EXECUTION COPY
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▇▇▇▇▇ WHOLE LOAN HOME EQUITY TRUST 2003-C,
as Issuer,
and
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Indenture Trustee
------------------------------------------------
INDENTURE
DATED AS OF August 1, 2003
HOME EQUITY LOAN-BACKED NOTES
HOME EQUITY LOAN-BACKED VARIABLE FUNDING NOTES
HOME EQUITY LOAN-BACKED SUBORDINATE NOTES
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................................2
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........................................3
Section 2.01. FORM..................................................3
Section 2.02. EXECUTION, AUTHENTICATION AND DELIVERY................3
ARTICLE III COVENANTS........................................................4
Section 3.01. RESERVED.............................................4
Section 3.02. MAINTENANCE OF OFFICE OR AGENCY......................4
Section 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING
AGENT................................................4
Section 3.04. EXISTENCE............................................6
Section 3.05. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED
INTEREST.............................................6
Section 3.06. PROTECTION OF TRUST ESTATE..........................10
Section 3.07. OPINIONS AS TO TRUST ESTATE.........................11
Section 3.08. PERFORMANCE OF OBLIGATIONS; SALE AND SERVICING
AGREEMENT...........................................11
Section 3.09. NEGATIVE COVENANTS..................................12
Section 3.10. ANNUAL STATEMENT AS TO COMPLIANCE...................12
Section 3.11. RECORDATION OF ASSIGNMENTS..........................13
Section 3.12. REPRESENTATIONS AND WARRANTIES CONCERNING THE
MORTGAGE LOANS......................................13
Section 3.13. ASSIGNEE OF RECORD OF THE MORTGAGE LOANS............13
Section 3.14. SERVICER AS AGENT AND BAILEE OF THE INDENTURE
TRUSTEE.............................................13
Section 3.15. INVESTMENT COMPANY ACT..............................14
Section 3.16. ISSUER MAY NOT CONSOLIDATE, ETC.....................14
Section 3.17. SUCCESSOR OR TRANSFEREE.............................16
Section 3.18. NO OTHER BUSINESS...................................16
Section 3.19. NO BORROWING........................................16
Section 3.20. GUARANTEES..........................................16
Section 3.21. CAPITAL EXPENDITURES................................16
Section 3.22. INDENTURE TRUSTEE NOT LIABLE FOR NOTES OR RELATED
DOCUMENTS...........................................17
Section 3.23. NOTICE OF EVENTS OF DEFAULT.........................17
Section 3.24. FURTHER INSTRUMENTS AND ACTS........................17
Section 3.25. STATEMENTS TO NOTEHOLDERS...........................17
Section 3.26. ALLOCATION OF PRINCIPAL PAYMENTS TO THE OFFERED
NOTES AND THE VARIABLE FUNDING NOTES................17
Section 3.27. RESERVED............................................18
Section 3.28. ALLOCATION OF LOSSES ON THE MORTGAGE LOANS..........18
Section 3.29. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE
ISSUER..............................................19
ARTICLE IV THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE...............20
Section 4.01. THE NOTES............................................20
Section 4.02. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND
EXCHANGE OF NOTES; APPOINTMENT OF CERTIFICATE
REGISTRAR............................................21
Section 4.03. MUTILATED, DESTROYED, LOST OR STOLEN NOTES...........24
Section 4.04. PERSONS DEEMED OWNERS................................25
Section 4.05. CANCELLATION.........................................25
Section 4.06. BOOK-ENTRY NOTES.....................................26
Section 4.07. NOTICES TO DEPOSITORY................................26
Section 4.08. DEFINITIVE NOTES.....................................27
Section 4.09. TAX TREATMENT........................................27
Section 4.10. RESERVED.............................................28
Section 4.11. SATISFACTION AND DISCHARGE OF INDENTURE..............28
Section 4.12. APPLICATION OF TRUST MONEY...........................29
Section 4.13. RESERVED.............................................29
Section 4.14. REPAYMENT OF MONIES HELD BY PAYING AGENT.............29
Section 4.15. TEMPORARY OFFERED NOTES..............................30
ARTICLE V DEFAULT AND REMEDIES..............................................30
Section 5.01. NOTIFICATION OF CERTAIN EVENTS OF DEFAULT............30
Section 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT...30
Section 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY INDENTURE TRUSTEE.................................31
Section 5.04. REMEDIES; PRIORITIES.................................33
Section 5.05. OPTIONAL PRESERVATION OF THE TRUST ESTATE............35
Section 5.06. LIMITATION OF SUITS..................................36
Section 5.07. UNCONDITIONAL RIGHT OF NOTEHOLDERS TO RECEIVE
PRINCIPAL AND INTEREST..............................37
Section 5.08. RESTORATION OF RIGHTS AND REMEDIES...................37
Section 5.09. RIGHTS AND REMEDIES CUMULATIVE.......................37
Section 5.10. DELAY OR OMISSION NOT A WAIVER.......................37
Section 5.11. CONTROL BY NOTEHOLDERS...............................37
Section 5.12. WAIVER OF PAST DEFAULTS..............................38
Section 5.13. UNDERTAKING FOR COSTS................................38
Section 5.14. WAIVER OF STAY OR EXTENSION LAWS.....................39
Section 5.15. SALE OF TRUST ESTATE.................................39
Section 5.16. ACTION ON NOTES......................................41
Section 5.17. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS...41
ARTICLE VI THE INDENTURE TRUSTEE............................................42
Section 6.01. DUTIES OF INDENTURE TRUSTEE..........................42
Section 6.02. RIGHTS OF INDENTURE TRUSTEE..........................43
Section 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE...............44
Section 6.04. INDENTURE TRUSTEE'S DISCLAIMER.......................44
Section 6.05. NOTICE OF EVENT OF DEFAULT...........................44
Section 6.06. REPORTS BY INDENTURE TRUSTEE TO NOTEHOLDERS..........44
Section 6.07. COMPENSATION.........................................45
Section 6.08. REPLACEMENT OF INDENTURE TRUSTEE.....................45
Section 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER................46
Section 6.10. APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE
INDENTURE TRUSTEE....................................47
Section 6.11. ELIGIBILITY; DISQUALIFICATION........................48
Section 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.....49
Section 6.13. REPRESENTATIONS AND WARRANTIES.......................49
Section 6.14. DIRECTIONS TO INDENTURE TRUSTEE......................50
Section 6.15. CONFLICTING INSTRUCTIONS.............................50
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS..................................50
Section 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND
ADDRESSES OF NOTEHOLDERS............................50
Section 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS.........................................50
Section 7.03. REPORTS BY ISSUER...................................51
Section 7.04. REPORTS BY INDENTURE TRUSTEE........................51
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES...........................52
Section 8.01. COLLECTION OF MONEY.................................52
Section 8.02. RESERVED............................................52
Section 8.03. OFFICER'S CERTIFICATE...............................52
Section 8.04. TERMINATION UPON DISTRIBUTION TO NOTEHOLDERS........52
Section 8.05. RELEASE OF TRUST ESTATE.............................52
Section 8.06. SURRENDER OF NOTES UPON FINAL PAYMENT...............53
ARTICLE IX SUPPLEMENTAL INDENTURES..........................................53
Section 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
NOTEHOLDERS.........................................53
Section 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF
NOTEHOLDERS.........................................54
Section 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES................56
Section 9.04. EFFECT OF SUPPLEMENTAL INDENTURE....................56
Section 9.05. CONFORMITY WITH TRUST INDENTURE ACT.................56
Section 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.......57
ARTICLE X MISCELLANEOUS.....................................................57
Section 10.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC...........57
Section 10.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE....59
Section 10.03. ACTS OF NOTEHOLDERS.................................59
Section 10.04. NOTICES.............................................60
Section 10.05. NOTICES TO NOTEHOLDERS; WAIVER......................60
Section 10.06. CONFLICT WITH TRUST INDENTURE ACT...................61
Section 10.07. EFFECT OF HEADINGS..................................61
Section 10.08. SUCCESSORS AND ASSIGNS..............................61
Section 10.09. SEVERABILITY OF PROVISIONS..........................61
Section 10.10. RESERVED............................................61
Section 10.11. LEGAL HOLIDAYS......................................61
Section 10.12. GOVERNING LAW.......................................62
Section 10.13. COUNTERPARTS........................................62
Section 10.14. RECORDING OF INDENTURE..............................62
Section 10.15. ISSUER OBLIGATION...................................62
Section 10.16. NO PETITION.........................................63
Section 10.17. INSPECTION..........................................63
Appendix A Definitions
Exhibit A-1 Form of Offered Senior Notes (includes Form of Class I-A
Note, Class II-A Note and Class A-IO Note)
Exhibit A-2 Form of Offered Subordinate Notes (includes Form of
Class M-1 Note, Class M-2 Note, Class B-1 Note and Class B-2 Note)
Exhibit A-3 Form of Non-Offered Senior Notes (includes Form of
Variable Funding Note and Capped Funding Note)
Exhibit A-4 Form of Non-Offered Subordinate Notes (includes Form of
Class X-1 Note, Class X-2A Note and Class X-2B Note)
Exhibit B Form of Rider 144A Investment Representation
Exhibit C Form of Investor Representation Letter
Exhibit D Form of Transferor Representation Letter
Exhibit E Form of Representation Letter
Exhibit F Certificate of Non-Foreign Status
This INDENTURE, dated as of August 1, 2003, is between ▇▇▇▇▇ Whole Loan
Home Equity Trust 2003-C, a Delaware statutory trust, as issuer (the "Issuer"),
and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as trustee (the "Indenture
Trustee").
WITNESSETH:
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 Home Equity
Loan-Backed Notes, Series 2003-C (the "Offered Notes"), the Holders of the
Issuer's Home Equity Loan-Backed Variable Funding Notes, Series 2003-C (the
"Variable Funding Notes") and the Holders of the Issuer's Home Equity
Loan-Backed Subordinate Notes, Series 2003-C (the "Subordinate Notes" and,
together with the Variable Funding Notes and the Offered Notes, the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
trustee for the benefit of the Noteholders, all of the Issuer's right, title and
interest, whether now existing or hereafter created, in and to (i) the Mortgage
Loans and all Additional Balances, (ii) all funds on deposit from time to time
in the Collection Account and the Trustee Collection Account (in each case as
defined in Appendix A hereto) and all proceeds thereof, (iii) the assignment of
the Depositor's right, title and interest in the representations and warranties
made by the Seller in the Mortgage Loan Purchase and Servicing Agreement and
(iv) 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 that 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 herein.
The Indenture Trustee, as trustee on behalf of the Noteholders,
acknowledges such Grant, 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 used herein
that are not otherwise defined shall have the meanings ascribed thereto in
Appendix A attached hereto, which is incorporated by reference herein.
Section 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture Act of
1939, as amended (the "TIA"), such 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 meanings 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" includes "and/or"; (iv) "including" means including
without limitation; (v) words in the singular include the plural and words in
the plural include the singular; (vi) the term "proceeds" has the meaning
ascribed thereto in the UCC; (vii) 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; and (viii) references to a Person are also to such
Person's permitted successors and assigns.
ARTICLE II
ORIGINAL ISSUANCE OF NOTES
Section 2.01. FORM.
The Senior Notes (other than the Variable Funding Notes), the Subordinate
Notes, the Variable Funding Notes (including the Capped Funding Notes) and the
Non-Offered Subordinate Notes, in each case together with the Indenture
Trustee's certificate of authentication, shall be in substantially the forms set
forth in Exhibit ▇-▇, ▇-▇, ▇-▇, and A-4, respectively, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution thereof. Any portion of the text of a Note may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face thereof.
The Notes shall be typewritten, printed, lithographed or engraved, or
produced by any combination of such methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing the same, as
evidenced by their execution thereof.
The terms of the Notes set forth in Exhibits ▇-▇, ▇-▇, ▇-▇, and A-4 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 shall 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
Offered Notes for original issuance in their Initial Class Note Balance or
Notional Amount as of the Cut-Off Date and Variable Funding Notes for original
issuance in an aggregate initial principal amount of zero. Notwithstanding the
foregoing, (i) at any time the Variable Funding Balance may not exceed the
Maximum Variable Funding Balance, and (ii) the Variable Funding Balance may not
increase more than $100,000 in any month unless the Indenture Trustee receives
an Opinion of Counsel to the effect that such increase will not have any
material adverse tax consequences to the Trust.
Each Note shall be dated the date of its authentication. The Notes, other
than the Class A-IO Notes, shall be issuable as registered Notes in minimum
initial Note Balances of $1,000 and in integral multiples of $1 in excess
thereof. The Class A-IO Notes shall be issuable as registered Notes in minimum
percentage interests of 5% and in integral multiples of 5% in excess thereof.
Each Variable Funding Note shall be initially issued with a Variable
Funding Balance of $0 or, if applicable, with a Variable Funding Balance in an
amount equal to the sum of the Additional Balance Differential for the
Collection Period relating to the Payment Date following the date of issuance of
such Variable Funding Note pursuant to Section 4.01.
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. RESERVED.
Section 3.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer shall maintain an office or agency where, subject to the
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. The Issuer
hereby initially appoints the Indenture Trustee to serve as its agent for the
foregoing purposes. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Indenture Trustee, and the Issuer hereby appoints
the Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
Section 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT.
All payments of amounts due and payable with respect to any Notes pursuant
to Section 3.05 shall be made on behalf of the Issuer by the Indenture Trustee
or the Paying Agent, and no amounts shall be paid to the Issuer except as
provided in this Section. The Indenture Trustee shall initially be the Paying
Agent.
The Issuer shall 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 as Paying Agent, the
Indenture Trustee hereby so agrees), subject to the provisions of this Section,
that such Paying Agent will:
(a) 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;
(b) give the Indenture Trustee 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;
(c) 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;
(d) immediately resign as Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for payments in respect of the 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;
(e) 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
(f) deliver to the Indenture Trustee a copy of the statement to Noteholders
prepared with respect to each Payment Date pursuant to Section 4.01 of the Sale
and 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 such sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
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 mailing notice of such repayment to
Holders the Notes of which have been called but have not been surrendered for
redemption or the right of which to or interest in monies due and payable but
not claimed is determinable from the records of the Indenture Trustee or any
Paying Agent, at the last address of record for each such Holder).
Section 3.04. EXISTENCE.
The Issuer shall keep in full force and effect its existence, rights and
franchises as a statutory 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 shall keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and shall obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Mortgage Loans and each other instrument or agreement included in the
Trust Estate.
Section 3.05. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
(a) On each Payment Date (other than a Payment Date after an Event of
Default and an acceleration of the Notes), from amounts on deposit in the
Trustee Collection Account resulting from Interest Collections and Principal
Collections with respect to the Mortgage Loans (after the Indenture Trustee has
removed any investment earnings to be retained by it pursuant to Section 6.07 or
paid to the Depositor pursuant to Section 5.03 of the Sale and Servicing
Agreement), MINUS the Indenture Trustee Fee payable to the Indenture Trustee for
such Payment Date and any permitted expenses reimbursable to the Indenture
Trustee pursuant to Section 6.07, the Indenture Trustee shall apply the
following amounts in the following order of priority, in accordance with the
Report to Noteholders:
FIRST, to pay the accrued and unpaid interest due on the Note Balances
(or Variable Funding Balance in the case of the Variable Funding Notes) of
the Notes and the notional balance of the Class A-IO Notes at their
respective Note Rates, in the following order:
(A) to the Senior Notes on a PRO RATA basis in accordance with
the amount of accrued interest due thereon;
(B) to the Class M-1 notes;
(C) to the Class M-2 notes;
(D) to the Class B-1 notes; and
(E) to the Class B-2 notes;
SECOND, to pay as principal on the Notes (other than the Class A-IO
Notes), in an amount equal to the Principal Collection Distribution Amount,
in the following order:
(A) to the Senior Notes, in the order specified in Section
3.26(a) and (b), until their aggregate Note Balance has been reduced
to the Senior Optimal Principal Balance;
(B) to the Class M-1 Notes, until the Note Balance thereof has
been reduced to the Class M-1 Optimal Balance;
(C) to the Class M-2 Notes, until the Note Balance thereof has
been reduced to the Class M-2 Optimal Balance;
(D) to the Class B-1 Notes, until the Note Balance thereof has
been reduced to the Class B-1 Optimal Balance;
(E) to the Class B-2 Notes, until the Note Balance thereof has
been reduced to the Class B-2 Optimal Balance;
THIRD, to pay as principal on the Senior Notes, in the order specified
in Section 3.26(a) and (b), until their aggregate Note Balance has been
reduced to the Senior Optimal Principal Balance, an amount equal to the
Liquidation Loss Distribution Amount;
FOURTH, to pay as principal on the Class M-1 Notes, until the Note
Balance thereof has been reduced to the Class M-1 Optimal Balance, an
amount equal to the Liquidation Loss Distribution Amount, to the extent not
distributed to the holders of the Senior Notes under clause THIRD above;
FIFTH, to pay as principal on the Class M-2 Notes, until the Note
Balance thereof has been reduced to the Class M-2 Optimal Balance, an
amount equal to the Liquidation Loss Distribution Amount, to the extent not
distributed to the holders of the Senior Notes or the Class M-1 Notes under
clause THIRD and FOURTH above respectively;
SIXTH, to pay as principal on the Class B-1 Notes, until the Note
Balance thereof has been reduced to the Class B-1 Optimal Balance, an
amount equal to the Liquidation Loss Distribution Amount, to the extent not
distributed to the holders of the Senior Notes, the Class M-1 Notes or the
Class M-2 Notes under clauses THIRD, FOURTH and FIFTH above, respectively;
SEVENTH, to pay as principal on the Class B-2 Notes (other than the
Class IO Notes), until the Note Balance thereof has been reduced to the
Class B-2 Optimal Balance, an amount equal to the Liquidation Loss
Distribution Amount, to the extent not distributed to the holders of the
Senior Notes, the Class M-1 Notes, the Class M-2 Notes or the Class B-1
Notes under clauses THIRD, FOURTH, FIFTH and SIXTH above, respectively;
EIGHTH, to pay as principal on the Senior Notes, in the order
specified in Section 3.26(a) and (b), until their aggregate Note Balance
has been reduced to the Senior Optimal Principal Balance, an amount equal
to the Overcollateralization Increase Amount (up to the
Overcollateralization Funding Amount);
NINTH, to pay as principal on the Class M-1 Notes, until the Note
Balance thereof has been reduced to the Class M-1 Optimal Principal
Balance, an amount equal to the Overcollateralization Increase Amount (up
to the Overcollateralization Funding Amount, less any portion thereof
applied under clause EIGHTH above), to the extent not distributed to the
holders of the Senior Notes under clause EIGHTH above;
TENTH, to pay as principal on the Class M-2 Notes, until the Note
Balance thereof has been reduced to the Class M-2 Optimal Principal
Balance, an amount equal to the Overcollateralization Increase Amount (up
to the Overcollateralization Funding Amount, less any portion thereof
applied under clauses EIGHTH or NINTH above), to the extent not distributed
to the holders of the Senior Notes or the Class M-1 Notes under clauses
EIGHTH or NINTH above respectively;
ELEVENTH, to pay as principal on the Class B-1 Notes, until the Note
Balance thereof has been reduced to the Class B-1 Optimal Principal
Balance, an amount equal to the Overcollateralization Increase Amount (up
to the Overcollateralization Funding Amount, less any portion thereof
applied under clauses EIGHTH, NINTH or TENTH above), to the extent not
distributed to the holders of the Senior Notes, the Class M-1 Notes or the
Class M-2 Notes under clauses EIGHTH, NINTH or TENTH above;
TWELFTH, to pay as principal on the Class B-2 Notes, until the Note
Balance thereof has been reduced to the Class B-2 Optimal Principal
Balance, an amount equal to the Overcollateralization Increase Amount (up
to the Overcollateralization Funding Amount, less any portion thereof
applied under clauses EIGHTH, NINTH, TENTH or ELEVENTH above), to the
extent not distributed to the holders of the Senior Notes, the Class M
Notes, or the Class B-1 Notes under clauses EIGHTH, NINTH, TENTH or
ELEVENTH above;
THIRTEENTH, to pay the Indenture Trustee, the Administrator, the
Master Servicer and the Owner Trustee any unpaid expenses and other
reimbursable amounts owed to them;
FOURTEENTH, to pay any unpaid Interest Carry-Forward Amounts, together
with interest thereon, in the following order:
(A) to the Senior Notes on a pro rata basis in accordance with
the amount of any unpaid Interest Carry-Forward Amounts;
(B) to the Class M-1 notes;
(C) to the Class M-2 notes;
(D) to the Class B-1 notes; and
(E) to the Class B-2 Notes; and
FIFTEENTH, any remaining amounts to the holders of the Non-Offered
Subordinate Notes and the Certificates in the proportions and priorities
set forth in Section 3.26(d).
PROVIDED, that the foregoing is also subject to the allocation rules and
priorities set forth in Sections 3.26 and 3.28.
Notwithstanding the foregoing, on the applicable Legal Final Payment Date
of the Offered Notes (other than the Class A-IO Notes) and the Variable Funding
Notes, the amounts to be paid pursuant to clause SECOND above shall be equal to
the sum of the Offered Note Balance of the applicable Class or Classes of
Offered Notes and the Variable Funding Balance of the Variable Funding Notes
immediately prior to such Payment Date.
In the event that any withholding tax is imposed on distributions (or
allocations of income) to a Holder of a Note or Certificate, such tax shall
reduce the amount otherwise distributable to such Holder in accordance with this
Section 3.05. The Indenture Trustee is hereby authorized and directed to retain
or cause to be retained from amounts otherwise distributable to the Holders of
the Notes or Certificates sufficient funds for the payment of any tax that is
legally owed by the Issuer; provided, that such authorization shall not prevent
the Indenture Trustee from contesting any such tax in appropriate Proceedings
and withholding payment thereof, if permitted by law, pending the outcome of
such Proceedings. The amount of any withholding tax imposed with respect to a
Holder of a Note or Certificate shall be treated as cash distributed to such
Holder at the time it is withheld by the Indenture Trustee and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution, the Indenture Trustee may in its sole
discretion withhold such amounts in accordance with this paragraph.
Amounts paid to Noteholders shall be paid in respect of the Offered Notes,
the Variable Funding Notes or the Non-Offered Subordinate Notes, as the case may
be, in accordance with the applicable percentage as set forth in paragraph (b)
below. Any installment of interest or principal payable on any Note that is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Holder of record thereof on the immediately preceding
Record Date by wire transfer to an account specified in writing by such Holder
reasonably satisfactory to the Indenture Trustee, or by check or money order
mailed to the address of such Noteholder reflected in the Note Register, in the
amount required to be distributed to such Holder on such Payment Date pursuant
to such Holder's Notes; provided, that the Indenture Trustee shall not pay to
any such Holder any amounts required to be withheld from a payment to such
Holder by the Code.
