EXHIBIT 4.4
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INDENTURE
between
HOUSEHOLD MORTGAGE LOAN TRUST 200_-_
as Issuer
and
[ ],
as Indenture Trustee
Dated as of [ ]
HOUSEHOLD MORTGAGE LOAN TRUST 200_-_
[ ] Mortgage Loan Asset-Backed Notes,
Series 200_-_
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS......................................................................2
Section 1.1. Definitions..................................................................2
Section 1.2. Incorporation by Reference of Trust Indenture Act............................9
Section 1.3. Rules of Construction........................................................9
ARTICLE II THE NOTES.......................................................................10
Section 2.1. Form........................................................................10
Section 2.2. Execution, Authentication, Delivery and Dating..............................10
Section 2.3. Registration; Registration of Transfer and Exchange.........................11
Section 2.4. Mutilated, Destroyed, Lost or Stolen Notes..................................12
Section 2.5. Persons Deemed Owner........................................................13
Section 2.6. Payment of Principal and Interest; Defaulted Interest.......................13
Section 2.7. Cancellation................................................................13
Section 2.8. [Reserved]..................................................................14
Section 2.9. Release of Trust Estate.....................................................14
Section 2.10. Book-Entry Notes............................................................14
Section 2.11. Notices to Clearing Agency..................................................15
Section 2.12. Definitive Notes............................................................15
Section 2.13. Tax Treatment...............................................................15
ARTICLE III COVENANTS.......................................................................16
Section 3.1. Payment of Principal and Interest...........................................16
Section 3.2. Maintenance of Office or Agency.............................................16
Section 3.3. Money for Payments To Be Held in Trust......................................16
Section 3.4. Existence...................................................................17
Section 3.5. Protection of Trust Estate..................................................18
Section 3.6. Annual Opinions as to the Trust Estate......................................18
Section 3.7. Performance of Obligations; Servicing of Mortgage Loans.....................19
Section 3.8. Negative Covenants..........................................................20
Section 3.9. Annual Statement as to Compliance...........................................21
Section 3.10. Covenants of the Issuer.....................................................21
Section 3.11. Master Servicer's Obligations...............................................22
Section 3.12. Restricted Payments.........................................................22
Section 3.13. Treatment of Notes as Debt for All Purposes.................................22
Section 3.14. Notice of Events of Default.................................................22
Section 3.15. Further Instruments and Acts................................................22
Section 3.16. Issuer May Consolidate, etc.................................................22
Section 3.17. Successor or Transferee.....................................................24
Section 3.18. No Other Business...........................................................24
Section 3.19. No Borrowing................................................................24
Section 3.20. Guarantees, Loans, Advances and Other Liabilities...........................25
Section 3.21. Capital Expenditures........................................................25
Section 3.22. Representations and Warranties of the Issuer................................25
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ARTICLE IV SATISFACTION AND DISCHARGE......................................................26
Section 4.1. Satisfaction and Discharge of
Indenture.....................................26
Section 4.2. Application of Trust Money..................................................27
Section 4.3. Subrogation and Cooperation.................................................27
Section 4.4. Repayment of Moneys Held by Paying Agent....................................28
ARTICLE V REMEDIES........................................................................28
Section 5.1. Events of Default...........................................................28
Section 5.2. Acceleration of Maturity; Rescission and Annulment..........................29
Section 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee...30
Section 5.4. Remedies; Priorities........................................................32
Section 5.5. Optional Preservation of the Trust Estate...................................34
Section 5.6. Limitation of Suits.........................................................34
Section 5.7. Unconditional Rights of Noteholders To Receive Principal and Interest.......35
Section 5.8. Restoration of Rights and Remedies..........................................35
Section 5.9. Rights and Remedies Cumulative..............................................35
Section 5.10. Delay or Omission Not a Waiver..............................................35
Section 5.11. Control by Noteholders......................................................35
Section 5.12. Waiver of Past Defaults.....................................................36
Section 5.13. Undertaking for Costs.......................................................36
Section 5.14. Waiver of Stay or Extension Laws............................................37
Section 5.15. Action on Notes.............................................................37
Section 5.16. Performance and Enforcement of Certain Obligations..........................37
ARTICLE VI THE
INDENTURE TRUSTEE...........................................................38
Section 6.1. Duties of
Indenture Trustee.................................................38
Section 6.2. Rights of
Indenture Trustee.................................................39
Section 6.3. Individual Rights of
Indenture Trustee......................................41
Section 6.4.
Indenture Trustee's Disclaimer..............................................41
Section 6.5. Notice of Defaults..........................................................41
Section 6.6. Reports by Indenture Trustee to Holders.....................................41
Section 6.7. Compensation and Indemnity..................................................41
Section 6.8. Replacement of Indenture Trustee............................................42
Section 6.9. Successor Indenture Trustee by Merger.......................................43
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee...........43
Section 6.11. Eligibility; Disqualification...............................................45
Section 6.12. Preferential Collection of Claims Against Issuer............................45
Section 6.13. Representations and Warranties..............................................45
Section 6.14. Directions to Indenture Trustee.............................................45
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS..................................................46
Section 7.1. Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders......46
Section 7.2. Preservation of Information; Communications to Noteholders..................46
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Section 7.3. Reports by Issuer...........................................................46
Section 7.4. Reports by Indenture Trustee................................................47
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES............................................47
Section 8.1. Collection of Money.........................................................47
Section 8.2. Accounts; Distributions.....................................................47
Section 8.3. [Reserved]..................................................................48
Section 8.4. Master Servicer's Monthly Statements........................................48
Section 8.5. [Reserved]..................................................................48
Section 8.6. Opinion of Counsel..........................................................48
ARTICLE IX SUPPLEMENTAL INDENTURES.........................................................48
Section 9.1. Supplemental Indentures Without Consent of Noteholders......................48
Section 9.2. Supplemental Indentures with Consent of Noteholders.........................50
Section 9.3. Execution of Supplemental Indentures........................................51
Section 9.4. Effect of Supplemental Indenture............................................51
Section 9.5. Conformity with Trust Indenture Act.........................................51
Section 9.6. Reference in Notes to Supplemental Indentures...............................51
ARTICLE X REDEMPTION OF NOTES.............................................................52
Section 10.1. Redemption..................................................................52
ARTICLE XI MISCELLANEOUS...................................................................52
Section 11.1. Compliance Certificates and Opinions, etc...................................52
Section 11.2. Form of Documents Delivered to Indenture Trustee............................54
Section 11.3. Acts of Noteholders.........................................................54
Section 11.4. Notices.....................................................................55
Section 11.5. Notices to Noteholders; Waiver..............................................56
Section 11.6. Rights of the Insurer to Exercise Rights of Noteholders.....................56
Section 11.7. Conflict with Trust Indenture Act...........................................56
Section 11.8. Effect of Headings and Table of Contents....................................57
Section 11.9. Successors and Assigns......................................................57
Section 11.10. Separability................................................................57
Section 11.11. Benefits of Indenture.......................................................57
Section 11.12. Legal Holidays..............................................................57
Section 11.13. GOVERNING LAW...............................................................57
Section 11.14. Counterparts................................................................57
Section 11.15. Recording of Indenture......................................................57
Section 11.16. Trust Obligation............................................................57
Section 11.17. No Petition.................................................................58
Section 11.18. Inspection..................................................................58
Section 11.19. Inconsistencies With the Sale and Servicing Agreement.......................58
Section 11.20. Third-Party Beneficiaries...................................................58
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EXHIBITS
SCHEDULE A - Mortgage Loan Schedule
EXHIBIT A - Form of Notes
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INDENTURE dated as of [ ] between HOUSEHOLD MORTGAGE LOAN TRUST
200_-_, a Delaware business trust (the "Issuer"), and [ ], a
[ ] banking corporation, as trustee and not in its individual capacity
(the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the holders of the Issuer's [ ] Mortgage Loan
Asset-Backed Notes (the "Notes") and the Insurer:
GRANTING CLAUSE
Subject to the terms of this Indenture, the Issuer hereby Grants to the
Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of
the Class A Noteholders and the Insurer, all of the Issuer's right, title and
interest in and to: (i) the Trust Estate; (ii) all right, title and interest of
the Issuer in the Sale and Servicing Agreement and the Mortgage Loan Purchase
Agreement with respect to the Mortgage Loans (including the Issuer's right to
cause the Depositor or the Master Servicer to repurchase Mortgage Loans from the
Issuer under certain circumstances described therein); (iii) all present and
future claims, demands, causes of action and choses in action in respect of any
or all of the foregoing and all payments on or under and all proceeds of every
kind and nature whatsoever in respect of any or all of the foregoing, including
all proceeds of the conversion thereof, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing; (iv) all funds on deposit from time to time in the Collection
Account; (v) all other property of the Trust from time to time; and (vi) any and
all proceeds of the foregoing (collectively the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Class A Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The foregoing Grant shall inure to the benefit of the Insurer in respect of
draws made on the Insurance Policy and amounts owing from time to time pursuant
to the Insurance and Reimbursement Agreement, and such Grant shall continue in
full force and effect for the benefit of the Insurer until all such amounts
owing to it have been repaid in full.
The Indenture Trustee, as Indenture Trustee on behalf of the holders of the
Notes, acknowledges the foregoing Grant, accepts the trusts hereunder in good
faith and without notice of any adverse claim or liens and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the holders of the Notes and the Insurer may be adequately and
effectively protected. The Indenture Trustee further agrees and acknowledges
that each item of Collateral that is physically delivered to the Indenture
Trustee will be held by the Indenture Trustee in [state].
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS.
(a) For all purposes of this Indenture, except as otherwise expressly
provided herein or unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in the
Sale and Servicing Agreement. All other capitalized terms used herein shall have
the meanings specified herein.
"ACT" has the meaning specified in Section 11.3(a).
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as of
[ ], among the Administrator, the Issuer, the Indenture Trustee and [ ].
"ADMINISTRATOR" means [ ], [a state] banking corporation, or any
successor Administrator under the Administration Agreement.
"AFFILIATE" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AUTHORIZED OFFICER" means, with respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers delivered
by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter) and, so long as
the Administration Agreement is in effect, any Vice President or more senior
officer of the Administrator or [ ] who is authorized to act for the
Administrator or [ ] in matters relating to the Issuer and to be acted upon
by the Administrator or [ ] pursuant to the Administration Agreement and who
is identified on the list of Authorized Officers delivered by the Administrator
to the Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"BOOK-ENTRY NOTES" means any Class A Note registered in the name of the
Depository or its nominee, ownership of which is reflected on the books of the
Depository or on the books of a Person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"BUSINESS DAY" has the meaning assigned thereto in the Sale and Servicing
Agreement.
"CERTIFICATE OF TRUST" means the certificate of trust of the Issuer
substantially in the form of Exhibit C to the Trust Agreement.
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"CLASS A NOTE RATE" with respect to the Class A Notes shall have the
meaning assigned thereto in the Sale and Servicing Agreement.
