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EXHIBIT 4.2
INDENTURE
BETWEEN
[ISSUER],
AS ISSUER,
AND
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
AS TRUSTEE
Dated as of [ ]
Relating to
[ISSUER]
ASSET-BACKED BONDS, SERIES 199[ ]-[ ]
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TABLE OF CONTENTS
Page
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ARTICLE I.
DEFINITIONS
Section 1.01 General Definitions...........................................................3
Accountant...........................................................................3
Act..................................................................................3
Advance..............................................................................3
Affiliate............................................................................3
Agent................................................................................3
Aggregate Stated Balance.............................................................3
Assignments..........................................................................4
Assumed Scheduled Payment............................................................4
Authenticating Agent.................................................................4
Authorized Officer...................................................................4
Available Funds......................................................................4
Balloon Loan.........................................................................5
Balloon Payment......................................................................5
Best Efforts.........................................................................5
Bond Account.........................................................................5
Bond Balance.........................................................................5
Bondholder or Holder.................................................................6
Bond Interest Payment Amount.........................................................6
Bond Interest Rate...................................................................6
Bond Principal Payment Amount........................................................6
Bond Owner...........................................................................6
Bond Register........................................................................6
Bond Registrar.......................................................................6
Bonds................................................................................6
Book Entry Bonds.....................................................................6
Book Entry Termination...............................................................6
Borrower.............................................................................7
Business Day.........................................................................7
Certificate of Incorporation.........................................................7
Clearing Agency......................................................................7
Clearing Agency Participants.........................................................7
Closing Date.........................................................................7
Code.................................................................................7
Collection Account...................................................................7
Collection Period....................................................................7
Commission...........................................................................7
Condemnation Proceeds................................................................8
Corporate Trust Office...............................................................8
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Current Bond Balance.................................................................8
Custodian............................................................................8
Cut-off Date.........................................................................8
Cut-off Date Balance.................................................................8
Debt Service Requirement.............................................................8
Default..............................................................................8
Defaulted Mortgage Loan..............................................................8
Definitive Bonds.....................................................................8
Determination Date...................................................................8
Due Date.............................................................................8
Eligible Investments.................................................................9
Event of Default.....................................................................9
Full Prepayment......................................................................9
Grant...............................................................................10
Highest Lawful Rate.................................................................10
Indenture...........................................................................10
Independent.........................................................................10
Individual Bond.....................................................................11
Insurance Policies..................................................................11
Insurance Proceeds..................................................................11
Interest Accrual Period.............................................................11
Issuer..............................................................................11
Issuer Order........................................................................11
Issuer Request......................................................................11
Letter Agreement....................................................................11
Liquidation Date....................................................................11
Liquidation Principal Amount........................................................11
Liquidation Proceeds................................................................11
Loan Number.........................................................................12
Maturity............................................................................12
Monthly Advance.....................................................................12
Monthly Payment.....................................................................12
Mortgage............................................................................12
Mortgage File.......................................................................12
Mortgage Loan.......................................................................12
Mortgage Loan Conveyance Agreement..................................................13
Mortgage Loan Provider..............................................................13
Mortgage Loan Schedule..............................................................13
Mortgage Note.......................................................................13
Mortgage Pool.......................................................................13
Mortgage Rate.......................................................................13
Mortgaged Property..................................................................13
Mortgagor...........................................................................13
Net Monthly P&I.....................................................................13
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Net Mortgage Rate...................................................................14
Net Principal Distribution Amount...................................................14
Nonrecoverable Advance..............................................................14
Officers' Certificate...............................................................14
Officers' Certificate of the Servicer...............................................14
Opinion of Counsel..................................................................14
Opinion of Independent Counsel......................................................14
Optional Redemption Date............................................................14
Original Mortgage Loans.............................................................14
Outstanding.........................................................................14
Paying Agent........................................................................15
Payment Date........................................................................15
Payment Date Statement..............................................................15
Permitted Encumbrance...............................................................15
Person..............................................................................16
Predecessor Bonds...................................................................16
Prepayment..........................................................................16
Prepayment Period...................................................................16
Prepayment Premium..................................................................16
Principal Distribution Amount.......................................................16
Proceeding..........................................................................17
Rating Agency.......................................................................17
Realized Loss.......................................................................17
Record Date.........................................................................17
Redemption Price....................................................................18
Reimbursement Rate..................................................................18
Remittance..........................................................................18
Remittance Date.....................................................................18
REO Disposition.....................................................................18
REO Disposition Proceeds............................................................18
REO Property........................................................................18
Required Subordination Level........................................................19
Responsible Officer.................................................................19
Sale................................................................................19
Scheduled Payment...................................................................19
Servicer............................................................................19
Servicer Reporting Date.............................................................19
Servicing Advance...................................................................19
Servicing Agreement.................................................................19
Servicing Fee.......................................................................20
Stated Maturity.....................................................................20
Stated Maturity Date................................................................20
Stated Principal Balance............................................................20
Subordination Level.................................................................20
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Trigger Event.......................................................................21
Trust Estate........................................................................21
Trust Indenture Act or TIA..........................................................21
Trustee.............................................................................21
Trustee's Fee.......................................................................21
Vice President......................................................................21
ARTICLE II.
THE BONDS
Section 2.01 Forms Generally..............................................................21
Section 2.02 Forms of Certificate of Authentication.......................................22
Section 2.03 General Provisions With Respect to Principal and Interest Payments...........22
Section 2.04 Denominations................................................................23
Section 2.05 Execution, Authentication, Delivery and Dating...............................23
Section 2.06 Registration, Registration of Transfer and Exchange..........................24
Section 2.07 Mutilated, Destroyed, Lost or Stolen Bonds...................................25
Section 2.08 Payments of Principal and Interest...........................................25
Section 2.09 Persons Deemed Owners........................................................28
Section 2.10 Cancellation.................................................................28
Section 2.11 Authentication and Delivery of Bonds.........................................29
Section 2.12 Book Entry Bonds.............................................................30
Section 2.13 Termination of Book Entry System.............................................31
ARTICLE III.
COVENANTS
Section 3.01 Payment of Bonds.............................................................32
Section 3.02 Maintenance of Office or Agency..............................................32
Section 3.03 Money for Bond Payments to Be Held in Trust..................................32
Section 3.04 Existence of Issuer..........................................................34
Section 3.05 Protection of Trust Estate...................................................35
Section 3.06 Opinions as to Trust Estate..................................................36
Section 3.07 Performance of Obligations; Servicing Agreement..............................36
Section 3.08 Investment Company Act.......................................................37
Section 3.09 Negative Covenants...........................................................37
Section 3.10 Annual Statement as to Compliance............................................39
Section 3.11 Recording of Assignments.....................................................39
ARTICLE IV.
SATISFACTION AND DISCHARGE
Section 4.01 Satisfaction and Discharge of Indenture......................................40
Section 4.02 Application of Trust Money...................................................41
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ARTICLE V.
DEFAULTS AND REMEDIES
Section 5.01 Event of Default.............................................................41
Section 5.02 Acceleration of Maturity; Rescission and Annulment...........................43
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Trustee..............43
Section 5.04 Remedies.....................................................................44
Section 5.05 Trustee May File Proofs of Claim.............................................44
Section 5.06 Trustee May Enforce Claims Without Possession of Bonds.......................45
Section 5.07 Application of Money Collected...............................................45
Section 5.08 Limitation on Suits..........................................................46
Section 5.09 Unconditional Rights of Bondholders to Receive Principal and Interest........47
Section 5.10 Restoration of Rights and Remedies...........................................47
Section 5.11 Rights and Remedies Cumulative...............................................47
Section 5.12 Delay or Omission Not Waiver.................................................47
Section 5.13 Control by Bondholders.......................................................48
Section 5.14 Waiver of Past Defaults......................................................48
Section 5.15 Undertaking for Costs........................................................48
Section 5.16 Waiver of Stay or Extension Laws.............................................49
Section 5.17 Sale of Trust Estate.........................................................49
Section 5.18 Action on Bonds..............................................................51
Section 5.19 No Recourse to Other Trust Estates or Other Assets of the Issuer.............51
Section 5.20 Application of the Trust Indenture Act.......................................51
ARTICLE VI.
THE TRUSTEE
Section 6.01 Duties of Trustee............................................................51
Section 6.02 Notice of Default............................................................53
Section 6.03 Rights of Trustee............................................................53
Section 6.04 Not Responsible for Recitals or Issuance of Bonds............................54
Section 6.05 May Hold Bonds...............................................................54
Section 6.06 Money Held in Trust..........................................................54
Section 6.07 Compensation and Reimbursement...............................................55
Section 6.08 Eligibility; Disqualification................................................56
Section 6.09 Trustee's Capital and Surplus................................................56
Section 6.10 Resignation and Removal; Appointment of Successor............................56
Section 6.11 Acceptance of Appointment by Successor.......................................58
Section 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee.......58
Section 6.13 Preferential Collection of Claims Against Issuer.............................59
Section 6.14 Co-Trustees and Separate Trustees............................................59
Section 6.15 Authenticating Agents........................................................60
Section 6.16 Review of Mortgage Files.....................................................61
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ARTICLE VII.
BONDHOLDERS' LISTS AND REPORTS
Section 7.01 Issuer to Furnish Trustee Names and Addresses of Bondholders.................62
Section 7.02 Preservation of Information; Communications to Bondholders...................62
Section 7.03 Reports by Trustee...........................................................62
Section 7.04 Reports by Issuer............................................................63
ARTICLE VIII.
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01 Collection of Moneys.........................................................63
Section 8.02 Bond Account.................................................................64
Section 8.03 General Provisions Regarding the Bond Account and Mortgage Loans.............66
Section 8.04 Releases of Defective Mortgage Loans Withdrawn by Servicer...................67
Section 8.05 Reports by Trustee to Bondholders; Access to Certain Information.............68
Section 8.06 Trust Estate Mortgage Files..................................................68
Section 8.07 Amendment to Servicing Agreement.............................................69
Section 8.08 Delivery of the Mortgage Files Pursuant to Servicing Agreement...............69
Section 8.09 Records......................................................................69
Section 8.10 Servicer as Agent............................................................70
Section 8.11 Termination of Servicer......................................................70
Section 8.12 Opinion of Counsel...........................................................70
Section 8.13 Appointment of Custodians....................................................70
ARTICLE IX.
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of Bondholders.......................71
Section 9.02 Supplemental Indentures With Consent of Bondholders..........................72
Section 9.03 Execution of Supplemental Indentures.........................................73
Section 9.04 Effect of Supplemental Indentures............................................74
Section 9.05 Conformity With Trust Indenture Act..........................................74
Section 9.06 Reference in Bonds to Supplemental Indentures................................74
Section 9.07 Amendments to Governing Documents............................................74
ARTICLE X.
REDEMPTION OF BONDS
Section 10.01 Redemption...................................................................75
Section 10.02 Form of Redemption Notice....................................................75
Section 10.03 Bonds Payable on Optional Redemption.........................................76
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ARTICLE XI.
MISCELLANEOUS
Section 11.01 Compliance Certificates and Opinions.........................................76
Section 11.02 Form of Documents Delivered to Trustee.......................................77
Section 11.03 Acts of Bondholders..........................................................78
Section 11.04 Notices, etc. to Trustee and Issuer..........................................79
Section 11.05 Notices and Reports to Bondholders; Waiver of Notices........................79
Section 11.06 Rules by Trustee.............................................................80
Section 11.07 Conflict With Trust Indenture Act............................................80
Section 11.08 Effect of Headings and Table of Contents.....................................80
Section 11.09 Successors and Assigns.......................................................80
Section 11.10 Separability.................................................................80
Section 11.11 Benefits of Indenture........................................................80
Section 11.12 Legal Holidays...............................................................80
Section 11.13 Governing Law................................................................81
Section 11.14 Counterparts.................................................................81
Section 11.15 Recording of Indenture.......................................................81
Section 11.16 Issuer Obligation............................................................81
Section 11.17 Inspection...................................................................81
Section 11.18 Usury........................................................................82
SCHEDULES AND EXHIBITS
Schedule A Mortgage Loan Schedule
Exhibit A Form of Bond
Exhibit B Mortgage Loan Conveyance Agreement
Exhibit C Letter of Representations to The Depository Trust Company
Exhibit D Trustee's Final Certification
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CROSS-REFERENCE TABLE
Cross-reference sheet showing the location in the Indenture of the
provisions inserted pursuant to Sections 310 through 318(a) inclusive of the
Trust Indenture Act of 1939, as amended.*
Trust Indenture Act of 1939 Indenture Section
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Section 310
(a) (1)................................ 6.08
(a) (2)................................ 6.09
(a) (3)................................ 6.14
(a) (4)................................ Not Applicable
(b) 6.08
....................................... 6.10(d)(2)
(c).................................... Not Applicable
Section 311
(a).................................... 6.13
(b).................................... 6.13
(c).................................... Not Applicable
Section 312
(a).................................... 7.01(a)
....................................... 7.02(a)
(b).................................... 7.02(b)
(c).................................... 7.02(c)
Section 313
(a).................................... 7.03(a)
(b).................................... 7.03(a)
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*This Cross-Reference Table is not part of the Indenture.
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Trust Indenture Act of 1939 Indenture Section
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(c).................................... 11.05
(d).................................... 7.03(b)
Section 314
(a).................................... 7.04
(b)(1)................................. 2.11(c)(viii)
(b)(2)................................. 3.06
(c)(1)................................. 2.11(d)
....................................... 4.01
....................................... 8.02(d)
....................................... 11.01
(c)(2)................................. 2.11(c)(ii)
....................................... 4.01
....................................... 8.02(d)
....................................... 11.01
(c)(3).................................
....................................... 2.11(e)
....................................... 8.02(d)
(d)(1)................................. 11.01(b)
(d)(2)................................. 11.01(c)
(d)(3) 11.01(d)
(e).................................... 11.01
.......................................
.......................................
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*This Cross-Reference Table is not part of the Indenture.
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Section 315
(a).................................... 6.01(b)
....................................... 6.01(c)(1)
(b).................................... 6.02
....................................... 11.05
(c).................................... 6.01(a)
(d)(1)................................. 6.01(b)
....................................... 6.01(c)
(d)(2)................................. 6.01(c)(2)
(d)(3)................................. 6.01(c)(3)
(e).................................... 5.15
Section 316
(a) ................................... 5.20(a)
(b).................................... 5.09
(c).................................... 5.20(b)
....................................... 1.01
Section 317
(a)(1)................................. 5.03
(a)(2)................................. 5.05
(b).................................... 3.03
Section 318
(a).................................... 11.07
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*This Cross-Reference Table is not part of the Indenture.
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THIS INDENTURE, dated as of [ ], 199[ ] (as amended or supplemented from
time to time as permitted hereby, this "Indenture"), is between [ISSUER], a
[Delaware] corporation (together with its permitted successors and assigns, the
"Issuer") and BANKERS TRUST COMPANY OF CALIFORNIA, N.A., a national banking
association, as trustee (together with its permitted successors in the trusts
hereunder, the "Trustee").
Preliminary Statement
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for its Asset-Backed Bonds, Series 199[ ]-[ ] (the
"Bonds"), issuable as provided in this Indenture. All covenants and agreements
made by the Issuer herein are for the benefit and security of the Holders of the
Bonds. The Issuer is entering into this Indenture, and the Trustee is accepting
the trusts created hereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer in accordance with its terms have been done.
Granting Clause
The Issuer hereby Grants to the Trustee, for the exclusive benefit of the
Holders of the Bonds, all of the Issuer's right, title and interest in and to
(a) the Mortgage Loans listed in Schedule A to this Indenture, including the
related Mortgage Files, that the Issuer has caused to be delivered to the
Trustee herewith and all payments of Net Monthly P&I due thereon after the
Cut-off Date whenever received, whether before or after the date hereof, all
Prepayments thereof received after the Cut-off Date, and all other proceeds
received in respect of such Mortgage Loans (other than payments of Monthly
Payments due on or prior to the Cut-off Date), (b) the Servicing Agreement, (c)
each Mortgage Loan Conveyance Agreement, (d) the Insurance Policies, (e) all
cash, instruments or other property held or required to be deposited in the
Collection Account or the Bond Account, including all investments made with
funds in the Collection Account or the Bond Account (but not including any
income on funds deposited in, or investments made with funds deposited in, the
Collection Account which income shall belong to and be for the account of the
Servicer, and not including any income on funds deposited in, or investments
made with funds deposited in, the Bond Account which income shall belong to and
be for the account of the Trustee), and (g) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing into cash or other liquid
assets, including, without limitation, all insurance proceeds and condemnation
awards. Such Grants are made, however, in trust, to secure the Bonds equally and
ratably without prejudice, priority or distinction between any Bond and any
other Bond by reason of difference in time of issuance or otherwise, and to
secure (i) the payment of all amounts due on the Bonds in accordance with their
terms, (ii) the payment of all other sums payable under this Indenture and (iii)
compliance with the provisions of this
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Indenture, all as provided in this Indenture. All terms used in the foregoing
granting clauses that are defined in Section 1.01 are used with the meanings
given in said Section.
The Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions of this Indenture and agrees to perform the
duties herein required to the end that the interests of the Holders of the Bonds
may be adequately and effectively protected.
ARTICLE I.
DEFINITIONS
Section 1.01 General Definitions.