(b) Principal of each Note (other than the Class A-IO Notes) shall be due
and payable in full on the Legal Final Payment Date for the related Class of
Notes as provided in the applicable form of Note set forth in Exhibits ▇-▇, ▇-▇,
▇-▇, and A-4. All principal payments on the Offered Notes and the Variable
Funding Notes shall be made pro rata to the Class of Noteholders entitled
thereto in accordance with the related Percentage Interests represented thereby.
Upon written notice to the Indenture Trustee by the Issuer, the Indenture
Trustee shall notify the Person in the name of which a Note is registered at the
close of business on the Record Date preceding the related Legal Final Payment
Date. Such notice shall be mailed no later than five Business Days prior to the
related Legal Final Payment Date and shall specify that payment of the principal
amount and any interest due with respect to such Note at the related Legal 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 shall 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 shall 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 Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders therein 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 that
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 shall have yet been
delivered pursuant to Section 3.07(b)), unless the Indenture Trustee shall have
first received an Opinion of Counsel to the effect that the Lien and security
interest created by this Indenture with respect to such property will continue
to be maintained after giving effect to such action or actions.
The 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.
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,
stating that (i) 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 Mortgage Loans and reciting the details of such action, or (ii) in the
opinion of such counsel, no such action is necessary to make such Lien and
security interest effective.
(b) On or before December 31st of each calendar year, commencing in 2004,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer stating that (i) in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
re-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 is necessary to maintain the
Lien and security interest in the Mortgage Loans and reciting the details of
such action or (ii) 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 re-filing 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 Mortgage Loans until December 31 of the following
calendar year.
Section 3.08. PERFORMANCE OF OBLIGATIONS; SALE AND SERVICING AGREEMENT.
(a) The Issuer shall punctually perform and observe all of its obligations
and agreements contained in this Indenture, the other Basic Documents and 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 shall not take any action or permit any action to be taken
by others that would release any Person from any of such Person's covenants or
obligations under any document relating to the Mortgage Loans (including the
Mortgage Documents and the Related Documents) or under any instrument included
in the Trust Estate, or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such document or any such instrument, except such actions
as the Master Servicer is expressly permitted to take in the Sale and Servicing
Agreement.
(d) The Issuer 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:
(a) 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;
(b) 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;
(c) 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, permit any Lien (other than the Lien of this
Indenture) to be created on or extend to or otherwise arise upon or burden the
Trust Estate, any part thereof, any interest therein or any proceeds thereof or
permit the Lien of this Indenture not to constitute a valid first priority
security interest in the Trust Estate; or
(d) impair or cause to be impaired the Issuer's interest in the Mortgage
Loans, the Mortgage Loan Purchase and Servicing Agreement or in any other 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 shall deliver to the Indenture Trustee, on or before March 15 of
each year (commencing with 2004), an Officer's Certificate stating, as to the
Authorized Officer signing such Officer's Certificate, that:
(a) a review of the activities of the Issuer during such year (or from the
Closing Date in the case of the first such Certificate) and of its performance
under this Indenture and the Trust Agreement has been made under such Authorized
Officer's supervision; and
(b) 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 Trust Agreement throughout such year (or from the Closing Date
in the case of the first such Certificate) 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. RECORDATION OF ASSIGNMENTS.
The Issuer shall enforce the obligation of the Master Servicer under
Section 3.13 of the Sale and Servicing Agreement to submit or cause to be
submitted for recording Assignments of Mortgages in accordance with such
Section.
Section 3.12. REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOANS.
The Indenture Trustee, as pledgee of the Mortgage Loans, shall have the
benefit of the representations and warranties of the Seller in Sections 7.01 and
7.02 of the Mortgage Loan Purchase and Servicing Agreement, assigned to the
Issuer in Section 2.01 of the Sale and Servicing Agreement and restated by the
Seller in Section 2.07 of the Sale and Servicing Agreement, concerning the
Mortgage Loans, including without limitation the right to enforce the remedies
against the Seller and the Depositor provided in Sections 7.03 and 12.01 of the
Mortgage Loan Purchase and Servicing Agreement and Section 2.08 of the Sale and
Servicing Agreement 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 MORTGAGE LOANS.
As pledgee of the Mortgage Loans, the Indenture Trustee shall hold record
title to the Mortgage Loans by being named as payee in the endorsements of the
Mortgage Notes and assignee in the Assignments of Mortgage recorded to the
extent required by Section 3.13 of the Sale and Servicing Agreement. Except as
expressly provided in the Mortgage Loan Purchase and Servicing Agreement or the
Sale and Servicing Agreement with respect to any Mortgage Loan, the Indenture
Trustee shall not execute any endorsement or assignment or otherwise release or
transfer record title to such Mortgage Loan until such time as the remaining
Trust Estate, or any portion thereof, may be released pursuant to Section 8.05
hereof.
Section 3.14. SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE.
Solely for purposes of perfection under Section 9-313 of the UCC or other
similar applicable law, rule or regulation of the State in which such property
is held by the Master Servicer, the Indenture Trustee hereby acknowledges that
the Master Servicer is acting as agent and bailee of the Indenture Trustee in
holding amounts on deposit in the Collection Account pursuant to Section 3.04
and Section 5.02 of the Sale and Servicing Agreement that are allocable to the
Mortgage Loans, as well as the agent and bailee of the Indenture Trustee in
holding any Related Documents released to the Master Servicer pursuant to
Section 3.09 of the Sale and Servicing Agreement, and any other items
constituting a part of the Trust Estate that from time to time come into the
possession of the Master Servicer. It is intended that, by the Master Servicer's
acceptance of such agency pursuant to Section 3.01 of the Sale and Servicing
Agreement, the Indenture Trustee, as pledgee of the Mortgage Loans, will be
deemed to have possession of such Related Documents, such monies and such other
items for purposes of Section 9-313 of the UCC of the State in which such
property is held by the Master 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, 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, that the
Issuer shall be in compliance with this Section 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 NOT 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, 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
the 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) each Rating Agency shall have notified the Issuer that such
transaction will not cause a Rating Event;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered a copy thereof to the Indenture Trustee) to the effect that
such transaction will not 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 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) 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 assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee, the due and punctual payment of the principal of and interest on
all 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 agree by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of the Noteholders, (D)
unless otherwise provided in such supplemental indenture, expressly agree
to indemnify, defend and hold harmless the Issuer from and against any
loss, liability or expense arising under or relating to this Indenture or
the Notes and (E) expressly agree by means of such supplemental indenture
that such Person (or if a group of Persons, then one specified Person)
shall make all filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) each Rating Agency shall have notified the Issuer that such
transaction will not cause a Rating Event;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered a copy thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer or any Senior 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 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 Mortgage Loans, the issuance of
the Notes and the Certificate in the manner contemplated by this Indenture and
the other 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.
Except as contemplated by this Indenture or the other 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 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. INDENTURE TRUSTEE NOT LIABLE FOR NOTES OR RELATED DOCUMENTS.
The recitals contained herein shall be taken as the statements of the
Depositor, and the Indenture Trustee assumes no responsibility for the
correctness thereof. The Indenture Trustee makes no representations as to the
validity or sufficiency of this Indenture, of any other Basic Document or of the
Notes (other than the signatures of the Indenture Trustee on the authentication
of the Notes) or of any other documents relating thereto. The Indenture Trustee
shall at no time have any responsibility or liability with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
distributed to the Noteholders under this Indenture, including the compliance by
the Depositor or the Seller with any representation or warranty made under any
Basic Document or in any related document or the accuracy of any such
representation or warranty, or any action of the Paying Agent or the Note
Registrar or the Indenture Trustee taken in the name of the Owner Trustee.
Section 3.23. NOTICE OF EVENTS OF DEFAULT.
The Issuer shall give the Indenture Trustee, the Administrator and each
Rating Agency prompt written notice of each Event of Default hereunder.
Section 3.24. FURTHER INSTRUMENTS AND ACTS.
Upon request of the Indenture Trustee, the Issuer shall 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 3.25. STATEMENTS TO NOTEHOLDERS.
On each Payment Date, the Indenture Trustee will make the Report to
Noteholders (and, at its option, any additional files containing the same
information in alternative format) available to Noteholders, the Depositor and
the Issuer via the Indenture Trustee's internet website. The Indenture Trustee's
internet website shall initially be located at ▇▇▇.▇▇▇▇▇▇▇.▇▇▇. Assistance in
using the website can be obtained by calling the Trustee's customer service desk
at (▇▇▇) ▇▇▇-▇▇▇▇. Persons that are unable to use the above distribution options
are entitled to have a paper copy mailed to them via first class mail by calling
the customer service desk and indicating such. The Indenture Trustee shall have
the right to change the way Report to Noteholders are distributed in order to
make such distribution more convenient and/or more accessible to the above
Persons, and the Indenture Trustee shall provide timely and adequate
notification to all above Persons regarding any such changes.
Section 3.26. ALLOCATION OF PRINCIPAL PAYMENTS TO THE OFFERED NOTES AND THE
VARIABLE FUNDING NOTES.
(a) All principal payments made to the holders of the Senior Notes (other
than the Class A-IO Notes) on each Payment Date from whatever source with
respect to the Principal Collection Distribution Amount, the Liquidation Loss
Amount and the Overcollateralization Increase Amount shall be distributed
concurrently to: (a) the Class I-A Notes and (b) the Group II Notes in the
aggregate, in each case in proportion to the percentage of the Principal
Collections (net of Principal Collections from Group II used to purchase any
Additional Balances) derived from the related Loan Group (with respect to which
any related Notes are outstanding) for that Payment Date, until the Note
Balances of the Class I-A Notes and the Group II notes in the aggregate have
been reduced to zero. After the Note Balances of either the Class I-A Notes or
the Group II Notes in the aggregate have been reduced to zero, all principal
payments allocated to the Senior Notes of such Group shall be distributed to the
remaining class or classes of Senior Notes of the other Group in reduction of
the Note Balance or Balances thereof.
(b) Payments of principal that are allocated to the Group II Notes will be
paid to the Class II-A Notes and the Variable Funding Notes PRO RATA based on
the outstanding Note Balance or Variable Funding Balance, as applicable, thereof
until paid in full.
(c) Any provision in this Agreement to the contrary notwithstanding, until
the Step-down Date, no principal payments shall be distributed to the
Subordinate Notes unless the Note Balances of all of the Senior Notes have been
reduced to zero. In addition, if on any Payment Date the Loss and Delinquency
Tests are not satisfied, amounts otherwise payable to the Subordinate Notes with
respect to principal shall be paid to the Senior Notes, and the Subordinate
Notes shall receive no distributions of principal on that Payment Date.
(d) Payments to the holders of the Non-Offered Subordinate Notes and
Certificates on each Payment Date will be equal to the amount of remaining funds
in the Trustee Collection Account under clause FIFTEENTH of Section 3.05(a).
Payment of such aggregate amount on each Payment Date will be made to the Holder
of the Non-Offered Subordinate Notes as follows: first, to the Class X-1 Notes,
solely as a payment of principal, until the Class X-1 Note Balance has been
reduced to $0, and thereafter, to the Class X-2A and Class X-2B Notes in the
proportion of 25% and 75%, respectively, of the aggregate amount to be paid on
each Payment Date. No payment of any portion of such aggregate amount will be
made to the Holder of the Certificate on any Payment Date.
Section 3.27. RESERVED.
Section 3.28. ALLOCATION OF LOSSES ON THE MORTGAGE LOANS.
On each Payment Date, the amount of Liquidation Loss Amounts incurred on
the Mortgage Loans in the related Collection Period that were not distributed
pursuant to clauses THIRD, FOURTH, FIFTH, SIXTH or SEVENTH of Sections 3.05(a)
will be applied as follows: FIRST, to reduce any Overcollateralization Amount
(after allocation of Principal Collections and Interest Collections on the
Mortgage Loans for such Payment Date) until such amount has been reduced to $0;
SECOND, to reduce the Note Balance of the Class B-2 Notes, until the outstanding
Note Balance thereof has been reduced to $0; THIRD, to reduce the Note Balance
of the Class B-1 Notes, until the outstanding Note Balance thereof has been
reduced to $0; FOURTH, to reduce the Note Balance of the Class M-2 Notes, until
the outstanding Note Balance thereof has been reduced to $0; FIFTH, to reduce
the Note Balance of the Class M-1 Notes, until the outstanding Note Balance
thereof has been reduced to $0; and SIXTH, to reduce the Note Balance of the
Senior Notes until the outstanding Note Balances thereof have been reduced to
zero. Any such Liquidation Loss Amounts allocated to Senior Notes (other than
the Class A-IO Notes) shall be allocated to the Senior Notes on a PRO RATA
basis. The reduction of the Note Balance of any Class of Notes by application of
Liquidation Loss Amounts as described above shall entitle such Class to
reimbursement for such amount, with interest thereon, in accordance with Section
3.05(a) as a distribution of the Liquidation Loss Distribution Amount (but
without double counting for any prior distribution of Liquidation Loss
Distribution Amounts to such Class covering such loss amounts). Payment of that
reimbursement amount will not further reduce the Note Balance of the applicable
Class of Subordinate Notes. Notwithstanding any provision of this section to the
contrary, after the Note Balance of any Class has been reduced to $0, that Class
will no longer be entitled to distributions.
Section 3.29. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE ISSUER.
This Indenture creates a valid and continuing security interest (as defined
in the applicable UCC) in the Mortgage Loans in favor of the Indenture Trustee,
which security interest is prior to all other Liens, and is enforceable as such
as against creditors of and purchasers from the Issuer. The Mortgage Loans
constitute "instruments" or "accounts" within the meaning of the applicable UCC.
The Issuer owns and has good and marketable title to the Mortgage Loans free and
clear of any Lien, claim or encumbrance of any Person. All original executed
copies of each Mortgage Note (or a "lost note affidavit" in lieu thereof) that
constitute or evidence the Mortgage Loans have been delivered to the Indenture
Trustee. The Issuer has caused or will have caused, within ten days following
the Closing Date, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in the Collateral granted to the
Indenture Trustee hereunder. Other than the security interest granted to the
Indenture Trustee pursuant to this Indenture, the Issuer has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Mortgage Loans. The Issuer has not authorized the filing of and is not aware of
any financing statements against the Issuer that include a description of
collateral covering the Mortgage Loans other than any financing statement
relating to the security interest granted to the Indenture Trustee hereunder or
that has been terminated. The Issuer is not aware of any judgment or tax lien
filings against the Issuer. None of the Mortgage Notes that constitute or
evidence the Mortgage Loans has any marks or notations indicating that they have
been pledged, assigned or otherwise conveyed to any Person other than the
Indenture Trustee. The foregoing representations and warranties shall survive
the discharge of this Indenture.
ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01. THE NOTES.
(a) The Offered Notes shall be registered in the name of a nominee
designated by the Depository. Beneficial Owners shall hold interests in the
Offered Notes through the book-entry facilities of the Depository in minimum
initial Note Balances (or Notional Balances in the case of the Class A-IO Notes)
of $1,000 and integral multiples of $1 in excess thereof. The Capped Funding
Notes shall be issued as physical notes in fully registered form in minimum
initial Capped Funding Balances of $10,000 and integral multiples of $1,000 in
excess thereof, together with any additional amount necessary to cover (i) the
aggregate Variable Funding Balance of the Variable Funding Notes at the time of
the denominational exchange thereof or (ii) the aggregate Capped Funding Balance
of any Capped Funding Notes issued in an exchange described in paragraph (d)
below. The Variable Funding Balance of the Variable Funding Notes at the time of
such exchange shall be the initial Capped Funding Balance of the Capped Funding
Notes issued in exchange therefor.
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 Offered Notes for
the purposes of exercising the rights of Offered Noteholders hereunder. Except
as provided in the next succeeding paragraph, the rights of Beneficial Owners
with respect to the Offered 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 Offered Notes as to which they are
the Beneficial Owners. Requests and directions from, and votes of, the
Depository as Holder of the Offered 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 Offered Noteholders and give notice to the Depository
of such Record Date. Without the consent of the Issuer and the Indenture
Trustee, the Depository may not transfer any Offered Note except to a successor
Depository that agrees to hold such Offered Note for the account of the
Beneficial Owners.
In the event that 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 after the effective date of the predecessor Depository's resignation or
removal, each Beneficial Owner shall be entitled to certificates representing
the Offered Notes it beneficially owns in the manner prescribed in Section 4.08.
The Owner Trustee (not in its individual capacity but solely as Owner
Trustee), shall, on original issue, execute the Offered Notes on behalf of the
Issuer, and the Indenture Trustee shall authenticate and deliver the Notes to or
upon the order of the Issuer.
(b) On each Payment Date, the aggregate Variable Funding Balance of the
Variable Funding Notes shall be increased by an amount equal to the Additional
Balance Differential for such Payment Date, subject to the terms and conditions
set forth below. The aggregate Variable Funding Balance of the Variable Funding
Notes, including the Capped Funding Balance of the Capped Funding Notes, shall
not exceed the Maximum Variable Funding Balance, and may not increase by more
than $100,000 in any month unless the Indenture Trustee receives an Opinion of
Counsel to the effect that such increase will not have any material adverse tax
consequences to the Trust.
(c) The Variable Funding Note issued on the Closing Date shall bear the
Designation "VFN-1", and each Variable Funding Note issued thereafter shall bear
sequential numerical designations in the order of their issuance.
(d) Subject to the following conditions, the Variable Funding Notes may be
exchanged pursuant to Section 4.02 for one or more Capped Funding Notes. Prior
to any such exchange, the party requesting the exchange must provide an Opinion
of Counsel, addressed to the Issuer and the Indenture Trustee, to the effect
that the Capped Funding Notes shall qualify for federal income tax purposes as
indebtedness of the Issuer and neither the Issuer nor any portion thereof will
be characterized as a taxable mortgage pool within the meaning of Section
7701(i) of the Code. Upon receipt of the Opinion of Counsel, the Indenture
Trustee shall issue Capped Funding Notes with a Capped Funding Balance equal to
the Capped Funding Balance permitted under such Opinion of Counsel, in minimum
denominations as set forth in paragraph (a) above. The Capped Funding Notes
shall bear the designation "Capped" in addition to any other applicable
designation. The Capped Funding Notes shall be issued concurrently with a
reduction in the aggregate Variable Funding Balance. Any Variable Funding
Balance not represented by a Capped Funding Note shall result in the issuance of
a new Variable Funding Note having an initial Variable Funding Balance equal to
the excess of the outstanding Variable Funding Balance of the Variable Funding
Note so surrendered over the initial Capped Funding Balances of the Capped
Funding Notes. The Indenture Trustee and the Issuer agree to cooperate with each
other, the party requesting the exchange of Variable Funding Notes for Capped
Funding Notes and the Depositor, the Seller and the Owner Trustee, and to cause
no unreasonable delay in issuing Capped Funding Notes in connection with this
Section.
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 Corporate Trust Office of the
Indenture Trustee 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 of the
Indenture Trustee, 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 Note Balances.
No transfer of a Non-Offered Subordinate Note shall be permitted, and no
such transfer shall be registered in the Note Register or be effective
hereunder, unless evidenced by an Opinion of Counsel that establishes that such
transfer and the registration of such transfer will not cause the Issuer, or any
portion thereof, to be characterized as an association (or a publicly traded
partnership) taxable as a corporation either by having more than 100 holders of
the Certificates and the Non-Offered Subordinate Notes at any time during the
taxable year of the Issuer or otherwise, a corporation or a taxable mortgage
pool for federal income tax purposes.
No Non-Offered Subordinate Note or any interest therein (the "Transferred
Note or Interest") may be transferred unless all of the Non-Offered Subordinate
Notes and all interests therein are transferred together with the Transferred
Note or Interest. Any purported transfers in violation of this provision shall
be void.
In addition, no transfer, sale, assignment, pledge or other disposition of
a Non-Offered Subordinate Note shall be made unless the proposed transferee
executes a representation letter substantially in the form of Exhibit E, that
(i) such transferee is acquiring the Non-Offered Subordinate Note for its own
behalf and is not acting as agent or custodian for any other Person or entity in
connection with such acquisition, (ii) if such transferee is a partnership,
grantor trust or S corporation for federal income tax purposes, Non-Offered
Subordinate Notes represent not more than 50% of the assets of the partnership,
grantor trust or S corporation, (iii) such transferee agrees to be bound by the
Indenture and (iv) such transferee will not (x) incur indebtedness secured by
Non-Offered Subordinate Notes where payments on such indebtedness bear a
relationship to payments on either the Mortgage Loans in Group II or the
Mortgage Loans as a whole within the meaning of Treasury Regulations Section
301.7701(i)-1(f) or (y) use a partnership, trust or other entity to indirectly
achieve the result described in clause (x).
Except as described below, each holder of Non-Offered Subordinate Notes
shall establish its non-foreign status by submitting to the Owner Trustee and
the Indenture Trustee an IRS Form W-9 and the Certificate of Non-Foreign Status
(in substantially the form attached hereto as Exhibit F).
A Non-Offered Subordinate Note may be transferred to a Person unable to
establish its non-foreign status as described in the preceding paragraph only if
such Person provides an Opinion of Counsel to the Depositor, the Owner Trustee
and the Indenture Trustee, which Opinion of Counsel shall not be an expense of
the Trust, the Depositor, the Owner Trustee or the Indenture Trustee,
satisfactory to the Owner Trustee and the Indenture Trustee, that such transfer
(i) will not affect the federal income tax status of the Trust or any portion
thereof and (ii) will not adversely affect the interests of any
Certificateholder or Noteholder, including as a result of the imposition of any
federal withholding taxes on the Trust (except to the extent that such
withholding taxes would be payable solely from amounts otherwise distributable
to the Non-Offered Subordinate Notes of the prospective transferee). If such
transfer occurs and such foreign Person becomes subject to such federal
withholding taxes, any such taxes will be withheld by the Indenture Trustee.
Each holder of Non-Offered Subordinate Notes unable to establish its non-foreign
status shall submit to the Indenture Trustee a properly completed copy of the
type of Form W-8 that the Indenture Trustee shall reasonably request and shall
resubmit such form every three years or with the frequency as required by
then-applicable regulations.
No Variable Funding Note, other than any Capped Funding Note, may be
transferred. Subject to the provisions set forth below, Capped Funding Notes may
be transferred; provided, that with respect to the initial transfer thereof by
the Seller, prior written notification of such transfer shall have been given to
each Rating Agency by the Seller.