"CLASS A NOTES" means any Note, designated as a Class A Note, executed by
the Issuer and authenticated by the Indenture Trustee substantially in the form
of Exhibit A hereto.
"CLEARING AGENCY" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"CLOSING DATE" means [ ].
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Granting Clause of this
Indenture.
"COMMISSION" shall mean the Securities and Exchange Commission.
"CORPORATE TRUST OFFICE" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Agreement is located at
[ ], Attention: Indenture Trust Administration, or at such other
address as the Indenture Trustee may designate from time to time by notice to
the Noteholders, the Issuer and the Insurer or the principal corporate trust
office of any successor Indenture Trustee at the address designated by such
successor Indenture Trustee by notice to the Noteholders, the Insurer, and the
Issuer.
"DEFAULT" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"DEFINITIVE NOTES" has the meaning specified in Article II.
"DEPOSITOR" shall mean Household Mortgage Funding Corporation III, a
Delaware corporation, in its capacity as depositor under the Sale and Servicing
Agreement, and its successor in interest.
"DEPOSITORY INSTITUTION" means any depository institution or trust company,
including the Indenture Trustee, that (i) has short-term debt obligations and
long-term debt obligations at the time of any deposit therein and throughout the
time the interest is maintained that are rated at least ["P-1"] and ["A2,"]
respectively, by Moody's and ["A-1"] and ["A,"] respectively, by Standard &
Poor's, and that the deposits in such account are fully insured to the maximum
extent provided by either the BIF or the SAIF and which is any of (a) a federal
savings and loan association duly organized, validly existing and in good
standing under the applicable banking laws of any state, (b) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (c) a national banking association duly organized,
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validly existing and in good standing under the federal banking laws or (d) a
principal subsidiary of a bank holding company, and in each case of (a)-(d),
approved in writing by the Insurer. Such Depository Institution shall have (x) a
segregated trust account maintained with the corporate trust department of a
federal or state chartered depository or trust company, having capital and
surplus of not less than [$50,000,000,] acting in its fiduciary capacity or (y)
an account otherwise acceptable to each Rating Agency and the Insurer as
evidenced by a letter from each Rating Agency and the Insurer to the Owner
Trustee and the Indenture Trustee, without reduction or withdrawal of the then
current ratings of the Class A Notes, without regard to the Insurance Policy.
"DISTRIBUTION ACCOUNT" means the Distribution Account (as defined in the
Sale and Servicing Agreement), established by the Indenture Trustee.
"EVENT OF DEFAULT" has the meaning specified in Section 5.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
"FINAL PAYMENT DATE" means, with respect to any Note, the Payment Date
occurring in [ ].
"GRANT" means mortgage, pledge, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral with respect to any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the granting party or otherwise, and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note is
registered on the Note Register.
"INDENTURE TRUST ESTATE" or "TRUST ESTATE" means all money, instruments,
rights and other property that are subject or intended to be subject to the lien
and security interest of this Indenture for the benefit of the Noteholders and
the Insurer (including, without limitation, all Collateral Granted to the
Indenture Trustee pursuant to the Granting Clause), including all proceeds
thereof.
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"INDENTURE TRUSTEE" means [ ], an [ ] banking corporation, as
Indenture Trustee under this Indenture, or any successor Indenture Trustee
appointed pursuant to the terms of this Indenture.
"INDEPENDENT" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, any other obligor on the
Notes, the Transferor and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Transferor or any Affiliate
of any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, the Transferor or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 herein, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.
"INSURANCE AND REIMBURSEMENT AGREEMENT" shall have the meaning assigned
thereto in the Sale and Servicing Agreement.
"INSURER" shall have the meaning assigned thereto in the Sale and Servicing
Agreement.
"INTEREST PERIOD" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
"ISSUER" means [ ] Mortgage Loan Trust 200_-_ until a successor replaces
it in accordance with the terms of the Transaction Documents and, thereafter,
means the successor.
"ISSUER ORDER" and "Issuer Request" mean a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"LIBOR" shall have the meaning assigned thereto in the Sale and Servicing
Agreement.
"LIBOR BUSINESS DAY" shall have the meaning assigned thereto in the Sale
and Servicing Agreement.
"LIEN" shall mean any lien, pledge, encumbrance or security interest on or
in any particular asset or property.
"MASTER SERVICER" shall mean [ ], in its capacity as master servicer
under the Sale and Servicing Agreement, or any Successor Master Servicer
appointed in accordance with the terms of the Sale and Servicing Agreement.
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereto.
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"MORTGAGE LOAN SCHEDULE" means the listing of the Mortgage Loans set forth
in Schedule A, as supplemented as of any date on which a Defective Mortgage Loan
has been repurchased from the Trust or substituted with an Eligible Substitute
Mortgage Loan pursuant to the Sale and Servicing Agreement.
"NOTE" means any of the Class A Notes.
"NOTE DEPOSITORY AGREEMENT" means the agreement dated [ ], among the
Issuer, the Indenture Trustee and The Depository Trust Company, as the initial
Clearing Agency, relating to the Book-Entry Notes.
"NOTE OWNER" means, with respect to a Book-Entry Note, the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings specified
in Article II.
"NOTEHOLDER" means a Holder of a Class A Note.
"OBLIGATIONS" shall mean the Mortgage Loans.
"OFFICER'S CERTIFICATE" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 herein, and
delivered to the Indenture Trustee. Unless otherwise specified, any reference in
this Indenture to an Officer's Certificate shall be to an Officer's Certificate
of any Authorized Officer of the Issuer.
"OPINION OF COUNSEL" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be employees of or
counsel to the Issuer and who shall be satisfactory to the Indenture Trustee and
the Insurer, and which opinion or opinions shall be addressed to the Indenture
Trustee and the Insurer, as Indenture Trustee and the Insurer, respectively, and
shall comply with any applicable requirements of Section 11.1 herein and shall
be in form and substance satisfactory to the Indenture Trustee and the Insurer.
"OUTSTANDING" means, with respect to any Note and as of the date of
determination, any Note theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision for such notice
has been made, satisfactory to the Indenture Trustee);
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(iii) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser; and
(iv) Notes for which the Final Payment Date has occurred;
provided, however, in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent, or waiver hereunder or under any Transaction
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Depositor, the Transferor or any Affiliate of any of the foregoing Persons shall
be disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, or waiver, only
Notes that the Indenture Trustee knows to be so owned shall be so disregarded
and provided further that for purposes of determining the Insurer's subrogation
rights, a Note shall be deemed Outstanding to the extent of any payment made by
the Insurer. Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes, the Transferor or
any Affiliate of any of the foregoing Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes
Outstanding at the date of determination.
"OWNER TRUSTEE" means [ ], not in its individual capacity but solely
as Owner Trustee under the Trust Agreement.
"PAYING AGENT" means the Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.11 of
the Sale and Servicing Agreement and is authorized by the Issuer to make
payments to and distributions from the Distribution Account, including payment
of principal of or interest on the Notes on behalf of the Issuer.
"PAYMENT DATE" shall mean the twenty-fifth day of each month or, if such
day is not a Business Day, then the next Business Day, beginning in [ ].
"PERSON" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization, limited liability company, limited
liability partnership, or government or any agency or political subdivision
thereof.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Article II in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"PROCEEDING" means any suit in equity, action at law or other judicial or
administrative proceeding.
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"RATING AGENCY CONDITION" means, with respect to certain actions requiring
prior Rating Agency consent, that each Rating Agency shall have been given 10
days (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each of the Rating Agencies shall have notified the
Transferor, the Master Servicer and the Insurer in writing that such action will
not result in a reduction or withdrawal of the then current rating of the Notes
without regard to the Insurance Policy.
"RATING AGENCY" means either of (i) [ ]or (ii) [ ]. If no such
organization or successor is any longer in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization or other comparable person
designated by the Depositor and the Insurer, notice of which designation shall
have been given to the Indenture Trustee.
"RECORD DATE" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
"REDEMPTION DATE" means, in the case of a redemption of the Notes pursuant
to Section 10.1, the Payment Date specified by the Indenture Trustee pursuant to
Section 10.1.
"REGISTERED HOLDER" means the Person in whose name a Note is registered on
the Note Register on the applicable Record Date.
"RESPONSIBLE OFFICER" shall have the meaning assigned thereto in the Sale
and Servicing Agreement.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement dated
as of [ ], among the Issuer, the Depositor, the Master Servicer and the
Indenture Trustee.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"STATE" means any one of the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ or
the District of Columbia.
"SUCCESSOR MASTER SERVICER" has the meaning specified in Section 3.7(e)
hereof.
"TRANSACTION DOCUMENTS" has the meaning set forth in the Sale and Servicing
Agreement.
"TRANSFEROR" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
"TRUST" means the Issuer.
"TRUST ESTATE" shall mean the assets subject to the Sale and Servicing
Agreement, the Mortgage Loan Purchase Agreement [THE TRANSFER AGREEMENT], the
Trust Agreement and this Indenture, assigned to the Indenture Trustee, which
assets consist of: (i) the Mortgage Loans, (ii) such assets as shall from time
to time be identified as deposited in the Collection Account
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(exclusive of net earnings thereon), (iii) the Mortgage Notes and other Mortgage
File documents for the Mortgage Loans, (iv) any property that secured a Mortgage
Loan and that has become REO, (v) the interest of the Depositor in certain
hazard insurance policies maintained by the Mortgagors or the Master Servicer in
respect of the Mortgage Loans, (vi) the Collection Account, (vii) [the Insurance
Policy,] (viii) the proceeds of each of the foregoing and (viii) one share of
Preferred Stock of the Depositor.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
Section 1.2. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"COMMISSION" means the Securities and Exchange Commission.
"INDENTURE SECURITIES" means the Notes.
"INDENTURE SECURITY HOLDER" means a Noteholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Indenture Trustee.
"OBLIGOR" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
Section 1.3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in
effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
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(v) words in the singular include the plural and words in the plural
include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented (as provided in such agreements) and includes (in
the case of agreements or instruments) references to all attachments
thereto and instruments incorporated therein; references to a Person are
also to its permitted successors and assigns.
ARTICLE II
THE NOTES
Section 2.1. FORM. The Notes shall be designated as the "HOUSEHOLD MORTGAGE
LOAN TRUST 200_-_, [ ] Mortgage Loan Asset-Backed Notes, Series 200_-_". Each
Note shall be in substantially the form set forth in Exhibit A with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may, consistently herewith, be determined by the officers executing such Notes,
as evidenced by their execution thereof. Any portion of the text of any Note may
be set forth on the reverse thereof, with an appropriate reference thereto on
the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the officers executing such Notes, as evidenced by their execution of such
Notes.
The terms of the Notes are set forth in EXHIBIT A hereto. The terms of the
Notes are part of the terms of this Indenture.