Except as otherwise specified or as the context may otherwise require, the
following terms have the respective meanings set forth below for all purposes of
this Indenture, and the definitions of such terms are applicable to the singular
as well as to the plural forms of such terms and to the masculine as well as to
the feminine genders of such terms. Whenever reference is made herein to an
Event of Default or a Default known to the Trustee or of which the Trustee has
notice or knowledge, such reference shall be construed to refer only to an Event
of Default or Default of which the Trustee is deemed to have notice or knowledge
pursuant to Section 6.01(d). All other terms used herein that are defined in the
Trust Indenture Act (as hereinafter defined), either directly or by reference
therein, have the meanings assigned to them therein.
"Accountant": A Person engaged in the practice of accounting who (except
when this Indenture provides that an Accountant must be Independent) may be
employed by or affiliated with the Issuer or an Affiliate of the Issuer.
"Act": With respect to any Bondholder, as defined in Section 11.03.
"Advance": Any Monthly Advance or Servicing Advance.
"Affiliate": 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
specified 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, relation to individuals or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent": Any Bond Registrar, Paying Agent, Authenticating Agent or
Custodian.
"Aggregate Stated Balance": With respect to any Determination Date, an
amount equal to the aggregate of the Stated Principal Balances of the Mortgage
Loans included in the Mortgage Pool as of the end of the immediately preceding
Collection Period.
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"Assignments": Collectively (i) the original instrument of assignment of a
Mortgage, the Mortgage Note secured thereby and all other documents securing
such Mortgage Note, including any interim assignments from the originator or any
other holder of any Mortgage Loan to the Issuer, (ii) the original instrument of
assignment of each agreement creating any leases, rents, income or profits
derived from the ownership, operation or disposition of all or a portion of the
related Mortgaged Property (if such item is separate from the Mortgage) and
(iii) the original instrument of assignment of such Mortgage, Mortgage Note and
other documents (described in clauses (i) and (ii)) made by the Issuer to the
Trustee (that in each case may, to the extent permitted by the laws of the state
in which the related Mortgaged Property is located, be a blanket instrument of
assignment covering other Mortgages and Mortgage Notes as well and that may also
be an instrument of assignment running directly from the mortgagee of record
under the related Mortgage to the Trustee).
["Assumed Scheduled Payment": With respect to any Mortgage Loan that has a
Balloon Payment and that is delinquent in respect of its Balloon Payment beyond
the first Determination Date that follows its Stated Maturity Date, an amount
deemed to be due for such Mortgage Loan on its Stated Maturity Date and on each
successive related Due Date that it remains or is deemed to remain outstanding
equal to the Scheduled Payment that would have been due thereon on such date if
the related Balloon Payment had not come due but rather such Mortgage Loan had
continued to amortize in accordance with such Mortgage Loan's amortization
schedule, if any, in effect prior to its Stated Maturity Date. With respect to
any delinquent Balloon Loan that provides for Monthly Payments of interest only
prior to its Stated Maturity Date, the Assumed Scheduled Payment for such
Balloon Loan will equal zero.]
"Authenticating Agent": The Person, if any, appointed as Authenticating
Agent by the Trustee at the request of the Issuer pursuant to Section 6.15,
until any successor Authenticating Agent for the Bonds is named, and thereafter
"Authenticating Agent" shall mean such successor. The initial Authenticating
Agent shall be the Trustee.
"Authorized Officer": Chairman, President, or any Vice President of the
Issuer.
"Available Funds": With respect to each Payment Date, an amount equal to
the sum of the following amounts:
(i) scheduled payments of principal and interest due on the
Mortgage Loans during the related Collection Period and collected prior to or
during the related Collection Period;
(ii) all Monthly Advances made with respect to such Payment Date;
(iii) with respect to each Mortgage Loan, all partial and full
Prepayments received on that Mortgage Loan during the related Prepayment Period;
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(iv) all other proceeds received on or in respect of the Mortgage
Loans during the related Prepayment Period; and
(v) any other amounts required under the Indenture to be deposited
into the Bond Account during the related Collection Period or with respect to
such Payment Date (including, without limitation, deposits pursuant to Section
8.04 in connection with breaches of representations and warranties by the
Mortgage Loan Provider and deposits pursuant to Section 4.01, Section 8.01,
Section 8.04(c) and Section 10.01);
but net of the following amounts:
(a) the Servicing Fee and the Trustee's Fee paid during or
with respect to the related Collection Period;
(b) amounts applied to reimburse Monthly Advances for prior
Payment Dates or other previously unreimbursed Servicing Advances (and interest
thereon at the related Reimbursement Rate), and all other amounts permitted to
be withdrawn from the Collection Account in accordance with the terms of the
Servicing Agreement; and
(c) any late payment fees, escrow payments and Prepayment
Premiums paid by Mortgagors.
"Balloon Loan": A Mortgage Loan whose amortization schedule includes a
Balloon Payment.
"Balloon Payment": With respect to any Mortgage Loan that is not fully
amortizing over its term to maturity, a lump-sum payment, equal to the unpaid
principal balance due on the Stated Maturity Date thereof.
"Best Efforts": Efforts determined to be in good faith and reasonably
diligent by the Person performing such efforts, specifically the Issuer or the
Servicer, as the case may be, in its reasonable discretion. Such efforts do not
require the Issuer or the Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Issuer or the Servicer, as the case may be, to advance or expend
fees or sums of money in addition to those specifically set forth in this
Indenture and the Servicing Agreement.
"Bond Account": The trust account or accounts created and maintained
pursuant to Section 8.02.
"Bond Balance": With respect to all of the Bonds the aggregate of the
Current Bond Balances of all Bonds Outstanding at the time of determination.
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"Bondholder" or "Holder": The Person in whose name a Bond is registered in
the Bond Register.
"Bond Interest Payment Amount": With respect to each Payment Date, one
month's interest at the Bond Interest Rate on the Bond Balance on the related
Determination Date as provided in Section 2.03.
"Bond Interest Rate": With respect to the Bonds, the annual rate at which
interest accrues on the Bonds as specified in the Bonds and in Section 2.03.
"Bond Principal Payment Amount":
[(i) with respect to each Payment Date for which a Trigger
Event does not exist and with respect to each Payment Date on which the
Subordination Level will be (after taking into account the principal payments
that are to be made on the Bonds on such Payment Date, if made in an amount
determined pursuant to this clause (i)) equal to or greater than the Required
Subordination Level for such Payment Date, the lesser of (a) [ ] of the Net
Principal Distribution Amount for such Payment Date plus the Liquidation
Principal Amount for such Payment Date; and (b) the Bond Balance immediately
prior to such Payment Date; and
(ii) with respect to any other Payment Date, the lesser of
(a) 100% of the Principal Distribution Amount for such Payment Date and (b) the
Bond Balance immediately prior to such Payment Date.]
"Bond Owner": With respect to a Book Entry Bond, the Person who is the
beneficial owner of such Bond as reflected on the books of the Clearing Agency
for the Bonds or on the books of a Person maintaining an account with such
Clearing Agency (directly or as an indirect participant, in accordance with the
rules of such Clearing Agency).
"Bond Register": As defined in Section 2.06.
"Bond Registrar": As defined in Section 2.06.
"Bonds": Any bonds authorized by, and authenticated and delivered under,
this Indenture.
"Book Entry Bonds": Bonds that are issued in book entry form and held in
the form of one or more certificates issued in the name of a Clearing Agency
registered with the Commission.
"Book Entry Termination": The time at which the book entry registration of
the Book Entry Bonds shall terminate, as specified in Section 2.13.
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"Borrower": The original Mortgagor under a Mortgage Loan.
"Business Day": Any day other than (i) a Saturday or Sunday or (ii) a day
that is either a legal holiday or a day on which banking institutions in the
State of New York or the State of California are authorized or obligated by law,
regulation or executive order to be closed.
"Certificate of Incorporation": The Issuer's Certificate of Incorporation
filed with the Secretary of State of the State of Delaware on [ .]
"Clearing Agency": An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
and the regulations of the Commission thereunder and shall initially be [The
Depository Trust Company of New York], the nominee for which is Cede & Co.
"Clearing Agency Participants": The entities for whom the Clearing Agency
will maintain book entry records of ownership and transfer of Book Entry Bonds,
which may include securities brokers and dealers, banks and trust companies and
clearing corporations and certain other organizations.
"Closing Date": [ ], the date of initial issuance of the Bonds.
"Code": The Internal Revenue Code of 1986, as amended, and as may be
further amended from time to time, as successor statutes thereto, and applicable
U.S. Department of Treasury regulations issued pursuant thereto in temporary or
final form and proposed regulations thereunder to the extent that, by reason of
their proposed effective date, such proposed regulations would apply.
"Collection Account": As defined in Article I of the Servicing Agreement.
"Collection Period": With respect to a Payment Date, the period commencing
on the [ ] day of the month preceding the month in which such Payment Date
occurs (except that, in the case of the first Payment Date, the related
Collection Period will commence on the day following the Cut-off Date) and
ending on the [ ] day of the month in which such Payment Date occurs.
"Commission": The Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934, or if at any
time such Commission is not existing and performing the duties now assigned to
it under the Trust Indenture Act, then the body performing such duties at such
time under the Trust Indenture Act or similar legislation replacing the Trust
Indenture Act.
"Condemnation Proceeds": All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
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"Corporate Trust Office": The principal corporate trust office of the
Trustee located at [3 ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇], or at
such other address as the Trustee may designate from time to time by notice to
the Bondholders and the Issuer, or the principal corporate trust office of any
successor Trustee.
"Current Bond Balance": With respect to any Bond as of any date of
determination, the original principal amount of such Bond, reduced by all prior
payments, if any, made with respect to principal of such Bond.
"Custodian": A Person who is at any time appointed by the Trustee pursuant
to Section 8.13 as a document custodian for the Mortgage Files, which Person
shall not be the Issuer or an Affiliate of the Issuer.
"Cut-off Date": [ ].
"Cut-off Date Balance": With respect to any Mortgage Loan, the outstanding
principal balance of such Mortgage Loan as of the Cut-off Date, after the
application of all principal payments due on or before such date, whether or not
received.
"Debt Service Requirement": With respect to a particular Payment Date, the
sum of:
(a) the Bond Interest Payment Amount for such Payment Date; and
(b) the Bond Principal Payment Amount for such Payment Date.
"Default": Any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.
"Defaulted Mortgage Loan": The meaning specified in Section 8.04(c).
"Definitive Bonds": Bonds other than Book Entry Bonds.
"Determination Date": With respect to any Payment Date, the first Business
Day following the end of the related Collection Period.
"Due Date": With respect to any Mortgage Loan, the date each month on
which the Monthly Payment is due.
"Eligible Investments": Any one or more of the following obligations,
instruments and securities:
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(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of the United
States;
(ii) general obligations of, or obligations guaranteed by, any
state of the United States or the District of Columbia receiving one of the two
highest ratings of the Rating Agency;
(iii) commercial paper that is then rated in the highest commercial
paper rating category of the Rating Agency;
(iv) certificates of deposit, demand or time deposits, federal
funds or bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any state thereof
and subject to supervision and examination by federal and/or state banking
authorities; provided that the commercial paper and/or long-term debt
obligations of such depository institution or trust company (or in the case of
the principal depository institution in a holding company system, the commercial
paper or long-term debt obligations of such holding company) are then rated in
the highest rating category of the Rating Agency, in the case of commercial
paper, or in the two highest categories in the case of long-term debt
obligations;
(v) demand or time deposits or certificates of deposit issued by
any bank or trust company or savings and loan association and fully insured by
the FDIC;
(vi) repurchase obligations with respect to any security described
in (i) and (ii) above or any other security issued or guaranteed by an agency or
instrumentality of the United States, in either case entered into with a
depository institution or trust company (acting as principal) described in (iv)
above; or
(vii) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States or any state
thereof that, at the time of such investment or contractual commitment providing
for such investments, are then rated in one of the two highest categories of the
Rating Agency.
"Event of Default": The meaning specified in Section 5.01.
"Full Prepayment": With respect to any Mortgage Loan, when any one of the
following occurs: (i) payment is made by the Mortgagor to the Trustee or the
Servicer of 100% of the outstanding principal balance of such Mortgage Loan,
together with all accrued and unpaid interest thereon at the Net Mortgage Rate,
(ii) payment is made to the Trustee of the cash purchase price of such Mortgage
Loan in connection with the purchase of such Mortgage Loan by the Mortgage Loan
Provider, (iii) payment is made to the Servicer or the Trustee of all Insurance
Proceeds, Liquidation Proceeds, Condemnation Proceeds and REO Disposition
Proceeds, and other payments, if any, that have been determined by the Servicer
in accordance
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with the provisions of the Servicing Agreement to be finally recoverable, in the
Servicer's reasonable judgment, in respect of such Mortgage Loan, or (iv)
payment by the Issuer to the Trustee pursuant to Section 8.04(c) of the amount
specified therein with respect to a Defaulted Mortgage Loan.
"Grant": To grant, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security interest
in, deposit, set-over and confirm. A Grant of a Mortgage Loan and related
Mortgage Files, an Eligible Investment, the Servicing Agreement, a Mortgage Loan
Conveyance Agreement, an Insurance Policy or any other instrument shall include
all rights, powers and options (but none of the obligations) of the Granting
party thereunder, including without limitation the immediate and continuing
right to claim for, collect, receive and give receipts for principal and
interest payments thereunder, insurance proceeds, Condemnation Proceeds,
purchase prices and all other moneys payable thereunder and all proceeds
thereof, 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.
"Highest Lawful Rate": The meaning specified in Section 11.18.
"Indenture" or "this Indenture": This instrument as originally executed
and, if from time to time supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
as so supplemented or amended. All references in this instrument to designated
"Articles", "Sections", "Subsections" and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions of this
instrument as originally executed. The words "herein", "hereof", "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section, Subsection or other subdivision.
"Independent": When used with respect to any specified Person means such a
Person who (i) is in fact independent of the Issuer and any other obligor upon
the Bonds, (ii) does not have any direct financial interest or any material
indirect financial interest in the Issuer or in any such other obligor or in an
Affiliate of the Issuer or such other obligor, and (iii) is not connected with
the Issuer or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is herein provided that any Independent Person's opinion or
certificate shall be furnished to the Trustee, such Person shall be appointed by
an Issuer Order and such opinion or certificate shall state that the signer has
read this definition and that the signer is Independent within the meaning
hereof.
"Individual Bond": A Bond of an original principal amount of $[ ]; a Bond
of an original principal amount in excess of $[ ] shall be deemed to be a number
of Individual Bonds equal to the quotient obtained by dividing such original
principal amount by $[ ].
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"Insurance Policies": All insurance policies insuring any Mortgage Loan or
Mortgaged Property, to the extent the Issuer or the Trustee has any interest
therein.
"Insurance Proceeds": As defined in Article I of the Servicing Agreement.
"Interest Accrual Period": With respect to a Payment Date, the one month
period ending on the last day of the month preceding each Payment Date.
"Issuer": Issuer, a [Delaware] corporation, until a successor Person shall
have become the Issuer pursuant to the applicable provisions of this Indenture,
and thereafter "Issuer" shall mean such successor Person.
"Issuer Order" and "Issuer Request": A written order or request of the
Issuer signed by the Chairman, President, any Vice President, Secretary or any
Assistant Secretary of the Issuer and delivered to the Trustee.
"Letter Agreement": The Letter of Representations to The Depository Trust
Company from the Trustee and the Issuer dated [ ], attached hereto as Exhibit C.
"Liquidation Date": With respect to any Mortgage Loan, the date of the
final receipt of all Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds or other payments with respect to such
Mortgage Loan.
"Liquidation Principal Amount": With respect to any Payment Date, the
aggregate of all Liquidation Proceeds, Insurance Proceeds, REO Disposition
Proceeds, Condemnation Proceeds and proceeds of Mortgage Loan repurchases that
were received on or in respect of Mortgage Loans during the related Prepayment
Period and that were identified and applied as recoveries of principal, in each
case net of any portion of such amounts that represents a recovery of the
principal portion of any Scheduled Payment (other than a Balloon Payment) due or
of the principal portion of any Assumed Scheduled Payment deemed due in respect
of the related Mortgage Loan on a Due Date during or prior to the related
Prepayment Period and not previously recovered.
"Liquidation Proceeds": Cash (other than REO Disposition Proceeds,
Condemnation Proceeds and Insurance Proceeds) received in connection with the
liquidation of a Defaulted Mortgage Loan, whether through the sale or assignment
of the Mortgage Loan, trustee's sale, foreclosure sale or otherwise.
"Loan Number": With respect to any Mortgage Loan, the number assigned to
such Mortgage Loan by the Servicer, which number is set forth in the Mortgage
Loan Schedule.
"Maturity": With respect to any Bond, the date on which the entire unpaid
principal amount of such Bond becomes due and payable as therein or herein
provided, whether at the
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Stated Maturity of the final installment of such principal or by declaration of
acceleration, call for redemption or otherwise.
"Monthly Advance": As defined in Article I of the Servicing Agreement.
"Monthly Payment": The scheduled monthly payment of principal and interest
on a Mortgage Loan (including any Balloon Payment) that is payable by a
Mortgagor from time to time under the related Mortgage Note.
"Mortgage": The original mortgage, deed of trust or other security
instrument that creates a first lien in the Mortgaged Property securing a
Mortgage Loan.
