidation,
consent to the appointment of a conservator, receiver, liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Seller
or the Issuer or of or relating to all or substantially all of its
property, or a decree or order of a court, agency or supervisory authority
having jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Seller or the Issuer and such decree or order shall have
remained in force undischarged, unbonded or unstayed for a period of 60
days; or the Seller or the Issuer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment
of its obligations;
(e) the Issuer becomes subject to regulation by the Commission as an
investment company within the meaning of the Investment Company Act of
1940, as amended;
(f) a Servicing Default relating to the Servicer occurs under the
Servicing Agreement and the Servicer is the Seller;
(g) the aggregate of all draws under the Credit Enhancement Instrument
(other than draws with respect to the Insured Undercollateralization)
exceeds 1.00% of the Cut-off Date Pool Balance; or
(h) the Issuer is determined to be an association taxable as a
corporation for federal income tax purposes.
In the case of any event described in (a) or (b), a Rapid Amortization
Event will be deemed to have occurred only if, after any applicable grace period
described in such clauses, the Credit Enhancer or, with the consent of the
Credit Enhancer, Securityholders evidencing not less than 51% of the Security
Balance of each of the Notes and the Certificates, by written notice to the
Seller, the Servicer, the Indenture Trustee, the Depositor and the Owner
Trustee, declare that a Rapid Amortization Event has occurred as of the date of
such notice. In the case of any event described in clauses (c), (d), (e) or (h),
an Rapid Amortization Event will be deemed to have occurred without any notice
or other action on the part of the Noteholders or the Credit Enhancer
immediately upon the occurrence of such event; provided, that any Rapid
Amortization Event may be waived and deemed of no effect with the written
consent of the Credit Enhancer and each Rating Agency, subject to the
satisfaction of any conditions to such waiver.
Rating Agency: Any nationally recognized statistical rating
organization, or its successor, that rated the Securities at the request of the
Depositor at the time of the initial issuance of the Securities. Initially,
▇▇▇▇▇'▇ or Standard & Poor's. If such organization or a successor is no longer
in existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, designated by the Depositor,
notice of which designation shall be given to the Indenture Trustee. References
herein to the highest short term unsecured rating category of a Rating Agency
shall mean "A-1+" or better in the case of Standard & Poor's and "P-1" or better
in the case of ▇▇▇▇▇'▇ and in the case of any other Rating Agency shall mean
such equivalent ratings. References herein to the highest long-term rating
category of a Rating Agency shall mean "AAA" in the case of Standard & Poor's
and "Aaa" in the case of ▇▇▇▇▇'▇ and in the case of any other Rating Agency,
such equivalent rating.
Record Date: With respect to the Notes and any Payment Date, the
Business Day next preceding such Payment Date and with respect to the
Certificates and any Payment Date, the last Business Day of the month preceding
the month of such Payment Date.
Reference Bank Rate: With respect to any Interest Period, as follows:
the arithmetic mean (rounded upwards, if necessary, to the nearest one sixteenth
of a percent) of the offered rates for United States dollar deposits for one
month which are offered by the Reference Banks as of 11:00 A.M., London, England
time, on the second LIBOR Business Day prior to the first day of such Interest
Period to prime banks in the London interbank market for a period of one month
in amounts approximately equal to the sum of the outstanding Security Balance of
the Notes and the Certificates; provided that at least two such Reference Banks
provide such rate. If fewer than two offered rates appear, the Reference Bank
Rate will be the arithmetic mean of the rates quoted by one or more major banks
in New York City, selected by the Indenture Trustee after consultation with the
Servicer, as of 11:00 a.m., New York time, on such date for loans in U.S.
Dollars to leading European Banks for a period of one month in amounts
approximately equal to the aggregate Security Balance of the Notes. If no such
quotations can be obtained, the Reference Bank Rate shall be the Reference Bank
Rate applicable to the preceding Interest Period.
Reference Banks: Barclays Bank PLC, National Westminster Bank and
Bankers Trust Company.
Registered Holder: The Person in whose name a Note is registered in
the Note Register on the applicable Record Date.
Related Documents: With respect to each Revolving Credit Loan, the
documents specified in Section 2.1(c) of the Revolving Credit Loan Purchase
Agreement and any documents required to be added to such documents pursuant to
the Revolving Credit Loan Purchase Agreement, the Trust Agreement or the
Servicing Agreement.
REO: A Mortgaged Property that is acquired by the Trust in foreclosure
or by deed in lieu of foreclosure.