Section 2.2. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Notes
shall be executed on behalf of the Issuer by an Authorized Officer of the Owner
Trustee. The signature of any such Authorized Officer on the Notes may be manual
or facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Owner Trustee shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
Subject to the satisfaction of the conditions set forth in Section 2.8, the
Indenture Trustee shall upon receipt of an Issuer Order, authenticate and
deliver the Class A Notes for original issue in the principal amount equal to
$[ ]. The aggregate principal amount of the Class A Notes outstanding at any
time may not exceed such amount.
The Notes that are authenticated and delivered by the Indenture Trustee to
or upon the order of the Issuer on the Closing Date shall be dated [ ]. All
other Notes that are authenticated after the Closing Date for any other purpose
under the Indenture shall be dated the
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date of their authentication. The Class A Notes shall be issuable as registered
Notes in the minimum denomination of $[25,000] and multiples of $[1,000] in
excess thereof.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
Section 2.3. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee initially shall be the "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of the Note
Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Indenture Trustee prompt written notice
of the appointment of such Note Registrar and of the location, and any change in
the location, of the Note Register, and the Indenture Trustee shall have the
right to inspect the Note Register at all reasonable times and to obtain copies
thereof, and the Indenture Trustee shall have the right to rely upon a
certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.2 hereof, the
Owner Trustee on behalf of the Issuer shall execute, and the Indenture Trustee
shall authenticate and the Noteholder shall obtain from the Indenture Trustee,
in the name of the designated transferee or transferees, one or more new Notes
in any authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes in any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Notes to be exchanged at such office or agency. Whenever any Notes are so
surrendered for exchange, the Issuer shall execute, and the Indenture Trustee
shall authenticate and the Noteholder shall obtain from the Indenture Trustee,
the Notes which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in
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the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.4 or Section 9.6 hereof not involving any
transfer.
Section 2.4. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be reasonably 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, an Authorized Officer of the Owner Trustee shall execute,
and upon its request the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note; provided, however, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become or within seven days shall be
due and payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable or upon the Redemption Date without surrender thereof. If, after
the delivery of such replacement Note or payment of a destroyed, lost or stolen
Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of
the original Note in lieu of which such replacement Note was issued presents for
payment such original Note, the Issuer and the Indenture Trustee shall be
entitled to recover such replacement Note (or such payment) from the Person to
whom it was delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon the
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 2.4, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 2.4 in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 2.4 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.
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Section 2.5. PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest on, if
any, such Note and for all other purposes whatsoever, whether or not such Note
be overdue, and none of the Issuer, the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 2.6. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
(a) Each Class A Note shall accrue interest at the Class A Note Rate
and such interest shall be payable on each Payment Date as specified in Exhibit
A hereto, subject to Section 3.1 hereof. Any installment of interest or
principal, if any, payable on any Note that is punctually paid or duly provided
for by the Issuer on the applicable Payment Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered on the
Record Date in the manner set forth in Section 5.01(c) of the Sale and Servicing
Agreement.
(b) The principal of each Class A Note shall be payable in
installments on each Payment Date as provided in the forms of the Notes set
forth in Exhibit A hereto. Notwithstanding the foregoing, the entire unpaid
principal amount of the Class A Notes shall be due and payable, if not
previously paid, on the earliest of (i) the Final Payment Date, (ii) the
Redemption Date or (iii) the date on which an Event of Default shall have
occurred and be continuing, if the Indenture Trustee, the Insurer or the Holders
of Notes representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 hereof. All principal payments on the Notes shall be in
the manner set forth in the Sale and Servicing Agreement. The Indenture Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Payment Date on which the Issuer
expects that the final installment of principal of and interest on such Note
will be paid. Such notice shall be mailed or transmitted by facsimile prior to
such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 8.01 of the Sale and Servicing Agreement.
Section 2.7. CANCELLATION. All Notes surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly canceled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly canceled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes canceled
as provided in this Section, except as expressly permitted by this Indenture.
All canceled Notes may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at the
time unless the Issuer shall direct by an Issuer Order that they be destroyed or
returned to it; provided, that such Issuer Order is timely and the Notes have
not been previously disposed of by the Indenture Trustee.
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Section 2.8. [Reserved].
Section 2.9. RELEASE OF TRUST ESTATE.
(a) Except as otherwise provided in subsections (b) and (c) of this
Section 2.9 and Section 11.1 hereof and the terms of the Transaction Documents,
the Indenture Trustee shall release property from the lien of this Indenture
only upon consent of the Insurer and receipt of an Issuer Request accompanied by
an Officer's Certificate, an Opinion of Counsel and Independent Certificates in
accordance with TIA Sections 314(c) and 314(d)(l) or an Opinion of Counsel in
lieu of such Independent Certificates to the effect that the TIA does not
require any such Independent Certificates.
(b) The Master Servicer, on behalf of the Issuer and with the consent
of the Insurer, shall be entitled to obtain a release from the lien of this
Indenture for any Mortgage Loan and the related Mortgaged Property at any time
in accordance with the provisions of Section 3.08 of the Sale and Servicing
Agreement.
(c) The Indenture Trustee shall, if requested by the Master Servicer,
temporarily release to the Master Servicer the Indenture Trustee's Mortgage File
pursuant to the provisions of Section 3.08 of the Sale and Servicing Agreement
upon compliance by the Master Servicer of the provisions thereof provided that
the Indenture Trustee's Mortgage File shall have been stamped to signify the
Issuer's pledge to the Indenture Trustee under the Indenture.
Section 2.10. BOOK-ENTRY NOTES. The Notes, upon original issuance, will be
issued in the form of typewritten Notes representing the Book-Entry Notes, to be
delivered to The Depository Trust Company, the initial Clearing Agency or its
custodian, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the nominee
of the initial Clearing Agency, and no Note Owner thereof will receive a
definitive Note representing such Note Owner's interest in such Note, except as
provided in Section 2.12 below. Unless and until definitive, fully registered
Notes (the "Definitive Notes") have been issued to such Note Owners pursuant to
Section 2.12 below:
(i) the provisions of this Section shall be in full force and effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled to
deal with the Clearing Agency for all purposes of this Indenture (including
the payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole holder of the Notes, and
shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreement.
Unless and until Definitive Notes are issued pursuant to Section 2.12
below, the initial Clearing Agency will make book-entry transfers among
14
the Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Outstanding Amount of the Notes, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Note Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has
delivered such instructions to the Indenture Trustee.
Section 2.11. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to such Note Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes, to the
Clearing Agency, and shall have no obligation to such Note Owners.
Section 2.12. DEFINITIVE NOTES. If (i) the Clearing Agency or the Issuer
advises the Indenture Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Book-Entry Notes and the Clearing Agency or the Issuer is unable to locate a
qualified successor, (ii) the Issuer at its option advises the Indenture Trustee
in writing that it elects to terminate the book-entry system through the
Clearing Agency or (iii) after the occurrence of an Event of Default, Owners of
the Book-Entry Notes representing beneficial interests aggregating at least a
majority of the Outstanding Amount of such Notes advise the Clearing Agency in
writing that the continuation of a book-entry system through the Clearing Agency
is no longer in the best interests of such Note Owners, then the Clearing Agency
shall notify all Note Owners and the Indenture Trustee of the occurrence of such
event and of the availability of Definitive Notes to Note Owners requesting the
same. Upon surrender to the Indenture Trustee of the typewritten Notes
representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes in accordance with the instructions of
the Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
Section 2.13. TAX TREATMENT. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for all tax purposes, the
Class A Notes will qualify as indebtedness secured by the Trust Estate. The
Issuer, by entering into this Indenture, and each Noteholder, by its acceptance
of a Note (and each Note Owner by its acceptance of an interest in the
applicable Book-Entry Note), agree to treat the Notes for all purposes as
indebtedness of the Issuer.
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ARTICLE III
COVENANTS
Section 3.1. PAYMENT OF PRINCIPAL AND INTEREST. The Issuer will duly and
punctually pay (or will cause to be duly and punctually paid) the principal of
and interest, if any, on the Notes in accordance with the terms of the Notes and
this Indenture. Without limiting the foregoing, the Indenture Trustee shall,
pursuant to Section 5.01 of the Sale and Servicing Agreement, distribute all
amounts on deposit in the Distribution Account on each Payment Date deposited
therein pursuant to the Sale and Servicing Agreement, and held therein for
distribution to the Noteholders for the benefit of such Noteholders and the
Insurer. Amounts properly withheld under the Code by any Person from a payment
to any Noteholder of interest and/or principal shall be considered as having
been paid by the Issuer to such Noteholder for all purposes of this Indenture.
The Notes shall be non-recourse obligations of the Issuer and shall be
limited in right of payment to amounts available from the Trust Estate, as
provided in this Indenture. The Issuer shall not otherwise be liable for
payments on the Notes. If any other provision of this Indenture shall be deemed
to conflict with the provisions of this Section 3.1, the provisions of this
Section 3.1 shall control.
Section 3.2. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain in
[ ] an office or agency where Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes and to serve as Paying Agent with respect to the Notes. If at any time
the Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders, notices
and demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
Section 3.3. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in Section
8.2(a) and (b), all payments of amounts due and payable with respect to any
Notes that are to be remitted from amounts withdrawn from the Distribution
Account pursuant to Section 8.2(c) shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Distribution Account for payments on the Notes shall be paid over to the Issuer
except as provided in this Section 3.3.
Any Paying Agent shall be appointed by Issuer Order with written notice
thereof to the Indenture Trustee. Any Paying Agent appointed by the Issuer shall
be a Person who would be eligible to be Indenture Trustee hereunder as provided
in Section 6.11 hereof. The Issuer shall not appoint any Paying Agent (other
than the Indenture Trustee) which is not, at the time of such appointment, a
Depository Institution.
The Issuer will cause each Paying Agent to execute and deliver to the
Indenture Trustee an instrument in which such Paying Agent shall agree with the
Indenture Trustee (and if the
16
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section 3.3, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee and the Insurer notice of any default
by the Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with respect to
the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith; provided, however, that
with respect to withholding and reporting requirements applicable to
original issue discount (if any) on the Notes, the Issuer shall have first
provided the calculations pertaining thereto to the Indenture Trustee.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same terms
as those upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any termination and release of a Trust Estate shall be done in accordance
with the provisions of Section 8.01 of the Sale and Servicing Agreement.
Section 3.4. EXISTENCE.
(a) Subject to Section 3.4(b) below, the Issuer will keep in full
effect its existence, rights and franchises as a business trust under the laws
of the State of Delaware (unless it becomes, or any successor Issuer hereunder
is or becomes, organized under the laws of any other State or of the United
States of America, in which case the Issuer will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes and the Trust Estate.
17
(b) Any successor to the Owner Trustee appointed pursuant to Section
10.2 of the Trust Agreement shall be the successor Owner Trustee under this
Indenture without the execution or filing of any paper, instrument or further
act to be done on the part of the parties hereto.
(c) Upon any consolidation or merger of or other succession to the
Owner Trustee, the Person succeeding to the Owner Trustee under the Trust
Agreement may exercise every right and power of the Owner Trustee under this
Indenture with the same effect as if such Person had been named as the Owner
Trustee herein.