"Mortgage File": With respect to each Mortgage Loan, (i) the original
Mortgage Note, endorsed, in the form "Pay to the order of Bankers Trust Company
of California, N.A., as Trustee for the benefit of [Issuer] Asset-Backed Bonds,
Series [ ]-[ ], without recourse"; (ii) the original of the Mortgage, together
with an original or of any intervening assignments of the Mortgage, in each case
with evidence of recording indicated thereon; (iii) the original of any related
assignment of leases (if such item is a document separate from the Mortgage),
with evidence of recording indicated thereon; (iv) an original recorded
assignment of the Mortgage in the form "Pay to the order of Bankers Trust
Company of California, N.A., as Trustee for the benefit of [Issuer] Asset-Backed
Bonds, Series [ ]-[ ]"; (v) an original recorded assignment of any related
assignment of leases (if such item is a document separate from the Mortgage) in
the form "Pay to the order of Bankers Trust Company of California, N.A., as
Trustee for the benefit of [Issuer] Asset-Backed Bonds, Series [ ]-[ ]"; (vi)
originals or copies of all written modification agreements in those instances in
which the terms or provisions of the Mortgage or Mortgage Note have been
modified; (vii) the original or a copy of the policy or certificate of lender's
title insurance issued on the date of the origination of such Mortgage Loan, or,
if such policy has not been issued, an irrevocable, binding commitment to issue
such title insurance policy or an attorneys' title opinion, if customary in the
related jurisdiction where the Mortgaged Property is located; and (viii) any
file copies of any UCC financing statements in the possession of the Mortgage
Loan Provider; if the original of any document described in clause (ii), (iii),
(iv), (v) or (vi) has been retained by the recording office in which such
document was recorded, then a copy thereof duly certified as true and correct by
a duly authorized representative of such recording office shall be included as
part of the Mortgage File for the related Mortgage Loan.
"Mortgage Loan": A mortgage loan Granted to the Trustee under this
Indenture as security for the Bonds. The term "outstanding Mortgage Loans" as of
any date means the Mortgage Loans other than those that have been the subject of
Full Prepayments as of or prior to such date. Notwithstanding that any Mortgaged
Property may be acquired by the Servicer, on behalf of the Trust Estate through
foreclosure, deed in lieu of foreclosure or otherwise, the related Mortgage Loan
will be treated, for purposes of determining the Available Funds, the Principal
Distribution Amount and the amount of Servicing Fees and Trustee's Fees payable
with respect to such Mortgage Loan, as having remained outstanding until the
related REO Property is
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liquidated. In connection therewith, operating revenues and other proceeds
derived from such REO Property (exclusive of related operating costs) will be
applied by the Servicer as principal, interest and other amounts due on such
Mortgage Loan, and the Servicer will make Monthly Advances in respect of such
Mortgage Loan, in all cases as if such Mortgage Loan had remained outstanding.
"Mortgage Loan Conveyance Agreement": That certain Mortgage Loan
Conveyance Agreement, dated as of [ ], between Aames Capital Corporation and
[Issuer], relating to the sale of the Mortgage Loans, a copy of which agreement
is attached hereto as Exhibit B.
"Mortgage Loan Provider": Aames Capital Corporation.
"Mortgage Loan Schedule": Schedule A hereto identifying the Mortgage Loans
being Granted to the Trustee on the Closing Date.
"Mortgage Note": The original note, bond or other evidence of indebtedness
executed by a Borrower that evidences the indebtedness of such Borrower under a
Mortgage Loan.
"Mortgage Pool": As of any date all of the outstanding Mortgage Loans on
such date.
"Mortgage Rate": With respect to each Mortgage Loan, the adjustable rate
per annum set forth in the related Mortgage Note from time to time at which
interest accrues on such Mortgage Loan as of the most recent interest rate
adjustment pursuant to the related Mortgage Note, in each case after giving
effect to any modification of a Mortgage Loan for any period in connection with
a bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Servicer in accordance with the Servicing Agreement.
"Mortgaged Property": The real property and improvements thereon securing
a Mortgage Note.
"Mortgagor": Each Person who is indebted under a Mortgage Note or who has
acquired real property subject to the Mortgage securing a Mortgage Note.
"Net Monthly P&I": With respect to any Mortgage Loan for any Due Date, the
Monthly Payment for such Due Date net of the Servicing Fee.
"Net Mortgage Rate": The Mortgage Rate of a Mortgage Loan net of the
Servicing Fee (expressed in a comparable manner) on such Mortgage Loan.
"Net Principal Distribution Amount": With respect to any Payment Date, the
excess of the Principal Distribution Amount for such Payment Date over the
Liquidation Principal Amount for such Payment Date.
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"Nonrecoverable Advance": As defined in Article I of the Servicing
Agreement.
"Officers' Certificate": A certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary of
the Issuer or of such other Person as is delivering such certificate, and
delivered to the Trustee. Unless otherwise specified, any reference in this
Indenture to an Officers' Certificate shall be to an Officers' Certificate as
defined in the previous sentence.
"Officers' Certificate of the Servicer": A certificate signed by two
authorized officers of the Servicer.
"Opinion of Counsel": A written opinion of counsel who may, except as
otherwise expressly provided in this Indenture, be counsel for the Issuer and
who shall be reasonably satisfactory to the Trustee.
"Opinion of Independent Counsel": An Opinion of Counsel rendered by
counsel that is Independent.
"Optional Redemption Date": With respect to the Bonds that are subject to
optional redemption, any Payment Date on or after the Payment Date on which the
Bond Balance is less than [ ]% of the initial Bond Balance.
"Original Mortgage Loans": The Mortgage Loans listed on the Mortgage Loan
Schedule and Granted to the Trustee on the Closing Date.
"Outstanding": As of the date of determination, all Bonds theretofore
authenticated and delivered under this Indenture except:
(i) Definitive Bonds theretofore canceled by the Bond Registrar or
delivered to the Bond Registrar for cancellation;
(ii) Bonds or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Issuer) in trust for the Holders of such Bonds;
provided, however, that if such Bonds are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor,
satisfactory to the Trustee, has been made;
(iii) Bonds in exchange for or in lieu of which other Bonds have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Trustee is presented that any such Bonds are held by a bona
fide purchaser (as defined by the Uniform Commercial Code of the applicable
jurisdiction); and
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(iv) Bonds alleged to have been destroyed, lost or stolen that have
been paid as provided for in Section 2.07;
provided, however, that in determining whether the Holders of the requisite
percentage of the Bond Balance of the Outstanding Bonds have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Bonds
owned by the Issuer, any other obligor upon the Bonds or any Affiliate of the
Issuer or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Bonds that the Trustee knows to be so owned shall be so
disregarded. Bonds so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Bonds and that the pledgee is not
the Issuer, any other obligor upon the Bonds or any Affiliate of the Issuer or
such other obligor.
"Paying Agent": The Trustee or any other depository institution or trust
company that is authorized by the Issuer pursuant to Section 3.03 to pay the
principal of, or interest on, any Bonds on behalf of the Issuer.
"Payment Date": The [ ] day of each month (or if any such day is not a
Business Day, the next succeeding Business Day) beginning [ ].
"Payment Date Statement": The meaning specified in Section 2.08(d).
"Permitted Encumbrance": Any lien, charge, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) Granted by the Issuer
in any portion of the Trust Estate, provided that:
(i) such lien, charge, security interest, mortgage or encumbrance
extends only to a portion of the Trust Estate that is limited to cash
deliverable or payable to the Issuer pursuant to Section 8.01 or Section
8.02(d);
(ii) such lien, charge, security interest, mortgage or other
encumbrance secures indebtedness that the Issuer is permitted to incur under the
terms of this Indenture; and
(iii) the beneficiary of such lien, charge, security interest,
mortgage or other encumbrance has agreed that in connection with the enforcement
thereof it will not bring any Proceeding seeking, or that would result in, the
sale of any portion of the Trust Estate and will not file any petition for the
commencement of insolvency proceedings with respect to the Issuer under the
federal bankruptcy laws, as now or hereafter in effect, or any other present or
future federal or state bankruptcy, insolvency or similar law, or for the
appointment of any receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or of
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any of its property or seeking an order for the winding up or liquidation of the
affairs of the Issuer until not less than 91 days after payment in full of all
Outstanding Bonds.
"Person": Any individual, corporation, partnership, joint venture,
association, joint- stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Bonds": With respect to any particular Bond, every previous
Bond evidencing all or a portion of the same debt as that evidenced by such
particular Bond; and, for the purpose of this definition, any Bond authenticated
and delivered under Section 2.07 in lieu of a lost, destroyed or stolen Bond
shall be deemed to evidence the same debt as the lost, destroyed or stolen Bond.
"Prepayment": Any payment or other recovery of principal on a Mortgage
Loan that is received in advance of its scheduled Due Date, including any
Prepayment Premium thereon, and is not accompanied by an amount as to interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month in which it is received.
"Prepayment Period": With respect to a Payment Date, the calendar month
preceding the month in which such Payment Date occurs, except that, in the case
of the first Payment Date, the related Prepayment Period will commence on the
Cut-off Date.
"Prepayment Premium": With respect to any Mortgage Loan that permits
voluntary Prepayments, an amount, if any, required to be paid under the terms of
the Mortgage Loan in excess of the Prepayment.
"Principal Distribution Amount": With respect to each Payment Date, an
amount equal the excess of (i) the aggregate of the following:
(a) the aggregate of the principal portions of all Scheduled
Payments (other than Balloon Payments) due and any Assumed Scheduled Payments
deemed due on or in respect of the Mortgage Loans for their respective Due Dates
occurring during the related Collection Period;
(b) the aggregate of all Prepayments received on the
Mortgage Loans during the related Prepayment Period;
(c) with respect to any Mortgage Loan as to which the
related Stated Maturity Date occurred during or prior to the related Collection
Period, any payment of principal made by or on behalf of the related Mortgagor
during the related Collection Period, net of any portion of such payment that
represents a recovery of the principal portion of any Scheduled Payment (other
than a Balloon Payment) due or the principal portion of any Assumed Scheduled
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Payment deemed due in respect of such Mortgage Loan on a Due Date during or
prior to the related Collection Period and previously recovered; and
(d) the Liquidation Principal Amount for such Payment Date,
over
(ii) the amount, if any, by which interest due and payable on
the Bonds on such Payment Date exceeds the aggregate amount of interest
collected or received in respect of the Mortgage Loans in the Mortgage Pool
during the related Collection Period.
If, in any month, the payment received with respect to a Mortgage Loan is
less than the payment of principal and interest due in that month, the amount
received will be allocated first to interest and then to principal unless the
related Mortgage Loan provides otherwise.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Rating Agency": [ ] and its successors so long as they shall be engaged
in the business of rating debt securities similar to the Bonds.
"Realized Loss": As to any liquidated Mortgage Loan (or related REO
Property), the excess, if any, of (a) the actual outstanding principal balance
thereof on the Liquidation Date plus (i) accrued and unpaid interest thereon
(without consideration of any Monthly Advances) at the Mortgage Rate to but not
including the Due Date in the Collection Period in which the Liquidation Date
occurs and (ii) related unreimbursed Servicing Advances, over (b) the aggregate
amount of related Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds and REO Disposition Proceeds, if any, recovered in connection with such
liquidation. A Realized Loss shall also include any portion of the amount due
under a Mortgage Loan that is forgiven, whether in connection with a
modification, waiver or amendment granted or agreed to by the Servicer or in
connection with the bankruptcy or similar proceeding involving the related
Mortgagor.
"Record Date": With respect to any Payment Date, the date on which the
Persons entitled to receive any payment of principal of or interest on any Bonds
(or notice of a payment in full of principal) due and payable on such Payment
Date are determined; such date shall be the last Business Day of the month
preceding the month of such Payment Date. With respect to a vote of Bondholders
required or allowed hereunder, the Record Date shall be the later of (i) 30 days
prior to the first solicitation of consents or (ii) the date of the most recent
list of Bondholders furnished to the Trustee pursuant to Section 7.01(a) prior
to such solicitation.
"Redemption Price": With respect to any Bond to be redeemed in whole or in
part, an amount equal to 100% of the Current Bond Balance of the Bond to be so
redeemed, together with accrued and unpaid interest on such amount at the Bond
Interest Rate through the last day of the month preceding the month in which the
applicable Optional Redemption Date occurs.
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"Reimbursement Rate": As defined in Article I of the Servicing Agreement.
"Remittance": With respect to any one or more Mortgage Loans for any
particular date or period, the Net Monthly P&I and the net amount of all
Prepayments, Insurance Proceeds, Liquidation Proceeds, Condemnation Proceeds and
REO Disposition Proceeds for such date or period and all other amounts required
to be remitted by the Servicer to the Trustee for deposit in the Bond Account in
accordance with Section [ ] of the Servicing Agreement.
"Remittance Date": The date each month on which funds on deposit in the
Collection Account are remitted by the Servicer to the Trustee for deposit into
the Bond Account, which date shall be with respect to any Payment Date, the
Business Day that is [two] Business Days prior to such Payment Date, commencing
in [ ].
"REO Disposition": The final sale by the Servicer of any REO Property
pursuant to the Servicing Agreement.
"REO Disposition Proceeds": All amounts received with respect to an REO
Disposition in accordance with the Servicing Agreement.
"REO Property": A Mortgaged Property acquired by the Servicer on behalf
and in the name of the Trustee through foreclosure, acceptance of a deed-in-lieu
of foreclosure or otherwise in accordance with the Servicing Agreement and
applicable law in connection with the default or imminent default of a Mortgage
Loan.
"Required Subordination Level": With respect to any Payment Date, the
amount determined according to the following schedule:
Aggregate Stated Balance of
Mortgage Loans with Respect to
such Payment Date Required Subordination Level
------------------------------- ----------------------------
$____________ and above ____%
$____________ to $____________ ____%
$____________ to $____________ ____%
$____________ to $____________ ____%
"Responsible Officer": With respect to the Trustee, the chairman or
vice-chairman of the board of directors, the chairman or vice-chairman of the
executive committee of the board of directors, the president, any vice
president, any assistant vice president, the secretary, any assistant secretary,
the treasurer, any assistant treasurer, the cashier, any trust officer or
assistant trust officer, the controller, any assistant controller or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
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"Sale": The meaning specified in Section 5.17.
"Scheduled Payment": With respect to any Mortgage Loan and any Due Date
for such Mortgage Loan the amount of the Monthly Payment that would have been
due thereon on such date, without regard to any waiver, modification or
amendment of such Mortgage Loan granted or agreed to by the Servicer or
otherwise resulting in connection with a bankruptcy or similar proceeding
involving the related Mortgagor, and assuming that each prior Scheduled Payment
has been made in a timely manner and notwithstanding that the Mortgaged Property
securing any such Mortgage Loan is acquired by the Servicer through foreclosure
or otherwise.
"Servicer": With respect to any Mortgage Loan, Aames Capital Corporation,
as Servicer under the Servicing Agreement, and its permitted successors and
assigns thereunder, including any successor servicers appointed pursuant to
Section [ ] of the Servicing Agreement.
"Servicer Reporting Date": With respect to a Payment Date the [third]
Business Day after the related Determination Date but not later than the [third]
Business Day before such Payment Date.
"Servicing Advance": As defined in Article I of the Servicing Agreement.
"Servicing Agreement": The servicing agreement dated as of [ ] among the
Issuer, the Servicer and the Trustee, providing, among other things, for the
servicing of the Mortgage Loans, as such agreement may be amended or
supplemented from time to time as permitted hereby and thereby. Such term shall
also include any servicing agreement entered into with a successor servicer.
"Servicing Fee": As defined in Article I of the Servicing Agreement.
"Stated Maturity": With respect to any installment of principal of or
interest on any Bond, the date specified in such Bond as the fixed date on which
such installment is due and payable.
"Stated Maturity Date": With respect to any Mortgage Loan, the month in
which the last payment of principal of such Mortgage Loan shall be due and
payable after taking into account all partial Prepayments received prior to the
date of determination, without regard to any change in or modification of such
terms in connection with a bankruptcy or similar proceeding involving the
related Mortgagor or a modification, waiver or amendment of such Mortgage Loan
granted or agreed to by the Servicer.
"Stated Principal Balance": With respect to each Mortgage Loan outstanding
at the date of determination, the principal balance of such Mortgage Loan
ultimately due and payable by the
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related Mortgagor and equal to the Cut-off Date Balance thereof reduced (to not
less than zero) by
(i) any Scheduled Payments of such Mortgage Loan actually received
during all prior complete Collection Periods and all other collections of
principal actually received during all prior complete Prepayment Periods;
(ii) the principal portions of all Scheduled Payments (other than
any Balloon Payment) due but not received, and the principal portion of any
Assumed Scheduled Payment deemed due, during all prior Collection Periods; and
(iii) the principal portion of any Realized Loss incurred in respect
of such Mortgage Loan during all prior Prepayment Periods;
[provided, however, that solely for purposes of determining the Subordination
Level for any Payment Date or the existence of a Trigger Event with respect to
any Payment Date, each Mortgage Loan that either is delinquent with respect to
any Balloon Payment at the end of the immediately preceding Collection Period or
60 or more days delinquent with respect to any other Scheduled Payment at the
end of such Collection Period shall be deemed to have a Stated Principal Balance
of one-half of the amount computed above.]
"Subordination Level": With respect to any Payment Date, the result,
expressed as a percentage, obtained by dividing (i) the excess of the Aggregate
Stated Balance of the Mortgage Pool for the related Determination Date over the
Bond Balance (computed after taking into account the principal payment to be
made on such Payment Date) by (ii) the Aggregate Stated Balance of the Mortgage
Pool for the related Determination Date.
"Trigger Event": With respect to any Payment Date, the occurrence as of
the related Determination Date of either of the following: (i) [ ] or fewer
Mortgage Loans (not counting any Mortgage Loan that is delinquent with respect
to any Balloon Payment or 60 or more days delinquent with respect to any other
Scheduled Payment) remain in the Mortgage Pool or (ii) the Aggregate Stated
Balance of the Mortgage Pool is equal to or less than $[ ].