Repurchase Event: With respect to any Revolving Credit Loan, either
(i) a discovery that, as of the Closing Date, the related Mortgage was not a
valid lien on the related Mortgaged Property subject only to (A) the lien of any
prior mortgage indicated on the Revolving Credit Loan Schedule, (B) the lien of
real property taxes and assessments not yet due and payable, (C) covenants,
conditions, and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage and such other title
exceptions permissible by mortgage lenders generally and (D) other matters to
which like properties are commonly subject which do not materially adversely
affect the value, use, enjoyment or marketability of the related Mortgaged
Property or (ii) with respect to any Revolving Credit Loan as to which the
Seller delivers an affidavit certifying that the original Credit Line Agreement
has been lost or destroyed, a subsequent default on such Revolving Credit Loan
if the enforcement thereof or of the related Mortgage is materially and
adversely affected by the absence of such original Credit Line Agreement.
Repurchase Price: With respect to any Revolving Credit Loan required
to be repurchased on any date pursuant to the Revolving Credit Loan Purchase
Agreement or purchased by the Servicer pursuant to the Servicing Agreement, an
amount equal to the sum of (i) 100% of the Loan Balance thereof (without
reduction for any amounts charged off) and (ii) unpaid accrued interest at the
Loan Rate (or with respect to the last day of the month in the month of
repurchase, the Loan Rate will be the Loan Rate in effect as to the second to
last day in such month) on the outstanding principal balance thereof from the
Due Date to which interest was last paid by the Mortgagor to the first day of
the month following the month of purchase.
Required Overcollateralization Amount: As defined in the Insurance
Agreement.
Responsible Officer: With respect to the Indenture Trustee, any
officer of the Indenture Trustee with direct responsibility for the
administration of the Trust Agreement 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.
Revolving Credit Loan Purchase Agreement: The Revolving Credit Loan
Purchase Agreement, dated as of May 1, 1999, between the Seller, as seller, and
the Depositor, as purchaser, with respect to the Revolving Credit Loans.
Revolving Credit Loan Schedule: The initial schedule of Revolving
Credit Loans as of the Cut-off Date set forth in Exhibit A of the Servicing
Agreement, which schedule sets forth as to each Revolving Credit Loan (i) the
Cut-off Date Loan Balance ("Principal Bal"), (ii) the Credit Limit, (iii) the
Gross Margin ("Margin"), (iv) the name of the Mortgagor, (v) the Maximum Rate
("Ceiling"), if any, (vi) the loan number, (vii) the lien position of the
related Mortgage, (viii) the CLTV, (ix) the remaining term to maturity, (x)
maturity date, (xi) the Credit Limit Utilization Rate and (xiii) the Junior
Ratio.
Revolving Credit Loans: At any time, all Revolving Credit Loans,
including Additional Balances, if any, that have been sold to the Depositor
under the Revolving Credit Loan Purchase Agreement, together with the Related
Documents, and that remain subject to the terms thereof.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
Security: Any of the Certificates or Notes.
Security Balance: With respect to any Payment Date and the Notes, the
Initial Security Balance thereof prior to such Payment Date reduced by all
payments of principal thereon prior to such Payment Date. With respect to any
Payment Date and the Certificates, the Certificate Principal Balance thereof.
Security Collections: With respect to any Payment Date, the sum of the
following amounts:
(i) the aggregate of all Security Interest Collections received during
the related Collection Period;
(ii) (A) at any time during the Managed Amortization Period, so long
as a Rapid Amortization Event has not occurred, Net Principal Collections
for such Payment Date or (B) if a Rapid Amortization Event has occurred or
at any time after the end of the Managed Amortization Period, the aggregate
of all Security Principal Collections with respect to such Payment Date;
and
(iii) all Substitution Adjustment Amounts to be deposited to the
Payment Account for such Payment Date.
Securityholder or Holder: Any Noteholder or a Certificateholder.
Security Interest Collections: With respect to any Payment Date,
Interest Collections during the related Collection Period.
Security Percentage: With respect to any Payment Date and Security,
the percentage equivalent of a fraction the numerator of which is the Security
Balance of such Security immediately prior to such Payment Date and the
denominator of which is the aggregate of the Security Balances of all Securities
as of such date.
Security Principal Collections: With respect to any Payment Date,
Principal Collections during the related Collection Period.
Seller: NOVUS Financial Corporation, a Delaware corporation, and its
successors and assigns.
Seller P&I Collections: With respect to any Payment Date, the excess
of P&I Collections over the Investor P&I Collections for such Payment Date.
Servicer: NOVUS Financial Corporation, a Delaware corporation, and its
successors and assigns.
Servicing Agreement: The Servicing Agreement dated as of May 1, 1999
between the Indenture Trustee, the Issuer and the Servicer, as servicer.
Servicing Certificate: A certificate completed and executed by a
Servicing Officer on behalf of the Servicer in accordance with Section 4.01 of
the Servicing Agreement.