Section 3.5. PROTECTION OF TRUST ESTATE. The Issuer will from time to time
execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable
to:
(i) provide further assurance with respect to a Grant of all or any
portion of the related Trust Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(iii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iv) enforce any rights with respect to the Trust Estate; or
(v) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee, the Insurer and the Noteholders in such Trust Estate
against the claims of all persons and parties.
Section 3.6. ANNUAL OPINIONS AS TO THE TRUST ESTATE.
On or before [Date] in each calendar year, beginning in [ ], the Issuer
shall furnish to the Indenture Trustee an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with respect to
the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and continuation
statements as is necessary to maintain the lien and security interest created by
this Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and the execution and filing of any
financing statements and continuation statements that will, in the opinion of
such counsel, be required to maintain the lien and security interest of this
Indenture until [Date] of the following calendar year.
18
Section 3.7. PERFORMANCE OF OBLIGATIONS; SERVICING OF MORTGAGE LOANS.
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any instrument
or agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with or otherwise obtain the assistance of
other Persons 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. Initially, the Issuer has contracted with the Administrator and
[ ] to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Transaction
Documents and in the instruments and agreements included in the Trust Estate,
including but not limited to (i) filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of this
Indenture, the Mortgage Loan Purchase Agreement and the Sale and Servicing
Agreement and (ii) recording or causing to be recorded all Mortgages,
Assignments of Mortgage, all intervening Assignments of Mortgage and all
assumption and modification agreements required to be recorded by the terms of
the Sale and Servicing Agreement and the Mortgage Loan Purchase Agreement, in
accordance with and within the time periods provided for in this Indenture
and/or the Sale and Servicing Agreement, as applicable. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Transaction Document or any provision thereof
without the consent of the Indenture Trustee, the Insurer and the Holders of at
least a majority of the Outstanding Amount of the Notes.
(d) Subject to the terms of the Sale and Servicing Agreement, if the
Issuer shall have knowledge of the occurrence of an Master Servicer Termination
Event under the Sale and Servicing Agreement, the Issuer shall promptly notify
the Indenture Trustee, the Depositor, the Insurer, the Master Servicer and the
Rating Agencies thereof, and shall specify in such notice the action, if any,
the Master Servicer is taking with respect of such default. If such a Master
Servicer Termination Event shall arise from the failure of the Master Servicer
to perform any of its duties or obligations under the Sale and Servicing
Agreement with respect to the Mortgage Loans, the Issuer shall take all
reasonable steps available to it to remedy or cause to be remedied such failure.
(e) Subject to the terms of the Sale and Servicing Agreement, as
promptly as possible after the giving of notice of termination to the Master
Servicer of the Master Servicer's rights and powers pursuant to Section 7.01 of
the Sale and Servicing Agreement, a successor master servicer (the "Successor
Master Servicer") shall be appointed pursuant to Section 7.02 of the Sale and
Servicing Agreement. If the Indenture Trustee shall succeed to the Master
Servicer's duties as master servicer of the Mortgage Loans as provided herein,
it shall do so in its individual capacity and not in its capacity as Indenture
Trustee and, accordingly, the provisions
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of Article VI hereof shall be inapplicable to the Indenture Trustee in its
duties as successor Master Servicer and the servicing of the Mortgage Loans. In
case the Indenture Trustee shall become successor Master Servicer under the Sale
and Servicing Agreement, the Indenture Trustee shall be entitled to appoint as
Successor Master Servicer any one of its Affiliates acceptable to the Insurer,
provided that it shall be fully liable for the actions and omissions of such
Affiliate in such capacity as Successor Master Servicer.
(f) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without the
prior written consent of the Indenture Trustee and the Insurer (which consent
shall not be unreasonably withheld), amend, modify, waive, supplement, terminate
or surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of the Trust Estate (except to the extent
otherwise provided in the Sale and Servicing Agreement or the other Transaction
Documents), or waive timely performance or observance by the Master Servicer or
the Depositor under the Sale and Servicing Agreement; and (ii) that any such
amendment shall not (A) reduce in any manner the amount of, or delay the timing
of, collections of payments on mortgage loans, (B) reduce in any manner the
amount of, or delay the timing of, payments that are required to be made on a
Note without the consent of the affected Noteholder, (C) impair the right of any
Noteholder to institute suit for the enforcement of the provisions of the
Agreement, or (D) reduce the aforesaid percentage of the Notes that is required
to consent to any such amendment, without the consent of the Holders of all the
outstanding Notes. If any such amendment, modification, supplement or waiver
shall be so consented to by the Indenture Trustee and the Insurer, the Issuer
agrees, promptly following a request by the Indenture Trustee or the Insurer to
do so, to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as the Indenture Trustee
or the Insurer may deem necessary or appropriate in the circumstances.
Section 3.8. NEGATIVE COVENANTS. So long as any Notes are Outstanding, the
Issuer shall not, unless the Insurer otherwise consents in writing:
(i) except as expressly permitted by this Indenture or the Sale and
Servicing Agreement, sell, transfer, exchange or otherwise dispose of any
of the properties or assets of the Issuer, including those included in the
Trust Estate, unless directed to do so by the Indenture Trustee and
consented to by the Insurer;
(ii) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against any
present or former Noteholder by reason of the payment of the taxes levied
or assessed upon any part of the related Trust Estate;
(iii) engage in any business or activity other than as permitted by
the Trust Agreement or other than in connection with, or relating to, the
issuance of Notes pursuant to this Indenture and the Ownership Interest
pursuant to the Trust Agreement, or amend the Trust Agreement as in effect
on the Closing Date other than in accordance with Section 11.1 thereof;
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(iv) issue debt obligations under any other indenture;
(v) incur or assume any indebtedness or guaranty any indebtedness of
any Person, except for such indebtedness as may be incurred by the Issuer
in connection with the issuance of the Notes pursuant to this Indenture;
(vi) dissolve or liquidate in whole or in part or merge or consolidate
with any other Person;
(vii) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part thereof or any
interest therein or the proceeds thereof (other than tax liens, mechanics'
liens and other liens that arise by operation of law, in each case on any
of the Mortgaged Properties and arising solely as a result of an action or
omission of the related Mortgagor) or (C) permit the lien of this Indenture
not to constitute a valid first priority (other than with respect to any
such tax, mechanics' or other lien) security interest in the Trust Estate;
(viii) [reserved]; or
(ix) take any other action or fail to take any action which may cause
the Issuer to be taxable as (a) an association pursuant to Section 7701 of
the Code and the corresponding regulations or (b) a taxable mortgage pool
pursuant to Section 7701(i) of the Code and the corresponding regulations.
Section 3.9. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver to
the Indenture Trustee and the Insurer, within 120 days after the end of each
fiscal year of the Issuer (commencing with the fiscal year [ ]), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:
(i) a review of the activities of the Issuer during such year and of
its performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in its
compliance with any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status thereof.
Section 3.10. COVENANTS OF THE ISSUER.
All covenants of the Issuer in this Indenture are covenants of the Issuer
and are not covenants of the Owner Trustee. The Owner Trustee is, and any
successor Owner Trustee under
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the Trust Agreement will be, entering into this Indenture solely as Owner
Trustee under the Trust Agreement and not in its respective individual capacity,
and in no case whatsoever shall the Owner Trustee or any such successor Owner
Trustee be personally liable on, or for any loss in respect of, any of the
statements, representations, warranties or obligations of the Issuer hereunder,
as to all of which the parties hereto agree to look solely to the property of
the Issuer.
Section 3.11. MASTER SERVICER'S OBLIGATIONS. The Issuer shall cause the
Master Servicer to comply with its obligations under the terms of the Sale and
Servicing Agreement.
Section 3.12. RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Master Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made (x)
distributions to the Master Servicer, the Indenture Trustee, the Owner Trustee,
the Ownership Interest and the Noteholders as contemplated by, and to the extent
funds are available for such purpose under, the Sale and Servicing Agreement or
the Trust Agreement. The Issuer will not, directly or indirectly, make or cause
to be made payments to or distributions from the Collection Account except in
accordance with this Indenture and the Transaction Documents.
Section 3.13. TREATMENT OF NOTES AS DEBT FOR ALL PURPOSES.
The Issuer shall treat the Notes as indebtedness for all purposes.
Section 3.14. NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee, the Insurer and the Rating Agencies prompt written notice of
each Event of Default hereunder, each default on the part of the Master Servicer
of its obligations under the Sale and Servicing Agreement and each default on
the part of the Depositor of its obligations under the Sale and Servicing
Agreement.
Section 3.15. FURTHER INSTRUMENTS AND ACTS. Upon request of the Indenture
Trustee or the Insurer, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
Section 3.16. ISSUER MAY CONSOLIDATE, ETC.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any state or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee,
in form reasonably satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes and to
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the Paying Agent, on behalf of the holder of the Transferor Interests
and the performance or observance of every agreement and covenant of
this Indenture on the part of the Issuer to be performed or observed,
all as provided herein;
(ii) immediately after giving effect to such transaction, no Event
of Default shall have occurred and be continuing;
(iii) the Insurer shall have consented in writing thereto and each
Rating Agency shall have notified the Issuer that such transaction
will not cause a reduction or withdrawal by a Rating Agency of its
then current rating of the Notes, without regard to the Insurance
Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the
Insurer) to the effect that such transaction will not have any
material adverse tax consequence to the Issuer, any Noteholder or the
Insurer;
(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 and
the Insurer an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation or merger and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in any Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer, the conveyance or transfer of
which is hereby restricted, shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any state, (B) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee
and the Insurer, in form satisfactory to the Indenture Trustee and the
Insurer, the due and punctual payment of the principal of and interest
on all Notes and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed
or observed, all as provided herein, (C) expressly agrees by means of
such supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the rights
of Holders of the Notes and the Insurer, (D) unless otherwise provided
in such supplemental indenture, expressly agrees to indemnify, defend
and hold harmless the Issuer and the Insurer against and from any
loss, liability or expense arising under or related to this Indenture
and the Notes and (E) expressly agrees by means of such supplemental
indenture that such Person (or if a group of Persons, then
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one specified Person) shall make all filings with the Commission (and
any other appropriate Person) required by the Exchange Act in
connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Insurer shall have consented thereto, and each Rating
Agency shall have notified the Issuer that such transaction will not
cause a reduction or withdrawal by a Rating Agency of its then current
rating of the Notes, without regard to the Insurance Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, the Insurer or any Noteholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee and
the Insurer an Officer's Certificate and an Opinion of Counsel each
stating that such conveyance or transfer and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act).
Section 3.17. SUCCESSOR OR TRANSFEREE.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.16(a) above, 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) above, the Issuer shall be released from
every covenant and agreement (except such obligations that survive such
transfer) 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, selling and managing the
Mortgage Loans and the issuance of the Notes in the manner contemplated by this
Indenture and the Transaction 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.
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Section 3.20. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except as
contemplated by this Indenture or the other Transaction Documents, the Issuer
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person.
Section 3.21. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.22. REPRESENTATIONS AND WARRANTIES OF THE ISSUER.