"Trust Estate": All money, instruments and other property subject or
intended to be subject to the lien of this Indenture for the benefit of the
Bondholders as of any particular time (including, without limitation, all
property and interests Granted to the Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939 as it may
be amended from time to time.
"Trustee": [Bankers Trust Company of California, N.A., a national banking
association, and any Person resulting from or surviving any consolidation or
merger to which it may be a
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party until a successor Person shall have become the Trustee pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Person.]
"Trustee's Fee": The fee payable to the Trustee on a monthly basis as
provided in Section 6.07 and calculated as an amount equal to [ ].
"Vice President": With respect to the Trustee, any vice president, whether
or not designated by a number or a word or words added before or after the title
"vice president".
ARTICLE II.
THE BONDS
Section 2.01 Forms Generally.
The Bonds shall be in substantially the form set forth on Exhibit A
attached hereto. Each Bond may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which the Bonds
may be listed, or as may, consistently herewith, be determined by the officers
executing such Bonds, as evidenced by their execution thereof. Any portion of
the text of any Bond may be set forth on the reverse thereof with an appropriate
reference on the face of the Bond.
The Definitive Bonds may be produced in any manner determined by the
officers executing such Bonds, as evidenced by their execution thereof.
Section 2.02 Forms of Certificate of Authentication.
The form of the Trustee's certificate of authentication is as follows:
This is one of the Bonds referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By _________________________________________
Authorized Signatory
Section 2.03 General Provisions With Respect to Principal and Interest
Payments.
The Bonds shall be designated generally as the "Asset-Backed Bonds, Series
[ ]-[ ]" of the Issuer.
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The aggregate principal amount of Bonds that may be authenticated and
delivered under the Indenture is limited to $[ ], except for the Bonds
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Bonds pursuant to Sections 2.06, 2.07 or 9.06 of this
Indenture. The Bonds shall consist of one and only one class having an original
principal amount, Bond Interest Rate and Stated Maturity of its final
installment of principal as follows
------------------ ------------------ -------------------- ---------------------
Designation Original Bond Stated Maturity of
Principal Interest Final Installment
Amount Rate of Principal
------------------ ------------------ -------------------- ---------------------
Series [ -[ ] [ $] [ %] [ ]
------------------ ------------------ -------------------- ---------------------
The Bonds shall be issued in the form specified in Section 2.01.
Subject to the provisions of Section 3.01, Section 5.09 and Section
8.02(d), the principal of the Bonds shall be payable in installments ending no
later than the Stated Maturity of the final installment of the principal thereof
unless the unpaid principal of such Bonds become due and payable at an earlier
date by declaration of acceleration or call for redemption or otherwise.
The aggregate amount of principal of and interest on the Bonds due and
payable on each Payment Date shall be equal to the Debt Service Requirement for
such Payment Date. All payments made with respect to any Bond shall be applied
first to the interest then due and payable on such Bond and then to the
principal thereof. All computations of interest accrued on any Bond shall be
made as if each year consisted of twelve months of 30 days each.
Interest on the Bonds shall accrue at the Bond Interest Rate during each
Interest Accrual Period on the Current Bond Balance, as of the Determination
Date immediately following such Interest Accrual Period, of each Outstanding
Bond. Interest accrued during an Interest Accrual Period shall be payable on the
next following Payment Date.
All payments of principal of and interest on any Bond shall be made in the
manner specified in Section 2.08.
Notwithstanding any of the foregoing provisions with respect to payments
of principal of and interest on the Bonds, if the Bonds have become or been
declared due and payable following an Event of Default and such acceleration of
maturity and its consequences have not been rescinded and annulled, then
payments of principal of and interest on the Bonds shall be made in accordance
with Section 5.07.
Section 2.04 Denominations.
The Bonds shall be issuable only as registered Bonds in the minimum
denomination of $[ ] and integral multiples of $[ ] in excess thereof.
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Section 2.05 Execution, Authentication, Delivery and Dating.
The Bonds shall be executed on behalf of the Issuer by the Chairman,
President or one of the Vice Presidents of the Issuer. The signature of such
officer on the Bonds may be manual or facsimile.
Bonds bearing the manual or facsimile signature of an individual who was
at any time a proper officer of the Issuer shall bind the Issuer,
notwithstanding that such individual has ceased to hold such office prior to the
authentication and delivery of such Bonds or did not hold such office at the
date of such Bonds.
At any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Bonds executed on behalf of the Issuer to the
Trustee for authentication; and the Trustee shall authenticate and deliver such
Bonds as in this Indenture provided and not otherwise.
Each Bond authenticated on the Closing Date shall be dated the Closing
Date. All other Bonds that are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication.
No Bond shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Bond a certificate
of authentication substantially in the form provided for herein executed by the
Trustee or by any Authenticating Agent by the manual signature of one of its
authorized officers or employees, and such certificate upon any Bond shall be
conclusive evidence, and the only evidence, that such Bond has been duly
authenticated and delivered hereunder.
Section 2.06 Registration, Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Bond Register") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Bonds and the registration of transfers of
Bonds. The Trustee is hereby initially appointed "Bond Registrar" for the
purpose of registering Bonds and transfers of Bonds as herein provided. Upon any
resignation of any Bond Registrar appointed by the Issuer, the Issuer shall
promptly appoint a successor or, in the absence of such appointment, shall
assume the duties of Bond Registrar.
At any time the Trustee is not also the Bond Registrar, the Trustee shall
be a co-Bond Registrar. The Issuer shall cause each co-Bond Registrar to furnish
the Bond Registrar promptly after each authentication of a Bond by it
appropriate information with respect thereto for entry by the Bond Registrar
into the Bond Register. If the Trustee shall at any time not be authorized to
keep and maintain the Bond Register, the Trustee shall have the right to inspect
such Bond Register at all reasonable times and to rely conclusively upon a
certificate of the Person in charge
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of the Bond Register as to the names and addresses of the Holders of the Bonds
and the principal amounts and numbers of such Bonds as held.
Upon surrender for registration of transfer of any Bond at the office or
agency of the Issuer to be maintained as provided in Section 3.02, the Issuer
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Bonds of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Bonds may be exchanged for other Bonds of any
authorized denominations, and of a like aggregate initial principal amount, upon
surrender of the Bonds to be exchanged at such office or agency. Whenever any
Bonds are so surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and deliver, the Bonds that the Bondholder making the
exchange is entitled to receive.
All Bonds issued upon any registration of transfer or exchange of Bonds
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Bonds surrendered
upon such registration of transfer or exchange.
Every Bond presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by the Holder thereof
or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge as may be imposed in connection with
any registration of transfer or exchange of Bonds, other than exchanges pursuant
to Section 2.07 not involving any transfer.
Section 2.07 Mutilated, Destroyed, Lost or Stolen Bonds.
If (1) any mutilated Bond is surrendered to the Trustee or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Bond, and (2) there is delivered to the Trustee such security or indemnity as
may be required by the Trustee to save each of the Issuer and the Trustee
harmless, then, in the absence of notice to the Issuer or the Trustee that such
Bond has been acquired by a bona fide purchaser, the Issuer shall execute and
upon its request the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond or
Bonds of the same tenor and aggregate initial principal amount bearing a number
not contemporaneously outstanding. If, after the delivery of such new Bond, a
bona fide purchaser of the original Bond in lieu of which such new Bond was
issued presents for payment such original Bond, the Issuer and the Trustee shall
be entitled to recover such new Bond from the person to whom it was delivered or
any person taking therefrom, 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 expenses incurred by the Issuer or the Trustee in
connection therewith. If any such mutilated, destroyed, lost or stolen
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Bond shall have become or shall be about to become due and payable, or shall
have become subject to redemption in full, instead of issuing a new Bond, the
Issuer may pay such Bond without surrender thereof, except that any mutilated
Bond shall be surrendered.
Upon the issuance of any new Bond under this Section, the Issuer or the
Bond Registrar may require the payment 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 Trustee or the Bond
Registrar) connected therewith.
Every new Bond issued pursuant to this Section in lieu of any destroyed,
lost or stolen Bond shall constitute an original additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen Bond
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
Bonds duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds.
Section 2.08 Payments of Principal and Interest.
(a) Payments on Bonds issued as Book Entry Bonds will be made by
or on behalf of the Trustee to the Clearing Agency or its nominee. Any
installment of interest or principal payable on any Definitive Bonds 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 Bond (or one
or more Predecessor Bonds) is registered at the close of business on the
Record Date for such Payment Date by either (i) check mailed to such
Person's address as it appears in the Bond Register on such Record Date,
or (ii) by wire transfer of immediately available funds to the account of
a Bondholder, if such Bondholder (A) is the registered holder of
Definitive Bonds having an initial principal amount of at least $[ ] and
(B) has provided the Trustee with wiring instructions in writing by five
days prior to the related Record Date or has provided the Trustee with
such instructions for any previous Payment Date, except for the final
installment of principal payable with respect to such Bond (or the
Redemption Price for any Bond called for redemption, if such redemption
will result in payment of the then entire unpaid principal amount of such
Bond), which shall be payable as provided in subsection (b) below of this
Section 2.08. A fee may be charged by the Trustee to a Bondholder of
Definitive Bonds for any payment made by wire transfer. Any installment of
interest or principal not punctually paid or duly provided for shall be
payable as soon as funds are available to the Trustee for payment thereof,
or if Section 5.07 applies, pursuant to Section 5.07.
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(b) All reductions in the principal amount of a Bond (or one or
more Predecessor Bonds) effected by payments of installments of principal
made on any Payment Date shall be binding upon all Holders of such Bond
and of any Bond issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, whether or not such payment is noted
on such Bond. The final installment of principal of each Bond (including
the Redemption Price of any Bond called for optional redemption, if such
optional redemption will result in payment of the entire unpaid principal
amount of such Bond) shall be payable only upon presentation and surrender
thereof on or after the Payment Date therefor at the Trustee's presenting
office in [the Borough of Manhattan, the City of New York, State of New
York], pursuant to Section 3.02.
Whenever the Trustee expects that the entire remaining unpaid principal
amount of any Bond will become due and payable on the next Payment Date other
than pursuant to a redemption pursuant to Section 10.02, it shall, no later than
two days prior to such Payment Date, telecopy or hand deliver to each Person in
whose name a Bond to be so retired is registered at the close of business on
such otherwise applicable Record Date a notice to the effect that:
(i) the Trustee expects that funds sufficient to pay such
final installment will be available in the Bond Account on such
Payment Date; and
(ii) if such funds are available, (A) such final installment
will be payable on such Payment Date, but only upon presentation and
surrender of such Bond at the office or agency of the Trustee
maintained for such purpose pursuant to Section 3.02 (the address of
which shall be set forth in such notice) and (B) no interest shall
accrue on such Bond after such Payment Date.
Notices in connection with redemptions of Bonds shall be mailed to
Bondholders in accordance with Section 10.02.
(c) Subject to the foregoing provisions of this Section, each Bond
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Bond shall carry the rights to unpaid
principal and interest that were carried by such other Bond. Any checks
mailed pursuant to subsection (a) of this Section 2.08 and returned
undelivered shall be held in accordance with Section 3.03.
(d) Not later than each Payment Date, the Trustee shall prepare
and deliver to the Issuer a statement (a "Payment Date Statement") with
respect to such Payment Date setting forth:
(i) the amount of interest paid to Bondholders on such
Payment Date;
(ii) the amount of principal paid to Bondholders on such
Payment Date and the Bond Balance after giving effect to such
payment;
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(iii) the amount of Servicing Fees and other servicing
compensation and such other customary information as the Trustee
deems necessary or desirable, or that a Bondholder reasonably
requests, in respect of servicing expense;
(iv) the amount of Monthly Advances to be made by the
Servicer or the Trustee;
(v) the amount, if any, of Monthly Advances reimbursable to
the Servicer or the Trustee, as applicable, and not previously
reimbursed;
(vi) the Aggregate Stated Balance of the Mortgage Loans as of
the related Determination Date;
(vii) the aggregate amount of Prepayments made on the Mortgage
Loans during the related Prepayment Period;
(viii) the aggregate of any Insurance Proceeds, Liquidation
Proceeds, Condemnation Proceeds and REO Disposition Proceeds
received in respect of any Mortgage Loan during the related
Prepayment Period; and
(ix) the Subordination Level and the current Required
Subordination Level remaining in the Mortgage Pool, in each case, at
the close of business on such Payment Date.
In the case of information furnished pursuant to subclauses (i) and
(ii) above, the amounts will be expressed as a dollar amount per $[ ]
denomination of Bonds.
Each Payment Date Statement will be delivered by the Trustee only in
the event it receives the related Servicer report required under Section
[ ] of the Servicing Agreement on or prior to the Servicer Reporting Date.
Each Payment Date Statement shall be delivered by the Trustee to the
Issuer and the Rating Agency and shall also be delivered to each
Bondholder as the statement required pursuant to Section 8.05. The Trustee
shall have no responsibility to recalculate, verify or recompute
information contained in any such Servicer's report.
Within a reasonable period of time after the end of each calendar
year, the Trustee will be required to furnish to each person who at any
time during the calendar year was a Bondholder a statement containing the
information set forth in subclauses (i) and (ii) above, aggregated for
such calendar year or the applicable portion thereof during which such
person was a Bondholder. Such obligation will be deemed to have been
satisfied to
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the extent that substantially comparable information is provided pursuant
to any requirements of the Code as are from time to time in force.
Sction 2.09 Persons Deemed Owners.
Prior to due presentment for registration of transfer of any Bond, the
Issuer, the Trustee, any Agent and any other agent of the Issuer or the Trustee
may treat the Person in whose name any Bond is registered as the owner of such
Bond (a) on the applicable Record Date for the purpose of receiving payments of
the principal of and interest on such Bond and (b) on any other date for all
other purposes whatsoever, and neither the Issuer, the Trustee, any Agent nor
any other agent of the Issuer or the Trustee shall be affected by notice to the
contrary.
Section 2.10 Cancellation.
All Bonds surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Issuer may at
any time deliver to the Trustee for cancellation any Bond previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Bonds so delivered shall be promptly canceled by the
Trustee. No Bonds shall be authenticated in lieu of or in exchange for any Bonds
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Bonds held by the Trustee shall be held by the Trustee
in accordance with its standard retention policy, unless the Issuer shall direct
by an Issuer Order that they be destroyed or returned to it.
Section 2.11 Authentication and Delivery of Bonds.
The Bonds may be executed by the Issuer and delivered to the Trustee for
authentication, and thereupon the same shall be authenticated and delivered by
the Trustee, upon Issuer Request and upon receipt by the Trustee of the
following:
(a) an Issuer Order authorizing the execution, authentication and
delivery of the Bonds and specifying the Stated Maturity of the final
installment of principal, the principal amount and the Bond Interest Rate
of such Bonds to be authenticated and delivered;
(b) an Issuer Order authorizing the execution and delivery of this
Indenture; and
(c) one or more Opinions of Counsel addressed to the Trustee,
complying with the requirements of Section 11.01, reasonably satisfactory
in form and substance to the Trustee and the Rating Agency.
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In rendering the opinions set forth above, such counsel may rely
upon officer's certificates of the Issuer, the Servicer and the Trustee,
without independent confirmation or verification with respect to factual
matters relevant to such opinions. In rendering the opinions set forth
above, such counsel need express no opinion as to (A) the existence of, or
the priority of the security interest created by the Indenture against,
any liens or other interests that arise by operation of law and that do
not require any filing or similar action in order to take priority over a
perfected security interest or (8) the priority of the security interest
created by this Indenture with respect to any claim or lien in favor of
the United States or any agency or instrumentality thereof (including
federal tax liens and liens arising under Title IV of the Employee
Retirement Income Security Act of 1974).
The acceptability to the Rating Agency of the Opinion of Counsel
delivered to the Trustee at the Closing Date shall be conclusively
evidenced by the delivery at the Closing of such Rating Agency's rating
letter.
(d) an Officers' Certificate complying with the requirements of
Section 11.01 and stating that:
(i) the Issuer is not in Default under this Indenture and
the issuance of the Bonds will not result in any breach of any of
the terms, conditions or provisions of, or constitute a default
under, the Issuer's Certificate of Incorporation or bylaws or any
indenture, mortgage, deed of trust or other agreement or instrument
to which the Issuer is a party or by which it is bound, or any order
of any court or administrative agency entered in any proceeding to
which the Issuer is a party or by which it may be bound or to which
it may be subject, and that all conditions precedent provided in
this Indenture relating to the authentication and delivery of the
Bonds have been complied with;
(ii) the Issuer is the owner of each Mortgage Loan, free and
clear of any lien, security interest or charge, has not assigned any
interest or participation in any such Mortgage Loan (or, if any such
interest or participation has been assigned, it has been released)
and has the right to Grant each such Mortgage Loan to the Trustee:
(iii) the information set forth in the Mortgage Loan Schedule
attached as Schedule A to this Indenture is correct;
(iv) the Issuer has Granted to the Trustee all of its right,
title and interest in each Mortgage Loan;
(v) as of the Closing Date, no lien in favor of the United
States described in Section 6321 of the Code, or lien in favor of
the Pension Benefit Guaranty Corporation described in Section
4068(a) of the Employee Retirement
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Income Security Act of 1974, as amended, has been filed as described
in subsections 6323(f) and 6323(g) of the Code upon any property
belonging to the Issuer; and
(vi) attached thereto is a true and correct copy of a letter
signed by the Rating Agency confirming that the Bonds have been
rated ["___"] by such Rating Agency.