Servicing Default: The meaning specified in Section 7.01 of the
Servicing Agreement.
Servicing Fee: With respect to any Revolving Credit Loan and any
Collection Period, the product of (i) the Servicing Fee Rate divided by 12 and
(ii) the Calculated Principal Balance as of the first day of such Collection
Period.
Servicing Fee Rate: With respect to any Revolving Credit Loan, 0.50%
per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Revolving Credit Loans
whose name and specimen signature appear on a list of servicing officers
furnished to the Indenture Trustee (with a copy to the Credit Enhancer) by the
Servicer, as such list may be amended from time to time.
Servicing Report: The monthly report delivered to the Indenture
Trustee by the Servicer pursuant to Section 4.01 of the Servicing Agreement.
Single Certificate: A Certificate in the denomination of $1,000.
Single Note: A Note in the amount of $1,000.
Six Month Delinquency Rate: As to any Determination Date the
arithmetic average of the Sixty Day Delinquency Rates for the six prior
Collection Periods.
Sixty Day Delinquency Rates: As to any Collection Period, the
percentage equivalent of a fraction, the numerator of which is the aggregate
Principal Balances of the Revolving Credit Loans that are (a) 60 or more days
delinquent as of the last day of such Collection Period or (b) REO Property and
Revolving Credit Loans in foreclosure or in bankruptcy and the denominator of
which is the Pool Balance as of the last day of such Collection Period. For
purposes of this calculation, Revolving Credit Loans which have been repurchased
by the Seller or Servicer shall not be included.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc., or its successor in interest.
Statement: The monthly statement delivered to the Noteholders by the
Indenture Trustee pursuant to Section 3.26 of the Indenture.
Subservicer: Any Person with whom the Servicer has entered into a
Subservicing Agreement as a Subservicer by the Servicer.
Subservicing Account: An Eligible Account established or maintained by
a Subservicer as provided for in Section 3.02(c) of the Servicing Agreement.
Subservicing Agreement: The written contract between the Servicer and
any Subservicer relating to servicing and administration of certain Revolving
Credit Loans as provided in Section 3.01 of the Servicing Agreement.
Substitution Adjustment Amounts: With respect to any Eligible
Substitute Loan and any Deleted Loan, the amount, if any, as determined by the
Servicer, by which the aggregate principal balance of all such Eligible
Substitute Loans as of the date of substitution is less than the aggregate
principal balance of all such Deleted Loans (after application of the principal
portion of the Monthly Payments due in the month of substitution that are to be
distributed to the Payment Account in the month of substitution).
Teaser Loan: Any Revolving Credit Loan which provides for an initial
period during which the Loan Rate is less than the sum of the current Index plus
the applicable Gross Margin.
Telerate Screen Page 3750: The display designated as page 3750 on the
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks). If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, such other
service for displaying LIBOR or comparable rates as may be selected by the
Issuer after consultation with the Indenture Trustee), the rate will be the
Reference Bank Rate.
Transfer Date: Any Payment Date on which the Seller removes Revolving
Credit Loans from the Trust pursuant to Section 2.3 of the Revolving Credit Loan
Purchase Agreement.
Transition Costs: Any documented fees, expenses and allocated costs
reasonably incurred by the Indenture Trustee (or a successor Servicer) in
connection with a transfer of servicing from the Servicer to the Indenture
Trustee (or a successor Servicer), including, without limitation, any costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Indenture Trustee (or a successor Servicer) to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Indenture
Trustee (or a successor Servicer) to service the Revolving Credit Loans properly
and effectively.
Treasury Regulations: Regulations, including proposed or temporary
Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Trust Agreement: The Amended and Restated Trust Agreement, dated as of
May 1, 1999, between the Owner Trustee and the Depositor.
Trust Estate: The meaning specified in the Granting Clause of the
Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as
amended from time to time, as in effect on any relevant date.
UCC: The Uniform Commercial Code, as amended from time to time, as in
effect in any specified jurisdiction.
Underwriter: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.
Uniform Single Attestation Program for Mortgage Bankers: The Uniform
Single Attestation Program for Mortgage Bankers, as published by the Mortgage
Bankers Association of America and effective with respect to fiscal periods
ending on or after December 15, 1995.
Weighted Average Net Loan Rate: With respect to the Revolving Credit
Loans in the aggregate, and any Payment Date, the average of the Net Loan Rate
for each Revolving Credit Loan as of the last day of the Billing Cycle
immediately prior to such Payment Date weighted on the basis of the related Loan
Balances outstanding as of for each Revolving Credit Loan as determined by the
Servicer in accordance with the Servicer's normal servicing procedures.