(a) The Issuer hereby represents and warrants, for the benefit of the
Indenture Trustee and the Noteholders, that:
(i) this Agreement creates a valid and continuing security
interest (as defined in the UCC) in the Collateral in favor of the
Indenture Trustee, which security interest is prior to all other
Liens, and is enforceable as such as against creditors of and
purchasers from the Issuer;
(ii) the Collateral constitutes "general intangibles" within the
meaning of the UCC;
(iii) immediately prior to its Grant of the Collateral provided
for herein, the Issuer had good title to, and was the sole owner of,
the Collateral, free and clear of any Lien of any Person;
(iv) the Issuer has received all consents and approvals required
by the terms of the Collateral for the transfer to the Indenture
Trustee of its rights and interests therein;
(v) the Issuer has caused or will have caused, within ten days,
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; and
(vi) other than the security interest granted to the Indenture
Trustee pursuant to this Agreement, the Issuer has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed
any of the Collateral. 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 Collateral other than
any financing statement relating to the security interest granted to
the Indenture Trustee hereunder or that has been terminated.
(b) The foregoing representations and warranties shall survive
satisfaction and discharge of this Indenture.
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(c) The foregoing representations and warranties may not be waived by
the Indenture Trustee[, the Insurer] or any Noteholder.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1. SATISFACTION AND DISCHARGE OF INDENTURE. Subject to and in
accordance with Section 8.01 of the Sale and Servicing Agreement, this Indenture
shall cease to be of further effect with respect to the Notes (except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8 and
3.10 hereof, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.7
hereof and the obligations of the Indenture Trustee under Section 4.2 hereof)
and (vi) the rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of them),
and the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, when all of the following have occurred:
(A) either
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.4 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.3 above) have
been delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation
a. have become due and payable,
b. will become due and payable within one year prior to the
Final Payment Date, or
c. are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving
of notice of redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer,
and the Issuer, in the case of a., b. or c. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Indenture Trustee for cancellation
26
when due to the Final Payment Date or Redemption Date (if Notes shall have been
called for redemption pursuant to Section 10.1 hereof) and all amounts due and
owing the Insurer and the Indenture Trustee have been paid, as the case may be;
(B) the later of (a) twelve months after payment in full of all
outstanding obligations under the Notes, (b) the payment in full of all
unpaid fees and expenses of the Indenture Trustee hereunder and the other
Transaction Documents, (c) the payment of all amounts due and owing to the
Insurer for unpaid premiums and unreimbursed Insured Payments and all other
amounts owing to the Insurer, together with interest thereon as provided
under the Insurance and Reimbursement Agreement and (d) the date on which
the Issuer has paid or caused to be paid all other sums payable hereunder
by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee and the Insurer
an Officer's Certificate, an Opinion of Counsel and (if required by the TIA
or the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements of
Section 11.1(a) hereof and, subject to Section 11.2 hereof, each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture with respect to the Notes have
been complied with.
Section 4.2. APPLICATION OF TRUST MONEY. All moneys deposited with the
Indenture Trustee pursuant to Sections 3.3 and 4.1 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Sale and Servicing
Agreement, to the payment, either directly or through any Paying Agent to the
Holders of the particular Notes and the Insurer for the payment or redemption of
which such moneys have been deposited with the Indenture Trustee, of all sums
due and to become due thereon for principal and interest; but such moneys need
not be segregated from other funds except to the extent required herein or in
the Sale and Servicing Agreement or required by law.
Section 4.3. SUBROGATION AND COOPERATION.
(a) The Issuer and the Indenture Trustee acknowledge that (i) to the
extent the Insurer makes payments under the Insurance Policy on account of
principal of or interest on the Mortgage Loans, the Insurer will be fully
subrogated to the rights of the Noteholders to receive such principal of and
interest on the Mortgage Loans of the related Trust Estate, and (ii) the Insurer
shall be paid such principal and interest only from the sources and in the
manner provided herein and in the Insurance and Reimbursement Agreement for the
payment of such principal and interest.
The Indenture Trustee shall cooperate in all respects with any reasonable
request or direction by the Insurer for action to preserve or enforce the
Insurer's rights or interest under this Indenture or the Insurance and
Reimbursement Agreement, consistent with this Indenture and without limiting the
rights of the Noteholders as otherwise set forth in the Indenture, including
without limitation upon the occurrence and continuance of an Insurer Default, a
request to take any one or more of the following actions:
27
(i) institute Proceedings for the collection of all amounts then
payable on the Notes or under this Indenture in respect to the Notes
and all amounts payable under the Insurance and Reimbursement
Agreement and to enforce any judgment obtained and collect from the
Issuer monies adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
(iii) file or record all assignments that have not previously been
recorded;
(iv) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights
and remedies of the Insurer hereunder.
Following the payment in full of the Notes, the Insurer shall continue to
have all rights and privileges provided to it under this Section 4.3 and in all
other provisions of this Indenture, until all amounts owing to the Insurer have
been paid in full.
Section 4.4. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
moneys then held by any Paying Agent other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.3 above and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
ARTICLE V
REMEDIES
Section 5.1. EVENTS OF DEFAULT. "Event of Default," wherever used herein,
means with respect to 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) default in the payment of any interest on any Note when the same
becomes due and payable, and continuance of such default for a period of five
(5) days; or
(b) default in the payment in full of the principal of the Class A
Note Principal Amount on the Final Payment Date; or
(c) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance
28
or performance of which is elsewhere in this Section 5.1 specifically dealt
with), or any representation or warranty of the Issuer made in this Indenture,
the Sale and Servicing Agreement or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have been
made, and such default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period of 30 days after
there shall have been given, by registered or certified mail, to the Issuer by
the Indenture Trustee or to the Issuer and the Indenture Trustee by the Insurer
or the Holders of at least 25% of the Outstanding Amount of the Notes, a written
notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a notice of Default
hereunder; or
(d) [reserved]; or
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the 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 __
consecutive days; or
(f) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by the Issuer to the entry of an order for
relief in an involuntary case under any such law, or the consent by the Issuer
to the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the 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.
The Issuer shall deliver to the Indenture Trustee, the Transferor and the
Insurer within five days after the occurrence thereof, written notice in the
form of an Officer's Certificate of any event which with the giving of notice
and the lapse of time would become an Event of Default under clause (c) above,
its status and what action the Issuer is taking or proposes to take with respect
thereto.
Section 5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee, at the direction of the Insurer or upon the prior written
direction of the Holders of Notes representing not less than [51]% of the
Outstanding Amount of the Notes, with the written consent of the Insurer, may
declare all the Notes to be immediately due and payable, by a notice in writing
to the Issuer (and to the Indenture Trustee if given by Noteholders), and upon
any such declaration the unpaid principal amount of such Notes, together with
accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
29
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Insurer or the Holders of Notes representing a majority of the Outstanding
Amount of the related Notes, with the written consent of the Insurer, by written
notice to the Issuer and the Indenture Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(A) all payments of principal of and interest on all Notes and all
other amounts that would then be due hereunder or upon such Notes if
the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.12 below.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) The Issuer covenants that if (i) default occurs in the payment of
any interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default occurs in the payment of
the principal of or any installment of the principal of any Note when the same
becomes due and payable, and such default continues for a period of five days,
the Issuer will, upon demand of the Indenture Trustee or the Insurer if the
Insurer has made a payment under the Insurance Policy, pay to the Indenture
Trustee or the Insurer, as applicable, for the benefit of the Holders of the
Notes, the whole amount then due and payable on such Notes for principal and
interest, with interest upon the overdue principal and, to the extent payment at
such rate of interest shall be legally enforceable, upon overdue installments of
interest at the rate borne by the Notes and in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee, the Insurer and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee may, and shall at the direction of the
Insurer, institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
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(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, with the consent of the Insurer, and shall at the written direction
of the Insurer or of the Holders of [51]% of the Outstanding Amount of the
Notes, with the consent of the Insurer, as more particularly provided in Section
5.4 below, proceed to protect and enforce its rights and the rights of the
Noteholders and the Insurer, [by such appropriate Proceedings as the Insurer
shall deem most effective to protect and enforce any such rights] whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy or legal or equitable right vested in the Indenture Trustee by this
Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section 5.3, shall be entitled and empowered by intervention in such
Proceedings with the consent of or at the direction of the Insurer or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable
in order to have the claims of the Indenture Trustee (including any
claim for reasonable compensation to the Indenture Trustee, each
predecessor Indenture Trustee and its agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and
all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee (except as a result of negligence or bad faith)),
and of the Noteholders and the Insurer allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes and the Insurer in any election of a
trustee, a standby trustee or Person performing similar functions in
any such Proceedings;
(iii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders, the Indenture
Trustee and the Insurer on their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the
Indenture Trustee, the Insurer or the Holders of Notes allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property; and any trustee, receiver, liquidator,
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custodian or other similar official in any such Proceeding is hereby
authorized by each of such Noteholders to make payments to the
Indenture Trustee and, in the event that the Indenture Trustee shall
consent to the making of payments directly to such Noteholders, to pay
to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel,
and all other expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor Indenture Trustee
except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder or the Insurer any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof or to authorize the Indenture Trustee to vote in respect of the claim of
any Noteholder or the Insurer in any such proceeding except, as aforesaid, to
vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
Section 5.4. REMEDIES; PRIORITIES.
(a) If an Event of Default shall have occurred and be continuing of
which a Responsible Officer of the Indenture Trustee has actual knowledge, the
Indenture Trustee may with the consent of the Insurer, or, at the direction of
the Insurer, shall or, if an Insurer Default shall be continuing, at the
direction of a majority of the Holders of the Notes shall, do one or more of the
following (subject to Section 5.5 below):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
related Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, and all amounts payable under the Insurance
and Reimbursement Agreement, enforce any judgment obtained, and
collect from the Issuer and any other obligor upon such Notes moneys
adjudged due;
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(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee or the related Noteholders or
the Insurer; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein in a commercially reasonable manner, at one or more
public or private sales called and conducted in any manner permitted
by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Insurer and the Holders of 100% of
the Outstanding Amount 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 upon such Notes for principal and interest and
to reimburse the Insurer for any unreimbursed Insured Payments and any other
amounts due the Insurer under the Insurance and Reimbursement Agreement or (C)
the Indenture Trustee determines that the Trust Estate will not continue to
provide sufficient funds for the payment of principal of and interest on the
Notes as they would have become due if the Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of the Insurer and the
Holders of 66-2/3% of the Outstanding Amount 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 as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, the Indenture Trustee and the Paying Agent in respect of
amounts due on the Senior Interest Participation shall pay out the money or
property in the following order:
FIRST: to the Indenture Trustee for the Indenture Trustee Fee then
due and any costs or expenses incurred by it in connection with the
enforcement of the remedies provided for in this Article V and to the
Owner Trustee for the Owner Trustee Fee then due;
SECOND: to the Noteholders for amounts due and unpaid on the Notes
for interest pro rata among the Holders of the Notes, according to the
amounts due and payable on such Notes;
THIRD: to the Noteholders for amounts due and unpaid on the Notes
for principal, pro rata, among the Holders of the Notes according to
the amounts due and payable until the Class A Note Principal Amount is
reduced to zero;
FOURTH: to the Insurer, any other amounts owed to the Insurer
under the Insurance and Reimbursement Agreement; and
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FIFTH: to the Owner Trustee, as applicable, for any amounts to be
distributed, to the holder of the Ownership Interest, in the manner
set forth in Section 5.01 of the Sale and Servicing Agreement.