(e) An executed counterpart of the Servicing Agreement.
Section 2.12 Book Entry Bonds.
The Bonds will be issued initially as one or more certificates in the name
of the Cede & Co., as nominee for the Clearing Agency maintaining book entry
records with respect to ownership and transfer of such Bonds, and registration
of the Bonds may not be transferred by the Trustee or Bond Registrar except upon
Book Entry Termination. In such case, the Trustee shall deal with the Clearing
Agency and Clearing Agency Participants as representatives of the Bond Owners of
such Bonds for purposes of exercising the rights of Bondholders hereunder. Each
payment of principal of and interest on a Book Entry Bond shall be paid to the
Clearing Agency, which shall credit the amount of such payments to the accounts
of its Clearing Agency Participants in accordance with its normal procedures.
Each Clearing Agency Participant shall be responsible for disbursing such
payments to the Bond Owners of the Book Entry Bonds that it represents and to
each indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Bond Owners of the Book Entry Bonds that
it represents. All such credits and disbursements are to be made by the Clearing
Agency and the Clearing Agency Participants in accordance with the provisions of
the Bonds. None of the Trustee, the Bond Registrar, if any, the Issuer, or any
Agents shall have any responsibility therefor except as otherwise provided by
applicable law. Requests and directions from, and votes of, such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Bond Owners.
Section 2.13 Termination of Book Entry System.
(a) The book entry system through the Clearing Agency with respect
to the Book Entry Bonds may be terminated upon the happening of any of the
following:
(i) The Clearing Agency or the Issuer advises the Trustee
that the Clearing Agency is no longer willing or able to properly
discharge its responsibilities under the Letter Agreement and the
Issuer is unable to locate a qualified successor clearing agency
satisfactory to the Trustee and the Issuer;
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(ii) The Issuer, in its sole discretion but with the consent
of the Trustee, elects to terminate the book entry system by notice
to the Clearing Agency and the Trustee; or
(iii) After the occurrence of an Event of Default (at which
time the Trustee shall use all reasonable efforts to promptly notify
each Bond Owner through the Clearing Agency of such Event of
Default) when such notice shall be given pursuant to Section 6.02,
the Bond Owners of a majority in Bond Balance of the Book Entry
Bonds advise the Trustee in writing, through the related Clearing
Agency Participants and the Clearing Agency, that the continuation
of a book entry system through the Clearing Agency to the exclusion
of any Definitive Bonds being issued to any person other than the
Clearing Agency or its nominee is no longer in the best interests of
the Bond Owners.
(b) Upon the occurrence of any event described in subsection (a)
above, the Trustee shall use all reasonable efforts to notify all Bond
Owners, through the Clearing Agency, of the occurrence of such event and
of the availability of Definitive Bonds to Bond Owners requesting the
same, in an aggregate Current Bond Balance representing the interest of
each, making such adjustments and allowances as it may find necessary or
appropriate as to accrued interest and previous calls for redemption.
Definitive Bonds shall be issued only upon surrender to the Trustee of the
global Bond by the Clearing Agency, accompanied by registration
instructions for the Definitive Bonds. Neither the Issuer nor the 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 issuance of the Definitive Bonds, all references herein
to obligations imposed upon or to be performed by the Clearing Agency
shall cease to be applicable and the provisions relating to Definitive
Bonds shall be applicable.
ARTICLE III.
COVENANTS
Section 3.01 Payment of Bonds.
The Issuer will pay or cause to be duly and punctually paid the principal
of, and interest on, the Bonds in accordance with the terms of the Bonds and
this Indenture. The Bonds 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 and the Issuer shall not otherwise be liable for
payments on the Bonds. No person shall be personally liable for any amounts
payable under the Bonds. If any other provision of this Indenture conflicts or
is deemed to conflict with the provisions of this Section 3.01, the provisions
of this Section 3.01 shall control.
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Section 3.02 Maintenance of Office or Agency.
The Issuer will cause the Trustee to maintain its corporate trust office
as a location where Bonds may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of the
Bonds and this Indenture may be served. [In addition, the Trustee has appointed
[ ] as the presenting agent for such purpose and for the purpose of presentment
or surrender for payment of the Bonds and such agency shall be maintained at the
Trustee's expense.]
The Issuer may also from time to time at its own expense designate one or
more other offices or agencies (in or outside the City of New York) where the
Bonds may be presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided, however, that (i) no such
designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain an office or agency in the Borough of Manhattan, the City
of New York, the State of New York, for the purposes set forth in the preceding
paragraph, (ii) presentations or surrenders of Bonds for payment may be made
only in the City of New York, the State of New York and (iii) any designation of
an office or agency for payment of Bonds shall be subject to Section 3.03. The
Issuer will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
Section 3.03 Money for Bond Payments to Be Held in Trust.
All payments of amounts due and payable with respect to any Bonds that are
to be made from amounts withdrawn from the Bond Account pursuant to Section
8.02(c) or Section 5.07 shall be made on behalf of the Issuer by the Trustee or
by a Paying Agent, and no amounts so withdrawn from the Bond Account for
payments of Bonds shall be paid over to the Issuer under any circumstances
except as provided in this Section 3.03 or in Section 5.07.
If the Issuer shall have a Paying Agent that is not also the Bond
Registrar, it shall furnish, or cause the Bond Registrar to furnish, no later
than the fifth calendar day after each Record Date, a list, in such form as such
Paying Agent may reasonably require, of the names and addresses of the Holders
of Bonds and of the number of Individual Bonds held by each such Holder.
Whenever the Issuer shall have a Paying Agent other than the Trustee, it
will, on or before the Business Day next preceding each Payment Date direct the
Trustee to deposit with such Paying Agent an aggregate sum sufficient to pay the
amounts then becoming due (to the extent funds are then available for such
purpose in the Bond Account), such sum to be held in trust for the benefit of
the Persons entitled thereto. Any moneys deposited with a Paying Agent in excess
of an amount sufficient to pay the amounts then becoming due on the Bonds with
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respect to which such deposit was made shall, upon Issuer Order, be paid over by
such Paying Agent to the Trustee for application in accordance with Article
VIII.
Any Paying Agent other than the Trustee shall be appointed by Issuer Order
and at the expense of the Issuer. The Issuer shall not appoint any Paying Agent
(other than the Trustee) that is not, at the time of such appointment, a
depository institution or trust company whose obligations would be Eligible
Investments pursuant to clause (ii) of the definition of the term "Eligible
Investments". The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee (and if the Trustee acts as Paying Agent, it hereby
so agrees), subject to the provisions of this Section, that such Paying Agent
will:
(1) allocate all sums received for payment to the Holders of Bonds
on each Payment Date among such Holders in the proportion specified in the
applicable Payment Date Statement, in each case to the extent permitted by
applicable law;
(2) hold all sums held by it for the payment of amounts due with
respect to the Bonds 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;
(3) if such Paying Agent is not the Trustee, immediately resign as
a Paying Agent and forthwith pay to the Trustee all sums held by it in
trust for the payment of the Bonds if at any time it ceases to meet the
standards set forth above required to be met by a Paying Agent at the time
of its appointment;
(4) if such Paying Agent is not the Trustee, give the Trustee
notice of any Default by the Issuer (or any other obligor upon the Bonds)
in the making of any payment required to be made with respect to any Bonds
for which it is acting as Paying Agent;
(5) if such Paying Agent is not the Trustee, at any time during
the continuance of any such Default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent; and
(6) comply with all requirements of the Code, and all regulations
thereunder, with respect to the withholding taxes from any payments made
by it on any Bonds 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
any of the Bonds, the Issuer has provided the calculations pertaining
thereto to the Trustee.
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The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or any other purpose, by Issuer Order direct any
Paying Agent, if other than the Trustee, to pay to the Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by such Paying Agent; and upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money held by the Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Bond and remaining unclaimed for [two and
one-half years] after such amount has become due and payable to the Holder of
such Bond (or if earlier, [three months] before the date on which such amount
would escheat to a governmental entity under applicable law) shall be discharged
from such trust and paid to the Issuer; and the Holder of such Bond shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease. The Trustee may adopt and employ, at the expense of
the Issuer, any reasonable means of notification of such repayment (including,
but not limited to, mailing notice of such repayment to Holders whose Bonds have
been called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Trustee or any Agent, at the last address of record for each such
Holder).
Section 3.04 Existence of Issuer.
(a) Subject to Sections 3.04(b) and (c), the Issuer will keep in
full effect its existence, rights and franchises as a corporation under
the laws of the State of Delaware or under the laws of any other state or
the United States of America, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the
validity and enforceability of this Indenture or the Bonds.
(b) Subject to Section 3.09(vii), any corporation into which the
Issuer may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Issuer
shall be a party, shall be the successor Issuer 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, anything in any agreement
relating to such merger or consolidation, by which any such Issuer may
seek to retain certain powers, rights and privileges therefore obtaining
for any period of time following such merger or consolidation to the
contrary notwithstanding (other than Section 3.09(vii)).
(c) Upon any consolidation or merger of or other succession to the
Issuer in accordance with this Section 3.04, the Person formed by or
surviving such consolidation or merger (if other than the Issuer) may
exercise every right and power of, the Issuer
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under this Indenture with the same effect as if such Person had been named
as the Issuer herein.
Section 3.05 Protection of Trust Estate.
(a) The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other
instruments, and will take such other action as may be necessary or
advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the lien 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 of the Mortgage Files; or
(v) preserve and defend title to the Trust Estate and the
rights of the Trustee, and of the Bondholders, in the Mortgage Loans
and the other property held as part of the Trust Estate against the
claims of all Persons and parties.
The Issuer hereby designates the Trustee its agent and
attorney-in-fact to execute any financing statement, continuation
statement or other instrument required pursuant to this Section 3.05;
provided, however, that such designation shall not be deemed to create a
duty in the Trustee to monitor the compliance of the Issuer with the
foregoing covenants; and provided further, however, that the duty of the
Trustee to execute any instrument required pursuant to this Section 3.05
shall arise only if the Trustee has knowledge pursuant to Section 6.01(d)
of the occurrence of a failure of the Issuer to comply with the provisions
of this Section 3.05.
(b) The Trustee shall not remove any portion of the Trust Estate
that consists of money or is evidenced by an instrument, certificate or
other writing from the jurisdiction in which it was held at the date of
the most recent Opinion of Counsel delivered pursuant to Section 3.06 (or
from the jurisdiction in which it was held, or to which it is intended to
be removed, as described in the Opinion of Counsel delivered at the
Closing Date pursuant to Section 2.11(c), if no Opinion of Counsel has yet
been delivered pursuant to Section 3.06) or cause or permit ownership or
the pledge of any portion of the Trust Estate that consists of book-entry
securities to be recorded on the books of a Person located in a different
jurisdiction from the jurisdiction in which such ownership or pledge was
recorded at such time unless the Trustee shall have first received
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an Opinion of Independent Counsel to the effect that the lien and security
interest created by this Indenture with respect to such property will
continue to be maintained after giving effect to such action or actions.
Section 3.06 Opinions as to Trust Estate.
On or before [ ] in each calendar year, beginning with the first calendar
year commencing after the Closing Date, the Issuer shall furnish to the Trustee
an Opinion of Independent Counsel reasonably satisfactory in form and substance
to the Trustee either stating that, in the opinion of such counsel, such action
has been taken 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 Independent Counsel shall also
describe all such action, if any, that will, in the opinion of such counsel, be
required to be taken to maintain the lien and security interest of this
Indenture with respect to the Trust Estate until [ ] in the following calendar
year.
Section 3.07 Performance of Obligations; Servicing Agreement.
(a) The Issuer shall 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 covenants or obligations under any of
the Mortgage Files or under any instrument included in the Trust Estate,
or that would result in the amendment, hypothecation, subordination,
termination or discharge of, or impair the validity or effectiveness of,
any of the Mortgage Files, except as expressly provided as permitted in
this Indenture, the Servicing Agreement or such document included in the
Mortgage File or other instrument or unless such action will not adversely
affect the interests of the Holders of the Bonds.
(b) The Issuer shall monitor the performance of the Servicer under
the Servicing Agreement, and shall use its Best Efforts to cause the
Servicer duly and punctually to perform all of its duties and obligations
thereunder. Upon the occurrence of an event of default of which an
Authorized Officer has actual knowledge under the Servicing Agreement, the
Issuer shall promptly notify the Trustee thereof, and shall specify in
such notice the action the Issuer is taking in respect of such event of
default.
(c) Upon any termination of the Servicer's rights and powers
pursuant to the Servicing Agreement, the rights and powers of the Servicer
with respect to the Mortgage Loans shall vest in the Trustee, and the
Trustee shall be the successor in all respects to the Servicer in its
capacity as Servicer with respect to such Mortgage Loans under the
Servicing Agreement, until the Trustee shall have appointed, with the
consent of the Issuer and the Rating Agency, a new servicer to serve as
successor to the Servicer under the Servicing Agreement. Upon appointment
of a successor Servicer, the Trustee, the
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Issuer and such Servicer shall enter into a Servicing Agreement in a form
substantially similar to the Servicing Agreement. In connection with any
such appointment, the Trustee may make such arrangements for the
compensation of such successor as it and such successor shall agree, but
in no event shall such compensation of the successor Servicer (including
the Trustee) be in excess of that payable to the original Servicer under
the Servicing Agreement without the consent of the Rating Agency.
(d) Upon any termination of the Servicer's rights and powers
pursuant to the Servicing Agreement, the Trustee shall promptly notify the
Rating Agency. As soon as any successor Servicer is appointed, the Trustee
shall notify the Rating Agency, specifying in such notice the name and
address of such successor Servicer.
Section 3.08 Investment Company Act.
The Issuer shall at all times conduct its operations so as not to be
subject to, or shall comply with, the requirements of the Investment Company Act
of 1940, as amended (or any successor statute), and the rules and regulations
thereunder.
Section 3.09 Negative Covenants.
The Issuer shall not:
(i) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate except as expressly permitted by this
Indenture or the Servicing Agreement;
(ii) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Bonds by reason of the
payment of any taxes levied or assessed upon any portion of the
Trust Estate;
(iii) engage in any business or activity other than in
connection with, or relating to, the issuance of the Bonds pursuant
to this Indenture or amend Articles THIRD, SIXTH, SEVENTH or NINTH
of the Issuer's Certificate of Incorporation, as in effect on the
Closing Date without, in each case, the written consent of the
majority of the Holders of the Bonds (with respect to the Bond
Balance of the Bonds then Outstanding);
(iv) issue bonds under any other indenture unless such bonds
are non-recourse obligations of the Issuer;
(v) incur, assume, guaranty or agree to indemnify any Person
with respect to any indebtedness of any Person, except for such
indebtedness as may be incurred by the Issuer in connection with the
issuance of the Bonds pursuant to
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this Indenture or as permitted under clause (iv) above or
indebtedness that, if consisting of indebtedness other than Bonds or
indebtedness permitted under clause (iv) above, (a) shall either be
(1) subordinate to the Bonds or (2) secured by collateral other than
the Trust Estate and to which the creditor with respect to such
indebtedness has recourse only to such collateral and not to any
other assets of the Issuer and (b) shall provide that the holder
thereof may not file a petition in any bankruptcy or insolvency
proceeding with respect to the Issuer until not less than 91 days
after payment in full of all Outstanding Bonds issued pursuant to
this Indenture;
(vi) incur any indebtedness, other than the Bonds, for which
the timing or amount of the payments on such indebtedness are in
part determined by the timing or amount of payments or projected
payments on assets in the Trust Estate or that would cause the
Issuer or the Trust Estate to be treated as a "taxable mortgage
pool" within the meaning of Code Section 7701(i).
(vii) dissolve or liquidate in whole or in part;
(viii) merge or consolidate with any entity except as provided
Article SEVENTH of the Issuer's Certificate of Incorporation, any
such merger or consolidation with an Affiliate of the Issuer to be
subject to the following conditions:
(1) the surviving or resulting corporation (if other
than the Issuer) shall expressly assume by an indenture
supplemental hereto all of the Issuer's obligations hereunder;
(2) the consummation of such merger or consolidation
shall not result in the lowering of any rating of the
Outstanding Bonds by the Rating Agency;
(3) immediately after consummation of the merger or
consolidation no Default shall exist with respect to the
Bonds; and
(4) the Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Independent Counsel
each stating that such merger or consolidation and such
supplemental indenture comply with this Article and that all
conditions precedent provided for relating to this transaction
have been complied with; or
(ix) (1) permit the validity or effectiveness of this
Indenture or any Grant to be impaired, or permit the lien of this
Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be
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released from any covenants or obligations under this Indenture,
except as may be expressly permitted hereby, (2) permit any lien,
charge, security interest, mortgage or other encumbrance (other than
the lien of this Indenture or any Permitted Encumbrance) to be
created on or extend to or otherwise arise upon or burden the Trust
Estate or any part thereof or any interest therein or the proceeds
thereof, or (3) permit the lien of this Indenture not to constitute
a valid perfected first priority security interest in the Trust
Estate.
Section 3.10 Annual Statement as to Compliance.
On or before 120 days after the end of the first fiscal year of the Issuer
that ends more than three months after the Closing Date, and each fiscal year
thereafter, the Issuer shall deliver to the Trustee a written statement, signed
by an Authorized Officer, stating that:
(1) a review of the fulfillment by the Issuer during such year of
its obligations under this Indenture has been made under such officer's
supervision; and
(2) to the best of such 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 the
fulfillment of any such covenant or condition, specifying each such
Default known to such officer and the nature and status thereof.