No transfer, sale, pledge or other disposition of a Capped Funding Note
shall be made unless such transfer, sale, pledge or other disposition is exempt
from the registration requirements of the Securities Act, and any applicable
state securities laws, or is made in accordance with the Securities Act and such
state laws. In the event of any such transfer, the Indenture Trustee or the
Issuer shall require the transferee to execute either (i) an investment letter
in substantially the form attached hereto as Exhibit B (or in such form
reasonably satisfactory to the Indenture Trustee and the Issuer), which
investment letters shall not be an expense of the Issuer, the Owner Trustee, the
Indenture Trustee or the Depositor, and which investment letter shall state
that, among other things, such transferee is a "qualified institutional buyer"
as defined under Rule 144A, acting for its own account or for the accounts of
other "qualified institutional buyers" as defined under Rule 144A, and is aware
that the proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act provided by Rule 144A or (ii) a written
Opinion of Counsel (who may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Indenture Trustee and the Issuer that
such transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the Securities Act and such state laws or
is being made pursuant to the Securities Act and such state laws, which Opinion
of Counsel shall not be an expense of the Issuer, the Owner Trustee, the
Indenture Trustee or the Depositor, and the Indenture Trustee shall require the
transferee to execute an investment letter in substantially the form of Exhibit
C hereto, and the transferor shall execute a representation letter,
substantially in the form of Exhibit D hereto, acceptable to and in form and
substance reasonably satisfactory to the Issuer and the Indenture Trustee
certifying to the Issuer and the Indenture Trustee the facts surrounding such
transfer, which investment letter shall not be an expense of the Indenture
Trustee or the Issuer. The Holder of a Capped Funding Note desiring to effect
such transfer shall, and does hereby agree to, indemnify the Indenture Trustee
and the Issuer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal or state laws.
Notwithstanding the foregoing, the restriction of transfer specified in this
paragraph is not applicable to any Capped Funding Notes that have been
registered under the Securities Act.
Subject to the foregoing, at the option of the related Noteholders, Notes
may be exchanged for other Notes of like tenor and Class, in each case, in
authorized initial Note Balances evidencing the same aggregate Percentage
Interests upon surrender of the Notes to be exchanged at the Corporate Trust
Office of the Indenture Trustee, as Note Registrar. With respect to any
surrender of Capped Funding Notes for exchange, the new Capped Funding Notes
delivered in exchange therefore shall bear the designation "Capped" in addition
to any other applicable designation. Whenever any Notes are so surrendered for
exchange, the Indenture Trustee shall execute, and the Note Registrar shall
authenticate and deliver, the Notes that the Noteholder making such 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 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. Notes delivered upon any such
transfer or exchange shall evidence the same obligations, and shall be entitled
to the same rights and privileges, as the Notes surrendered.
No service charge shall be made for any registration of transfer or
exchange of any Notes, but the Note Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any such registration of transfer or exchange. 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
3.08 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 3.04
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; provided, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall be, 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 a 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 which it was delivered or any Person
taking such replacement Note from the 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 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, the Issuer
may require the payment by the related Noteholder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection therewith
and any other reasonable related expenses (including the fees and expenses of
the Indenture Trustee).
Each replacement Note issued pursuant to this Section in replacement of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not such mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone each
such replacement Note shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude, to the
extent lawful, all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
Section 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 the name of which such Note is registered as of
the date of determination as the owner of such Note for the purpose of receiving
payments of principal and interest, if any, on such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue; and neither the
Issuer nor the Indenture Trustee nor 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 that
the Issuer may have acquired in any manner whatsoever, and the Indenture Trustee
shall promptly cancel all Notes so delivered. No Notes shall be authenticated in
lieu of or in exchange for any Notes cancelled as provided in this Section,
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 of cancellation thereof,
unless the Issuer directs by Issuer Request that the same be destroyed or
returned to it; provided, that such Issuer Request shall be timely and such
Notes have not been previously disposed of by the Indenture Trustee.
Section 4.06. BOOK-ENTRY NOTES.
The Offered Notes, upon original issuance, will be issued in the form of
typewritten notes representing Book-Entry Notes, to be delivered to The
Depository Trust Company, the initial Depository, by or on behalf of the Issuer.
The Offered 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
shall receive a Definitive Note representing such Beneficial Owner's interest in
the related Offered Note, except as provided in Section 4.08. Unless and until
definitive, fully-registered Offered Notes (the "Definitive Notes") have been
issued to Beneficial Owners pursuant to Section 4.08:
(a) the provisions of this Section shall be in full force and effect;
(b) 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 Offered Notes, and shall have no
obligation to Beneficial Owners;
(c) to the extent that the provisions of this Section conflict with any
other provisions of this Indenture, the provisions of this Section shall
control;
(d) the rights of Beneficial Owners shall be exercised only through the
Depository, and shall be limited to those established by law and agreements
between the related Beneficial Owners and the Depository or the Depository
Participants. Unless and until Definitive Notes are issued pursuant to Section
4.08, the initial Depository shall make book-entry transfers among the
Depository Participants and receive and transmit payments of principal of and
interest on the Offered Notes to such Depository Participants; and
(e) whenever this Indenture requires or permits actions to be taken based
upon instructions or directions of Holders of Notes representing a specified
percentage of the aggregate Note Balance, the Depository shall be deemed to
represent such percentage only to the extent that it has received instructions
to such effect from Beneficial Owners or Depository Participants owning or
representing, respectively, such required percentage, and has delivered such
instructions to the Indenture Trustee.
Section 4.07. NOTICES TO DEPOSITORY.
Whenever a notice or other communication to the Offered Noteholders 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
Offered Noteholders to the Depository, and shall have no obligation to any
Beneficial Owner.
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
Offered 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,
Beneficial Owners representing at least a majority of the aggregate Offered Note
Balance 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 such event and of the availability of
Definitive Notes to Beneficial Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Offered Notes representing the Book-Entry
Notes by the Depository, accompanied by registration instructions, the Issuer
shall execute and the Indenture Trustee shall authenticate 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 such Definitive Notes as
Offered Noteholders.
Section 4.09. TAX TREATMENT.
(a) The Issuer has entered into this Indenture, and the Offered Senior
Notes, the Variable Funding Notes, the Offered Subordinate Notes and the Class
X-1 Notes shall be issued, with the intention that, for federal, state and local
income, single business and franchise tax purposes, such Notes will qualify as
indebtedness of the Issuer.
The Issuer, by entering into this Indenture, and each holder of an Offered
Senior Note, the Variable Funding Notes, an Offered Subordinate Notes or a Class
X-1 Note, by its acceptance of such Note (and each Beneficial Owner by its
acceptance of an interest in such Note), agrees to treat such Note for federal,
state and local income, single business and franchise tax purposes as
indebtedness of the Issuer.
(b) The Issuer has entered into this Indenture, and the Class X-2A Notes
and the Class X-2B Notes shall be issued, with the intention that, for federal,
state and local, income, single business and franchise tax purposes, such Notes
will qualify as equity of the Issuer.
The Issuer, by entering into this Indenture, and each holder of a Class
X-2A Note or a Class X-2B Note, by its acceptance of such Note (and each
Beneficial Owner by its acceptance of a beneficial interest in such Note),
agrees (i) to treat such Note for federal, state and local income, single
business and franchise tax purposes as equity of the Issuer and (ii) to the
terms of Section 4.09(c) hereof and Sections 3.12 and 5.03 of the Trust
Agreement.
(c) If the Certificates, the Class X-2A Notes and Class X-2B Notes are held
by more than one Person, the net income of the Issuer for any month as
determined for federal income tax purposes (and each item of income, gain, loss,
credit and deduction entering into the computation thereof) shall be allocated
among the Certificateholders and the holders of the Class X-2A Notes and Class
X-2B Notes as of the first Record Date following the end of such month, in
accordance with each such holder's Percentage Interest in the Certificates and
the Class X-2A Notes and Class X-2B Notes. Net losses of the Issuer, if any, for
any month as determined for federal income tax purposes (and each item of
income, gain, loss, credit and deduction entering into the computation thereof)
shall be allocated among the Certificateholders and the holders of the Class
X-2A Notes and Class X-2B Notes as of the first Record Date following the end of
such month, in accordance with each such holder's Percentage Interest in the
Certificates and the Class X-2A Notes and Class X-2B Notes. The Indenture
Trustee, on behalf of the Depositor and at the direction of the Master Servicer,
is authorized to modify the allocations in this paragraph if necessary or
appropriate for the allocations to fairly reflect the economic income, gain or
loss to the holders of the Certificates and the Class X-2A Notes and Class X-2B
Notes, or as otherwise required by the Code. The Master Servicer shall act as
agent of the tax matters partner of the Trust.
Section 4.10. RESERVED.
Section 4.11. SATISFACTION AND DISCHARGE OF INDENTURE.
Upon the occurrence of the events set forth in the immediately following
sentence, this Indenture shall cease to be of further effect with respect to the
Notes except as to (a) rights of registration of transfer and exchange, (b)
substitution of mutilated, destroyed, lost or stolen Notes, (c) rights of
Noteholders to receive payments of principal thereof and interest thereon, (d)
Sections 3.03, 3.04, 3.06, 3.09, 3.16, 3.18 and 3.19, (e) 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 (f) 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. The Indenture Trustee, upon the
demand and at the expense of the Issuer, shall execute proper instruments
acknowledging the satisfaction and discharge of this Indenture with respect to
the Notes, when:
(i) 367 days after either
(A) all Notes theretofore authenticated and delivered (other than
(1) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 4.03 and (2) Notes for the
payment of which 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
(B) all Notes not theretofore delivered to the Indenture Trustee
for cancellation (I) have become due and payable; (II) will become due
and payable at the last Legal Final Payment Date within one year; or
(III) have been declared immediately due and payable pursuant to
Section 5.02;
and the Issuer, in the case of (I) or (II) 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 that 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 the Notes then outstanding and not theretofore
delivered to the Indenture Trustee for cancellation when due on the last
Legal Final Payment Date;
(ii) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel, each meeting the applicable
requirements of Section 10.01 and stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with. If such Opinion of Counsel relates to a
deposit made in connection with clause (i)(A)(2) above, such opinion shall
further be to the effect that such deposit will not have any material
adverse tax consequences to the Issuer, the Noteholders or the
Certificateholders.
Section 4.12. APPLICATION OF TRUST MONEY.
All monies deposited with the Indenture Trustee pursuant to Section 4.11
shall be held in trust and applied by the Indenture Trustee in accordance with
the provisions of the Notes and this Indenture to the payment, either directly
or through the Paying Agent or the Certificate Paying Agent, as the Indenture
Trustee may determine, to the Securityholders of all sums due and to become due
thereon for principal and interest; provided, that such monies need not be
segregated from other funds except to the extent required herein or required by
law.
Section 4.13. RESERVED.
Section 4.14. 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 the
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 the Paying Agent shall
be released from all further liability with respect to such monies.
Section 4.15. TEMPORARY OFFERED NOTES.
Pending the preparation of Definitive Notes, the Issuer may execute, and
upon its written direction, the Indenture Trustee may authenticate and make
available for delivery, temporary Offered 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 Offered Notes may determine, as
evidenced by their execution of such Term Notes.
If temporary Offered Notes are issued, the Issuer shall cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of the
Definitive Notes, the temporary Offered Notes shall be exchangeable for
Definitive Notes upon surrender of such temporary Offered Notes at the office or
agency of the Indenture Trustee, without charge to the related Offered
Noteholder. Upon surrender for cancellation of any one or more temporary Offered
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 Offered 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. NOTIFICATION OF CERTAIN EVENTS OF DEFAULT.
The Issuer shall deliver to the Indenture Trustee, within five days after
learning of the occurrence of any event that with the giving of notice and the
lapse of time would become an Event of Default under paragraph (c) of the
definition of "Event of Default", written notice in the form of an Officer's
Certificate of the status thereof 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 shall occur and be continuing with respect to the
Notes or if the Depositor or the Master Servicer shall purchase all of the
Mortgage Loans pursuant to Section 8.08 of the Sale and Servicing Agreement,
then in every such case the Indenture Trustee, acting at the direction of the
Holders of the Notes representing not less than a majority of the aggregate Note
Balance of the Notes, may (or shall in the case of a Master Servicer purchase
under Section 8.08 of the Sale and Servicing Agreement) declare the Notes to be
immediately due and payable, by a notice in writing to the Issuer and to the
Indenture Trustee; and upon any such declaration, the unpaid Note Balance of the
Notes, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.
At any time after a declaration of acceleration of maturity with respect to
an Event of Default has been made with respect to the Notes and before a
judgment or decree for payment of the money due has been obtained by the
Indenture Trustee as hereinafter provided in this Article, the Holders of Notes
representing not less than a majority of the aggregate Note Balance of the Notes
that caused the acceleration of the Notes, by written notice to the Issuer and
the Indenture Trustee, may in writing waive such Event of Default and rescind
and annul such declaration and its consequences if the Issuer has paid or
deposited with the Indenture Trustee a sum sufficient to pay:
(i) 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;
(ii) all sums paid or advanced by the Indenture Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel; and
(iii) all Events of Default, other than the nonpayment of 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 a default occurs in the payment of (i)
interest on any Note when the same becomes due and payable, and such default
continues for a period of five (5) days, or (ii) principal of any Note when the
same becomes due and payable; then, in each case the Issuer shall, upon demand
of the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Noteholders, the entire amount then due and payable on the Notes for principal
and interest, with interest on the overdue principal at the applicable Note
Rate. In addition thereto, the foregoing shall include 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) As to the Senior Notes, 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 10.16, may,
and at the direction of the Holders of Senior Notes representing not less than a
majority of the aggregate Note Balance of the Senior Notes, shall, institute
Proceedings for the collection of the sums so due and unpaid, and may prosecute
such Proceedings to judgment or final decree, and may enforce the same against
the Issuer or other obligor on the Senior Notes and collect in the manner
provided by law out of the property of the Issuer or such other obligor on the
Senior Notes, wherever situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default shall occur and be continuing, the Indenture
Trustee, subject to the provisions of Section 10.16, 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, relating to the Issuer, any other
obligor on 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 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 Proceedings relating to the Issuer or such
other obligor, 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 expressed in such Notes or by declaration
or otherwise, and irrespective of whether the Indenture Trustee shall have made
any demand pursuant to this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim for the entire 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, 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 such predecessor Indenture Trustee, except as a
result of negligence, willful misconduct or bad faith) and the Noteholders
allowed in the related Proceeding;
(ii) unless prohibited by applicable law or regulation, to vote on
behalf of the Noteholders in any election of a trustee, standby trustee or
Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable or
deliverable in respect of the claims of the Noteholders and the Indenture
Trustee and to distribute all amounts received with respect to any such
claims 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 Noteholders allowed in any judicial Proceeding relating to
the Issuer, its creditors or its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by the Noteholders to make payments to
the Indenture Trustee and, in the event the Indenture Trustee shall consent to
the making of payments directly to the Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation of
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 such predecessor
Indenture Trustee, except as a result of negligence, willful misconduct or bad
faith.
(e) Nothing contained herein shall be deemed to permit 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 Noteholder, or to authorize
the Indenture Trustee to vote in respect of any claim of a Noteholder in any
such Proceeding, except to vote for the election of a trustee in bankruptcy or
similar Person as provided above.
(f) All rights of action and of asserting claims under this Indenture or in
respect of the Notes may be enforced by the Indenture Trustee without the
possession of any Notes or the production thereof in any Proceeding relating
thereto. Any such Proceeding 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 Noteholders.
(g) In any Proceeding brought by the Indenture Trustee (including any
Proceeding 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 Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceeding.
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 5.05 and Section 10.16,
may, or shall, at the direction of the Holders of Notes representing not less
than a majority of the aggregate Note Balance of the Notes, do one or more of
the following:
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or under
this Indenture with respect thereto, whether by declaration or otherwise,
enforce any judgment thereby obtained and collect from the Issuer or any
other obligor on the Notes any monies thereby adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture;
(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 Noteholders; and
(iv) sell the Trust Estate or any smaller portion thereof or any right
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 Notes representing 100%
of the aggregate Note Balance of the Notes, (B) the proceeds of such sale or
liquidation distributable to the Noteholders are sufficient to discharge in full
all amounts then due and unpaid on the Notes for principal and interest, or (C)
the Indenture Trustee determines that the Mortgage Loans will not continue to
provide sufficient funds for the payment of principal of and interest on the
Notes as the same would have become due if the Notes had not been declared due
and payable, and the Indenture Trustee obtains the consent of the Holders of
Notes representing not less than 66 2/3% of the aggregate Note Balance of the
Notes. In determining such sufficiency or insufficiency with respect to clauses
(B) and (C) above, the Indenture Trustee may, but need not, obtain and rely upon
an opinion of an Independent investment banking or accounting firm of national
reputation addressed to the Indenture Trustee as to the feasibility of such
proposed action and as to the sufficiency of the portion of the Trust Estate for
such purpose. Notwithstanding the foregoing, for so long as a Servicing Default
shall not have occurred, any Sale of the Trust Estate shall be made subject to
the continued servicing of the Mortgage Loans by the Master Servicer as provided
in the Sale and Servicing Agreement. Notwithstanding any sale of the Mortgage
Loans pursuant to this Section 5.04(a), the Indenture Trustee shall, for so long
as any principal or accrued interest on the Notes remains unpaid, continue to
act as Indenture Trustee hereunder.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article (or in any case following an Event of Default and an acceleration
of the Notes), it shall pay out such money or property in the following order:
(i) to the Indenture Trustee, for amounts due under Section 6.07 and
to the Administrator for amounts due under Section 4 of the Administration
Agreement and to the Owner Trustee, for amounts due to it under the Basic
Documents;
(ii) to the Senior Noteholders, for amounts due and unpaid on the
Senior Notes in respect of interest, ratably, without preference or
priority of any kind, according to the amounts then due and payable;
(iii) to the Senior Noteholders, for amounts due and unpaid on the
Notes in respect of principal, ratably, without preference or priority of
any kind, until the respective Note Balances of the Senior Notes have been
reduced to zero;
(iv) to the Class M-1 Noteholders, for amounts due and unpaid on the
Class M-1 Notes in respect of interest, ratably, without preference or
priority of any kind, according to the amounts then due and payable;
(v) to the Class M-1 Noteholders, for amounts due and unpaid on the
Class M-1 Notes in respect of principal, ratably, without preference or
priority of any kind, according to the amounts then due and payable;
(vi) to the Class M-2 Noteholders, for amounts due and unpaid on the
Class M-2 Notes in respect of interest, ratably, without preference or
priority of any kind, according to the amounts then due and payable;
(vii) to the Class M-2 Noteholders, for amounts due and unpaid on the
Class M-2 Notes in respect of principal, ratably, without preference or
priority of any kind, according to the amounts then due and payable;
(viii) to the Class B-1 Noteholders, for amounts due and unpaid on the
Class B-1 Notes in respect of interest, ratably, without preference or
priority of any kind, according to the amounts then due and payable;
(ix) to the Class B-1 Noteholders, for amounts due and unpaid on the
Class B-1 Notes in respect of principal, ratably, without preference or
priority of any kind, according to the amounts then due and payable;
(x) to the Class B-2 Noteholders, for amounts due and unpaid on the
Class B-2 Notes in respect of interest, ratably, without preference or
priority of any kind, according to the amounts then due and payable;
(xi) to the Class B-2 Noteholders, for amounts due and unpaid on the
Class B-2 Notes in respect of principal, ratably, without preference or
priority of any kind, according to the amounts then due and payable; and
(xii) to the Indenture Trustee any remaining amounts for distribution
to the Holders of Certificates and the Non-Offered Subordinate Notes in
accordance with Section 3.26(d).
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date, the Indenture Trustee shall mail to each Noteholder a notice that
states such record date, and payment date and the amount to be paid.
Section 5.05. OPTIONAL PRESERVATION OF THE TRUST ESTATE.
If the Notes have been declared 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, but need not, elect
to take and maintain possession of the Trust Estate. It is the desire of the
Issuer 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. 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
addressed to the Indenture Trustee 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 Noteholder shall have any right to institute any Proceeding with respect
to this Indenture, for the appointment of a receiver or trustee or for any other
remedy hereunder, unless (subject to the provisions of Section 10.16):
(a) such Noteholder shall have previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(b) the Holders of Notes representing not less than 25% of the aggregate
Note Balance of the Notes shall have made written request to the Indenture
Trustee to institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(c) such Noteholders shall have offered the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities that may be incurred by it
in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute such Proceedings;
and
(e) no direction inconsistent with such written request shall have been
given to the Indenture Trustee during such 60-day period by the Holders of Notes
representing not less than a majority of the aggregate Note Balance of the
Notes.
No Noteholder shall have any right in any manner whatsoever by virtue of or
by availing itself of any provision of this Indenture to affect, disturb or
prejudice the rights of any other Noteholder, to obtain or to seek to obtain
priority or preference over any other Noteholder or to enforce any right under
this Indenture, in each case except in the manner herein provided.
In the event that the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing less than a majority of the aggregate Note Balance of the Senior
Notes, as applicable, the Indenture Trustee in its sole discretion may determine
what action, if any, shall be taken, notwithstanding any other provision of this
Indenture.
Section 5.07. UNCONDITIONAL RIGHT OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision of this Indenture, each Noteholder
shall have the right, which is absolute and unconditional, to receive payment of
the interest and principal, if any, due on such Noteholder's Notes on or after
the due date expressed in such Notes or in this Indenture and to institute suit
for the enforcement of any such payment. Such right shall not be impaired
without the consent of the related Noteholder.
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 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 or the Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder or otherwise shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 5.10. DELAY OR OMISSION NOT A WAIVER.
No delay or omission of the Indenture Trustee or any Noteholder to exercise
any right or remedy accruing upon an 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 or by law to
the Indenture Trustee or the Noteholders may be exercised from time to time, and
as often as may be deemed expedient, by the Indenture Trustee or the
Noteholders, as the case may be.
Section 5.11. CONTROL BY NOTEHOLDERS.
(a) The Holders of Notes representing not less than a majority of the
aggregate Note Balance of the Notes shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that:
(i) such direction shall not conflict with any rule of law or with
this Indenture;
(ii) subject to Section 5.04, any direction to the Indenture Trustee
to sell or liquidate the Trust Estate shall be given by the Holders of Notes
representing 100% of the aggregate Note Balance of the Notes;
(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 aggregate Note Balance of the Notes to sell
or liquidate the Trust Estate shall be of no force or 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 the Noteholders as set forth in this Subsection,
and subject to Section 6.01, the Indenture Trustee need not take any action that
it determines might subject it to liability or might materially and adversely
affect the rights of any Noteholders not consenting thereto unless the Indenture
Trustee has received indemnity satisfactory to it from a Noteholder.