The Indenture Trustee may fix a record date and payment date for any
payment to be made to the Noteholders pursuant to this Section 5.4. At least 15
days before such record date, the Indenture Trustee shall mail to each
Noteholder and the Issuer a notice that states the record date, the payment date
and the amount to be paid.
Section 5.5. OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Notes have
been declared to be due and payable under Section 5.2 above following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may with the consent of the Insurer, but need
not (but shall at the written direction of the Insurer), elect to maintain
possession of the Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes (although the parties hereto understand
that there exists the possibility of a shortfall in collections of the Mortgage
Loans), and the Indenture Trustee shall take such desire into account when
determining whether or not to maintain possession of the Trust Estate. In
determining whether to maintain possession of the Trust Estate, the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
Section 5.6. LIMITATION OF SUITS. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless the Insurer has otherwise consented in writing thereto
and:
(a) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% of the Outstanding Amount of the
Notes have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such Proceedings;
and
(e) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the Holders of a majority
of the Outstanding Amount of the Notes.
It is understood and intended that no Noteholders shall have any right in
any manner whatever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or
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prejudice the rights of any other Noteholders or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
Section 5.7. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due date thereof expressed in such Note or in this Indenture (or, in
the case of redemption, on or after the Redemption Date) to the extent funds are
available therefor out of the Trust Estate and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.
Section 5.8. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture Trustee
or any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.
Section 5.9. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Insurer or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or omission of the
Indenture Trustee, the Insurer or any Noteholder to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee, the Insurer or to the Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the Indenture
Trustee, the Insurer or by the Noteholders, as the case may be.
Section 5.11. CONTROL BY NOTEHOLDERS. The Insurer (so long as no Insurer
Default exists) or if an Insurer Default exists the Holders of a majority of the
Outstanding Amount of the Notes with the consent of the Insurer, shall have the
right to direct the time, method and place of conducting any Proceeding for any
remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
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(b) subject to the express terms of Section 5.4 above, any direction
to the Indenture Trustee to sell or liquidate the Trust Estate shall be in
writing by the Insurer (so long as no Insurer Default exists) or the Holders of
Notes representing not less than 100% of the Outstanding Amount of the Notes
with the consent of the Insurer;
(c) if the conditions set forth in Section 5.5 above have been
satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant
to such Section 5.5, then any direction to the Indenture Trustee by Holders of
Notes representing less than 100% of the Outstanding Amount of the Notes to sell
or liquidate the Trust Estate shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of the Noteholders set forth in this Section
5.11, subject to Section 6.1 hereof, the Indenture Trustee need not take any
action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
Section 5.12. WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.2 above, the
Insurer (so long as no Insurer Default exists) or the Holders of Notes
representing not less than 51% of the Outstanding Amount of the Notes, with the
consent of the Insurer (so long as no Insurer Default exists), may waive any
past Default or Event of Default and its consequences except a Default (a) in
the payment of principal of or interest on any of the Notes or (b) in respect of
a covenant or provision hereof that cannot be modified or amended without the
consent of the Holder of each Note. In the case of any such waiver, the Issuer,
the Insurer, the Indenture Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
Section 5.13. UNDERTAKING FOR COSTS. All parties to this Indenture agree,
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or
36
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
Section 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 5.15. ACTION ON NOTES. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.4(b) above.
Section 5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.
(a) Promptly following a request from the Insurer or the Indenture
Trustee, with the consent of the Insurer to do so, the Issuer shall take all
such lawful action as the Indenture Trustee or the Insurer, as applicable, may
request to compel or secure the performance and observance by the Depositor and
the Master Servicer, as applicable, of each of their obligations to the Issuer
under or in connection with 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 Sale and Servicing Agreement to the
extent and in the manner directed by the Indenture Trustee or the Insurer, as
applicable, including the transmission of notices of default on the part of the
Depositor or the Master Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Depositor or the Master Servicer of each of their obligations under the Sale and
Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee, subject to the rights of the Insurer hereunder and under the
Sale and Servicing Agreement, may, and at the direction (which direction shall
be in writing or by telephone, confirmed in writing promptly thereafter) of the
Insurer or the Holders of a majority of the Outstanding Amount if there is an
Insurer Default shall, exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Depositor or the Master Servicer under or in
connection with the Sale and Servicing Agreement, including the right or power
to take any action to compel or secure performance or observance by the
Depositor, the Master Servicer, as the case may be, of each of their obligations
to the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension, or waiver under the Sale and Servicing Agreement, and any
right of the Issuer to take such action shall be suspended.
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ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.1. DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 6.1;
(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 above or any
direction from the Insurer that the Insurer is entitled to give under
the terms of the Transaction Documents.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section
6.1.
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) Money held in trust by the Indenture Trustee shall be segregated
from other funds except to the extent permitted by law or the terms of this
Indenture or the Sale and Servicing Agreement.
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(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it; and none of the provisions contained in this Indenture
shall in any event require the Indenture Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Master Servicer,
the Issuer or Transferor under this Indenture except during such time, if any,
as the Indenture Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer in accordance with
the terms of this Indenture.
(h) The Indenture Trustee shall challenge or cause to be challenged
any attempt at substantive consolidation of the assets and liabilities of the
Issuer with those of any Owner (as the term "Owner" is defined in the Trust
Agreement) in connection with any insolvency proceeding of the Issuer.
(i) 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 6.1 and to the provisions of
the TIA.
(j) Subject to the other provisions of this Indenture and without
limiting the generality of this Section 6.1, the Indenture Trustee shall have no
duty (A) to see to any recording, filing, or depositing of this Indenture or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording or filing or depositing or to any rerecording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Estate other than from funds available in the
Distribution Account, (D) to confirm or verify the contents of any reports or
certificates of the Issuer, Insurer or Master Servicer delivered to the
Indenture Trustee pursuant to this Indenture believed by the Indenture Trustee
to be genuine and to have been signed or presented by the proper party or
parties.
Section 6.2. RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting on any resolution, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
person. The Indenture Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require and shall be entitled to receive an Officer's Certificate or an Opinion
of Counsel. The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on an Officer's Certificate or Opinion
of Counsel.
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(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of such agent,
attorney, nominee or custodian appointed by the Indenture Trustee with due care.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that such action or omission by the
Indenture Trustee does not constitute willful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel selected by it with due care with respect to legal matters
relating to this Indenture, the Notes and the Transaction Documents to which it
is a party, shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of the Insurer or any of the Noteholders, pursuant to the
provisions of this Indenture, unless the Insurer or such Noteholders shall have
offered to the Indenture Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Indenture Trustee of the
obligation, upon the occurrence of an Event of Default of which a Responsible
Officer of the Indenture Trustee shall have actual knowledge (which has not been
cured), to exercise such of the rights and powers vested in it by this
Indenture, and to use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(g) The Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Insurer or
the Majority Noteholders; provided, however, that if the payment within a
reasonable time to the Indenture Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to taking any such action. The reasonable expense of
every such examination shall be paid by the Issuer or, if paid by the Indenture
Trustee, shall be repaid by the Issuer upon demand.
(h) The right of the Indenture Trustee to perform any discretionary
act enumerated in this Indenture shall not be construed as a duty, and the
Indenture Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act.
(i) The Indenture Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust Fund created hereby or the
powers granted hereunder.
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(j) The Indenture Trustee shall have no liability in connection with
the malfeasance or nonfeasance by the Issuer, the Master Servicer or the
Administrator. The Indenture Trustee shall have no liability in connection with
compliance by the Issuer or the Master Servicer with statutory or regulatory
requirements related to the Collateral or the Trust Estate. The Indenture
Trustee shall not make or be deemed to have made any representations or
warranties with respect to the Collateral or the Trust Estate or the validity or
sufficiency of any assignment of the Collateral or the Trust Estate to the
Indenture Trustee.
(k) In the event that the Indenture Trustee is also acting as Paying
Agent or Registrar hereunder, the rights, protection, immunities and indemnities
afforded to the Indenture Trustee pursuant to this Article VI shall also be
afforded to such Paying Agent or Registrar.
Section 6.3. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Indenture Trustee must comply with Sections 6.11 and 6.12 below.
Section 6.4. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee shall
not be (i) responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, (ii) shall not be accountable for the
Issuer's use of the proceeds from the Notes or (iii) responsible for any
statement of the Issuer in the Indenture or in any document issued in connection
with the sale of the Notes or in the Notes other than the Indenture Trustee's
certificate of authentication.
Section 6.5. NOTICE OF DEFAULTS. If a Default occurs and is continuing and
if it is actually known to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall give prompt notice thereof to the Insurer. The Indenture
Trustee shall not be charged with the knowledge of an Event of Default unless a
Responsible Officer has received written notice or has actual knowledge thereof.
The Indenture Trustee shall mail to each Noteholder, the Master Servicer and the
Depositor notice of the Default within 30 days after it occurs at the expense of
the Issuer. Except in the case of a Default in payment of principal of or
interest on any Note, the Indenture Trustee may withhold the notice to the
Noteholders if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of Noteholders.
Section 6.6. REPORTS BY INDENTURE TRUSTEE TO HOLDERS. The Indenture Trustee
shall deliver to each Noteholder such information as may be required to enable
such holder to prepare its federal and state income tax returns. In addition,
upon Issuer Request, the Indenture Trustee shall promptly furnish such
information reasonably requested by the Issuer that is reasonably available to
the Indenture Trustee to enable the Issuer to perform its federal and state
income tax reporting obligations.
Section 6.7. COMPENSATION AND INDEMNITY. As compensation for its services
hereunder, the Indenture Trustee shall be entitled to receive, on each Payment
Date, the Indenture Trustee's Fee pursuant to Section 5.01 of the Sale and
Servicing Agreement (which
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compensation shall not be limited by any law on compensation of a trustee of an
express trust) and shall be entitled to reimbursement for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Indenture
Trustee shall be indemnified from the Trust Estate against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Indenture Trustee shall notify the Issuer promptly of any claim
for which it may seek indemnity. Failure by the Indenture Trustee to so notify
the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer
shall defend any such claim, and the Indenture Trustee may have separate counsel
and the Issuer shall pay the fees and expenses of such counsel. The Indenture
Trustee shall not be entitled to any such reimbursement of any expense or to
indemnification against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith. Anything in this Indenture to the contrary notwithstanding, in no
event shall the Indenture Trustee be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Indenture Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action. This
indemnity shall survive the termination of this Indenture.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section 6.7 shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses or provides services after the occurrence of a Default
specified in Section 5.1(e) or (f) hereof with respect to the Issuer, the
expenses and fees for such services are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
Section 6.8. REPLACEMENT OF INDENTURE TRUSTEE. No resignation or removal of
the Indenture Trustee and no appointment of a successor Indenture Trustee shall
become effective until the acceptance of appointment by the successor Indenture
Trustee acceptable to the Insurer pursuant to this Section. The Indenture
Trustee may resign at any time by so notifying the Issuer and the Insurer. The
Insurer or the Holders of a majority in Outstanding Amount of the Notes (with
the prior written consent of the Insurer) may remove the Indenture Trustee by so
notifying the Indenture Trustee and the Insurer (if given by such Noteholders)
and may appoint a successor Indenture Trustee acceptable to the Insurer. The
Issuer shall (with the prior written consent of the Insurer) remove the
Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11 below;
(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.