Section 3.11 Recording of Assignments.
Not later than [90 days] after the Closing Date, at the Issuer's expense
the Trustee will cause the Assignments of the Mortgage Loans securing the Bonds
to be duly recorded in the public records in which the related Mortgage shall
have been recorded unless the Issuer provides the Trustee with an Opinion of
Counsel to the effect that such recording is not necessary to protect the
interests of the Trustee and the Bondholders in the related Mortgage Loan.
ARTICLE IV.
SATISFACTION AND DISCHARGE
Section 4.01 Satisfaction and Discharge of Indenture.
Whenever the following conditions shall have been satisfied:
(1) either
(A) all Bonds theretofore authenticated and delivered (other
than (i) Bonds that have been destroyed, lost or stolen and that
have been replaced or paid as provided in Section 2.07, and (ii)
Bonds for whose payment money has
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theretofore been deposited in trust and thereafter repaid to the
Issuer, as provided in Section 3.03) have been delivered to the
Trustee for cancellation; or
(B) all Bonds not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at the Stated Maturity
of the final installment of the principal thereof within one
year, or
(iii) are to be called for redemption within one year
under irrevocable arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Issuer,
and the Issuer, in the case of clauses (B)(i), (B)(ii) or (B)(iii)
above, has deposited or caused to be deposited with the Trustee, in
trust for such purpose, an amount sufficient to pay and discharge
the entire indebtedness on such Bonds not theretofore delivered to
the Trustee for cancellation, for principal and interest to the
Stated Maturity of their entire unpaid principal amount or to the
applicable Optional Redemption Date, as the case may be, and in the
case of Bonds that were not paid at the Stated Maturity of their
entire unpaid principal amount, for all overdue principal and all
interest payable on such Bonds to the next succeeding Payment Date
therefor;
(2) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(3) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel satisfactory in form and
substance to the Trustee each stating that all conditions precedent herein
providing for the satisfaction and discharge of this Indenture have been
complied with;
then, upon Issuer Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the Trustee
and each co-trustee and separate trustee, if any, then acting as such hereunder
shall, at the expense of the Issuer, execute and deliver all such instruments as
may be necessary to acknowledge the satisfaction and discharge of this Indenture
and shall pay, or assign or transfer and deliver, to the Issuer or upon Issuer
Order all cash, securities and other property held by it as part of the Trust
Estate remaining after satisfaction of the conditions set forth in clauses (1)
and (2) above.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 6.07, the obligations of
the Trustee to the Issuer and the
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Holders of Bonds under Section 3.03, the obligations of the Trustee to the
Holders of Bonds under Section 4.02 and the provisions of Section 2.07 with
respect to lost, stolen, destroyed or mutilated Bonds, registration of transfers
of Bonds and rights to receive payments of principal of and interest on the
Bonds shall survive.
Section 4.02 Application of Trust Money.
All money deposited with the Trustee pursuant to Sections 3.03 and 4.01
shall be held in trust and applied by it, in accordance with the provisions of
the Bonds and this Indenture, to the payment, either directly or through any
Paying Agent, as the Trustee may determine, to the Persons entitled thereto, of
the principal and interest for whose payment such money has been deposited with
the Trustee.
ARTICLE V.
DEFAULTS AND REMEDIES
Section 5.01 Event of Default.
"Event of Default", wherever used herein, means, with respect to Bonds
issued hereunder, 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):
(1) if the Issuer shall
(A) default in the payment when and as due of any
installment of principal of or interest on any Bond or a failure to
pay the Bonds in full on or before the Payment Date in
________________; or
(B) default in the payment of the Redemption Price of any
Bond that has been called for optional redemption pursuant to
Article X; and
(C) except in the case of any such default in the payment of
principal, such default or failure shall continue for a period of
two days;
(2) if the Issuer shall breach or default in the due observance of
any one or more of the covenants set forth in clauses (i) through (ix) of
Section 3.09;
(3) if the Issuer shall breach, or default in the due observance
or performance of, any other of its covenants in this Indenture, and such
Default shall continue for a period of [30 days] after there shall have
been given, by registered or certified mail, to the Issuer by the Trustee,
or to the Issuer and the Trustee by the Holders of Bonds
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representing at least [ ]% of the Bond Balance of the Outstanding Bonds, a
written notice specifying such Default and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
(4) if any representation or warranty of the Issuer made in this
Indenture or any certificate or other writing delivered pursuant hereto or
in connection herewith shall prove to be incorrect in any material respect
as of the time when the same shall have been made and, within 30 days
after there shall have been given, by registered or certified mail,
written notice thereof to the Issuer by the Trustee, or to the Issuer and
the Trustee by the Holders of Bonds representing at least 25% of the Bond
Balance of the Outstanding Bonds, the circumstance or condition in respect
of which such representation or warranty was incorrect shall not have been
eliminated or otherwise cured;
(5) the entry of a decree or order for relief by a court having
jurisdiction in respect of the Issuer in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or any other
present or future federal or state bankruptcy, insolvency or similar law,
or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or of any substantial
part of its property, or ordering the winding up or liquidation of the
affairs of the Issuer and the continuance of any such decree or order
unstayed and in effect for a period of [60 consecutive days]; or
(6) the commencement by the Issuer of a voluntary case under the
federal bankruptcy laws, as now or hereafter in effect, or any other
present or future federal or state bankruptcy, insolvency or similar law,
or the consent by the Issuer to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Issuer or of any substantial part of its
property or the making by the Issuer of an 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 corporate action by the Issuer in
furtherance of any of the foregoing.
Section 5.02 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every such
case the Trustee or the Holders of Bonds representing not less than [ ]% of the
Bond Balance of the Outstanding Bonds may declare all the Bonds to be
immediately due and payable by a notice in writing to the Issuer (and to the
Trustee if given by Bondholders), and upon any such declaration such Bonds, in
an amount equal to the Bond Balance of such Bonds, together with accrued and
unpaid interest thereon to the date of such acceleration, shall become
immediately due and payable.
At any time after such a declaration of acceleration of maturity of the
Bonds has been made and before a judgment or decree for payment of the money due
has been obtained by the Trustee as hereinafter in this Article provided, the
Holders of Bonds representing more than
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[ ]% of the Bond Balance of the Outstanding Bonds, by written notice to the
Issuer and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all payments of principal of, and interest on, all Bonds
and all other amounts that would then be due hereunder or upon such
Bonds if the Event of Default giving rise to such acceleration had
not occurred; and
(B) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and
(2) all Events of Default, other than the nonpayment of the
principal of Bonds that have become due solely by such acceleration, have
been cured or waived as provided in Section 5.14.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
Section 5.03 Collection of Indebtedness and Suits for Enforcement by
Trustee.
Subject to the provisions of Section 3.01 and the following sentence, if
an Event of Default occurs and is continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Bondholders by
any Proceedings the Trustee deems appropriate 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 enforce
any other proper remedy. Any proceedings brought by the Trustee on behalf of the
Bondholders or any Bondholder against the Issuer shall be limited to the
preservation, enforcement and foreclosure of the liens, assignments, rights and
security interests under the Indenture and no attachment, execution or other
unit or process shall be sought, issued or levied upon any assets, properties or
funds of the Issuer, other than the Trust Estate relative to the Bonds in
respect of which such Event of Default has occurred. If there is a foreclosure
of any such liens, assignments, rights and security interests under this
Indenture, by private power of sale or otherwise, no judgment for any deficiency
upon the indebtedness represented by the Bonds may be sought or obtained by the
Trustee or any Bondholder against the Issuer. The Trustee shall be entitled to
recover the costs and expenses expended by it pursuant to this Section 5.03
including reasonable compensation, expenses, disburse advances of the Trustee,
its agents and counsel.
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Section 5.04 Remedies.
If an Event of Default shall have occurred and be continuing and the Bonds
have been declared due and payable and such declaration and its consequences
have not been rescinded and annulled, the Trustee (subject to Section 5.17, to
the extent applicable) may do one or more of the following:
(a) institute Proceedings for the collection of all amounts then
payable on the Bonds, or under this Indenture, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer
moneys adjudged due, subject in all cases to the provisions of Sections
3.01 and 5.03;
(b) in accordance with Section 5.17, 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;
(c) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(d) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and
enforce the rights and remedies of the Trustee or the Holders of the Bonds
hereunder; and
(e) refrain from selling the Trust Estate and apply all
Remittances pursuant to Section 5.07.
Section 5.05 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, composition or other judicial
Proceeding relative to the Issuer or any other obligor upon any of the Bonds or
the property of the Issuer or of such other obligor or their creditors, the
Trustee (irrespective of whether the Bonds shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Issuer for the payment of any overdue
principal or interest) shall be entitled and empowered, by intervention in such
Proceeding or otherwise to:
(i) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Bonds and file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Bondholders allowed in such Proceeding, and
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(ii) collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
receiver, assignee, trustee, liquidator, or sequestrator (or other similar
official) in any such Proceeding is hereby authorized by each Bondholder
to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Bondholders,
to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Bondholder any plan
of reorganization, arrangement, adjustment or composition affecting any of the
Bonds or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Bondholder in any such Proceeding.
Section 5.06 Trustee May Enforce Claims Without Possession of Bonds.
All rights of action and claims under this Indenture or any of the Bonds
may be prosecuted and enforced by the Trustee without the possession of any of
the Bonds or the production thereof in any Proceeding relating thereto, and any
such Proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Holders of the Bonds in respect of which such judgment
has been recovered after payment of amounts required to be paid pursuant to
Section 5.07, Clauses First and Second.
Section 5.07 Application of Money Collected.
If the Bonds have been declared due and payable following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, any money collected by the Trustee with respect to such Bonds pursuant
to this Article or otherwise and any other monies that may then be held or
thereafter received by the Trustee as security for such Bonds shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of the entire amount due on account of principal of, and
interest on, such Bonds, upon presentation and surrender thereof:
First: To the payment of all amounts due the Trustee under Section
6.07;
Second: To the payment (on a pro rata basis) of amounts then due and
unpaid to the Trustee or Servicer in respect of Nonrecoverable Advances
made by the Trustee or Servicer;
Third: To the payment of amounts then due and unpaid upon the
Outstanding Bonds for interest on the Bond Balance of such Bonds through
the end of the calendar month preceding the month in which such payment is
made at the Bond Interest Rate; and
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Fourth: To the payment of the Bond Balance of the Bonds, their
respective Current Bond Balances, ratably, without preference or priority
of any kind; and
Fifth: To the payment of the remainder, if any, to the Issuer or any
other Person legally entitled thereto.
Section 5.08 Limitation on Suits.
No Holder of a Bond shall have any right to institute any Proceedings,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of Bonds representing not less than [ ]% of the
Bond Balance of the Outstanding Bonds shall have made written request to
the Trustee to institute Proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
in full against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for [60 days] after its receipt of such notice,
request and offer of indemnity has failed to institute any such
Proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such [60-day] period by the Holders of Bonds
representing more than [ ]% of the Bond Balance of the Outstanding Bonds;
it being understood and intended that no one or more Holders of Bonds shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Bonds 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 and for the equal and ratable benefit of all the Holders
of Bonds.
In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Bonds, each
representing less than [ ]% of the Bond Balances of the Outstanding Bonds, the
Trustee in its sole discretion may determine what action, if any, shall be taken
notwithstanding any other provision herein to the contrary.
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Section 5.09 Unconditional Rights of Bondholders to Receive Principal and
Interest.
Subject to the provisions in this Indenture (including Sections 3.01 and
5.03) limiting the right to recover amounts due on a Bond to recovery from
amounts in the Trust Estate, the Holder of any Bond shall have the right, to the
extent permitted by applicable law, which right is absolute and unconditional,
to receive payment of each installment of interest on such Bond on the
respective Stated Maturities of such installments of interest, to receive
payment of each installment of principal of such Bond when due (or, in the case
of any Bond called for redemption, on the date fixed for such redemption) 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 5.10 Restoration of Rights and Remedies.
If the Trustee or any Bondholder 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 Trustee or to such Bondholder, then and in every such case the Issuer, the
Trustee and the Bondholders 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 Trustee and the
Bondholders shall continue as though no such Proceeding had been instituted.
Section 5.11 Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee or to
the Bondholders 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 5.12 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Bond to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Bondholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Bondholders, as the
case may be.
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Section 5.13 Control by Bondholders.
The Holders of Bonds representing more than [ ]% of the Bond Balance of
the Outstanding Bonds on the applicable Record Date shall have the right to
direct the time, method and place of conducting any Proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee; provided that:
(1) such direction shall not be in conflict with any rule of law
or with this Indenture;
(2) any direction to the Trustee to undertake a Sale of the Trust
Estate shall be by the Holders of Bonds representing the percentage of the
Bond Balance of the Outstanding Bonds specified in Section 5.17(b) (1),
unless Section 5.17(b) (2) is applicable; and
(3) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction; provided, however,
that, subject to Section 6.01, the Trustee need not take any action that
it determines might involve it in liability or be unjustly prejudicial to
the Bondholders not consenting.
Section 5.14 Waiver of Past Defaults.
The Holders of Bonds representing more than [ ]% of the Bond Balance of
the Outstanding Bonds on the applicable Record Date may on behalf of the Holders
of all the Bonds waive any past Default hereunder and its consequences, except a
Default:
(1) in the payment of any installment of principal of, or interest
on, any Bond; or
(2) in respect of a covenant or provision hereof that under
Section 9.02 cannot be modified or amended without the consent of the
Holder of each Outstanding Bond affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
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Section 5.15 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Bond by his
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 Trustee for any action taken,
suffered or omitted by it as 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 any suit instituted by the
Trustee, to any suit instituted by any Bondholder, or group of Bondholders,
holding in the aggregate Bonds representing more than [ ]% of the Bond Balance
of the Outstanding Bonds, or to any suit instituted by any Bondholder for the
enforcement of the payment of any installment of interest on any Bond on or
after the Stated Maturity thereof expressed in such Bond or for the enforcement
of the payment of any installment of principal of any Bond when due (or, in the
case of any Bond called for redemption, on or after the applicable Optional
Redemption Date).
Section 5.16 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 of law wherever enacted,
now or at any time hereafter in force, that may affect the covenants in, 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 Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 5.17 Sale of Trust Estate.
(a) The power to effect any sale (a "Sale") of any portion of the
Trust Estate pursuant to Section 5.04 shall not be exhausted by any one or
more Sales as to any portion of the Trust Estate remaining unsold, but
shall continue unimpaired until the entire Trust Estate shall have been
sold or all amounts payable on the Bonds and under this Indenture with
respect thereto shall have been paid. The Trustee may from time to time
postpone any public Sale by public announcement made at the time and place
of such Sale.
(b) To the extent permitted by law, the Trustee shall not in any
private Sale sell or otherwise dispose of the Trust Estate, or any portion
thereof, unless:
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(1) the Holders of Bonds representing not less than [ ]% of
the Bond Balance of the Bonds then Outstanding consent to or direct
the Trustee to make such Sale; or
(2) the proceeds of such Sale would be not less than the
entire amount that would be distributable to the Holders of the
Bonds, in full payment thereof in accordance with Section 5.07, on
the Payment Date next succeeding the date of such Sale.
The purchase by the Trustee of all or any portion of the Trust Estate at a
private Sale shall not be deemed a Sale or disposition thereof for purposes of
this Section 5.17(b).
(c) Unless the Holders of all Outstanding Bonds have otherwise
consented or directed the Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater
than the amount described in paragraph (2) of subsection (b) of this
Section 5.17 has not been established by the Trustee and no Person bids an
amount equal to or greater than such amount, the Trustee shall prevent
such sale and bid an amount at least $[ ] more than the highest other bid
in order to preserve the Trust Estate.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(1) any Holder or Holders of Bonds may bid for and purchase
the property offered for Sale, and upon compliance with the terms of
sale may hold, retain and possess and dispose of such property,
without further accountability, and may, in paying the purchase
money therefor, deliver any Outstanding Bonds or claims for interest
thereon in lieu of cash up to the amount that shall, upon
distribution of the net proceeds of such Sale, be payable thereon,
and such Bonds, in case the amounts so payable thereon shall be less
than the amount due thereon, shall be returned to the Holders
thereof after being appropriately stamped to show such partial
payment;
(2) the Trustee may bid for and acquire the property offered
for Sale in connection with any public Sale thereof, and, in lieu of
paying cash therefor, may make settlement for the purchase price by
crediting the gross Sale price against the sum of (A) the amount
that would be distributable to the Holders of the Bonds as a result
of such Sale in accordance with Section 5.07 on the Payment Date
next succeeding the date of such Sale and (B) the expenses of the
Sale and of any Proceedings in connection therewith which are
reimbursable to it, without being required to produce the Bonds in
order to complete any such Sale or in order for the net Sale price
to be credited against such Bonds, and any property so acquired
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by the Trustee shall be held and dealt with by it in accordance with
the provisions of this Indenture;
(3) the Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of
the Trust Estate in connection with a Sale thereof;
(4) the Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuer to transfer and convey its
interest in any portion of the Trust Estate in connection with a
Sale thereof, and to take all action necessary to effect such Sale;
and
(5) no purchaser or transferee at such a Sale shall be bound
to ascertain the Trustee's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any moneys.
(e) Notwithstanding anything in this Indenture to the contrary, if
an Event of Default specified in Section 5.01(l) is the Event of Default,
or one of the Events of Default, on the basis of which the Bonds have been
declared due and payable, then the Trustee may, in its sole discretion,
sell the Trust Estate without compliance with this Section 5.17.