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 representing not less than a
majority of the aggregate Note Balance of the Notes that caused the acceleration
of such Notes 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
such Notes or (b) in respect of a covenant or provision hereof that cannot be
modified or amended without the consent of all Noteholders or each Noteholder
affected thereby. In the case of any such waiver, the Issuer, the Indenture
Trustee and the applicable Noteholders shall be restored to their respective
former positions and rights hereunder; provided, that 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; provided, that 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.
The parties hereto agree, and each Noteholder, by such Noteholder's
acceptance of a Note, shall be deemed to have agreed, that any court may in its
discretion require, in any Proceeding for the enforcement of any right or remedy
under this Indenture, or in any Proceeding against the Indenture Trustee for any
action taken, suffered or omitted by it as Indenture Trustee, the filing by any
party litigant in such Proceeding of an undertaking to pay the costs of such
Proceeding, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such
Proceeding, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided, that the provisions of this
Section shall not apply to any Proceeding instituted by (i) the Indenture
Trustee, (ii) any Noteholder or group of Noteholders, in each case holding Notes
representing in the aggregate more than 10% of the aggregate Note Balance (or in
the case of a right or remedy under this Indenture which is instituted by the
Senior Notes, or the Subordinate Notes, more than 10% of the Note Balance of the
Senior Notes or the Subordinate Notes, as the case may be) or (iii) any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the due date 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, plead or in any manner whatsoever claim or
take the benefit or advantage of any stay or extension law wherever enacted, now
or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Indenture Trustee, but will suffer and permit the
execution of each 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 (each, a "Sale") of
the Trust Estate pursuant to Section 5.04 is expressly subject to the provisions
of Section 5.05 and this Section. 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. The power to effect any such Sale shall continue unimpaired
until the Trust Estate has been sold or all amounts payable on the related
Classes of Notes under this Indenture 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 smaller portion thereof, unless:
(i) the Noteholders of all affected Notes direct the Indenture Trustee
to make such Sale;
(ii) the proceeds of such Sale would be not less than the entire
amount that would be payable to the affected Securityholders, in full
payment thereof in accordance with Section 5.02, on the Payment Date next
succeeding the date of such Sale; or
(iii) 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 (and 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 Holders of
Notes representing not less than 66 2/3% of the aggregate Note Balance of
the affected 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 paragraph.
(c) Unless the Noteholders 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 clause
(ii) of paragraph (b) of this Section 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 greater than the highest
other bid.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(i) any Noteholder may bid for and purchase the property offered for
sale and, upon compliance with the terms of sale, may hold, retain, possess
and dispose of such property without further accountability; and may, in
paying the purchase price therefor, deliver any Notes or claims for
interest thereon in lieu of cash up to the amount, upon distribution of the
net proceeds of such Sale, payable thereon. 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;
(ii) the Indenture Trustee may bid for and acquire the property
offered for Sale, may, subject to any requirements of and to the extent
permitted by applicable law in connection therewith, purchase all or any
portion of the Trust Estate in a private Sale, and may, in lieu of paying
cash therefor, make settlement for the purchase price by crediting the
gross sale price against the sum of (A) the amount that would be
distributable to the Securityholders 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 such Sale and of any Proceeding in connection
therewith that are reimbursable to it, without being required to produce
the Notes in order to complete any such Sale or in order for the net sale
price to be credited against such Notes; and any property so acquired by
the Indenture Trustee shall be held and dealt with by it in accordance with
the provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the
Trust Estate in connection with a Sale thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the agent
and attorney in-fact of the 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
(v) no purchaser or transferee at any such 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 any other 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 request from the Indenture Trustee to do
so, the Issuer, in its capacity as owner of the Mortgage Loans, shall 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 Master
Servicer, as applicable, of each of their obligations to the Issuer under or in
connection with the Mortgage Loan Purchase and Servicing Agreement and the Sale
and Servicing Agreement, and to exercise any and all rights, remedies, powers
and privileges lawfully available to the Issuer under or in connection with the
Mortgage Loan Purchase and Servicing Agreement, and the Sale and Servicing
Agreement, to the extent and in the manner directed by the Indenture Trustee, as
pledgee of the Mortgage Loans, including the transmission of notices of default
on the part of the Seller or the Master Servicer thereunder and the institution
of Proceedings to compel or secure performance by the Seller or the Master
Servicer of each of their obligations under the Mortgage Loan Purchase and
Servicing Agreement and the Sale and Servicing Agreement.
(b) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee, as pledgee of the Mortgage Loans, at the direction (which
direction shall be in writing or by telephone confirmed in writing promptly
thereafter) of the Holders of Notes representing not less than 66 2/3% of the
aggregate Note Balance of the Notes, shall exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Seller or the Master
Servicer under or in connection with the Mortgage Loan Purchase and Servicing
Agreement or the Sale and Servicing Agreement, including the right or power to
take any action to compel or secure performance or observance by the Seller or
the Master Servicer, as the case may be, of each of their respective obligations
to the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Mortgage Loan Purchase and Servicing
Agreement or the Sale and 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 execute all
documents provided to it by the Indenture Trustee necessary to effect the
transfer of the Mortgage Loans to the Indenture Trustee.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default shall have occurred and be 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 under the circumstances in the conduct of such
Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee that conform to the
requirements of this Indenture; provided, that the Indenture Trustee shall
examine such certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) 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.
(h) For all purposes under this Indenture, the Indenture Trustee shall not
be deemed to have notice or knowledge of any Amortization Event or Event of
Default unless a Responsible Officer has actual knowledge thereof or unless
written notice of any event which is in fact an Amortization Event or an Event
of Default is received by the Indenture Trustee at the Corporate Trust Office,
and such notice references the Notes generally, the Issuer, or this Indenture.
(i) The Indenture Trustee shall comply with all applicable information
reporting requirements with respect to payments on the Notes under this
Indenture.
Section 6.02. RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may rely upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Indenture
Trustee need not investigate any fact or matter stated in such 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 any such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers or
perform any duties hereunder either directly or by or through agents, attorneys,
a custodian or a 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 that it believes to be authorized or within its
rights or powers, provided 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 Securities and may otherwise deal with the Issuer and
its Affiliates with the same rights that 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. Notwithstanding the foregoing, 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 (a) responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(b) accountable for the Issuer's use of the proceeds from the sale of the Notes
or (c) responsible for any statement of the Issuer in the Indenture, 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.
The Indenture Trustee shall mail to each Noteholder notice of any Event of
Default within 90 days promptly after such Event of Default occurs. Except in
the case of an Event of Default relating to the payment of principal of or
interest on any Note, the Indenture Trustee may withhold such notice to the
Noteholders only if and for so long as a committee of its Responsible Officers
in good faith determines that withholding such notice is in the interests of the
Noteholders.
Section 6.06. REPORTS BY INDENTURE TRUSTEE TO NOTEHOLDERS.
The Indenture Trustee shall deliver to each Noteholder such information in
the possession of the Indenture Trustee as may be required to enable such
Noteholder to prepare its federal and state income tax returns. In addition,
upon Issuer Request, the Indenture Trustee shall promptly furnish information in
the possession of the Indenture Trustee 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. COMPENSATION.
The Indenture Trustee shall be compensated and indemnified by the Master
Servicer in accordance with Section 6.06 of the Sale and Servicing Agreement,
including without limitation the payment to itself on each Payment Date of the
Indenture Trustee Fee then due, and all amounts owing to the Indenture Trustee
hereunder and not paid pursuant to Sections 3.17 and 6.06 of the Sale and
Servicing Agreement shall be paid solely as provided in Sections 3.05(a) and
5.04 (subject to the priorities set forth therein). Except as provided in the
following sentence, the permitted expenses reimbursable to the Indenture Trustee
pursuant to the first paragraph of Section 3.05(a) shall be limited to a total
of $150,000 per year. In the event that the Indenture Trustee becomes the
successor to the Master Servicer pursuant to Section 7.02 of the Sale and
Servicing Agreement, then the expenses of the Indenture Trustee payable in
connection with the transfer of servicing shall also constitute permitted
expenses reimbursable under the first paragraph of Section 3.05(a) and shall not
be subject to the $150,000 Indenture Trustee yearly expense cap contained in the
preceding sentence.
The Indenture Trustee's compensation shall not be limited by any law
relating to 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 the Indenture Trustee in addition to the compensation for
its services as provided in Section 3.05(a) (subject to the priorities set forth
therein). Such expenses shall include costs of collection and reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee's
agents, counsel, accountants and experts, and payment to the Owner Trustee of
its unpaid expenses and reimbursable amounts.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of an Event of Default specified in
paragraph (d) or (e) of the definition thereof with respect to the Issuer, such
expenses are intended to constitute expenses of administration under Title 11 of
the United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
Section 6.08. REPLACEMENT OF INDENTURE TRUSTEE.
No resignation or removal of the Indenture Trustee and no appointment of a
successor Indenture Trustee shall become effective until the acceptance of
appointment by the successor Indenture Trustee pursuant to this Section. The
Indenture Trustee may resign at any time by so notifying the Issuer. The Holders
of Notes representing not less than a majority of the aggregate Note Balance of
the Notes may remove the Indenture Trustee by so notifying the Indenture Trustee
and may appoint a successor Indenture Trustee. The Issuer shall remove the
Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(d) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of 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, which consent shall
not be unreasonably withheld. In addition, the Indenture Trustee shall 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 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 the 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 Notes representing not less than a
majority of the aggregate Note Balance 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 a court of competent jurisdiction for the removal of the Indenture
Trustee and the appointment of a successor Indenture Trustee.
Section 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER.
If the Indenture Trustee consolidates with, merges or converts into or
transfers all or substantially all its corporate trust business or assets to
another corporation or banking association, the resulting, surviving or
transferee without any further act shall be the successor Indenture Trustee
hereunder; provided, that such corporation or banking association shall be
otherwise qualified and eligible under Section 6.11. The Indenture Trustee shall
provide each Rating Agency with 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 Indenture Trustee, and deliver such Notes
so authenticated. In case at such time any of the Notes shall not have been
authenticated, any successor Indenture Trustee may authenticate such Notes
either in the name of any predecessor hereunder or in the name of the successor
Indenture Trustee; and in all such cases, such certificates shall have the full
force that it is anywhere in the Notes or in this Indenture provided that the
certificate of the Indenture Trustee shall have.
Section 6.10. APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE.
(a) Notwithstanding any other provision 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 such 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, 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.
(b) Each 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. Each instrument
appointing a separate trustee or co-trustee shall refer to this Indenture and to
the conditions of this Article. 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 provisions of
this Indenture, including each provision relating to the conduct of, affecting
the liability of or affording protection to the Indenture Trustee. Each such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11. ELIGIBILITY; DISQUALIFICATION.
(a) 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, 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.
(b) Within ninety (90) days after ascertaining the occurrence of an Event
of Default which shall not have been cured or waived, unless authorized by the
TIA or the Commission, the Indenture Trustee shall resign with respect to the
Senior Notes, the Class M Notes and/or the Class B Notes in accordance with
Section 6.08 of this Indenture, and the Issuer shall appoint a successor
Indenture Trustee for two or more of such Classes, as applicable, so that there
will be separate Indenture Trustees for the Senior Notes, the Class M Notes and
the Class B Notes. In the event the Indenture Trustee fails to comply with the
terms of the preceding sentence, the Indenture Trustee shall comply with clauses
(ii) and (iii) of TIA Section 310(b).
(c) In the case of the appointment hereunder of a successor Indenture
Trustee with respect to any Class of Notes pursuant to this Section 6.11,
Issuer, the retiring Indenture Trustee and the successor Indenture Trustee with
respect to such Class of Notes shall execute and deliver an indenture
supplemental hereto wherein each successor Indenture Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, the successor Indenture
Trustee all the rights, powers, trusts and duties of the retiring Indenture
Trustee with respect to the Notes of the Class to which the appointment of such
successor Indenture Trustee relates, (ii) if the retiring Indenture Trustee is
not retiring with respect to all Classes of Notes, shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Indenture Trustee with respect to the
Notes of each Class as to which the retiring Indenture Trustee is not retiring
shall continue to be vested in the Indenture Trustee and (iii) shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Indenture Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Indenture Trustees co-trustees of
the same trust and that each such Indenture Trustee shall be a trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Indenture Trustee; and upon the removal of the
retiring Indenture Trustee shall become effective to the extent provided herein.
Section 6.12. 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). Any Indenture Trustee that has
resigned or been removed shall be subject to TIA ss.311 (a) to the extent
indicated therein.
Section 6.13. REPRESENTATIONS AND WARRANTIES.
The Indenture Trustee hereby represents and warrants that:
(a) the Indenture Trustee is a national banking association duly organized,
validly existing and in good standing under the laws of the United States, with
full power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently conducted;
(b) 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 action;
(c) 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 charter or bylaws of the Indenture Trustee
or any agreement or other instrument to which the Indenture Trustee is a party
or by which it may be bound;
(d) there are no Proceedings or investigations pending or, to the Indenture
Trustee's knowledge, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Indenture Trustee or any of its properties: (i) asserting the
invalidity of this Indenture, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Indenture or (iii) 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; and
(e) the Indenture Trustee does not have notice of any adverse claim (as
such terms are used in UCC Section 8-302) with respect to the Mortgage Loans.
Section 6.14. DIRECTIONS TO INDENTURE TRUSTEE.
The Indenture Trustee is hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the Trust Estate in
trust for the benefit of the Noteholders;
(b) to authenticate and deliver the Notes substantially in the form of
Exhibits ▇-▇, ▇-▇, ▇-▇, and A-4 hereto 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 6.15. CONFLICTING INSTRUCTIONS.
If the Indenture Trustee receives conflicting instructions from the Senior
Noteholders and the Subordinate Noteholders, the instructions of the Senior
Noteholders shall control.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS.
The Issuer shall furnish or cause to be furnished to the Indenture Trustee
(i) 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
Noteholders as of such Record Date, and (ii) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list in similar form and of similar content as of
a date not more than 10 days prior to the time such list is furnished; provided,
that for so long as the Indenture Trustee is the Note Registrar, no such list
need 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 Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.01, and the names and addresses of the Noteholders 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 upon receipt of a new list so
furnished.
(b) Noteholders may communicate pursuant to TIA ss.312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes.
(c) 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) Within 15 days after each Payment Date, the Indenture Trustee shall
file with the Commission via the Electronic Data Gathering and Retrieval System
(▇▇▇▇▇), a Form 8-K with a copy of the statement to the Noteholders for such
Payment Date as an exhibit thereto. Prior to January 31, 2004 the Indenture
Trustee shall prepare a Form 15 Suspension Notification with respect to the
Trust Estate. Prior to March 31, 2004, the Indenture Trustee shall prepare and
file a Form 10-K to be executed by the Master Servicer on behalf of the Issuer,
in substance conforming to industry standards, with respect to the Trust Estate.
The Master Servicer shall execute the Form 10-K after reviewing a satisfactory
document and the Indenture Trustee shall file the Form 10-K. The Issuer hereby
grants to each of the Master Servicer and the Indenture Trustee a limited power
of attorney to file each such document on behalf of the Issuer. Such power of
attorney shall continue until either the earlier of (i) receipt by the Indenture
Trustee from the Issuer of written termination of such power of attorney and
(ii) the termination of the Issuer. The Issuer agrees to promptly furnish to the
Indenture Trustee, from time to time upon request, such further information,
reports, and financial statements within its control related to this Indenture
and the Mortgage Loans as the Indenture Trustee reasonably deems appropriate to
prepare and file all necessary reports with the Commission. The Indenture
Trustee shall have no responsibility to file any item other that those specified
in this section.
(b) The Issuer shall 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 paragraph and by rules and
regulations prescribed from time to time by the Commission.
(c) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.
(d) In order to comply with their obligations in clause (a) above, the
Indenture Trustee and the Master Servicer shall deliver the documents referred
to in Section 3.16 of the Sale and Servicing Agreement to each other within the
time periods specified therein.
Section 7.04. REPORTS BY INDENTURE TRUSTEE.
If required by TIA ss.313(a), within 60 days after each January 1,
commencing with January 1, 2004, the Indenture Trustee shall mail to each
Noteholder as required by TIA ss.313(c). The Indenture Trustee also shall comply
with TIA ss. 313(b).
A copy of each report at the time of its mailing to the Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Offered Notes are listed. The Issuer shall notify the
Indenture Trustee if and when the Offered 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. RESERVED.
Section 8.03. OFFICER'S CERTIFICATE.
The Indenture Trustee shall receive at least seven days prior written
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 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 satisfied.
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 Noteholders and the Indenture Trustee of all amounts required to
be distributed pursuant to Article III or Article V.
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 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 there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to this Indenture
have been paid, release the 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 only upon receipt of an Issuer Request.
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.
Without the consent of the Holders of any Notes, but with prior written
notice to each Rating Agency, 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:
(a) to correct or amplify the description of any property at any time
subject to the Lien of this Indenture, or better to assure, convey and confirm
unto the Indenture Trustee any property subject or required to be subjected to
the Lien of this Indenture, or to subject to the Lien of this Indenture
additional property;
(b) to 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;
(c) to add to the covenants of the Issuer for the benefit of the
Noteholders, or to surrender any right or power herein conferred upon the
Issuer;
(d) to convey, transfer, assign, mortgage or pledge any property to or with
the Indenture Trustee;
(e) to cure any ambiguity or mistake, 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;
(f) 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
Noteholders (as evidenced by an Opinion of Counsel addressed to the Indenture
Trustee);
(g) to evidence and provide for the acceptance of the appointment hereunder
by a successor trustee with respect to the Notes and to add to or change any of
the provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to the
requirements of Article VI; or
(h) 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 supplemental indentures shall be entered into
unless the Indenture Trustee shall have received (1) an Opinion of Counsel to
the effect that entering into such supplemental indenture will not (i) cause the
Issuer, or any portion thereof, to be characterized as an association (or a
publicly traded partnership) taxable as a corporation, a corporation or a
taxable mortgage pool for federal income tax purposes or (ii) have any material
adverse tax consequence to the Noteholders or (2) confirmation from the Rating
Agencies that such Supplemental Indenture will not result in a Rating Event.
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.
Section 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
The Issuer and the Indenture Trustee, when authorized by an Issuer Request,
may, with prior written notice to each Rating Agency and the Holders of Notes
representing not less than a majority of the aggregate Note Balance of (i) the
Class I-A Notes if any Class I-A Notes are the only Notes affected thereby, (ii)
the Group II Notes if any Group II Notes are the only Notes affected thereby,
(iii) the Class A-IO Notes if the Class A-IO Notes are the only Notes Affected
(iv) the Subordinate Notes if any Subordinate Notes are the only Notes affected
thereby and (v) all Notes, if the Class I-A Notes, the Group II Notes, the Class
A-IO Notes and the Subordinate Notes, are all affected thereby, by Act of such
Noteholders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provision to, or changing in any manner or eliminating any of the provisions of,
this Indenture or of modifying in any manner the rights of such Noteholders
under this Indenture; provided, that no such supplemental indenture may, without
the consent of the Holder of each Note affected thereby:
(a) change the date of payment of any installment of principal of or
interest on any Note, 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, 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;
(b) reduce the percentage of the Note Balances or Percentage Interest of
the Notes, the consent of the Holders of which is required for any such
supplemental indenture or for any waiver of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of the
term "Outstanding" or modify or alter the exception in the definition of the
term "Holder";
(d) reduce the percentage of the aggregate Note Balance or the Percentage
Interest with respect to which the consent of the Holders of Notes representing
such Note Balance is required to direct the Indenture Trustee to direct the
Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04;
(e) modify any provision of this Section except to increase any percentage
specified herein or to provide that certain additional provisions of this
Indenture or the other Basic Documents cannot be modified or waived without the
consent of the Holder of each Note affected thereby;
(f) modify any provision of this Indenture in such a 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
(g) permit the creation of any Lien ranking prior to or on a parity with
the Lien of this Indenture with respect to any part of the 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.
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 all Noteholders, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section 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, the Indenture Trustee shall
mail to the Noteholders to which such amendment or supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Notwithstanding the foregoing, any failure of the
Indenture Trustee to mail such notice or any defect therein shall not in any way
impair or affect the validity of any such supplemental indenture.
No supplemental indentures may be entered into under this Section 9.02
unless the Indenture Trustee shall have received an Opinion of Counsel to the
effect that such supplemental indenture will not (i) cause the Issuer, or any
portion thereof, to be characterized as an association (or a publicly traded
partnership) taxable as a corporation, a corporation or a taxable mortgage pool
for federal income tax purposes or (ii) have any material adverse tax
consequence to the Noteholders.
Section 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing or permitting the additional trusts created by any
supplemental indenture permitted by this Article 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
Noteholders shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all 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.
Each amendment of this Indenture and every supplemental indenture executed
pursuant to this Article shall conform to the requirements of the TIA as then in
effect for so long as this Indenture shall then be qualified under the TIA.
Section 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article 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 (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:
(i) 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;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) 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;
(iv) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with; and
(v) if the signer of such certificate or opinion is required to be
Independent, the statement required by the definition of the term
"Independent".
(b) Prior to the deposit of any Collateral or other property or securities
with the Indenture Trustee that is to be made as 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.
(c) 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 paragraph (b) 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 as 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 paragraph (b) above and this paragraph,
is 10% or more of the aggregate Note Balance, 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 aggregate Note Balance.
(d) 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.
(e) 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 paragraph (d) 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 paragraph (f) 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 paragraph (d) above and this
paragraph equals 10% or more of the aggregate Note Balance, 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 aggregate Note Balance.
(f) Notwithstanding any provision of this Indenture, the Issuer may,
without compliance with the requirements of the other provisions of this
Section, (i) collect, sell or otherwise dispose of the Mortgage Loans as and to
the extent permitted or required by the Basic Documents or (ii) make cash
payments out of the Trustee Collection 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 twelve months, commencing December 31, 2004, an
Officer's Certificate of the Issuer stating that all the dispositions of
Collateral described in clauses (i) or (ii) above that occurred during the
preceding twelve 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 Depositor or
the Issuer, stating that the information with respect to such factual matters is
in the possession of the Depositor 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 the
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 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, shall be conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any manner that the Indenture Trustee deems
sufficient.
(c) The Note Register shall prove ownership of Notes.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by any Noteholder 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.
Notices required to be given hereunder shall be given in the manner set
forth in Section 8.03 of the Sale and Servicing Agreement.
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'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 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, any Person entitled
to receive such notice may waive such notice in writing, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Noteholders shall be filed with the Indenture Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to each Rating Agency, 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. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with any other
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 ss.ss.310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded hereby) are a part of and govern this Indenture, whether or
not physically contained herein.