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If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee with the consent of the
Insurer, which consent shall not be unreasonably withheld.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Insurer and to the Issuer.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the
Notes may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11 below, any
Noteholder may (with the consent of the Insurer) petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section 6.8, the Issuer's obligations under Section 6.7 above shall continue for
the benefit of the retiring Indenture Trustee.
Section 6.9. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11 below.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
Section 6.10. APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute
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and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Noteholders and the Insurer, such title to the Trust
Estate, or any part hereof, and, subject to the other provisions of this Section
6.10, 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 below and no notice to Noteholders of the appointment
of any co-trustee or separate trustee shall be required under Section 6.8
hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
Trust Estate or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, jointly with the Indenture
Trustee, subject to all the provisions of this Indenture, specifically including
every provision of this Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee. The Indenture Trustee shall remain
primarily liable for all actions of a co-trustee.
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Section 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. The Indenture Trustee
shall comply with TIA Section 310(b), including the optional provision permitted
by the second sentence of TIA Section 310(b)(9); provided, however, that there
shall be excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
Section 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
Section 6.13. REPRESENTATIONS AND WARRANTIES. The Indenture Trustee hereby
represents and warrants that:
(a) The Indenture Trustee is duly organized, validly existing and in
good standing under the laws of State of [ ], with power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is currently 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 corporate 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 certificate of
incorporation or bylaws of the Indenture Trustee or any agreement or other
instrument to which the Indenture Trustee is a party or by which it is bound.
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 assets of
the Trust in trust for the Noteholders and the Insurer;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibit A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.1. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after the earlier of (i) each Record Date
and (ii) three months after the last 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, (b) at such other times as the Indenture
Trustee and the Insurer may request in writing, within 30 days after receipt by
the Issuer of any such request, a list of similar form and content as of a date
not more than 10 days prior to the time such list is furnished; provided,
however, that so long as the Indenture Trustee is the Note Registrar, no such
list shall be required to be furnished.
Section 7.2. PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.1 above and the names and addresses of 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 7.1 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA Section 312(c).
Section 7.3. REPORTS BY ISSUER.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with the rules and regulations prescribed from time to time
by the Commission such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA Section
313(c)) such
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summaries of any information, documents and reports required to be
filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.3(a) and by rules and regulations prescribed from time to time by
the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.4. REPORTS BY INDENTURE TRUSTEE. If required by TIA Section
313(a), within 60 days after each August 1, beginning with [ ], the
Indenture Trustee shall mail to each Noteholder as required by TIA Section
313(c) and to the Insurer a brief report dated as of such date that complies
with TIA Section 313(a). The Indenture Trustee also shall comply with TIA
Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each securities exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any securities exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.1. 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 herein.
Section 8.2. ACCOUNTS; DISTRIBUTIONS.
(a) On or prior to the Closing Date, the Indenture Trustee shall
establish and maintain or cause to be established and maintained, in the name of
the Indenture Trustee for the benefit of the Noteholders, the Transferor and the
Insurer, the Distribution Account as provided in Article V of the Sale and
Servicing Agreement into which amounts shall be deposited in accordance with the
terms of the Sale and Servicing Agreement.
(b) The Indenture Trustee shall deposit any amounts representing
payments on and any collections in respect of the Mortgage Loans received by it,
if any, and any other amounts required by the terms of the Transaction Documents
to be deposited, immediately following receipt thereof, including, without
limitation, all amounts withdrawn by the Master Servicer from the Collection
Account pursuant to Section 3.03 of the Sale and Servicing Agreement for deposit
to the Distribution Account. Amounts on deposit in the Distribution
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Account may be invested in Eligible Investments pursuant to Section 5.06 of the
Sale and Servicing Agreement.
(c) On each Payment Date and the Redemption Date, to the extent funds
are available in the Distribution Account, the Indenture Trustee shall make the
distributions and payments in the amounts and in the priority set forth in
Section 5.01 of the Sale and Servicing Agreement (except as otherwise provided
in Section 5.4(b) herein).
(d) On each Payment Date and the Redemption Date, to the extent of the
interest of the Indenture Trustee in the Distribution Account (as described in
Section 5.05 of the Sale and Servicing Agreement), the Indenture Trustee hereby
authorizes the Owner Trustee or the Paying Agent, as applicable, to make the
distributions from the Distribution Account as required pursuant to Section 5.01
of the Sale and Servicing Agreement.
Section 8.3. [Reserved].
Section 8.4. MASTER SERVICER'S MONTHLY STATEMENTS.
On each Payment Date, the Indenture Trustee shall deliver the Servicing
Certificate (as defined in the Sale and Servicing Agreement) with respect to
such Payment Date to DTC and the Rating Agencies.
Section 8.5. [Reserved].
Section 8.6. OPINION OF COUNSEL. The Indenture Trustee shall receive at
least seven days notice when requested by the Issuer to take any action pursuant
to Section 2.9(a) herein, accompanied by copies of any instruments involved, and
the Indenture Trustee shall also require with a copy to the Insurer, as a
condition to such action, an Opinion of Counsel, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding that
all conditions precedent to the taking of such action have been complied with
and such action will not materially and adversely impair the security for the
Notes or the rights of the Noteholders or the Insurer in contravention of the
provisions of this Indenture; provided, however, that such Opinion of Counsel
shall not be required to express an opinion as to the fair market value of a
Trust Estate. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, at any time and from time to time and only with
the prior written consent of the Insurer, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the
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Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption
by any such successor of the covenants of the Issuer herein and in the
Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Noteholders or the Insurer, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture that may be inconsistent with
any other provision herein or in any supplemental indenture or to make
any other provisions with respect to matters or questions arising
under this Indenture or in any supplemental indenture; provided, that
such action shall not adversely affect the interests of the
Noteholders or the Insurer;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add
to or change any of the provisions of this Indenture as shall be
necessary to facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of Article VI
herein; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Noteholders but with prior
consent of the Rating Agencies and the Insurer, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Noteholders under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of
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Counsel or satisfaction of the Rating Agency Condition, adversely affect in any
material respect the interests of any Noteholder or the Insurer or cause the
Issuer to be subject to entity level tax.
Section 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior consent of the Rating Agencies and the Insurer, and with the consent
of the Holders of not less than a majority of the Outstanding Amount of the
Notes, by Act of such Holders delivered to the Issuer and the Indenture Trustee,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(a) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest rate
thereon or the amount required to be paid on the Notes following the exercise of
the option set forth in Section 8.01 of the Sale and Servicing Agreement, change
the provisions of this Indenture relating to the application of collections on,
or the proceeds of the sale of, the Trust Estate to payment of principal of or
interest on the Notes, or change any place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or impair the
right to institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in Article V
herein, to the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or after the
Redemption Date);
(b) reduce the percentage of the Outstanding Amount of the Notes, the
consent of the Holders of which is required for any such supplemental indenture,
or the consent of the Holders of which is required for any waiver of compliance
with certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of
the term "Outstanding";
(d) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.4 herein;
(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 Transaction Documents cannot be modified or waived without
the consent of the Holder of each Outstanding Note affected thereby;
(f) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest or principal
due on any Note on any Payment Date (including the calculation of any of the
individual components of such calculation); or
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(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 provided
further, that such action shall not, as evidenced by an Opinion of Counsel,
cause the Issuer to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
In connection with requesting the consent of the Noteholders pursuant to
this Section 9.2, the Indenture Trustee shall mail to the Holders of the Notes
to which such amendment or supplemental indenture relates a notice setting forth
in general terms the substance of such supplemental indenture at the Issuer's
expense. It shall not be necessary for any Act of Noteholders under this Section
9.2 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Section 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2 herein, 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 and all conditions
precedent to the execution of such supplemental indenture have been met. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
Section 9.4. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be deemed to be modified and amended in accordance therewith with respect to the
Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.5. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.
Section 9.6. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the
51
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
REDEMPTION OF NOTES
Section 10.1. REDEMPTION.
The Master Servicer may effect an early termination of the Notes pursuant
to Section 8.01 of the Sale and Servicing Agreement on or after any Payment Date
on which the Pool Balance declines to [__%] or less of the aggregate Cut-Off
Date Pool Balance and the purchase price for the Mortgage Loans together with
all amounts due and owing to the Insurer for unpaid premiums and unreimbursed
Insured Payments and any other amounts then due and owing under the Insurance
and Reimbursement Agreement to the Insurer, together with interest thereon as
provided under the Insurance and Reimbursement Agreement, have been paid,
pursuant to the provisions of Section 8.01(b) of the Sale and Servicing
Agreement.
The Indenture Trustee shall furnish notice of any such redemption in
accordance with Section 8.01 of the Sale and Servicing Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.1. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Issuer made to the
Indenture Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Indenture Trustee and to the Insurer (i) an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with,
(ii) an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with and (iii) (if required by
the TIA) an Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section 11.1, except that, in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
52
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture
(except in the case of the release of Mortgage Loans in accordance with the Sale
and Servicing Agreement), the Issuer shall, in addition to any obligation
imposed in Section 11.1(a) herein or elsewhere in this Indenture, furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days of
such deposit) to the Issuer of the Collateral or other property or securities to
be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (i) above,
the Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of
the Collateral, other property or securities to be so deposited and of
all other such Collateral, other property or securities made the basis
of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the aggregate Class A Note Principal Amount of
the Notes, but such a certificate need not be furnished with respect
to any securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is less than
either (A) $25,000 or (B) one percent of the aggregate Class A Note
Principal Amount of the Notes.
(iii) Whenever any property or securities are to be released from
the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person
the proposed release will not impair the security under this Indenture
in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (iii) above,
the Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair
53
value of the property or securities and of all other property or
securities released from the lien of this Indenture since the
commencement of the then-current calendar year, as set forth in the
certificates required by clause (iii) above and this clause (iv),
equals 10% or more of the aggregate Class A Note Principal Amount of
the Notes, but such certificate need not be furnished in the case of
any release of property or securities if the fair value thereof as set
forth in the related Officer's Certificate is less than $25,000 or
less than one percent of the then aggregate Class A Note Principal
Amount of the Notes.