Section 5.18 Action on Bonds.
The Trustee's right to seek and recover judgment 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 Trustee or the Holders of Bonds
shall be impaired by the recovery of any judgment by the Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Trust Estate.
Section 5.19 No Recourse to Other Trust Estates or Other Assets of the
Issuer.
The Trust Estate Granted to the Trustee as security for the Bonds serves
as security only for the Bonds. Holders of the Bonds shall have no recourse
against the trust estate granted as security for any other series of bonds
issued by the Issuer, and no judgment against the Issuer for any amount due with
respect to the Bonds may be enforced against either the trust estate securing
any other series or any other assets of the Issuer, nor may any prejudgment lien
or other attachment be sought against any such other trust estate or any other
assets of the Issuer.
Section 5.20 Application of the Trust Indenture Act.
Pursuant to Section 316(a) of the TIA, all provisions automatically
provided for in Section 316(a) are hereby expressly excluded.
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ARTICLE VI.
THE TRUSTEE
Section 6.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of 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 man would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) In the absence of bad faith on its part, the 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 Trustee and conforming to the requirements
of this Indenture. The Trustee shall, however, examine such
certificates and opinions to determine whether they conform to the
requirements of this Indenture.
(c) The 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:
(1) This paragraph does not limit the effect of subsection
(b) of this Section 6.01;
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) The 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 5.13 or 5.17 or
exercising any trust or power conferred upon the Trustee under this
Indenture.
(d) Except with respect to duties of the Trustee prescribed by the
TIA, as to which this Section 6.01(d) shall not apply, for all purposes
under this Indenture, the Trustee shall not be deemed to have notice or
knowledge of any Event of Default described in Section
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5.01(2), 5.01(5) or 5.01(6) or any Default described in Section 5.01(3) or
5.01(4) unless a Responsible Officer assigned to and working in the
Trustee's corporate trust department has actual knowledge thereof or
unless written notice of any event that is in fact such an Event of
Default or Default is received by the Trustee at the Corporate Trust
Office, and such notice references the Bonds generally, the Issuer, the
Trust Estate or this Indenture.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any 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 for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it. In determining that such
repayment or indemnity is not reasonably assured to it, the Trustee must
consider not only the likelihood of repayment or indemnity by or on behalf
of the Issuer but also the likelihood of repayment or indemnity from
amounts payable to it from the Trust Estate pursuant to Sections 6.07 and
8.02(d).
(f) Every provision of this Indenture that in any way relates to
the Trustee is subject to the provisions of this Section.
(g) Notwithstanding any extinguishment of all right, title and
interest of the Issuer in and to the Trust Estate following an Event of
Default and a consequent declaration of acceleration of the Maturity of
the Bonds, whether such extinguishment occurs through a Sale of the Trust
Estate to another Person, the acquisition of the Trust Estate by the
Trustee or otherwise, the rights, powers and duties of the Trustee with
respect to the Trust Estate (or the proceeds thereof) and the Bondholders
and the rights of Bondholders shall continue to be governed by the terms
of this Indenture.
(h) The Trustee shall at all times retain possession of the
Mortgage Files in the State of California, except for those Mortgage Files
or portions thereof, released to the Servicer pursuant to this Indenture
or the Servicing Agreement.
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Section 6.02 Notice of Default.
Within [90 days] after the occurrence of any Default known to the Trustee,
the Trustee shall transmit by mail to all Holders of Bonds notice of each such
Default, unless such Default shall have been cured or waived; provided, however,
that except in the case of a Default of the type described in Section 5.01(l),
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Bonds; and
provided, further, that in the case of any Default of the character specified in
Section 5.01(3) or 5.01(4) no such notice to Holders of the Bonds shall be given
until at least 30 days after the occurrence thereof. Concurrently with the
mailing of any such notice to the Holders of the Bonds, the Trustee shall
transmit by mail a copy of such notice to the Rating Agency.
Section 6.03 Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in any such
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Trustee. The Trustee shall not
be liable for any action it takes or omits to take in good faith in
reliance on any such Certificate or Opinion.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within
its rights or powers.
Section 6.04 Not Responsible for Recitals or Issuance of Bonds.
The recitals contained herein and in the Bonds, except the certificates of
authentication on the Bonds, shall be taken as the statements of the Issuer, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations with respect to the Trust Estate or as to the validity or
sufficiency of this Indenture or of the Bonds. The Trustee shall not be
accountable for the use or application by the Issuer of the Bonds or the
proceeds thereof or any money paid to the Issuer or upon Issuer Order pursuant
to the provisions hereof.
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Section 6.05 May Hold Bonds.
The Trustee, any Agent, or any other agent of the Issuer, in its
individual or any other capacity, may become the owner or pledgee of Bonds and,
subject to Sections 6.08 and 6.13, may otherwise deal with the Issuer or any
Affiliate of the Issuer with the same rights it would have if it were not
Trustee, Agent or such other agent.
Section 6.06 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by this Indenture or by law. The
Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Issuer and except to the extent of
income or other gain on investments that are obligations of the Trustee, in its
commercial capacity, and income or other gain actually received by the Trustee
on investments, which are obligations of others.
Section 6.07 Compensation and Reimbursement.
(a) The Issuer agrees:
(1) to pay the Trustee Fee to the Trustee on a monthly
basis, such Trustee Fee to be withdrawn from the Bond Account in
accordance with the provisions hereof for all services rendered by
it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold
them harmless against, any loss, liability or expense incurred
without negligence or bad faith on their part, arising out of, or in
connection with, the acceptance or administration of this trust,
including the costs and expenses of defending themselves against any
claim in connection with the exercise or performance of any of their
powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee shall
have given the Issuer written notice thereof promptly after
the Trustee shall have knowledge thereof;
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(ii) while maintaining absolute control over its own
defense, the Trustee shall cooperate and consult fully with
the Issuer in preparing such defense; and
(iii) notwithstanding anything to the contrary in this
Section 6.07(a)(3), the Issuer shall not be liable for
settlement of any such claim by the Trustee entered into
without the prior consent of the Issuer.
(b) The Issuer may remit payment for such fees and expenses to the
Trustee or, in the absence thereof, the Trustee may reimburse itself from
time to time pursuant to Section 8.02(c) hereof for payments of its fees
and expenses hereunder from moneys on deposit in the Bond Account.
(c) As security for the payment obligations of the Issuer pursuant
to the foregoing provisions of this Section 6.07, the Issuer hereby Grants
to the Trustee a lien ranking at all times senior to the lien of the Bonds
with respect to which any claim of the Trustee under this Section arose
and senior to all other liens, if any, upon all property and funds held or
collected as part of the Trust Estate for such Bonds by the Trustee in its
capacity as such. The Trustee shall not (i) exercise or enforce such
senior lien in any manner, or (ii) institute any Proceeding against the
Issuer for any payments, reimbursements, or indemnifications to the
Trustee or to enforce such lien, in either case unless (i) the Bonds have
been declared due and payable following an Event of Default pursuant to
Section 5.02, (ii) such acceleration of Maturity and its consequences have
not been rescinded and annulled, and (iii) moneys collected by the Trustee
are being applied in accordance with Section 5.07.
(d) Subject to the last sentence of Section 6.07(c), nothing in
this Section 6.07 shall be construed to limit (except as otherwise
expressly provided in subsection (c) of this Section 6.07) the exercise by
the Trustee of any right or remedy permitted under the Indenture or
otherwise in the event of the Issuer's failure to pay the amounts due the
Trustee pursuant to this Section 6.07.
Section 6.08 Eligibility; Disqualification.
Irrespective of whether this Indenture is qualified under the TIA, this
Indenture shall always have a Trustee who satisfies the requirements of TIA
Sections 310(a)(1) and 310(a)(5). The Trustee shall always have a combined
capital and surplus as stated in Section 6.09. The Trustee shall be subject to
TIA Section 310(b).
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Section 6.09 Trustee's Capital and Surplus.
The Trustee shall at all times have a combined capital and surplus of at
least $[ ] or shall be a member of a bank holding company system, the aggregate
combined capital and surplus of which is at least $50,000,000; provided,
however, that the Trustee's separate capital and surplus shall at all times be
at least the amount required by TIA Section 310(a)(2). If the Trustee publishes
annual reports of condition of the type described in TIA Section 310(a)(1), its
combined capital and surplus for purposes of this Section 6.09 shall be as set
forth in the latest such report. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.09 and TIA Section
310(a)(2), it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 6.10 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time by giving written notice
thereof to the Issuer. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
representing more than 50% of the Bond Balance of the Outstanding Bonds,
delivered to the Trustee and to the Issuer.
(d) If at any time:
(1) the Trustee shall have a conflicting interest
prohibited by Section 6.08 and shall fail to resign or
eliminate such conflicting interest in accordance with Section
6.08 after written request therefor by the Issuer or by any
Bondholder; or
(2) the Trustee shall cease to be eligible under
Section 6.09 or shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or
liquidation; then, in any such case, (i) the Issuer by an
Issuer Order may remove the Trustee, and the Issuer shall join
with the Trustee in the execution, delivery and performance of
all instruments and
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agreements necessary or proper to appoint a successor Trustee
and to vest in such successor Trustee any property, title,
right or power deemed necessary or desirable, subject to the
other provisions of this Indenture; provided, however, if the
Issuer does not join in such appointment within [fifteen (15)]
days after the receipt by it of a request to do so, or in case
an event of default has occurred and is continuing, the
Trustee may petition a court of competent jurisdiction to make
such appointment, or (ii) subject to Section 5.15, and, in the
case of a conflicting interest as described in clause (1)
above, unless the Trustee's duty to resign has been stayed as
provided in TIA Section 310(b), any Bondholder who has been a
bona fide Holder of a Bond for at least [six months] may, on
behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any
cause, the Issuer, by an Issuer Order shall promptly appoint a successor
Trustee. If within one year after such resignation, removal or
incapability or the occurrence of such vacancy a successor Trustee shall
be appointed by Act of the Holders of Bonds representing more than [ ]% of
the Bond Balance of the Outstanding Bonds delivered to the Issuer and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment, become the successor Trustee and
supersede the successor Trustee appointed by the Issuer. If no successor
Trustee shall have been so appointed by the Issuer or Bondholders and
shall have accepted appointment in the manner hereinafter provided, any
Bondholder who has been a bona fide Holder of a Bond for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(f) The Issuer shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to the
Holders of Bonds. Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office.
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Section 6.11 Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Issuer and the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee. Notwithstanding the foregoing, on request of the
Issuer or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder subject nevertheless to its lien,
if any, provided for in Section 6.07. Upon request of any such successor
Trustee, the Issuer shall execute and deliver any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 6.12 Merger, Conversion, Consolidation or Succession to Business
of Trustee.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Bonds have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Bonds so authenticated with the same effect as if
such successor Trustee had authenticated such Bonds.
Section 6.13 Preferential Collection of Claims Against Issuer.
The Trustee (and any co-trustee or separate trustee) shall be subject to
TIA Section 311(a), excluding any creditor relationship listed in TIA Section
311(b), and a Trustee (and any co-trustee or separate trustee) who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
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Section 6.14 Co-Trustees and Separate Trustees.
At any time or times, for the purpose of meeting the legal requirements of
the TIA or of any jurisdiction in which any of the Trust Estate may at the time
be located, the Issuer and the Trustee shall have power to appoint, and, upon
the written request of the Trustee or of the Holders of Bonds representing more
than [ ]% of the Bond Balance of the Outstanding Bonds with respect to which a
co-trustee or separate trustee is being appointed, the Issuer shall for such
purpose jointly with the Trustee in the execution, delivery and performance of
all instruments and agreements necessary or proper to appoint, one or more
Persons approved by the Trustee either to act as co-trustee, jointly with the
Trustee, of all or any part of the Trust Estate, or to act as separate trustee
of any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Issuer does not join in
such appointment within [15 days] after the receipt by it of a request to do so,
or in case an Event of Default has occurred and is continuing, the Trustee alone
shall have power to make such appointment. All fees and expenses of any
co-trustee or separate trustee shall be payable by the Issuer.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Issuer.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(1) The Bonds shall be authenticated and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised,
solely by the Trustee.
(2) The rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed
by the Trustee or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such co-trustee
or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Trustee
shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee.
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(3) The Trustee at any time, by an instrument in writing executed
by it, with the concurrence of the Issuer evidenced by an Issuer Order,
may accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section, and, in case an Event of Default has
occurred and is continuing, the Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without
the concurrence of the Issuer upon the written request of the Trustee, the
Issuer shall join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the manner
provided in this Section.
(4) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee, or any
other such trustee hereunder.
(5) Any Act of Bondholders delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee and separate
trustee.
Section 6.15 Authenticating Agents.
Upon the request of the Issuer and at the expense of the Issuer, the
Trustee shall appoint an Authenticating Agent with power to act on its behalf
and subject to its direction in the authentication and delivery of the Bonds
designated for such authentication by the Issuer and containing provisions
therein for such authentication (or with respect to which the Issuer has made
other arrangements, satisfactory to the Trustee and such Authenticating Agent,
for notation on the Bonds of the authority of an Authenticating Agent appointed
after the initial authentication and delivery of such Bonds) in connection with
transfers and exchanges under Section 2.06, as fully to all intents and purposes
as though the Authenticating Agent had been expressly authorized by that Section
to authenticate and deliver Bonds. For all purposes of this Indenture (other
than in connection with the authentication and delivery of Bonds pursuant to
Sections 2.05 and 2.11 in connection with their initial issuance and for
purposes of Section 2.07), the authentication and delivery of Bonds by the
Authenticating Agent pursuant to this Section shall be deemed to be the
authentication and delivery of Bonds "by the Trustee." Such Authenticating Agent
shall at all times be a Person that both meets the requirements of Section 6.09
for the Trustee hereunder and has an office for presentation of Bonds in the
Borough of Manhattan, City and State of New York. The Trustee shall initially be
the Authenticating Agent and shall be the Bond Registrar as provided in Section
2.06. The office from which the Trustee shall perform its duties as Bond
Registrar and Authenticating Agent shall be the Corporate Trust Office. Any
Authenticating Agent appointed by the Trustee pursuant to the terms of this
Section 6.15 or pursuant to the terms of any supplemental indenture shall
deliver to the Trustee as a condition precedent to the effectiveness of such
appointment an instrument accepting the trusts, duties and responsibilities of
Authenticating Agent and of Bond Registrar or co-Bond Registrar and indemnifying
the Trustee for and holding the Trustee harmless against, any loss, liability or
expense (including reasonable attorneys' fees) incurred without negligence or
bad faith on its
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part, arising out of or in connection with the acceptance, administration of the
trust or exercise of authority by such Authenticating Agent, Bond Registrar or
co-Bond Registrar.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any further act on the part of the
parties hereto or the Authenticating Agent or such successor corporation.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and the Issuer. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and the Issuer. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section, the Trustee
shall promptly appoint a successor Authenticating Agent, shall give written
notice of such appointment to the Issuer and shall mail notice of such
appointment to all Holders of Bonds.
The Trustee agrees, subject to Section 6.01(e), to pay to any
Authenticating Agent from time to time reasonable compensation for its services
and the Trustee shall be entitled to be reimbursed for such payments, subject to
Section 6.07. The provisions of Sections 2.09, 6.04 and 6.05 shall be applicable
to any Authenticating Agent.
Section 6.16 Review of Mortgage Files.
The Trustee agrees, for the benefit of the Holders of the Bonds, to
review, within [90 days] after the Closing Date, the Mortgage Files delivered to
it in connection with the Grant of the Original Mortgage Loans as security for
the Bonds and after completion of such review to provide a Final Certification
in the form attached hereto as Exhibit D. The Trustee's review shall be limited
to a determination that all documents referred to in the definition of the term
Mortgage Files have been delivered with respect to each such Mortgage Loan, that
all such documents have been executed, and that all such documents relate to the
Original Mortgage Loans. In performing such review the Trustee may rely upon the
purported genuineness and due execution of any such document and on the
purported genuineness of any signature thereon. If the Trustee discovers any
defect or omission in the Mortgage Files or that any document required to be
delivered to it has not been delivered or that any document so delivered does
not relate to any of the Original Mortgage Loans, it shall promptly notify the
Issuer and the Servicer of such Mortgage Loan.
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ARTICLE VII.
BONDHOLDERS' LISTS AND REPORTS
Section 7.01 Issuer to Furnish Trustee Names and Addresses of Bondholders.
(a) The Issuer shall furnish or cause to be furnished to the
Trustee (i) semi-annually, not less than [45 days] nor more than [60 days]
after the Payment Date occurring closest to six months after the Closing
Date and each Payment Date occurring at six-month intervals thereafter, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Bonds, and (ii) at such other times, as the
Trustee may request in writing, within [30 days] after receipt by the
Issuer of any such request, a list of similar form and content as of a
date not more than 10 days prior to the time such list is furnished;
provided, however, that so long as the Trustee is the Bond Registrar, no
such list shall be required to be furnished.
(b) In addition to furnishing to the Trustee the Bondholder lists,
if any, required under subsection (a), the Issuer shall also furnish all
Bondholder lists, if any, required under Section 3.03 at the times
required by said Section 3.03.
Section 7.02 Preservation of Information; Communications to Bondholders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Bonds
contained in the most recent list, if any, furnished to the Trustee as
provided in Section 7.01 and the names and addresses of the Holders of
Bonds received by the Trustee in its capacity as Bond Registrar. The
Trustee may destroy any list furnished to it as provided in Section 7.01
upon receipt of a new list so furnished.