Section 10.07. EFFECT OF HEADINGS.
The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
Section 10.08. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture and the Notes of the Issuer
shall bind its successors and assigns, whether or not so expressed. All
agreements of the Indenture Trustee in this Indenture shall bind its successors,
co-trustees and agents.
Section 10.09. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Indenture shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Indenture, and
shall in no way affect the validity or enforceability of the other provisions of
this Indenture or of the Notes or the rights of the Noteholders.
Section 10.10. RESERVED.
Section 10.11. 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 10.12. GOVERNING LAW.
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT CONSIDERATION OF THE CHOICE OF LAW PRINCIPLES THEREOF, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.13. 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 10.14. 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 10.15. 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 respective
individual capacities) 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 Articles V, VI and VII of the Trust Agreement.
Section 10.16. NO PETITION.
The Indenture Trustee, by entering into this Indenture, and each
Noteholder, by its acceptance of 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 federal or state bankruptcy or similar law in connection
with any obligation relating to the Notes, this Indenture or any of the other
Basic Documents.
Section 10.17. INSPECTION.
The Issuer agrees that, on reasonable prior written notice, it will 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 applicable law (and all reasonable
applications for confidential treatment are unavailing), and except to the
extent 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.
▇▇▇▇▇ WHOLE LOAN HOME EQUITY
TRUST 2003-C,
as Issuer
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Financial Services
Officer
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION hereby 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: Assistant Vice President
STATE OF MINNESOTA )
) SS.:
COUNTY OF HENNEPIN )
On this 15 day of August, 2003, before me personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇,
to me known, who being by me duly sworn, did depose and say that he is the
Assistant Vice President of ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as
Indenture Trustee, one of the parties described in and that executed the above
instrument; that he knows the seal of said party; that the seal affixed to said
instrument is the seal of such party; that it was so affixed by order of said
party; and that he signed his name thereto by like order.
Sworn to and subscribed before me this 15th day of August, 2003, by
▇▇▇▇▇ ▇. ▇▇▇▇.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Notary Public
Name: Kaula ▇. ▇▇▇▇
My Commission Expires: 1/31/05
[Notarial Seal]
EXECUTION COPY
APPENDIX A
DEFINITIONS
"ACT" has the meaning assigned thereto in Section 10.03 of the Indenture.
"ADDITIONAL BALANCE" means, with respect to any HELOC, any Draw (other than
a Draw that constitutes an Excluded Amount) made thereunder after the Cut-Off
Date and prior to the end of the Managed Amortization Period.
"ADDITIONAL BALANCE DIFFERENTIAL" means, with respect to any Payment Date
during the Managed Amortization Period, the amount, if any, by which the sum of
the aggregate Principal Balance of all Additional Balances transferred to the
Trust and included in Loan Group II during the related Collection Period exceeds
the Principal Collections for Loan Group II during the related Collection
Period.
"ADMINISTRATION AGREEMENT" means the administration agreement dated as of
August 1, 2003, by and among the Issuer, the Indenture Trustee and the Master
Servicer.
"ADMINISTRATOR" means the administrator appointed and serving from time to
time pursuant to the Administration Agreement.
"AFFILIATE" means, 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" means, with respect to any
Payment Date and the Variable Funding Notes, the sum of the Additional Balance
Differentials that have been added to the Variable Funding Balance of the
Variable Funding Notes prior to such Payment Date.
"AMORTIZATION EVENT" means any one of the following events:
(a) the failure on the part of the Master Servicer, the Depositor or
the Issuer (i) to make any payment or deposit required to be made under the
Sale and Servicing Agreement or the Indenture within three (3) 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 Master Servicer or the Depositor set forth in the Sale
and Servicing Agreement or the Issuer set forth in the Indenture, which
failure continues unremedied for a period of ninety (90) days after written
notice thereof to the Master Servicer, the Depositor or the Issuer, as
applicable, and such failure materially and adversely affects the interests
of the holders of the Notes;
(b) any representation or warranty made by the Seller in the Mortgage
Loan Purchase and Servicing Agreement or the Master Servicer or the
Depositor in the Sale and Servicing Agreement or the Issuer in the
Indenture shall prove to have been incorrect in any material respect when
made and shall continue to be incorrect in any material respect for the
related cure period specified in the Mortgage Loan Purchase and Servicing
Agreement, the Sale and Servicing Agreement or the Indenture, as
applicable, after written notice and as a result of which the interests of
the holders of the Notes are materially and adversely affected; provided,
that an Amortization Event will not be deemed to occur if the Seller has
repurchased or caused to be repurchased or substituted for the related
Mortgage Loans during such period in accordance with the provisions of the
Mortgage Loan Purchase and Servicing Agreement;
(c) the entry against the Depositor or the Issuer of a decree or order
by a court or agency having jurisdiction in the premises for the
appointment of a trustee, receiver or liquidator in any insolvency,
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 ninety (90) consecutive days;
(d) the Depositor or the Issuer shall voluntarily go into liquidation,
consent to the appointment of a trustee, receiver, liquidator or similar
person in any insolvency, receivership, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the
Depositor or the Issuer of or relating to all or substantially all of its
property, or a decree or order of a court or agency having jurisdiction in
the premises for the appointment of a receiver, liquidator or similar
person in any insolvency, receivership, 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 Depositor
or the Issuer and such decree or order shall remain in force undischarged,
unbonded or unstayed for a period of ninety (90) days or the Depositor 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 Securities and
Exchange Commission as an investment company within the meaning of the
Investment Company Act of 1940, as amended;
(f) a Servicing Default occurs and is unremedied under the Sale and
Servicing Agreement and a qualified successor Master Servicer has not been
appointed; or
(g) the Issuer or any portion thereof is determined to be an
association (or a publicly traded partnership) taxable as a corporation for
federal income tax purposes.
In the case of any event described in (a), (b), or (f), an Amortization
Event will be deemed to have occurred only if, after any applicable grace period
described in such clauses, either the Indenture Trustee or the holders of the
Senior Notes evidencing not less than 51% of the aggregate Note Balance of the
Senior Notes, by written notice to the Depositor, the Master Servicer and the
Owner Trustee (and to the Indenture Trustee, if given by the holders of the
Senior Notes), declare that an Amortization Event has occurred as of the date of
such notice. In the case of any event described in clauses (c), (d), (e) or (g),
an Amortization Event will be deemed to have occurred without any notice or
other action on the part of the Indenture Trustee or the holders of the Senior
Notes immediately upon the occurrence of such event; provided, that any
Amortization Event may be waived and deemed of no effect with the written
consent of each Rating Agency, subject to the satisfaction of any conditions to
such waiver.
"APPRAISED VALUE" means, with respect to any Mortgaged Property, the
appraised value thereof, determined in the appraisal or property valuation used
in the origination of the related Mortgage Loan (which may have been obtained at
an earlier time).
"ASSIGNMENT OF MORTGAGE" means, with respect to any Mortgage Loan, 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 Loan, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction if permitted under applicable law.
"AUTHORIZED NEWSPAPER" means 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" means, with respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers delivered
by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter).
"BANKRUPTCY CODE" means the Bankruptcy Code of 1978, as amended.
"BASIC DOCUMENTS" means the Trust Agreement, the Indenture, the Mortgage
Loan Purchase and Servicing Agreement, the Sale and Servicing Agreement, the
Administration Agreement and any documents or certificates required by the terms
of any of the foregoing to be delivered in connection therewith.
"BENEFICIAL OWNER" means, with respect to any Offered Note, the Person that
is the beneficial owner of such Offered 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).
"BOOK-ENTRY NOTES" means beneficial interests in the Offered 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" means any day other than (a) a Saturday or a Sunday or (b) a
day on which banking institutions in the States of California, Minnesota,
Maryland, New York, Indiana or Delaware are required or authorized by law to be
closed.
"CAPPED FUNDING BALANCE" means, with respect to any date of determination
and Capped Funding Note, the outstanding principal balance of such Capped
Funding Note as of such date.
"CAPPED FUNDING NOTE" means any Capped Funding Note, substantially in the
form of Exhibit A-3 to the Indenture, issued in connection with an exchange
pursuant to Section 4.01(d) of the Indenture.
"CERTIFICATES" means the Home Equity Loan-Backed Certificates, Series
2003-C, in substantially the form set forth in Exhibit A to the Trust Agreement.
"CERTIFICATE OF TRUST" means the certificate of trust filed for the Trust
pursuant to Section 3810(a) of the Statutory Trust Statute.
"CERTIFICATE PAYING AGENT" means any paying agent or co-paying agent
appointed pursuant to the Trust Agreement, which initially shall be the
Indenture Trustee.
"CERTIFICATE REGISTER" means the register maintained by the Certificate
Registrar in which the Certificate Registrar shall provide for the registration
and transfers and exchanges of Certificates.
"CERTIFICATE REGISTRAR" means, initially, the Indenture Trustee, in its
capacity as Certificate Registrar.
"CERTIFICATEHOLDER" means 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 thereof 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 thereof
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.
"CIVIL RELIEF ACT" shall mean the Soldiers' and Sailors' Civil Relief Act
of 1940, as amended or any similar state law.
"CLASS" means with respect to any Note, all Notes that bear the same class
designation, (I.E., the Class I-A Notes as a group).
"CLASS A-IO NOTIONAL BALANCE" means the least of (i) $25,000,000 for the
September 2003 through August 2005 Payment Dates, and $19,500,000 for the
September 2005 through February 2006 Payment Dates, (ii) the aggregate Principal
Balance of all of the Mortgage Loans, and (iii) after the Payment Date in
February 2006, $0.
"CLASS A-IO NOTES" means the Class A-IO Home Equity Loan-Backed Notes,
Series 2003-C, in substantially the form set forth in Exhibit A-1 to the
Indenture.
"CLASS B NOTES" means the Class B-1 Notes and the Class B-2 Notes.
"CLASS B-1 NOTE BALANCE" means with respect to any Payment Date and the
Class B-1 Notes, the Initial Class B-1 Note Balance reduced by all payments of
principal on the Class B-1 Notes prior to such Payment Date.
"CLASS B-1 NOTES" means the Class B-1 Home Equity Loan-Backed Notes, Series
2003-C, in substantially the form set forth in Exhibit A-2 to the Indenture.
"CLASS B-1 OPTIMAL PRINCIPAL BALANCE" means, with respect to any Payment
Date prior to the Step-down Date, $0; and with respect to any other Payment
Date, the aggregate Principal Balance of the Mortgage Loans as of the preceding
Determination Date minus the sum of (a) the aggregate Note Balances of the
Senior Notes and the Class M Notes (after taking into account payments made on
such Payment Date in reduction of such Note Balances), (b) approximately 3.00%
of the aggregate Principal Balance of the Mortgage Loans as of the preceding
Determination Date, and (c) the Overcollateralization Target Amount for such
Payment Date; PROVIDED, HOWEVER, that the Class B-1 Optimal Principal Balance
will not be reduced below the Class B-1 Optimal Principal Balance on the prior
Payment Date unless the Loss and Delinquency Tests are satisfied.
"CLASS B-2 NOTE BALANCE" means with respect to any Payment Date and the
Class B-2 Notes, the Initial Class B-2 Note Balance reduced by all payments of
principal on the Class B-2 Notes prior to such Payment Date.
"CLASS B-2 NOTES" means the Class B-2 Home Equity Loan-Backed Notes, Series
2003-C, in substantially the form set forth in Exhibit A-2 to the Indenture.
"CLASS B-2 OPTIMAL PRINCIPAL BALANCE" means, with respect to any Payment
Date prior to the Step-down Date, $0; and with respect to any other Payment
Date, the aggregate Principal Balance of the Mortgage Loans as of the preceding
Determination Date minus the sum of (a) the aggregate Note Balances of the
Senior Notes, the Class M Notes and the Class B-1 Notes (after taking into
account any payments made on such Payment Date in reduction of such Note
Balances) and (b) the Overcollateralization Target Amount for such Payment Date;
PROVIDED, HOWEVER, that the Class B-2 Optimal Principal Balance will not be
reduced below the Class B-2 Optimal Principal Balance on the prior Payment Date
unless the Loss and Delinquency Tests are satisfied.
"CLASS M NOTES" means the Class M-1 Notes and the Class M-2 Notes.
"CLASS M-1 NOTE BALANCE" means with respect to any Payment Date and the
Class M-1 Notes, the Initial Class M-1 Note Balance reduced by all payments of
principal on the Class M-1 Notes prior to such Payment Date.
"CLASS M-1 NOTES" means the Class M-1 Home Equity Loan-Backed Notes, Series
2003-C, in substantially the form set forth in Exhibit A-2 to the Indenture.
"CLASS M-1 OPTIMAL PRINCIPAL BALANCE" means, with respect to any Payment
Date prior to the Step-down Date, $0; and with respect to any other Payment
Date, the aggregate Principal Balance of the Mortgage Loans as of the preceding
Determination Date minus the sum of (a) the aggregate Note Balances of the
Senior Notes (after taking into account payments made on such Payment Date in
reduction of such Note Balances), (b) approximately 27.50% of the aggregate
Principal Balance of the Mortgage Loans as of the preceding Determination Date,
and (c) the Overcollateralization Target Amount for such Payment Date; PROVIDED,
HOWEVER, that the Class M-1 Optimal Principal Balance will not be reduced below
the Class M-1 Optimal Principal Balance on the prior Payment Date unless the
Loss and Delinquency Tests are satisfied.
"CLASS M-2 NOTE BALANCE" means with respect to any Payment Date and the
Class M-2 Notes, the Initial Class M-2 Note Balance reduced by all payments of
principal on the Class M-2 Notes prior to such Payment Date.
"CLASS M-2 NOTES" means the Class M-2 Home Equity Loan-Backed Notes, Series
2003-C, in substantially the form set forth in Exhibit A-2 to the Indenture.
"CLASS M-2 OPTIMAL PRINCIPAL BALANCE" means, with respect to any Payment
Date prior to the Step-down Date, $0; and with respect to any other Payment
Date, the aggregate Principal Balance of the Mortgage Loans as of the preceding
Determination Date minus the sum of (a) the aggregate Note Balances of the
Senior Notes and the Class M-1 Notes (after taking into account payments made on
such Payment Date in reduction of such Note Balances), (b) approximately 14.00%
of the aggregate Principal Balance of the Mortgage Loans as of the preceding
Determination Date, and (c) the Overcollateralization Target Amount for such
Payment Date; PROVIDED, HOWEVER, that the Class M-2 Optimal Principal Balance
will not be reduced below the Class M-2 Optimal Principal Balance on the prior
Payment Date unless the Loss and Delinquency Tests are satisfied.
"CLASS X NOTES" means the Class X-1 Notes, Class X-2A Notes and Class X-2B
Notes.
"CLASS X-1 NOTES" means the Class X-1 Home Equity Loan-Backed Subordinate
Notes, Series 2003-C, in substantially the form set forth in Exhibit A-4 to the
Indenture.
"CLASS X-1 NOTE BALANCE" means with respect to any Payment Date and the
Class X-1 Notes, the Initial Class X-1 Note Balance reduced by all payments on
the Class X-1 Note prior to such Payment Date.
"CLASS X-2A NOTES" means the Class X-2A Home Equity Loan-Backed Subordinate
Notes, Series 2003-C, in substantially the form set forth in Exhibit A-4 to the
Indenture.
"CLASS X-2B NOTES" means the Class X-2B Home Equity Loan-Backed Subordinate
Notes, Series 2003-C, in substantially the form set forth in Exhibit A-4 to the
Indenture.
"CLASS I-A NOTE BALANCE" means with respect to any Payment Date and the
Class I-A Notes, the Initial Class I-A Note Balance reduced by all payments of
principal on the Class I-A Notes prior to such Payment Date.
"CLASS I-A NOTES" means the Class I-A Home Equity Loan-Backed Notes, Series
2003-C, in substantially the form set forth in Exhibit A-1 to the Indenture.
"CLASS II-A NOTE BALANCE" means with respect to any Payment Date and the
Class II-A Notes, the Initial Class II-A Note Balance reduced by all payments of
principal on the Class II-A Notes prior to such Payment Date.
"CLASS II-A NOTES" means the Class II-A Home Equity Loan-Backed Notes,
Series 2003-C, in substantially the form set forth in Exhibit A-1 to the
Indenture.
"CLOSING DATE" means August 15, 2003.
"CODE" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"COLLATERAL" has the meaning set forth in the Granting Clause of the
Indenture.
"COLLECTION ACCOUNT" has the meaning set forth in Section 5.01 of the Sale
and Servicing Agreement.
"COLLECTION PERIOD" means, with respect to any Mortgage Loan and Payment
Date, the calendar month preceding any such Payment Date, except in the case of
the initial Collection Period. The initial Collection Period will commence on
the Closing Date and end on August 31, 2003.
"COLLECTIONS" means, with respect to any Collection Period and Group, all
Interest Collections and Principal Collections for such Group during such
Collection Period.
"COMBINED LOAN-TO-VALUE RATIO" or "CLTV" means, with respect to each HELOC,
the ratio, expressed as a percentage, of the sum of (i) the credit limit of such
HELOC and (ii) any outstanding principal balance, at origination of such HELOC,
of all other mortgage loans, if any, secured by senior liens on the Mortgaged
Property, divided by the Appraised Value of the Mortgaged Property; and with
respect to each Mortgage Loan that is a HEL or HLTV, the ratio, expressed as a
percentage, of the sum of (i) the Principal Balance at origination of such HEL
or HLTV and (ii) any outstanding principal balance, at origination of such HEL
or HLTV, of all other mortgage loans, if any, secured by senior liens on the
Mortgaged Property, divided by the Appraised Value of the Mortgaged Property.
"COMMISSION" means the Securities and Exchange Commission.
"CORPORATE TRUST OFFICE" means, with respect to the Indenture Trustee, the
principal corporate trust office of the Indenture Trustee 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 ▇▇▇▇▇ Fargo
Center, MAC # 9311-161, Sixth and Marquette, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Services. The principal corporate trust office of the
Owner Trustee is the office at which at any particular time its corporate trust
business shall be administered, and is, at the date of the execution of the
Trust Agreement, located at ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Administration.
"CREDIT LIMIT" means, with respect to any HELOC, the maximum Principal
Balance permitted under the terms of the related Loan Agreement.
"CUSTODIAN" initially means the Indenture Trustee or any successor
custodian.
"CUT-OFF DATE" means the close of business on August 14, 2003.
"CUT-OFF DATE PRINCIPAL BALANCE" means, with respect to any Mortgage Loan,
the Principal Balance thereof as of the Cut-Off Date.
"DEFAULT" means any occurrence that is or with notice or the lapse of time
or both would constitute an Event of Default.
"DEFINITIVE NOTES" has the meaning set forth in Section 4.06 of the
Indenture.
"DELETED LOAN" means a Mortgage Loan replaced or to be replaced with an
Eligible Substitute Mortgage Loan.
"DEPOSITOR" means Bear ▇▇▇▇▇▇▇ Asset Backed Securities, Inc., a Delaware
corporation, and its successors.
"DEPOSITORY" or "DEPOSITORY AGENCY" means 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" means a Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.
"DETERMINATION DATE" means, 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 succeeding Business Day.
"DRAW" means, with respect to any HELOC, a borrowing by the Mortgagor under
the related Loan Agreement.
"DRAW PERIOD" means, with respect to any HELOC, the period after the date
of origination of such HELOC during which the related Mortgagor is permitted to
make Draws thereon pursuant to the terms of the related Loan Agreement.
"ELIGIBLE ACCOUNT" means (i) with respect to the Collection Account, either
(a) a trust account maintained with The Bank of the West or (b) an account or
accounts (which may be an account with The Bank of the West) that satisfy the
requirements of either (I), (II), (III) or (IV) below and (ii) with respect to
the Trustee Collection Account, either (a) a trust account or accounts
maintained at the corporate trust department of the Indenture Trustee or (b) one
or more accounts that satisfy the requirements of either (I), (II), (III) or
(IV), as follows:
(I) that are maintained with a depository institution or trust company
whose short-term unsecured debt obligations (or, in the case of a depository
institution or trust company that is the principal subsidiary of a bank holding
company, the debt obligations of such holding company) at the time of deposit
therein have been rated by each Rating Agency in its highest short-term rating
category (provided, that if there at any time shall be a downgrading, withdrawal
or suspension of the short-term unsecured debt obligations of such depository
institution or trust company, the Master Servicer shall, within ten Business
Days thereof, move such account to another depository institution or trust
company having such required ratings);
(II) that are maintained with a depository institution or trust company the
long-term unsecured debt obligations of which have been rated Baa3 or higher by
Moody's and AA- or higher by Standard & Poor's (provided, that if there at any
time shall be a downgrading, withdrawal or suspension of the long-term unsecured
debt obligations of such depository institution or trust company, the Master
Servicer shall, within ten Business Days thereof, move such account to another
depository institution or trust company having such required ratings), and the
deposits in which are fully insured by the Federal Deposit Insurance Corporation
acting through either the Bank Insurance Fund or the Savings Association
Insurance Fund;
(III) that are segregated trust accounts maintained with the corporate
trust department of a depository institution or a trust company, acting in its
fiduciary capacity; or
(IV) such other accounts that are acceptable to each Rating Agency, as
evidenced by a letter from each Rating Agency to the Indenture Trustee, without
reduction or withdrawal of the rating of the Senior Notes.
The depository institution or trust company with which the Eligible Account
is maintained shall be organized under the laws of the United States or any
state thereof, have a net worth in excess of $100,000,000 and deposits insured
to the full extent permitted by law by the Federal Deposit Insurance Corporation
and be subject to supervision and examination by federal or state banking
authorities. An Eligible Account may bear interest, and may include, if
otherwise permitted by this definition, an account maintained with the Indenture
Trustee.
"ELIGIBLE SUBSTITUTE MORTGAGE LOAN" means a Mortgage Loan assigned to the
same Group as the Deleted Loan and that, on the date of substitution, as
confirmed in an Officers' Certificate delivered to the Indenture Trustee, (a)
relates or relate to a detached one-family residence or to the same type of
residential dwelling as the Deleted Loan and in each case has or have the same
or a better lien priority as the Deleted Loan with a Mortgagor having the same
or better traditionally ranked credit status and is an owner-occupied Mortgaged
Property, (b) matures or mature no later than (and not more than one year
earlier than) the Deleted Loan, (c) has or have a Combined Loan-to-Value Ratio
or Combined Loan-to-Value Ratios at the time of such substitution no higher than
the Combined Loan-to-Value Ratio of the Deleted Loan, (d) has or have a
Principal Balance or Principal Balances (after application of all payments
received on or prior to the date of substitution) not substantially less and not
more than the Principal Balance of the Deleted Loan as of such date, and (e)
complies or comply as of the date of substitution with each representation and
warranty set forth in the Mortgage Loan Purchase and Servicing Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERRORS AND OMISSIONS POLICY" has the meaning set forth in Section 3.06(a)
of the Sale and Servicing Agreement.