Section 11.2. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate of an Authorized Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Master Servicer, the Transferor or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Master Servicer, the
Transferor 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 hereof.
Section 11.3. ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in
54
and evidenced by one or more instruments of substantially similar tenor signed
by such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1 hereof) conclusive in favor of the Indenture Trustee
and the Issuer, if made in the manner provided in this Section 11.3.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
Section 11.4. NOTICES. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or Act of Noteholders is to be
made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed first-class,
postage prepaid to the Issuer addressed to: Household Mortgage Loan Trust
200_-_, in care of [ ], Attention: Corporate Trust Administration, with
copies to the Administrator addressed to: [ ], Attention: Indenture Trust
Administration and to the Master Servicer addressed to: [ ], or at any
other address previously furnished in writing to the Indenture Trustee by the
Issuer or the Administrator. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.
(c) the Insurer, by the Issuer, the Indenture Trustee or by any
Noteholders shall be sufficient for every purpose hereunder if in writing and
mailed, first-class postage pre-paid, or personally delivered or telecopied to:
[ ], Attention: [ ]. The Insurer shall promptly transmit any
notice received by it from the Issuer, the Indenture Trustee or the Noteholders
to the Issuer or Indenture Trustee, as the case may be.
Notices required to be given to the Rating Agencies by the Indenture
Trustee or the Owner Trustee shall be in writing, personally delivered or mailed
by certified mail, return receipt
55
requested, to (i) in the case of [ ], at the following address: [ ]
and (ii) in the case of [ ], at the following address: [ ];
or as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
Section 11.5. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture provides
for notice to Noteholders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class, postage prepaid to each Noteholder affected by such event, at his
address as it appears on the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Noteholders is given by mail, neither the failure to
mail such notice nor any defect in any notice so mailed to any particular
Noteholder shall affect the sufficiency of such notice with respect to other
Noteholders, and any notice that is mailed in the manner herein provided shall
conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder.
Section 11.6. RIGHTS OF THE INSURER TO EXERCISE RIGHTS OF NOTEHOLDERS.
By accepting its Note, each Noteholder agrees that unless an Insurer
Default exists, the Insurer shall have the right to exercise all rights of the
Noteholders as specified under this Agreement without any further consent of the
Noteholders. Any right conferred to the Insurer hereunder shall be suspended and
shall run to the benefit of the Noteholders during any period in which there
exists an Insurer Default, provided, however, that during an Insurer Default,
the consent of the Insurer must be obtained with respect to any amendments that
may materially adversely affect the Insurer.
Section 11.7. CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
56
Section 11.8. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 11.9. SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents.
Section 11.10. SEPARABILITY. In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.11. BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, the Insurer, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 11.12. LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.14. COUNTERPARTS. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 11.15. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
Section 11.16. TRUST OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent,
57
officer, director, employee or agent of the Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign
of the Indenture Trustee or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
Section 11.17. NO PETITION. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Transferor (and any
wholly-owned subsidiary thereof), the Depositor, the Master Servicer or the
Issuer, or join in any institution against the Transferor (and any wholly-owned
subsidiary thereof), the Depositor, the Master Servicer or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Transaction Documents.
Section 11.18. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or the
Insurer, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee and the Insurer (to the extent described in the
Insurance and Reimbursement Agreement) shall and shall cause its representatives
to hold in confidence all such information except to the extent disclosure may
be required by law (and all reasonable applications for confidential treatment
are unavailing) and except to the extent that the Indenture Trustee may
reasonably determine that such disclosure is consistent with its obligations
hereunder.
Section 11.19. INCONSISTENCIES WITH THE SALE AND SERVICING AGREEMENT. In
the event certain provisions of this Agreement conflict with the provisions of
the Sale and Servicing Agreement, the parties hereto agree that the provisions
of the Sale and Servicing Agreement shall be controlling.
Section 11.20. THIRD-PARTY BENEFICIARIES. This Indenture will inure to the
benefit of and be binding upon the parties hereto, the Noteholders, the Note
Owners, the Insurer and their respective successors and permitted assigns.
Except as otherwise provided in this Indenture, no other person will have any
right or obligation hereunder.
58
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
HOUSEHOLD MORTGAGE LOAN TRUST
200_-_
By: [ ], not in
its individual capacity but solely as
Owner Trustee
By:
-------------------------------------
Name:
Title:
[ ],
as Indenture Trustee
By:
------------------------------------------
Name:
Title:
STATE OF
COUNTY OF
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared _______________, known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
[ ], not in its individual capacity, but solely as Owner Trustee on
behalf of HOUSEHOLD MORTGAGE LOAN TRUST 200_-_, a Delaware business trust, and
that such person executed the same as the act of said business trust for the
purpose and consideration therein expressed, and in the capacities therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of [ ].
--------------------------------------------------
Notary Public in and for the State of
------------
(Seal)
My commission expires:
---------------------------
STATE OF
COUNTY OF
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ____________________, known to
me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of [ ],
[a state] banking corporation, and that such person executed the same as the act
of said corporation for the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of [ ].
--------------------------------------------------
Notary Public in and for the State of
------------
(Seal)
My commission expires:
---------------------------
SCHEDULE A
MORTGAGE LOAN SCHEDULE
EXHIBIT A
FORM OF CLASS A NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
No. CUSIP NO.
Aggregate Class Note Principal Amount: Denomination of this Class A
Note:
$ $
HOUSEHOLD MORTGAGE LOAN TRUST ______-_
[ ] MORTGAGE LOAN ASSET-BACKED NOTES, SERIES _____-_, CLASS A
HOUSEHOLD MORTGAGE LOAN TRUST ____-_, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Trust"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of $____________ payable on each Payment
Date in an amount equal to the result obtained by multiplying (i) a fraction the
numerator of which is the initial principal amount of this Class A Note and the
denominator of which is the aggregate principal amount of all Class A Notes by
(ii) the aggregate amount, if any, payable from the Distribution Account in
respect of principal on the Class A Note pursuant to Section 5.01 of the Sale
and Servicing Agreement dated as of [ ] (the "Sale and Servicing
Agreement"), among the Trust, Household Mortgage Funding Corporation III, as
Depositor (the "Depositor"), Household Finance Corporation, as Master Servicer
("HFC"), and [ ], a banking corporation organized under the laws of
the State of [ ], as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earliest to occur of (i) the Payment Date occurring in
[ ] (the "Final Maturity Date"), (ii) any termination date pursuant
to Section 8.01 of the Sale and Servicing Agreement or (iii) the date on which
an Event of Default under the Indenture dated as of [ ], between
the Trust and the Indenture Trustee shall have occurred and be continuing, if
the Indenture Trustee or the Holders of Notes representing not less than a
[ ] of the Outstanding
A-1
Amount of the Notes have declared the Notes to be immediately due and payable in
the manner provided in Section 5.2 of the Indenture. Capitalized terms used but
not defined herein are defined in Article I of the Indenture, which also
contains rules as to construction that shall be applicable herein.
The Trust will pay interest on this Note at the rate per annum described in
the Sale and Servicing Agreement with respect to the Class A Note on the
principal amount of this Note outstanding on the preceding Payment Date (after
giving effect to all payments of principal made on the preceding Payment Date)
on each Payment Date until the principal of this Note is paid or made available
for payment in full. Interest on this Note will accrue for each Payment Date
during the [period from the preceding Payment Date to the day preceding such
Payment Date (or, in the case of the first Payment Date, the period from the
Closing Date to the day preceding the First Payment Date)] (each, an "Interest
Period"). Interest will be computed on the basis of the [actual number of] days
in each Interest Period and a [360-]day year. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Trust
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
A-2
IN WITNESS WHEREOF, the Trust has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: [ ]
HOUSEHOLD MORTGAGE LOAN TRUST
______-_
By: [ ], not in its
individual capacity but solely as
Owner Trustee under the Trust Agreement
By:
-----------------------------------------
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: [ ]
[ ],
not in its individual capacity but solely as
Indenture Trustee,
By:
-----------------------------------------
Authorized Signatory
A-3
(REVERSE OF NOTE)
This Note is one of a duly authorized issue of Notes of the Trust,
designated as its [ ] Mortgage Loan Asset-Backed Notes, Class A, 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 Trust, the Indenture Trustee and the Holders of
the Notes. The Class A Notes are subject to all terms of the Indenture.
The Class A Notes are and will be secured by the collateral pledged as
security therefor as provided in the Indenture.
Principal of the Class A Notes will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the [25]th day of each
month, or, if any such date is not a Business Day, the next succeeding Business
Day, commencing in [ ].
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Final Maturity Date and any termination
date pursuant to Section 8.01 of the Sale and Servicing Agreement.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which an Event of Default under the
Indenture shall have occurred and be continuing and the Indenture Trustee, at
the direction or upon the prior written consent of the Holders of the Notes
representing not less than [51]% of the Outstanding Amount of the Notes, shall
have declared the Notes to be immediately due and payable in the manner provided
in Section 5.2 of the Indenture. All principal payments on the Class A Notes
shall be made pro rata to the Holders of the Class A Notes entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the related installment of principal, if any, to the extent not in
full payment of this Note, shall be made by wire transfer of immediately
available funds to, or by check mailed to, the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register as of the close of business on each Record Date, except that with
respect to Notes registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee. Such checks shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Trust, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's principal Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in
New York,
New York.
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As provided in the Sale and Servicing Agreement, the Class A Notes may be
redeemed in whole, but not in part, at the option of the Master Servicer, on any
Payment Date on and after the date on which the Pool Balance is less than or
equal to [ ]% of the Cut-Off Date Pool Balance.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Trust pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and thereupon one or more new Notes of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the Trust may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Trust, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Trust or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Trust, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such Person may have expressly
agreed and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees by accepting
the benefits of the Indenture that such Noteholder or Note Owner will not at any
time institute against the Depositor or the Trust, or join in any institution
against the Depositor or the Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Transaction Documents.
The Trust has entered into the Indenture and this Note is issued with the
intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Trust
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each
Note Owner by acceptance of a beneficial interest in a Note), agrees to treat
A-5
the Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Trust.
Prior to the due presentment for registration of transfer of this Note, the
Trust, the Indenture Trustee and any agent of the Trust or the Indenture Trustee
may treat the Person in whose name this Note (as of the day of determination or
as of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and none of
the Trust, the Indenture Trustee or any such agent shall be affected by notice
to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Holders of the Notes under the Indenture at any time
by the Trust with the consent of the Holders of Notes representing a majority of
the Outstanding Amount of all Notes at the time Outstanding. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Trust with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Trust" as used in this Note includes any successor to the Trust
under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws
of the State of
New York, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Trust, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Transaction Documents, none of the Trust in its individual
capacity, the Owner Trustee in its individual capacity, any owner of a
beneficial interest in the Trust, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations
A-6
or indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Transaction
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Trust for any
and all liabilities, obligations and undertakings contained in the Indenture or
in this Note.
A-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
__________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
---------------------------
*/
----------------------------------------
Signature Guaranteed:
*/
----------------------------------------
----------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
A-8