"EVENT OF DEFAULT" means, with respect to the Indenture and the Notes, any
one of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) a default in the payment of any interest on a Class of Notes when
the same becomes due and payable, and such default shall continue for a
period of five (5) days;
(b) the amount of principal due on a Legal Final Payment Date has not
been paid in full;
(c) a default in the observance or performance in any material respect
of any covenant or agreement of the Trust made in the Indenture, or any
representation or warranty made by the Trust in the Indenture or in any
certificate delivered pursuant thereto or in connection therewith having
been incorrect as of the time made, and the continuation of any such
default or the failure to cure such breach of a representation or warranty
for a period of 30 days after notice thereof is given to the Trust by the
Indenture Trustee or to the Trust and the Indenture Trustee by the holders
of at least 25% of the aggregate Note Balance of the Notes then
Outstanding;
(d) 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
(e) 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;
PROVIDED, HOWEVER, that while any of the Senior Notes remain Outstanding, the
failure to pay interest due on the Subordinate Notes under clause (a) above will
not constitute an Event of Default, and while any of the Class M Notes remain
Outstanding, the failure to pay interest due on the Class B Notes under clause
(a) above will not be an Event of Default.
"EXCESS SPREAD" means, with respect to any Payment Date, amounts available
for distribution on that Payment Date after the making of all payments required
under clauses FIRST and SECOND of Section 3.05(a) of the Indenture.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"EXCLUDED AMOUNT" has the meaning set forth in Section 3.19 of the Sale and
Servicing Agreement. "EXPENSES" has the meaning set forth in Section 7.02 of the
Trust Agreement.
"FDIC" means The Federal Deposit Insurance Corporation, or any successor
thereto.
"FIDELITY BOND" has the meaning set forth in Section 3.06(a) of the Sale
and Servicing Agreement.
"GRANT" means 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" means, with respect to any HELOC, the percentage set forth
as the "Margin" for such HELOC on the Mortgage Loan Schedule.
"GROUP" means each of Group I and Group II.
"GROUP I" means those Mortgage Loans identified on the Mortgage Loan
Schedule as being assigned to Group I.
"GROUP II" means those Mortgage Loans identified on the Mortgage Loan
Schedule as being assigned to Group II.
"GROUP II NOTES" means the Class II-A Notes and the Variable Funding Notes.
"HEL" means each Mortgage Loan identified on the Mortgage Loan Schedule as
being a Home Equity Mortgage Loan, which Mortgage Loans shall consist of each
and every Mortgage Loan assigned to the Issuer that was originated as a closed
end, fixed rate home equity loan that is not a HLTV.
"HELOC" means each Mortgage Loans identified on the Mortgage Loan Schedule
as being a "Home Equity Line of Credit," which Mortgage Loans shall consist of
each and every Mortgage Loan assigned to the Issuer that was originated as an
adjustable-rate, home equity line of credit.
"HLTV" means those Mortgage Loans identified on the Mortgage Loan Schedule
as HLTV Mortgage Loans, which Mortgage Loans shall consist of each and every
Mortgage Loan assigned to the Issuer that was originated as a high loan-to-value
mortgage loan.
"HOLDER" means a Noteholder or a Certificateholder, as the context may
require.
"INDEMNIFICATION AGREEMENT" means that certain indemnification agreement,
dated as of August 1, 2003 among the Master Servicer, the Depositor and the
Underwriter.
"INDEMNIFIED PARTIES" has the meaning set forth in Section 7.02 of the
Trust Agreement or Section 3.17 of the Sale and Servicing Agreement, as
applicable.
"INDENTURE" means the indenture dated as of August 1, 2003, between the
Issuer and the Indenture Trustee.
"INDENTURE TRUSTEE" means ▇▇▇▇▇ Fargo 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" means, with respect to any Payment Date, the
product of (x) one-twelfth of the Indenture Trustee Fee Rate and (y) the
aggregate Note Balance of the Offered Notes and the Variable Funding Notes as of
such Payment Date, before taking into account the distribution of principal on
the Notes on such Payment Date.
"INDENTURE TRUSTEE FEE RATE" means 0.0075 (0.75 basis points) per annum.
"INDEPENDENT" means, when used with respect to any specified Person, that
such Person (a) is in fact independent of the Issuer, any other obligor on the
Notes, the Depositor, the Seller, the Master Servicer or any Affiliate of any of
the foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Depositor, the Seller, the Master Servicer or any Affiliate of any of the
foregoing Persons and (c) is not connected with the Issuer, any such other
obligor, the Depositor, the Seller, the Master Servicer or any Affiliate of any
of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
made by an Independent appraiser or other expert appointed by an Issuer Request
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" herein and that the signer is Independent within the meaning
thereof.
"INITIAL AGGREGATE PRINCIPAL BALANCE" means $191,265,756.
"INITIAL CLASS I-A NOTE BALANCE" means $39,801,000.
"INITIAL CLASS II-A NOTE BALANCE" means $108,511,000.
"INITIAL CLASS A-IO NOTIONAL BALANCE" means $25,000,000.
"INITIAL CLASS M-1 NOTE BALANCE" means $15,415,000.
"INITIAL CLASS M-2 NOTE BALANCE" means $12,926,000.
"INITIAL CLASS B-1 NOTE BALANCE" means $10,532,000.
"INITIAL CLASS B-2 NOTE BALANCE" means $2,872,000.
"INITIAL CLASS X-1 NOTE BALANCE" means $5,000,000.
"INITIAL CLASS X-2A NOTIONAL BALANCE" means $191,494,102.
"INITIAL CLASS X-2B NOTIONAL BALANCE" means $191,494,102.
"INITIAL NOTIONAL BALANCE" means, with respect to any Non-Offered
Subordinate Note or Certificate, the notional amount set forth on the face
thereof.
"INITIAL OFFERED NOTE BALANCE" means $190,057,000 and for any one Offered
Note, the applicable Initial Class Note Balance for such Offered Note.
"INITIAL VARIABLE BALANCE" means $0.
"INSURANCE PROCEEDS" means proceeds paid by any insurer pursuant to any
insurance policy covering a Mortgage Loan that are required to be remitted to
the Master Servicer, or amounts required to be paid by the Master Servicer
pursuant to the next to last sentence of Section 3.04 of the Sale and Servicing
Agreement, net of any component thereof (a) covering any expenses incurred by or
on behalf of the Master Servicer in connection with obtaining such proceeds, (b)
that is applied to the restoration or repair of the related Mortgaged Property,
(c) released to the Mortgagor in accordance with the Master Servicer's normal
servicing procedures or (d) required to be paid to any holder of a mortgage
senior to such Mortgage Loan.
"INTEREST ADJUSTMENT DATE" means, with respect to each HELOC, the date or
dates on which the Mortgage Interest Rate thereof is adjusted in accordance with
the related Loan Agreement.
"INTEREST CARRY-FORWARD AMOUNT" means, with respect to any Class of Notes
(other than the Class A-IO Notes) for any Payment Date on which the related Note
Rate has been determined pursuant to clause (ii) of footnotes (1), (2), (3), (4)
and (5) of the definition of "Note Rate", the excess of (a) the amount of
interest that would have accrued on such Class during the related Interest
Period had such amount been determined pursuant to the lesser of clause (i) or
(iii) of footnotes (1), (2), (3), (4) and (5) of the definition of "Note Rate"
over (b) the interest actually accrued on such Class of Notes during such
Interest Period.
"INTEREST COLLECTIONS" means, with respect to any Payment Date, the sum of
all payments by or on behalf of Mortgagors and any other amounts constituting
interest (including such portion of Insurance Proceeds, Liquidation Proceeds and
Repurchase Prices as is allocable to interest on the applicable Mortgage Loan as
are paid by the Master Servicer in respect of Mortgage Loans or is collected by
the Master Servicer under the Mortgage Loans, reduced by (i) the Servicing Fee
for the Mortgage Loans for the related Collection Period and (ii) by any late
fees, assumption fees, prepayment penalties, other administrative fees, release
fees, bad check charges and certain other servicing related fees paid by
Mortgagors with respect to Mortgage Loans during such Collection Period). The
terms of the related mortgage documents shall determine the portion of each
payment in respect of such Mortgage Loan that constitutes principal and
interest, respectively.
"INTEREST PERIOD" means, with respect to any Payment Date and each Class of
Notes other than the Class A-IO Notes (i) with respect to the first Payment
Date, the period commencing on the Closing Date and ending on the day preceding
the first Payment Date, and (ii) with respect to any Payment Date after the
first Payment Date, the period commencing on the Payment Date immediately
preceding the month in which such Payment Date occurs and ending on the day
preceding such Payment Date; and with respect to the Class A-IO Notes and any
Payment Date other than the initial Payment Date, the calendar month (such month
assumed to consist of 30 days in a year of 360 days) immediately preceding such
Payment Date. The Interest Period for the Class A-IO Notes and the initial
Payment Date will commence on August 14, 2003 and end on August 31, 2003.
"ISSUER" or "TRUST" means ▇▇▇▇▇ Whole Loan Home Equity Trust 2003-C, a
Delaware statutory trust, and its successors.
"ISSUER REQUEST" means 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.
"LEGAL FINAL PAYMENT DATE" means for each Class of Notes, the Payment Date
listed opposite the Class of Notes below.
LEGAL FINAL
CLASS PAYMENT DATE
I-A 4/25/2025
II-A 6/25/2028
A-IO 2/25/2006
M-1 6/25/2028
M-2 6/25/2028
B-1 6/25/2028
B-2 6/25/2028
Variable Funding Notes 6/25/2028
"LIBOR" means, 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 Depositor), 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" means any day other than (a) a Saturday or a Sunday or
(b) a day on which banking institutions in the city of London, England or New
York City are required or authorized by law to be closed.
"LIEN" means any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), claim, charge, preference, priority, right, interest or
other security agreement or preferential arrangement of any kind or nature
whatsoever, including 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,
that any assignment pursuant to Section 6.02 of the Sale and Servicing Agreement
shall not constitute a Lien.
"LIQUIDATED MORTGAGE LOAN" means a defaulted Mortgage Loan as to which the
Master Servicer has determined that all amounts that it expects to recover on
such Mortgage Loan have been recovered (exclusive of any possibility of a
deficiency judgment). All Mortgage Loans that are 180 days or more delinquent in
the payment of interest or principal shall be treated as Liquidated Mortgage
Loans for Trust reporting.
"LIQUIDATION EXPENSES" means out-of-pocket expenses (exclusive of overhead)
which are incurred by or on behalf of the Master Servicer in connection with the
liquidation of any Mortgage 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 Mortgage Loan and
amounts advanced to keep current or pay off a mortgage loan that is senior to
such Mortgage Loan) respecting the related Mortgage 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 AMOUNT" means, with respect to any Payment Date and any
Liquidated Mortgage Loan, the unrecovered Principal Balance thereof at the end
of the related Collection Period in which such Mortgage Loan became a Liquidated
Mortgage Loan, after giving effect to the Liquidation Proceeds in connection
therewith.
"LIQUIDATION LOSS DISTRIBUTION AMOUNT" means, with respect to any Payment
Date, an amount equal to any Liquidation Loss Amounts incurred on the Mortgage
Loans during the related Collection Period, plus any Liquidation Loss Amounts
incurred on the Mortgage Loans remaining undistributed from any previous Payment
Date. Any Liquidation Loss Amounts on the Mortgage Loans remaining undistributed
from any previous Payment Date will not be required to be paid as a Liquidation
Loss Distribution Amount to the extent that such Liquidation Loss Amounts (i)
were paid from collections on the Mortgage Loans, (ii) were reflected in a
reduction of the Overcollateralization Amount or (iii) in the case of the Senior
Notes, were reflected in a reduction in the Note Balances of the Subordinate
Notes.
"LIQUIDATION PROCEEDS" means the proceeds, including Insurance Proceeds, if
any, received in connection with the liquidation of any Mortgage Loan or any
related Mortgaged Property or any REO Loan, whether through trustee's sale,
foreclosure sale or otherwise, net of related Liquidation Expenses (but not
including the portion, if any, of such amount that exceeds the Principal Balance
of the related Mortgage Loan at the end of the Collection Period immediately
preceding the Collection Period in which such Mortgage Loan became a Liquidated
Mortgage Loan).
"LOAN AFFIDAVIT" means, with respect to any HEL as to which any related
original Mortgage Document has been permanently lost or destroyed and has not
been replaced, an affidavit from the Transferor certifying that the original of
such Mortgage Document has been lost, misplaced or destroyed (together with a
copy of such Mortgage Document).
"LOAN AGREEMENT" means, with respect to a HELOC, the loan agreement or
credit line agreement pursuant to which the related Mortgagor agrees to pay the
indebtedness evidenced thereby and secured by the related Mortgaged Property, as
modified or amended.
"LOAN GROUP" means either Group I or Group II, as the context requires.
"LOAN LEVEL DATA REPORT" means the Mortgage Loan information data report
prepared by the Master Servicer in an electronic format and in content
acceptable to the Indenture Trustee, and forwarded by the Master Servicer to the
Indenture Trustee in accordance with Section 4.01 of the Sale and Servicing
Agreement.
"LOSS AND DELINQUENCY TESTS" means the following tests that will be
satisfied with respect to a Payment Date upon
(a) satisfaction of a cumulative Liquidation Loss Amount test such that the
fraction (expressed as a percentage) of cumulative Liquidation Loss Amounts as
of the respective Payment Date divided by the initial aggregate Principal
Balance of the Mortgage Loans is less than or equal to the percentage set forth
below for the related Collection Period specified below:
CUMULATIVE
LIQUIDATION
COLLECTION LOSS A
PERIOD MOUNT PERCENTAGE
36 - 48 7.50%
49 - 60 10.00%
61 - 84 11.25%
85+ 11.75%; and
(b) satisfaction of a delinquency test such that the three-month rolling
average of the aggregate Principal Balance of the Mortgage Loans that are 60
days or more delinquent (including all Mortgage Loans that are in foreclosure
and Mortgage Loans that are REO Loans, but excluding Liquidated Mortgage Loans)
in the payment of principal or interest divided by the aggregate Principal
Balance of all of the Mortgage Loans, is less than 16.80% of the Senior
Enhancement Percentage.
"MANAGED AMORTIZATION PERIOD" means the period beginning on the Closing
Date and ending on the earlier of (a) August 25, 2008 and (b) the occurrence of
an Amortization Event.
"MASTER SERVICER" means ▇▇▇▇▇ Union Bank and Trust Company, and its
successors.
"MASTER SERVICER REMITTANCE DATE" means 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), but no later than 2:00
p.m. New York time on such day.
"MAXIMUM VARIABLE FUNDING BALANCE" means, with respect to any date, an
amount equal to 1.0% of the then current aggregate Principal Balance of the
Mortgage Loans.
"MERS" means the Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
"MERS(R) SYSTEM" means the system of recording transfers of mortgages
electronically maintained by MERS.
"MIN" means the Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R) System.
"MINIMUM MONTHLY PAYMENT" means, with respect to any Mortgage Loan and any
month, the minimum amount required to be paid by the related Mortgagor in such
month.
"MONTHLY PAYMENT" means the monthly payment made by a Mortgagor in respect
of a Mortgage Loan.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., and its successors.
"MORTGAGE" means the mortgage, deed of trust or other instrument creating a
first or more junior lien on an estate in fee simple interest in the real
property securing a Mortgage Loan.
"MORTGAGE DOCUMENTS" means (a) in the case of a HELOC, the related Mortgage
and Loan Agreement and (b) in the case of a HEL or a HLTV, the related Mortgage
and Mortgage Note.
"MORTGAGE FILE" means the file containing the Mortgage Documents and
Related Documents pertaining to a particular Mortgage Loan, and any additional
documents required to be added thereto pursuant to the Mortgage Loan Purchase
and Servicing Agreement, the Trust Agreement or the Sale and Servicing
Agreement.
"MORTGAGE INTEREST RATE" means, with respect to any Mortgage Loan and any
day, the per annum rate of interest applicable under the related Mortgage
Documents.
"MORTGAGE LOANS" means the Mortgage Loans transferred by the Depositor to
the Trust on the Closing Date, which Mortgage Loans are listed on the Mortgage
Loan Schedule on such date.
"MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT" means the Mortgage Loan
Purchase and Servicing Agreement, dated as of June 13, 2003, between ▇▇▇▇▇ Union
Bank and Trust Company and the Depositor, pursuant to which ▇▇▇▇▇ Union Bank and
Trust Company sold or will sell the Mortgage Loans to the Depositor.
"MORTGAGE LOAN SCHEDULE" means the schedule of Mortgage Loans set forth in
Exhibit B of the Sale and Servicing Agreement, which schedule sets forth as to
each Mortgage Loan (a) the Cut-Off Date Principal Balance, (b) the Credit Limit,
if applicable, (c) the original Principal Balance; (d) the Gross Margin, if
applicable, (e) the name of the related Mortgagor, (f) the loan number (g) the
Mortgage Interest Rate as of the Cut-Off Date, (h) the maturity date, (i)
whether the Lien of the related Mortgage is first or junior, (j) the property
type of the Mortgaged Property securing the related Mortgage Note; (k) the
original term to maturity; (l) the CLTV; and (m) whether such Mortgage Loan is a
HLTV, a HEL or a HELOC, as amended from time to time.
"MORTGAGE NOTE" means, with respect to a HEL or HLTV, the mortgage note
pursuant to which the related Mortgagor agrees to pay the indebtedness evidenced
thereby and secured by a Mortgage on the related Mortgaged Property, as modified
or amended.
"MORTGAGED PROPERTY" means the underlying property, including real property
and improvements thereon, securing a Mortgage Loan.
"MORTGAGOR" means the obligor or obligors under the related Mortgage
Documents.
"NET LOAN RATE" means, with respect to each Mortgage Loan, the related
Mortgage Interest Rate minus the Servicing Fee Rate.
"NET PRINCIPAL COLLECTIONS" means, with respect to any Payment Date, (a)
for Loan Group I, (1) during the Managed Amortization Period, the Principal
Collections for Loan Group I for the related Collection Period minus Principal
Collections for Loan Group I used by the Trust to acquire Additional Balances
during the related Collection Period (but not less than zero) and (2) after the
Managed Amortization Period, the Principal Collections for Loan Group I for the
related Collection Period and (b) for Loan Group II, the Principal Collections
for Loan Group II for the related Collection Period.
"NON-MERS LOAN" means a Mortgage Loan that is not registered on the MERS(R)
System.
"NON-OFFERED SUBORDINATE NOTES" means the Class X-1, Class X-2A and Class
X-2B Notes.
"NOTE" means an Offered Note or a Non-Offered Subordinate Note, as the
context may require.
"NOTE BALANCE" means the Offered Note Balance and/or the Variable Funding
Balance, as the context may require.
"NOTE RATE" means, with respect to the applicable Interest Period and the
Class of Notes, the applicable per annum Note Rate set forth below.
CLASS NOTE RATE
I-A Variable(1)
II-A Variable(2)
A-IO 7.75%
M-1 Variable(3)
M-2 Variable(4)
B-1 Variable(5)
B-2 Variable(5)
Variable Funding Note Variable(6)
(1) On any Payment Date, equal to the least of (i) LIBOR plus 0.48% per
annum (or, for any Payment Date on or after the Step-Up Date, LIBOR
plus 0.96% per annum), (ii) (a) the Weighted Average Net Loan Rate of
all of the Mortgage Loans, minus (b) a rate equal to, on or prior to
the Payment Date in February 2006, interest payable on the Class A-IO
Notes divided by the aggregate outstanding Principal Balance of the
Mortgage Loans, and (iii) 13.00% per annum.
(2) On any Payment Date, equal to the least of (i) LIBOR plus 0.52% per
annum (or, for any Payment Date on or after the Step-Up Date, LIBOR
plus 1.04% per annum), (ii) (a) the Weighted Average Net Loan Rate of
all of the Mortgage Loans, minus (b) a rate equal to, on or prior to
the Payment Date in February 2006, interest payable on the Class A-IO
Notes divided by the aggregate outstanding Principal Balance of the
Mortgage Loans, and (iii) 13.00% per annum.
(3) On any Payment Date, equal to the least of (i) LIBOR plus 1.00% per
annum (or, for any Payment Date on or after the Step-Up Date, LIBOR
plus 1.50% per annum), and (ii) (a) the Weighted Average Net Loan Rate
of all of the Mortgage Loans, minus (b) a rate equal to, on or prior
to the Payment Date in February 2006, interest payable on the Class
A-IO Notes divided by the aggregate outstanding Principal Balance of
the Mortgage Loans, and (iii) 13.00% per annum.
(4) On any Payment Date, equal to the least of (i) LIBOR plus 2.00% per
annum (or, for any Payment Date on or after the Step-Up Date, LIBOR
plus 3.00% per annum), and (ii) (a) the Weighted Average Net Loan Rate
of all of the Mortgage Loans, minus (b) a rate equal to, on or prior
to the Payment Date in February 2006, interest payable on the Class
A-IO Notes divided by the aggregate outstanding Principal Balance of
the Mortgage Loans, and (iii) 13.00% per annum.
(5) On any Payment Date, equal to the least of (i) LIBOR plus 4.00% per
annum (or, for any Payment Date on or after the Step-Up Date, LIBOR
plus 6.00% per annum), and (ii) (a) the Weighted Average Net Loan Rate
of all of the Mortgage Loans, minus (b) a rate equal to, on or prior
to the Payment Date in February 2006, interest payable on the Class
A-IO Notes divided by the aggregate outstanding Principal Balance of
the Mortgage Loans, and (iii) 13.00% per annum.
(6) On any Payment Date with respect to any outstanding Variable Funding
Notes with a Variable Funding Balance greater than $0, equal to the
least of (i) a per annum rate to LIBOR plus the VFN Spread, (ii) (a)
the Weighted Average Net Loan Rate of all of the Mortgage Loans, minus
(b) a rate equal to, on or prior to the Payment Date in February 2006,
interest payable on the Class A-IO Notes divided by the aggregate
outstanding Principal Balance of the Mortgage Loans, and (iii) 13.00%
per annum.
"NOTE REGISTER" means 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 pursuant to Section 4.02 of the Indenture.
"NOTE REGISTRAR" means the Indenture Trustee, in its capacity as Note
Registrar.
"NOTEHOLDER" means 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.
"OFFERED NOTE BALANCE" means as of any date of determination and with
respect to each class of Offered Notes (other than the Class A-IO Notes), the
principal balance of such class of Offered Notes on the Closing Date less any
amounts actually distributed as principal thereon on all prior Payment Dates.
"OFFERED NOTEHOLDER" means a Holder of an Offered Note.
"OFFERED NOTES" means the Senior Notes (other than the Variable Funding
Notes) and the Subordinate Notes.
"OFFICER'S CERTIFICATE" means, with respect to the Master Servicer, a
certificate signed by the President, Managing Director, a Director, a Vice
President or an Assistant Vice President, of the Master Servicer and delivered
to the Indenture Trustee; provided, that such certificate may be delivered by an
Affiliate of the Master Servicer on behalf of the Master Servicer. 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" means a written opinion of counsel. Any Opinion of
Counsel may be provided by in-house counsel if reasonably acceptable to the
Indenture Trustee or counsel for the Depositor, as the case may be.
"OUTSTANDING" means, with respect to any Notes, as of the date of
determination, all Notes theretofore executed, authenticated and delivered under
the Indenture except:
(a) Notes theretofore cancelled by the Note Registrar or delivered to the
Indenture Trustee for cancellation; and
(b) 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.
"OVERCOLLATERALIZATION AMOUNT" means, with respect to any Payment Date, the
excess, if any, of (x) the aggregate Principal Balance of all Mortgage Loans as
of the close of business on the last day of the related Collection Period, over
(y) the aggregate Note Balance of the Offered Notes and the Variable Funding
Balance, after taking into account the payment of the Principal Collection
Distribution Amount and Liquidation Loss Distribution Amount for such Payment
Date.
"OVERCOLLATERALIZATION FUNDING AMOUNT" means, with respect to any Payment
Date from the September 2003 Payment Date up to and including the August 2004
Payment Date, the maximum amount that may be applied towards the
Overcollateralization Increase Amount on such Payment Date as specified below
based on the following percentages of the annualized amounts available for
distribution on such Payment Date after the making of all payments required
under clauses FIRST through SEVENTH Section 3.05(a) of the Indenture, calculated
as a percentage of the then-current aggregate Principal Balance of the Mortgage
Loans.
PAYMENT DATE ANNUALIZED EXCESS
OCCURRING IN INTEREST PERCENTAGE
September 2003 5.75%
October 2003 5.75%
November 2003 5.75%
December 2003 5.50%
January 2004 5.50%
February 2004 4.00%
March 2004 4.00%
April 2004 3.75%
May 2004 3.50%
June 2004 3.50%
July 2004 3.25%
August 2004 3.25%
"OVERCOLLATERALIZATION INCREASE AMOUNT" means, with respect to any Payment
Date, the amount necessary to increase the Overcollateralization Amount to the
Overcollateralization Target Amount less any Overcollateralization Release
Amount.
"OVERCOLLATERALIZATION RELEASE AMOUNT" means, with respect to any Payment
Date, the excess, if any, of the Overcollateralization Amount over the
Overcollateralization Target Amount.
"OVERCOLLATERALIZATION TARGET AMOUNT" means as to any Payment Date prior to
the Step-down Date, an amount equal to 5.00% of the initial aggregate Principal
Balance of the Mortgage Loans. On or after the Step-down Date, the
Overcollateralization Target Amount for any Payment Date will be equal to the
lesser of (a) the Overcollateralization Target Amount as of the initial Payment
Date and (b) 10.00% of the current aggregate Principal Balance of the Mortgage
Loans (after applying payments received in the related Collection Period), but
not lower than approximately $968,848, which is 0.50% of the initial aggregate
Principal Balance of the Mortgage Loans; PROVIDED, HOWEVER, that the scheduled
reduction to the Overcollateralization Target Amount shall not be made as of any
Payment Date unless the Loss and Delinquency Tests are satisfied; and PROVIDED,
FURTHER, that the Overcollateralization Target Amount for any Payment Date may
be reduced with the prior written consent of the Rating Agencies.
"OWNER TRUSTEE" means Wilmington Trust Company, not in its individual
capacity but solely as trustee of the Trust, and its successors and assigns or
any successor thereto appointed pursuant to the terms of the Trust Agreement.
"PAYING AGENT" means any paying agent or co-paying agent appointed pursuant
to Section 3.03 of the Indenture, which initially shall be the Indenture
Trustee.
"PAYMENT DATE" means the 25th day of each month, or if such day is not a
Business Day, then the next succeeding Business Day, commencing in September
2003.
"PERCENTAGE INTEREST" means, with respect to any Note (other than a Class
A-IO Note and a Non-Offered Subordinate Note), the percentage obtained by
dividing the Note Balance thereof by the aggregate of the Note Balances of all
Notes of the same Class prior to such Payment Date. With respect to any Class
A-IO Note, any Non-Offered Subordinate Note or Certificate, the percentage set
forth on the face thereof.
"PERMITTED INVESTMENTS" means one or more of the following:
(a) 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;
(b) repurchase agreements on obligations specified in clause (a)
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 rated by each Rating Agency in
its highest available short-term rating; provided, however, that collateral
transferred pursuant to such repurchase obligation must be of the type
described in clause (a) above and must (i) be valued daily at current
market price plus accrued interest, (ii) pursuant to such valuation, be
equal, at all times, to 105% of the cash transferred by the Indenture
Trustee in exchange for such collateral and (iii) be delivered to the
Indenture Trustee or, if the Indenture Trustee is supplying the collateral,
an agent for the Indenture Trustee, in such a manner as to accomplish
perfection of a security interest in the collateral by possession of
certified securities;
(c) 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 subject to
supervision and examination by federal and/or state authorities; 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 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;
(d) 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 available; provided,
that such commercial paper shall have a remaining maturity of not more than
30 days;
(e) a money market fund or a qualified investment fund rated in one of
its two highest available long-term rating (such fund may be managed by, or
have an investment advisor that is, the Indenture Trustee or an Affiliate
thereof so long as such fund satisfies the criteria of this clause (e));
and of Standard & Poor's at the time of such investment and in the highest
available rating category by Moody's at the time of such investment, which
invests only in other Permitted Investments; and
(f) other obligations or securities that are acceptable to the Rating
Agencies as a Permitted Investment hereunder and will not cause a Rating
Event, as evidenced in writing; provided, that if the Master Servicer or
any other Person controlled by the Master Servicer is the issuer or the
obligor of any obligation or security described in this clause, 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 Mortgage Loans;
PROVIDED, HOWEVER, that no instrument shall be a Permitted Investment if it
represents, either (i) the right to receive only interest payments with respect
to the underlying debt instrument or (ii) 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.
"PERMITTED LIENS" shall mean liens for (a) real estate taxes and special
assessments not yet delinquent (provided, that property taxes may be delinquent
up to one year); (b) as to the Mortgage Loans identified as junior Mortgage
Loans as of the Cut-Off Date on the data tapes provided by the Master Servicer
to, among others, the Depositor, any senior mortgage loans secured by such
Mortgaged Property; (c) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording that
are acceptable to mortgage lending institutions generally; (d) liens prior to
the related first mortgage, if verified as paid, and liens and judgments of
$5,000 or less, including sewer or maintenance liens, mechanics' liens or UCC
filings that have been included in the first mortgage balance for the purpose of
calculating CLTV for any related Mortgage Loan; (e) Liens discovered after final
approval is given on a Mortgage Loan application that are less than 1.0% of the
Appraised Value or less than 10% of the original Principal Balance of the
Mortgage Loan, whichever is less; and (f) other matters to which like properties
are commonly subject that do not materially interfere with the benefits of the
security intended to be provided to, among others, the Noteholders by the
related Mortgage Documents.
"PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, business trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLAN ASSETS" has the meaning set forth in Section 3.04 of the Trust
Agreement.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 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.
"PRINCIPAL BALANCE" means, with respect to any Mortgage Loan (other than a
Liquidated Mortgage Loan) and as of any day, the related Cut-Off Date principal
balance, plus, in the case of a HELOC, any Additional Balances thereof conveyed
to the Trust, minus, in the case of all Mortgage Loans, all collections credited
as principal in respect of any such Mortgage Loan in accordance with the related
mortgage documents (except for any such collections allocable to any Excluded
Amount) and applied in reduction of the Principal Balance thereof. A Liquidated
Mortgage Loan will be deemed to have a Principal Balance equal to the Principal
Balance of the related Mortgage Loan immediately prior to the final recovery of
substantially all related Liquidation Proceeds, and a Principal Balance of $0
thereafter.
"PRINCIPAL COLLECTIONS" means, with respect to any Payment Date, the
aggregate of the following amounts:
(a) the total amount of payments made by or on behalf of the related
Mortgagors, received and applied as payments of principal on the Mortgage Loans
during the related Collection Period, as reported by the Master Servicer or the
Subservicer;
(b) any Liquidation Proceeds allocable as a recovery of principal received
in connection with the Mortgage Loans during the related Collection Period;
(c) if such Mortgage Loan (or Mortgage Loans) was repurchased by the Seller
pursuant to the Mortgage Loan Purchase and Servicing Agreement or the Depositor
pursuant to Section 2.08 of the Sale and Servicing Agreement during the related
Collection Period, 100% of the Principal Balance thereof as of the date of such
repurchase; and
(d) other amounts received as payments on or proceeds of the Mortgage Loans
during the related Collection Period, to the extent applied in reduction of the
Principal Balance thereof.
"PRINCIPAL COLLECTION DISTRIBUTION AMOUNT" means, with respect to any
Payment Date, the total Principal Collections for such Payment Date LESS (1) any
Overcollateralization Release Amount for such Payment Date, and (2) during the
Managed Amortization Period, Principal Collections used by the Trust to acquire
Additional Balances during the related Collection Period.
"PRINCIPAL PREPAYMENT" means, with respect to any Mortgage Loan, a payment
of principal by the related Mortgagor in advance of the scheduled due date of
such amount.
"PROCEEDING" means any suit in equity, action at law or other judicial or
administrative proceeding.
"PROSPECTUS" means the prospectus dated June 24, 2003 filed as a part of
the Registration Statement and pursuant to which (together with the Prospectus
Supplement) the Offered Notes were offered for sale.
"PROSPECTUS SUPPLEMENT" means the prospectus supplement dated August 12,
2003 filed as a part of Registration Statement and pursuant to which (together
with the Prospectus) the Offered Notes were offered for sale.
"RATING AGENCY" means any nationally recognized statistical rating
organization, or its successor, that rated the Offered Notes at the request of
the Depositor at the time of the initial issuance of the Securities. 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 Moody's; 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 Moody's; and in
the case of any other Rating Agency, such equivalent rating.
"RATING EVENT" means the qualification, reduction or withdrawal by a Rating
Agency of its then current rating of the Offered Notes which shall be the
current rating on the Senior Notes.
"RECORD DATE" means, with respect to any Payment Date, the Business Day
next preceding such Payment Date.
"REFERENCE BANK RATE" means, with respect to any Interest Period, as
follows: the arithmetic mean (rounded upwards, if necessary, to the nearest one
sixteenth of one 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; 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 Depositor 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. If no such quotations can be obtained, the Reference Bank Rate will
be the Reference Bank Rate applicable to the preceding Interest Period.
"REFERENCE BANKS" means three major banks that are engaged in transactions
in the London interbank market, selected by the Indenture Trustee after
consultation with the Master Servicer.
"REGISTRATION STATEMENT" means the registration statement on Form S-3 (No.
333-91334), including the Prospectus, relating to the Offered Notes, at the time
it became effective.
"REGISTERED HOLDER" means the Person in whose name a Note is registered in
the Note Register on the applicable Record Date.
"RELATED DOCUMENTS" means, with respect to each Mortgage Loan, the
documents specified in Exhibit 2 to the Mortgage Loan Purchase and Servicing
Agreement, and any documents required to be added to such documents pursuant to
the Mortgage Loan Purchase and Servicing Agreement, the Trust Agreement or the
Sale and Servicing Agreement.
"REO LOAN" means a Mortgage Loan where title to the related Mortgaged
Property has been acquired by the Trust in foreclosure or by deed in lieu of
foreclosure.
"REPORT TO NOTEHOLDERS" means the report prepared by the Indenture Trustee
in accordance with Section 4.01 of the Sale and Servicing Agreement.
"REPURCHASE EVENT" means, with respect to any Mortgage Loan, either (a) a
discovery that, as of the Closing Date, the related Mortgage Documents did not
constitute a valid Lien on the related Mortgaged Property subject only to
Permitted Liens or (b) with respect to any Mortgage Loan as to which the
Transferor delivers a Loan Affidavit, a subsequent default on such Mortgage Loan
if the enforcement thereof or of the related Mortgage Documents are materially
and adversely affected by the absence of such original Mortgage Document.
"REPURCHASE PRICE" with respect to any Mortgage Loan, an amount equal to
the Principal Balance of such Mortgage Loan as of the date of repurchase, plus
the greater of (a) all accrued and unpaid interest on such Principal Balance and
(b) 30 days' interest on such Principal Balance, computed at the Mortgage
Interest Rate.
"REQUEST FOR RELEASE" means the request for release, in the form of Exhibit
D to the Sale and Servicing Agreement.
"RESPONSIBLE OFFICER" means, with respect to the Indenture Trustee, any
officer of the Indenture Trustee with direct responsibility for the
administration of the Indenture 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.
"RULE 144A" means Rule 144A under the Securities Act.
"SALE" has the meaning set forth in Section 5.15 of the Indenture.
"SALE AND SERVICING AGREEMENT" means the sale and servicing agreement dated
as of August 1, 2003, among the Depositor, the Issuer, the Master Servicer, the
Seller and the Indenture Trustee.
"SECRETARY OF STATE" means the Secretary of State of the State of Delaware.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SECURITY" means a Certificate or a Note, as the context may require.
"SECURITYHOLDER" means any Noteholder or Certificateholder.
"SELLER" means ▇▇▇▇▇ Union Bank and Trust Company as seller under the
Mortgage Loan Purchase and Servicing Agreement.
"SELLER INFORMATION" means the information contained in the Prospectus
Supplement under the captions "SUMMARY - Mortgage Loan Groups," "RISK FACTORS -
Unpredictability of prepayments and its effect on yields" (solely with respect
to the first sentence thereof), "RISK FACTORS - Limited history," "RISK FACTORS
- Underwriting standards," "RISK FACTORS - Geographic concentration" (solely
with respect to statistical information therein), "RISK FACTORS - High combined
loan-to-value ratios" (solely with respect to the first sentence thereof), "RISK
FACTORS - Amount of borrower's equity" (solely with respect to the first
sentence thereof), "RISK FACTORS - Origination disclosure practices for mortgage
loans could create liabilities for your notes" (solely with respect to the first
sentence thereof), "DESCRIPTION OF THE MORTGAGE LOANS" and "THE ORIGINATOR AND
SUBSERVICER" or elsewhere in the Prospectus Supplement with respect to the
subjects discussed under such captions.
"SENIOR ENHANCEMENT PERCENTAGE" means, with respect to any Payment Date,
the percentage obtained by dividing:
(a) the excess of (i) the aggregate Principal Balance of Mortgage Loans as
of the first day of the related Collection Period over (ii) the aggregate Note
Balance of the Senior Notes immediately prior to such Payment Date, by
(b) the aggregate Principal Balance of the Mortgage Loans as of the first
day of the related Collection Period.
"SENIOR NOTE" means the Class I-A Notes, the Group II Notes and the Class
A-IO Notes.
"SENIOR OPTIMAL PRINCIPAL BALANCE" means, with respect to any Payment Date
prior to the Step-down Date or after the Step-down Date if the Loss and
Delinquency Tests have not been satisfied, $0; and with respect to any other
Payment Date, an amount equal to the aggregate Principal Balance of the Mortgage
Loans as of the preceding Determination Date minus the sum of (a) approximately
43.60% of the aggregate Principal Balance of the Mortgage Loans as of the
preceding Determination Date and (b) the Overcollateralization Target Amount for
such Payment Date.
"SERVICING DEFAULT" has the meaning set forth in Section 7.01 of the Sale
and Servicing Agreement.
"SERVICING FEE" means, with respect to any Collection Period and Mortgage
Loan, the product of (a) the Servicing Fee Rate multiplied by a fraction, the
numerator of which is the actual number of days in such Collection Period and
the denominator of which is 360 and (b) the Principal Balance of such Mortgage
Loan as of the first day of such Collection Period.
"SERVICING FEE RATE" means with respect to any Mortgage Loan, 1.00% per
annum.
"SERVICING OFFICER" means any officer of the Master Servicer involved in,
or responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Indenture Trustee by the Master Servicer, as such list may be amended from
time to time.
"STANDARD & POOR'S" means Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., and its successors.
"STATE" means any state of the United States of America, or the District of
Columbia.
"STATUTORY TRUST STATUTE" means Chapter 38 of Title 12 of the Delaware
Code, 12 DEL. C.ss.3801 et seq., as amended.
"STEP-DOWN DATE" means the later of:
(I) the Payment Date in August 2006;
(II) the first Payment Date as to which (i) the aggregate Note Balance of
the Senior Notes (after applying payments received in the related
Collection Period) will be reduced on such Payment Date (such
determination to be made by the Master Servicer prior to the Indenture
Trustee making actual distributions on such Payment Date) to an amount
equal to the excess, if any, of (a) the aggregate Principal Balance of
the Mortgage Loans as of the close of business on the last day of the
related Collection Period over (b) the greater of (x) approximately
10.00% of the aggregate Principal Balance of the Mortgage Loans as of
the close of business on the last day of the related Collection
Period, and (y) 5.00% of the initial aggregate Principal Balance of
the Mortgage Loans and (ii) the Loss and Delinquency Tests have been
satisfied.
"STEP-UP DATE" means the first Payment Date on which the aggregate
outstanding Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-Off Date.
"SUBORDINATE NOTES" means the Class M Notes and the Class B Notes.
"SUBSERVICER" means each Person that enters into a Subservicing Agreement
as a subservicer of Mortgage Loans and initially ▇▇▇▇▇ Home Equity Corporation.
"SUBSERVICING AGREEMENT" means the written contract between the Master
Servicer and a Subservicer that relates to the servicing and administration of
Mortgage Loans as provided in Section 3.02(a) of the Sale and Servicing
Agreement.
"SUBSTITUTION ADJUSTMENT AMOUNT" means, with respect to any Eligible
Substitute Mortgage Loan and Deleted Loan, the amount determined by the Master
Servicer, if any, by which the aggregate Principal Balance of all such Eligible
Substitute Mortgage 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 in the month of substitution).
"TAX MATTERS PERSON" has the meaning set forth in Section 5.03 of the Trust
Agreement.
"TELERATE SCREEN PAGE 3750" means the display page so designated on the
Moneyline Telerate service (or such other page as may replace page 3750 on such
service for the purpose of displaying London interbank offered rates of major
banks).
"TREASURY REGULATIONS" means 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" see "ISSUER."
"TRUST AGREEMENT" means the trust agreement dated as of August 1, 2003,
between the Owner Trustee and the Depositor.
"TRUST ESTATE" has the meaning set forth in the Granting Clause of the
Indenture.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939, as
amended, as in effect on any relevant date.
"TRUSTEE COLLECTION ACCOUNT" has the meaning set forth in Section 5.01 of
the Sale and Servicing Agreement.
"UCC" means the Uniform Commercial Code, as amended, as in effect in any
specified jurisdiction.
"UNDERWRITER" means Bear, ▇▇▇▇▇▇▇ & Co. Inc.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated August 12,
2003, between the Underwriter and the Depositor.
"VARIABLE FUNDING BALANCE" means, with respect to any Payment Date and the
Variable Funding Notes, the Aggregate Additional Balance Differential
immediately prior to such Payment Date reduced by all distributions of principal
on the Variable Funding Notes prior to such Payment Date.
"VARIABLE FUNDING NOTES" means the Home Equity Loan-Backed Variable Funding
Notes, Series 2003-C, including any Capped Funding Notes, in substantially the
form set forth in Exhibit A-3 to the Indenture.
"VFN SPREAD" means the fixed spread that may not significantly exceed
0.375%.
"WEIGHTED AVERAGE NET LOAN RATE" means for any Payment Date and Loan Group
or Loan Groups, the weighted average of the Net Loan Rates of the Mortgage Loans
in such Loan Group or Loan Groups, weighted by the respective Principal Balances
of such Mortgage Loans as of the beginning of the related Collection Period.
EXHIBIT A-1
FORM OF OFFERED SENIOR NOTES
Exhibit A-1a - Form of Class I-A Notes
Exhibit A-1b - Form of Class II-A Note
Exhibit A-1c - Form of Class A-IO Note
EXHIBIT A-1a
FORM OF CLASS I-A NOTE
EXHIBIT A-1b
FORM OF CLASS II-A NOTE
EXHIBIT A-1c
FORM OF CLASS A-IO NOTE
EXHIBIT A-2
FORM OF OFFERED SUBORDINATE NOTES
Exhibit A-2a - Form of Class M-1 Note
Exhibit A-2b - Form of Class M-2 Note
Exhibit A-2c - Form of Class B-1 Note
Exhibit A-2d - Form of Class B-2 Note
EXHIBIT A-2a
Form of Class M-1 Note
EXHIBIT A-2b
Form of Class M-2 Note
EXHIBIT A-2c
Form of Class B-1 Note
EXHIBIT A-2d
Form of Class B-2 Note
EXHIBIT A-3
FORM OF NON-OFFERED SENIOR NOTE
Exhibit A-3a - Form of Variable Funding Note
Exhibit A-3b - Form of Capped Funding Note
EXHIBIT A-3a
Form of Variable Funding Note
EXHIBIT A-3b
Form of Capped Funding Note
FORM OF CAPPED VARIABLE FUNDING NOTE
THIS CAPPED VARIABLE FUNDING NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND
IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE
INDENTURE REFERRED TO HEREIN.
THE PRINCIPAL OF THIS CAPPED VARIABLE FUNDING NOTE IS PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS CAPPED VARIABLE FUNDING NOTE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CAPPED VARIABLE FUNDING NOTE DOES NOT REPRESENT AN INTEREST IN OR
OBLIGATION OF THE SELLER, THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE
TRUSTEE, THE OWNER TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS
EXPRESSLY PROVIDED IN THE INDENTURE OR THE OTHER BASIC DOCUMENTS.
▇▇▇▇▇ WHOLE LOAN HOME EQUITY TRUST 2003-C
HOME EQUITY LOAN-BACKED CAPPED VARIABLE FUNDING NOTE,
SERIES 2003-C
No. VFN Capped -___
Note Rate: as set forth herein.
Initial Principal Balance: ___
▇▇▇▇▇ Whole Loan Home Equity Trust 2003-C, a statutory 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 ▇▇▇▇▇ Union Bank and
Trust Company or its registered assigns, the principal amount set forth on
Schedule A attached hereto (or otherwise owing hereunder as determined pursuant
to the Indenture), payable on each Payment Date in an amount equal to the pro
rata portion allocable hereto (based on the Variable Funding Balances of all
Variable Funding Notes immediately prior to such Payment Date) of the aggregate
amount, if any, payable in respect of principal of the Variable Funding Notes
pursuant to Section 3.05 of the indenture dated as of February 28, 2003 (the
"Indenture"), between the Issuer and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as indenture trustee (the "Indenture Trustee"); provided, however,
that the entire unpaid principal amount of this Capped Variable Funding Note
shall be due and payable on the [_______________] Payment Date to the extent not
previously paid on a prior Payment Date. Capitalized terms used herein that are
not otherwise defined shall have the meaning set forth in Appendix A to the
Indenture.
Interest on this Capped Variable Funding Note will be paid monthly on each
Payment Date at the Note Rate for the related Interest Period subject to
limitations that may result in Interest Carry-Forward Amounts (as further
described in the Indenture). Interest on this Capped Variable Funding 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 360-day year.
Principal of and interest on this Capped Variable Funding Note will be
payable on the related Payment Date as described in the Indenture. "Payment
Date" means the 25th day of each month or, if any such day is not a Business
Day, the immediately succeeding Business Day.
If an Event of Default shall have occurred and be continuing with respect
to the Notes, then the Indenture Trustee, acting at the direction of the Holders
of Notes representing not less than a majority of the aggregate Note Balance of
the Notes, 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
Variable Funding Notes shall be made pro rata to the Holders of Variable Funding
Notes entitled thereto.
Payments of interest on this Capped Variable Funding 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 Capped Variable Funding Note, shall be made
by check mailed to the Person whose name appears as the Registered Holder of
this Capped Variable Funding Note (or one or more Predecessor Notes) on the Note
Register as of the close of business on each Record Date. Any reduction in the
principal amount of this Capped Variable Funding 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 Capped Variable Funding Note and of any
Variable Funding 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 Capped Variable Funding 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 Capped Variable Funding
Note at the address specified in such notice of final payment.
Principal of and interest on this Capped Variable Funding Note will be
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 Capped Variable Funding Note will
generally be applied first to interest due and payable on this Capped Variable
Funding Note and then to the unpaid principal of this Capped Variable Funding
Note.
Reference is made to the further provisions of this Capped Variable Funding
Note set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Capped Variable Funding Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee by manual signature, this Capped Variable Funding Note shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supercede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.
REVERSE OF CAPPED VARIABLE FUNDING NOTE
This Capped Variable Funding Note is one of a duly authorized issue of
Variable Funding Notes of the Issuer, designated as its Home Equity Loan-Backed
Variable Funding Notes, Series 2003-C (the "Variable Funding 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 Variable Funding Notes. The Variable Funding Notes are subject to all terms
of the Indenture.
The Variable Funding Notes and the Offered Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Capped Variable Funding Note may be registered on
the Note Register upon surrender of this Capped Variable Funding Note for
registration of transfer at the Corporate Trust Office of the Indenture Trustee,
duly endorsed by, and 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 Variable Funding
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 Capped
Variable Funding 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 Capped Variable
Funding Note.
Each Holder of a Variable Funding Note, by its acceptance of a Variable
Funding 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 Master Servicer, the Depositor or the Indenture Trustee on the
Variable Funding 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 of a Variable Funding Note, by its acceptance of a Variable
Funding Note, covenants and agrees by accepting the benefits of the Indenture
that such Holder will not at any time institute against the Depositor, the
Seller, the Master Servicer or the Issuer, or join in any institution against
the Depositor, the Seller, the Master Servicer or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
federal or state bankruptcy or similar law in connection with any obligations
relating to the Capped Variable Funding Notes, the Indenture or the other Basic
Documents.
Each Beneficial Owner or Variable Funding Noteholder, by its acceptance of
a Variable Funding Note (or in the case of a Beneficial Owner of a Variable
Funding Note, a beneficial interest in such Variable Funding Note) represents
either (i) that it is not, and is not purchasing the Variable Funding Note with
assets of, an employee benefit plan subject to Section 406 of ERISA or a plan
subject to Section 4975 of the Code or a governmental plan or church plan that
is subject to applicable federal, state or local law similar to the foregoing
provisions of ERISA and/or the Code or (ii) that a class or individual exemption
under Section 406 of ERISA or Section 4975 of the Code is applicable to the
acquisition and holding of the Variable Funding Note by such Beneficial Owner or
Noteholder or the acquisition and holding of the Variable Funding Note by such
Beneficial Owner or Noteholder does not constitute or give rise to a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or other
applicable federal, state or local law, for which no statutory, regulatory or
administrative exemption is available.
The Issuer has entered into the Indenture and this Capped Variable Funding
Note is issued with the intention that, for federal, state and local income,
single business and franchise tax purposes, the Variable Funding Notes will
qualify as indebtedness of the Issuer. Each Holder of a Variable Funding Note,
by its acceptance of a Variable Funding Note, agrees to treat the Variable
Funding 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 Capped
Variable Funding Note, the Issuer, the Indenture Trustee and any agent of the
Issuer or the Indenture Trustee may treat the Person in the name of which this
Capped Variable Funding Note (as of the day of determination or as of such other
date as may be specified in the Indenture) is registered as the owner hereof for
all purposes, whether or not this Capped Variable Funding 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 Variable
Funding Notes under the Indenture at any time by the Issuer and the Indenture
Trustee with the consent of the Holders of Notes representing not less than a
majority of the aggregate Note Balance of the Notes affected thereby, and with
prior written notice to each Rating Agency. The Indenture also contains
provisions permitting the Holders of Notes representing specified aggregate Note
Balances, on behalf of all Noteholders, 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 Capped Variable Funding Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such Holder and upon all future Holders of this
Capped Variable Funding Note and of any Variable Funding 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 Capped Variable
Funding Note. The Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
the Noteholders but with prior written notice to each Rating Agency.
The term "Issuer" as used in this Capped Variable Funding Note includes any
successor to 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 Variable Funding Notes under the Indenture.
The Variable Funding Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Capped Variable Funding Note and the Indenture shall be construed in
accordance with the laws of the State of New York, 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 Capped Variable Funding 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 Capped Variable Funding 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 or ▇▇▇▇▇ Fargo
Bank Minnesota, National Association in their respective individual capacities,
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 Capped Variable Funding
Note or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Holder of this
Capped Variable Funding 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, such 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 Capped Variable Funding Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not in
its individual capacity, has caused this Capped Variable Funding Note to be duly
executed.
▇▇▇▇▇ WHOLE LOAN HOME EQUITY TRUST
2003-C
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
By:
-------------------------------
Authorized Signatory
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Capped Variable Funding Notes referred to in the
within-mentioned Indenture.
▇▇▇▇▇ WHOLE LOAN HOME EQUITY TRUST
2003-C
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Indenture Trustee
By:
-------------------------------
Authorized Signatory
Dated:
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: */
------------------------------- --------------------------------------
--------------------------------------*/
_________________
* 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.
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: */
------------------------------- --------------------------------------
--------------------------------------*/
_________________
* 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.
EXHIBIT A-4
FORM OF NON-OFFERED SUBORDINATE NOTE
Exhibit A-4a - Form of X-1 Note
Exhibit A-4b - Form of X-2A Note
Exhibit A-4c - Form of X-2B Note
EXHIBIT A-4a
Exhibit A-4a - Form of X-1 Note
EXHIBIT ▇-▇▇
▇▇▇▇▇▇▇ ▇-▇▇ - ▇▇▇▇ ▇▇ ▇-▇▇ Note
EXHIBIT A-4c
Exhibit A-4c - Form of X-2B Note
EXHIBIT B
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
_________________________________
_________________________________
_________________________________
_________________________________
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer
(the "Buyer").
(a) In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Securities were issued, the Seller hereby
certifies the following facts: Neither the Seller nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of' general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the ▇▇▇▇ ▇▇▇.
(b) The Buyer warrants and represents to, and covenants with, the Indenture
Trustee and the Issuer (as defined in the Indenture (the "Indenture"), dated as
of August 1, 2003, between ▇▇▇▇▇ Whole Loan Home Equity Trust 2003-C, as Issuer,
and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Indenture Trustee),
pursuant to Section 4.02 of the Indenture, as follows:
a. The Buyer understands that the Rule 144A Securities have not been
registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated institutional
investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information regarding the Rule
144A Securities that it has requested from the Seller, the Indenture
Trustee, the Owner Trustee or the Master Servicer.
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security
from, or otherwise approached or negotiated with respect to the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner,
or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the 1933 Act or that would render the
disposition of the Rule 144A Securities a violation of Section 5 of
the 1933 Act or require registration pursuant thereto, nor will it
act, nor has it authorized or will it authorize any person to act, in
such manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term is defined
in Rule 144A under the 1933 Act and has completed either of the forms
of certification to that effect attached hereto as Annex 1 or Annex 2.
The Buyer is aware that the sale to it is being made in reliance on
Rule 144A. The Buyer is acquiring the Rule 144A Securities for its own
account or the accounts of other qualified institutional buyers,
understands that such Rule 144A Securities may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given
that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under
the 1933 Act.
(c) This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as of
the date set forth below.
-------------------------------------- ----------------------------------------
Print Name of Seller Print Name of Buyer
By: By:
----------------------------------- -------------------------------------
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No: No:
---------------------------------- -------------------------------------
Date: Date:
-------------------------------- -----------------------------------
ANNEX 1 TO EXHIBIT B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
For Buyers Other Than Registered Investment Companies
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer
owned and/or invested on a discretionary basis $_________________* in
securities (except for the excluded securities referred to below) as of the
end of the Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Buyer satisfies the criteria in the
category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar statutory trust, partnership, or charitable organization described
in Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (i) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is supervised by
the State or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (ii) has an audited net worth
of at least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (i) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a state or federal
authority having supervision over any such institutions or is a foreign
savings and loan association or equivalent institution and (ii) has an
audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934, as amended.
___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring
of risks underwritten by insurance companies and which is subject to
supervision by the insurance commissioner or a similar official or agency
of a State or territory of the United States.
___ State or Local Plan. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality of
such State or its political subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as amended.
___ Investment Adviser. The Buyer is an investment adviser registered under
the Investment Advisers Act of 1940, as amended.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958, as amended.
___ Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers Act of
1940, as amended.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (i) plans established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit
of its employees, or (ii) employee benefit plans within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as amended,
but is not a trust fund that includes as participants individual retirement
accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part
of an unsold allotment to or subscription by the Buyer, if the Buyer is a
dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Buyer, the Buyer used the cost of
such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such
aggregate amount, the Buyer may have included securities owned by
subsidiaries of the Buyer, but only if such subsidiaries are consolidated
with the Buyer in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such
securities were not included if the Buyer is a majority-owned, consolidated
subsidiary of another enterprise and the Buyer is not itself a reporting
company under the Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands
that the seller to it and other parties related to the Rule 144A Securities
are relying and will continue to rely on the statements made herein because
one or more sales to the Buyer may be in reliance on Rule 144A.
Yes _____ No ______ Will the Buyer be purchasing the Rule 144A
Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that, in
connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on
Rule 144A, the Buyer will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of
Rule 144A. In addition, the Buyer agrees that the Buyer will not purchase
securities for a third party unless the Buyer has obtained a current
representation letter from such third party or taken other appropriate
steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set
forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification is
made of any changes in the information and conclusions herein. Until such
notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
----------------------------------------
Print Name of Buyer
By:
-------------------------------------
Name:
Title:
Date:
ANNEX 2 TO EXHIBIT B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers that are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("Rule 144A") because the Buyer is
part of a Family of Investment Companies (as defined below), is such an
officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is
an investment company registered under the Investment Company Act of 1940,
as amended, and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities
(other than the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year. For purposes of determining the amount of
securities owned by the Buyer or the Buyer's Family of Investment
Companies, the cost of such securities was used.
___ The Buyer owned $____________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $_____________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) bank deposit notes and certificates of
deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of the
parties to which this certification is made are relying and will continue
to rely on the statements made herein because one or more sales to the
Buyer will be in reliance on Rule 144A. In addition, the Buyer will only
purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which this certification
is made of any changes in the information and conclusions herein. Until
such notice, the Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification by the undersigned as of the date of
such purchase.
----------------------------------------
Print Name of Buyer
By:
-------------------------------------
Name:
Title:
Date:
IF AN ADVISER
----------------------------------------
Print Name of Buyer
By:
-------------------------------------
Name:
Title:
Date:
EXHIBIT C
FORM OF INVESTOR REPRESENTATION LETTER
_________, ____
Bear ▇▇▇▇▇▇▇ Asset Backed Securities, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank Minnesota, National Association
▇▇▇▇▇ Fargo Center
Sixth and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: HOME EQUITY LOAN-BACKED CAPPED FUNDING NOTES, SERIES 2003-C
Ladies and Gentlemen:
________________ (the "Purchaser") intends to purchase $_________ Home
Equity Loan-Backed Capped Funding Notes], Series 2003-C (the "Capped Funding
Notes"), issued pursuant to the indenture dated as of August 1, 2003 (the
"Indenture"), between ▇▇▇▇▇ Whole Loan Home Equity Trust 2003-C, as issuer (the
"Issuer"), and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as indenture
trustee (the "Indenture Trustee"). Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in Appendix A to the
Indenture. The Purchaser hereby certifies, represents and warrants to, and
covenants with, the Issuer and the Indenture Trustee that:
(a) The Purchaser understands that (i) the Capped Funding Notes have not
been and will not be registered or qualified under the Securities Act of 1933,
as amended (the "Act") or any state securities law, (ii) the Issuer is not
required to so register or qualify the Capped Funding Notes, (iii) the Capped
Funding Notes may be resold only if registered and qualified pursuant to the
provisions of the Act or any state securities law, or if an exemption from such
registration and qualification is available, (iv) the Indenture contains
restrictions regarding the transfer of the Capped Funding Notes and (v) the
Capped Funding Notes will bear a legend to the foregoing effect.
(b) The Purchaser is acquiring the Capped Funding Notes for its own account
for investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or any applicable
state securities laws.
(c) The Purchaser is (i) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the Capped
Funding Notes, such that it is capable of evaluating the merits and risks of
investment in the Capped Funding Notes, (ii) able to bear the economic risks of
such an investment and (iii) an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Act.
(d) The Purchaser has been furnished with, and has had an opportunity to
review (i) a copy of the Indenture and (ii) such other information concerning
the Capped Funding Notes, the Mortgage Loans and the Issuer as has been
requested by the Purchaser from the Issuer or the Seller and is relevant to the
Purchaser's decision to purchase the Capped Funding Notes. The Purchaser has had
any questions arising from such review answered by the Issuer or the Seller to
the satisfaction of the Purchaser.
(e) The Purchaser has not and will not nor has it authorized or will it
authorize any person to (i) offer, pledge, sell, dispose of or otherwise
transfer any Note, any interest in any Note or any other similar security to any
person in any manner, (ii) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Note, any interest in any Note or any other
similar security from any person in any manner, (iii) otherwise approach or
negotiate with respect to any Note, any interest in any Note or any other
similar security with any person in any manner, (iv) make any general
solicitation by means of general advertising or in any other manner or (v) take
any other action, that (as to any of (i) through (v) above) would constitute a
distribution of any Capped Funding Note under the Act, that would render the
disposition of any Capped Funding Note a violation of Section 5 of the Act or
any state securities law, or that would require registration or qualification
pursuant thereto. The Purchaser will not sell or otherwise transfer any of the
Capped Funding Notes, except in compliance with the provisions of the Indenture.
(f) The Purchaser is not a non-United States person.
Very truly yours,
By:
-------------------------------------
Name:
Title:
EXHIBIT D
FORM OF TRANSFEROR REPRESENTATION LETTER
_________, ____
Bear ▇▇▇▇▇▇▇ Asset Backed Securities, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank Minnesota, National Association
▇▇▇▇▇ Fargo Center
Sixth and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: HOME EQUITY LOAN-BACKED CAPPED FUNDING NOTES, SERIES 2003-C
Ladies and Gentlemen:
___________ (the "Purchaser") intends to purchase $________ Home Equity
Loan-Backed Capped Funding Notes, Series 2003-C (the "Notes"), issued pursuant
to an indenture dated as of August 1, 2003 (the "Indenture"), between ▇▇▇▇▇
Whole Loan Home Equity Trust 2003-C, as issuer (the "Issuer"), and ▇▇▇▇▇ Fargo
Bank Minnesota, National Association, as indenture trustee (the "Indenture
Trustee"). Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in Appendix A to the Indenture. The Seller
hereby certifies, represents and warrants to, and covenants with, the Issuer and
the Indenture Trustee that:
Neither the Seller nor anyone acting on its behalf has (i) offered,
pledged, sold, disposed of or otherwise transferred any Capped Funding Note, any
interest in any Capped Funding Note or any other similar security to any person
in any manner, (ii) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Capped Funding Note, any interest in any
Capped Funding Note or any other similar security from any person in any manner,
(iii) has otherwise approached or negotiated with respect to any Capped Funding
Note, any interest in any Capped Funding Note or any other similar security with
any person in any manner, (iv) has made any general solicitation by means of
general advertising or in any other manner, or (v) has taken any other action,
that (as to any of (i) through (v) above) would constitute a distribution Capped
Funding Notes under the Securities Act of 1933, as amended (the "Act"), that
would render the disposition of any Capped Funding Note a violation of Section 5
of the Act or any state securities law, or that would require registration or
qualification pursuant thereto. The Seller will not act in any manner set forth
in the foregoing sentence with respect to any Capped Funding Note. The Seller
has not and will not sell or otherwise transfer any of the Notes, except in
compliance with the provisions of the Indenture.
Very truly yours,
By:
-------------------------------------
Name:
Title:
EXHIBIT E
FORM OF REPRESENTATION LETTER
_________, ____
Bear ▇▇▇▇▇▇▇ Asset Backed Securities, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Wilmington Trust Company,
as Owner Trustee
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank Minnesota, National Association
▇▇▇▇▇ Fargo Center
Sixth and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Bear ▇▇▇▇▇▇▇ Asset Backed Securities Inc.
▇▇▇▇▇ Whole Loan Home Equity Trust 2003-C;
Non-Offered Subordinate Notes
Dear Sirs:
One or more Non-Offered Subordinate Notes (the "Transferee") intends to
acquire from ____________ (the "Seller"), issued pursuant to an indenture dated
as of August 1, 2003 (the "Indenture"), between ▇▇▇▇▇ Whole Loan Home Equity
Trust 2003-C, as Issuer (the "Issuer") and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as Indenture Trustee. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in Appendix A to the
Indenture.
The Transferee hereby certifies, represents and warrants to, and covenants
with, the Depositor, the Owner Trustee, the Administrator and the Indenture
Trustee that:
(a) the Transferee is acquiring the Non-Offered Subordinate Note for its
own behalf and is not acting as agent or custodian for any other person or
entity in connection with such acquisition;
(g) the Transferee is not a partnership, grantor trust or S corporation for
federal income tax purposes, or, if the Transferee is a partnership, grantor
trust or S corporation for federal income tax purposes, the Non-Offered
Subordinate Notes are not more than 50% of the assets of the partnership,
grantor trust or S corporation;
(h) the Transferee will not (x) incur indebtedness secured by Non-Offered
Subordinate Notes where payments on such indebtedness bear a relationship to
payments on either the Mortgage Loans in Group I or the Mortgage Loans as a
whole within the meaning of Treasury Regulations Section 301.7701(i)-1(f) or (y)
use a partnership, trust or other entity to indirectly achieve the result
described in clause (x); and
(i) the Transferee has been furnished with, and has had an opportunity to
review a copy of the Indenture. The Transferee agrees to be bound by the
Indenture.
Very truly yours,
By:
-------------------------------------
Name:
Title:
EXHIBIT F
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status (the "Certificate") is delivered
pursuant to Section 4.02 of the indenture dated as of August 1, 2003 (the
"Indenture"), between ▇▇▇▇▇ Whole Loan Home Equity Trust 2003-C, as Issuer (the
"Issuer") and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Indenture
Trustee, in connection with the acquisition of, transfer to or possession by the
undersigned, whether as beneficial owner (the "Beneficial Owner"), or nominee on
behalf of the Beneficial Owner of the Non-Offered Subordinate Note. Capitalized
terms used herein but not otherwise defined shall have the meanings ascribed
thereto in Appendix A to the Indenture.
Each holder must complete Part I, Part II (if the holder is a nominee), and
in all cases sign and otherwise complete Part III.
In addition, each holder shall submit with this Certificate an IRS Form W-9
relating to such holder.
To confirm to the Indenture Trustee, the Owner Trustee and the Issuer that
the provisions of Sections 871, 881 or 1446 of the Internal Revenue Code
(relating to withholding tax on foreign partners) do not apply in respect of the
Non-Offered Subordinate Note held by the undersigned, the undersigned hereby
certifies:
Part I - Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is) not a non-resident alien
for purposes of U.S. income taxation;
2. My (The Beneficial Owner's) name and home address are:
_____________________________
_____________________________; and
3. My (The Beneficial Owner's) U.S. taxpayer
identification number (Social Security Number) is ___________________.
B. Corporate, Partnership or Other Entity as Beneficial Owner
1. _________________ (Name of the Beneficial Owner) is not
a foreign corporation, foreign partnership, foreign trust or foreign estate (as
those terms are defined in the Code and Treasury Regulations;
2. The Beneficial Owner's office address and place of
incorporation (if applicable) is _____________; and
3. The Beneficial Owner's U.S. employer identification
number is ________________.
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner, the undersigned
certifies that this Certificate has been made in reliance upon information
contained in:
___ an IRS Form W-9
___ a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trust at least 30 days prior to the date that the form
relied upon becomes obsolete, and (ii) in connection with change in Beneficial
Owners, the undersigned agrees to submit a new Certificate to the Trust promptly
after such change.
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof, agrees to
notify the Trust within 60 days of the date that the Beneficial Owner becomes a
foreign person. The undersigned understands that this Certificate may be
disclosed to the Internal Revenue Service by the Trust and any false statement
contained therein could be punishable by fines, imprisonment or both.
Under penalties of perjury, I declare that I have examined this Certificate
and to the best of my knowledge and belief it is true, correct and complete and
will further declare that I will inform the Trust of any change in the
information provided above, and, if applicable, I further declare that I have
the authority* to sign this document.
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Name
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Title (if applicable)
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Signature and Date
*NOTE: If signed pursuant to a power of attorney, the power of attorney must
accompany this Certificate.