(b) Bondholders may communicate pursuant to TIA Section 312(b)
with other Bondholders with respect to their rights under this Indenture
or under the Bonds.
(c) The Issuer, the Trustee and the Bond Registrar shall have the
protection of TIA Section 312(c).
Section 7.03 Reports by Trustee.
(a) Within [60 days] after [ ] of each year (the "reporting
date"), commencing with the year after the issuance of the Bonds, (i) the
Trustee shall mail to all Holders a brief report dated as of such
reporting date that complies with TIA Section 313(a); (ii) the Trustee
shall, to the extent not set forth in the Payment Date Statement pursuant
to Section 2.08(d), also mail to Holders of Bonds with respect to which it
has made advances, any reports with respect to such advances that are
required by TIA
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Section 313(b)(2); and, the Trustee shall also mail to Holders of Bonds
any reports required by TIA Section 313(b)(1). For purposes of the
information required to be included in any such reports pursuant to TIA
Sections 313(a)(2), 313(b)(1) (if applicable), or 313(b)(2), the principal
amount of indenture securities outstanding on the date as of which such
information is provided shall be the Bond Balance of the then Outstanding
Bonds covered by the report.
(b) A copy of each report required under this Section 7.03 shall,
at the time of such transmission to Holders of Bonds be filed by the
Trustee with the Commission and with each securities exchange upon which
the Bonds are listed. The Issuer will notify the Trustee when the Bonds
are listed on any securities exchange.
Section 7.04 Reports by Issuer.
The Issuer (a) shall deliver to the 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 by rules and regulations
prescribe) that the Issuer is required to file with the Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and (b)
shall also comply with the other provisions of TIA Section 314(a).
ARTICLE VIII.
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01 Collection of Moneys.
Except as otherwise expressly provided herein, the 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 Trustee pursuant to this
Indenture. The Trustee shall hold all such money and property received by it as
part of the Trust Estate and shall apply it as provided in this Indenture.
If the Trustee shall not have received a Remittance by close of business
on any related Remittance Date, the Trustee shall, unless the Issuer shall have
made provisions satisfactory to the Trustee for delivery to the Trustee of an
amount equal to such Remittance, deliver a notice to the Issuer and the Servicer
of their failure to make such Remittance and that such failure, if not remedied
by [2:00 p.m. Eastern Time] on the Business Day immediately preceding the
related Payment Date shall constitute an Event of Default. If the Trustee shall
subsequently receive any such Remittance by [2:00 p.m. Eastern Time] on the
Business Day immediately preceding the related Payment Date, such Event of
Default shall not be deemed to have occurred. Notwithstanding any other
provision hereof, the Trustee shall deliver to the Issuer or its designee or
assignee any Remittance received with respect to a Mortgage Loan after the
related Remittance Date to the extent that the Issuer previously made payment or
provision for payment
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with respect to such Remittance in accordance with this Section 8.01, and any
Remittance shall not be deemed part of the Trust Estate.
Except as otherwise expressly provided in this Indenture, if, following
delivery by the Trustee of the notice described above, the Servicer shall fail
to make such Remittance, the Trustee shall deliver a second notice to the
Servicer and the Issuer by [9:00 a.m. Eastern Time] on the related Payment Date
terminating the Servicer. Thereupon, the Trustee shall make a deposit in the
Bond Account of such Remittance for such Payment Date (provided, however, that
the Trustee's responsibility to make such deposit shall be limited to the
Trustee's determination, in its sole discretion, that such deposit if made would
be recoverable) and, pursuant to Section 8.11 hereof and Section [ ] of the
Servicing Agreement, assume the duties of the Servicer. In addition, if a
default occurs in any other performance required under the Servicing Agreement
or any Insurance Policy, the Trustee may, and upon the request of the Holders of
Bonds representing more than [ ]% of the Bond Balance of the Outstanding Bonds
shall, take such action as may be appropriate to enforce such payment or
performance including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture and to proceed thereafter as
provided in Article V.
Section 8.02 Bond Account.
(a) On or before the Closing Date, the Issuer shall direct the
Trustee in writing to open, at the Corporate Trust Office one or more
accounts that shall collectively be the "Bond Account". The Trustee shall
promptly deposit in the Bond Account (i) all Remittances received by it
from the Servicer pursuant to the Servicing Agreement, (ii) any other
funds from any deposits to be made by the Servicer pursuant to the
Servicing Agreement, (iii) any amount required to be deposited in the Bond
Account pursuant to Section 8.01, (iv) all amounts received pursuant to
Section 8.04 and (v) all other amounts received for deposit in the Bond
Account. All amounts that are deposited from time to time in the Bond
Account, and all investments, if any, made with such moneys shall be held
by the Trustee in the Bond Account as part of the Trust Estate as herein
provided, subject to withdrawal by the Trustee for the purposes set forth
in subsections (c) and (d) of this Section 8.02, except that the Trustee
shall be entitled to all income or other gain from such investments. All
funds withdrawn from the Bond Account pursuant to subsection (c) of this
Section 8.02 for the purpose of making payments to the Holders of Bonds
shall be applied in accordance with Section 3.03.
(b) So long as no Default or Event of Default shall have occurred
and be continuing, all or a portion of the Bond Account may be invested
and reinvested by the Trustee at the Trustee's discretion in one or more
Eligible Investments bearing interest or sold at discount. The Trust is
not required to invest any portion of the Bond Account.
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All income or other gains, if any, from investment of moneys
deposited in the Bond Account shall be withdrawn and retained by the
Trustee in the Bond Account immediately upon receipt, and any loss
resulting from such investment shall be reimbursed to the Bond Account by
the Trustee.
(c) Unless the Bonds have been declared due and payable pursuant
to Section 5.02 and moneys collected by the Trustee are being applied in
accordance with Section 5.07, amounts on deposit in the Bond Account on
any Payment Date or Optional Redemption Date shall be withdrawn from the
Bond Account, in the amounts required, for application as follows:
on any Payment Date,
first, to the payment of any unpaid amount due the Trustee
pursuant to Section 6.07,
second, to the payment of amounts then due and payable, in the
following order of priority, to the Trustee or Servicer in respect
of Nonrecoverable Advances made by the Trustee or Servicer,
third, to the payment of any installments of interest then due
on any Bonds,
fourth, to the payment, pro rata, of any installments of
principal then due and payable on the then Outstanding Bonds, and
fifth, to the payment of any unpaid surveillance fees payable
by the Issuer to the Rating Agency,
sixth, to the repayment to the Trustee of any amounts
deposited by it pursuant to Section 8.01,
each such amount being the amount thereof set forth in the applicable
Payment Date Statement.
(d) On or after each Payment Date, so long as the Trustee shall
have prepared a Payment Date Statement in respect of such Payment Date and
(i) shall have made, or, in accordance with Section 3.03, set aside from
amounts in the Bond Account an amount sufficient to make, the payment of
principal of and interest on the Bonds then required to be made as
indicated in such Payment Date Statement, (ii) shall have made any
reimbursement required to be made to the Trustee or Servicer in respect of
Nonrecoverable Advances made by the Trustee or Servicer and (iii) shall
have set aside any amounts that have been deposited in the Bond Account
prior to such time that
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represent amounts that are to be used to make payments on the Bonds on the
next succeeding Payment Date, the cash balance, if any, then remaining in
the Bond Account, less the amount of Remittances due with respect to the
Mortgage Loans but not received during the prior Collection Period, shall
be withdrawn from the Bond Account by the Trustee and shall be released
from the lien of this Indenture and paid by the Trustee to the Issuer or,
upon Issuer Order, to its assignee, subject to satisfaction of the
following conditions:
(i) no Default or Event of Default shall have occurred and
be continuing;
(ii) the Issuer shall have delivered to the Trustee an
Officers' Certificate stating that all conditions precedent to such
release specified in this subsection (d) have been satisfied; and
(iii) the Issuer shall have delivered to the Trustee an
Opinion of Counsel reasonably satisfactory in form and substance to
the Trustee to the effect that all Officers' Certificates delivered
to the Trustee in connection with such release comply as to form
with the requirements of this subsection (d) and all conditions
precedent to such release specified in this subsection (d) have been
satisfied.
Section 8.03 General Provisions Regarding the Bond Account and Mortgage
Loans.
(a) The Bond Account shall relate solely to the Bonds and to the
Mortgage Loans, Eligible Investments and other property securing the
Bonds. Funds and other property in the Bond Account shall not be
commingled with any other moneys or property of the Issuer or any
Affiliate thereof. Notwithstanding the foregoing, the Trustee may hold any
funds or other property received or held by it as part of the Bond Account
in collective accounts maintained by it in the normal course of its
business and containing funds or property held by it for other Persons
(which may include the Issuer or an Affiliate), provided that such
accounts are under the sole control of the Trustee and the Trustee
maintains adequate records indicating the ownership of all such funds or
property and the portions thereof held for credit to the Bond Account.
(b) If any amounts are needed for disbursement from the Bond
Account and sufficient uninvested funds are not available therein to make
such disbursement, the Trustee shall cause to be sold or otherwise
converted to cash a sufficient amount of the investments in the Bond
Account.
(c) Subject to Section 6.01, the Trustee shall not in any way be
held liable by reason of any insufficiency in the Bond Account except for
losses on investments.
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(d) All investments of funds in the Bond Account and all sales or
investments held in the Bond Account shall, except as provided below, be
made by the Trustee in its discretion in Eligible Investments.
(e) The Trustee shall, at all times while any Bonds are
Outstanding, maintain in its possession, or in the possession of an agent
whose actions with respect to such items are under the sole control of the
Trustee, all certificates or other instruments, if any, evidencing any
investment of funds in the Bond Account. The Trustee shall relinquish
possession of such items, or direct its agent to do so, only for purposes
of collecting the final payment receivable on such investment or
certificate or, in connection with the sale of any investment held in the
Bond Account, against delivery of the amount receivable in connection with
any sale.
(f) The Trustee shall not invest any part of the Trust Estate in
Eligible Investments that constitute uncertificated securities (as defined
in Section 8-102 of the Uniform Commercial Code, as enacted in the
relevant jurisdiction) or in any other book-entry securities unless it has
received an Opinion of Counsel reasonably satisfactory in form and
substance to the Trustee setting forth, with respect to each type of
security for which authority to invest is being sought, the procedures
that must be followed to maintain the lien and security interest created
by this Indenture with respect to the Trust Estate.
Section 8.04 Releases of Defective Mortgage Loans Withdrawn by Servicer.
(a) If any of the representations or warranties of the Mortgage
Loan Provider set forth in Sections 2(c) and 3(b) of the Mortgage Loan
Conveyance Agreement was materially incorrect or otherwise misleading with
respect to any Mortgage Loan as of the time made, the Issuer shall cause
the Mortgage Loan Provider to either (i) within 90 days after the Issuer
receives actual knowledge of such incorrectness, eliminate or otherwise
cure the circumstance or condition in respect of which such representation
or warranty was incorrect as of the time made, or (ii) withdraw such
Mortgage Loan from the lien of this Indenture following the expiration of
such 90-day period by depositing to the Bond Account an amount equal to
the actual principal balance of such Mortgage Loan, plus accrued interest
thereon (without consideration of any Monthly Advances) to the date of
deposit.
(b) If the Mortgage Loan Provider shall purchase any Mortgage Loan
it is required to purchase pursuant to the Mortgage Loan Conveyance
Agreement and remit the purchase price therefor to the Trustee for deposit
in the Bond Account on the next Servicer Reporting Date, then the Issuer
shall be deemed to have complied with all requirements imposed upon it by
this Section 8.04 with respect to such Mortgage Loan.
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(c) The Issuer shall have the right, as to any Mortgage Loan on
which four or more payments of Monthly Payments are delinquent or with
respect to which title to the related Mortgaged Property has been obtained
(a "Defaulted Mortgage Loan"), to treat such Mortgage Loan as having been
the subject of a Full Prepayment and request the release thereof from the
lien of this Indenture pursuant to Section 8.06. In connection therewith,
the Issuer shall deliver to the Trustee for deposit in the Bond Account an
amount equal to the actual principal balance of such Mortgage Loan plus
accrued interest thereon (without consideration of any Monthly Advances)
to the date of such deposit.
Section 8.05 Reports by Trustee to Bondholders; Access to Certain
Information.
On each Payment Date, the Trustee shall deliver the written report
required by Section 2.08(d) to Bondholders of record as of the related Record
Date (including the Clearing Agency, if any). Any Bondholder that does not
receive information through the Clearing Agency or a Clearing Agency Participant
may request that Trustee reports required to be delivered under this Indenture
be mailed directly to it by written request to the Trustee (accompanied by
verification of such Bondholder's ownership interest) at the Trustee's Corporate
Trust Office.
The Trustee shall make available at its Corporate Trust Office, during
normal business hours, for review by any Bondholder or any person identified to
the Trustee as a prospective Bondholder, originals or copies of the following
items: (a) the Indenture and any amendments thereto, (b) all Payment Date
Statements delivered to the Issuer since the Closing Date, (c) any Officers'
Certificates and any Officers' Certificate of the Servicer delivered to the
Trustee since the Closing Date as described in the Indenture, (d) any
Accountants' reports delivered to the Trustee since the Closing Date as required
under the Servicing Agreement, (e) any and all modifications, waivers and
amendments of the terms of a Mortgage Loan entered into by the Servicer and
delivered to the Trustee and (f) any and all Officers' Certificates of the
Servicer and other evidence delivered to the Trustee to support the Servicer's
determination that any Advance was not or, if made, would not be recoverable.
Copies of any and all of the foregoing items will be available from the Trustee
upon request; however, the Trustee will be permitted to require payment of a sum
sufficient to cover the reasonable costs and expenses of providing such copies.
Section 8.06 Trust Estate Mortgage Files.
(a) The Trustee may, and when required by the provisions of this
Indenture shall, execute such instruments or powers of attorney as are
prepared and delivered to it by the Servicer to release property from the
lien of this Indenture, or convey the Trustee's interest in the same, in a
manner and under circumstances that are not inconsistent with the
provisions of this Indenture. No party relying upon an instrument executed
by the Trustee as provided in this Article VIII shall be bound to
ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
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(b) Upon request of the Servicer accompanied by an Officers'
Certificate to the effect that a Mortgage Loan has been the subject of a
Full Prepayment (other than a prepayment pursuant to clause (ii) of the
definition of "Full Prepayment") and a release in a form acceptable to the
Trustee, the Trustee shall promptly release the related Mortgage Files as
the Servicer may request to evidence satisfaction and discharge of such
Mortgage Loan. In exchange for the release of the Mortgage Files, the
Servicer shall deliver to the Trustee a trust receipt reasonably
satisfactory to the Trustee and signed by an officer of the Servicer. If
such Mortgage Loan shall be liquidated and the Trustee receives a
certificate from the Servicer as provided above, then, upon request of the
Issuer, the Trustee shall release the trust receipt to or upon the order
of the Issuer.
(c) The Trustee shall, at such time as there are no Bonds
outstanding, release all of the Trust Estate to the Issuer (other than any
cash held for the payment of the Bonds pursuant to Section 3.03 or 4.02),
subject, however, to the rights of the Trustee under Section 6.07.
Section 8.07 Amendment to Servicing Agreement.
The Trustee may, without the consent of any Holder, enter into or consent
to any amendment or supplement to the Servicing Agreement for the purpose of
increasing the obligations or duties of any party other than the Trustee or the
Holders of the Bonds. The Trustee may, in its discretion, decline to enter into
or consent to any such supplement or amendment: (i) unless the Trustee receives
an Opinion of Counsel that the position of the Holders would not be materially
adversely affected or (ii) if its own rights, duties or immunities would be
adversely affected.
Section 8.08 Delivery of the Mortgage Files Pursuant to Servicing
Agreement.
As is appropriate for the servicing or foreclosure of any Mortgage Loan,
the Trustee shall deliver to the Servicer of such Mortgage the Mortgage Files
for such Mortgage Loan upon receipt by the Trustee on or prior to the date such
release is to be made of:
(a) such Officers' Certificates as are required by the Servicing
Agreement; and
(b) a trust receipt in the form prescribed by the Servicing
Agreement, executed by the Servicer, providing that the Servicer will hold
or retain the Mortgage Files in trust for the benefit of the Trustee and
the Holders of Bonds.
Section 8.09 Records.
In order to facilitate the servicing of the Mortgage Loans by the
Servicer, the Issuer shall cause Servicer to retain certain records in
accordance with the provisions of the Servicing Agreement and this Indenture.
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Section 8.10 Servicer as Agent.
In order to facilitate the servicing of the Mortgage Loans by the Servicer
of such Mortgage Loans, the Servicer of the Mortgage Loans has been appointed by
the Issuer to retain, in accordance with the provisions of the Servicing
Agreement and this Indenture, all Remittances on such Mortgage Loans prior to
the time they are deposited into the Bond Account.
Section 8.11 Termination of Servicer.
If the Servicer materially breaches or fails to perform or observe any
obligations or conditions in the Servicing Agreement, the Trustee may terminate
the Servicer. The Trustee shall not terminate the Servicer without cause or
incur any termination fee unless such action can reasonably be expected to
benefit the Holders of the Bonds by increasing ultimate cash proceeds available
to discharge the Bonds. If the Trustee terminates the Servicer, the Trustee
shall pursuant to Section [ ] of the Servicing Agreement assume the duties of
the Servicer or appoint a successor servicer acceptable to the Issuer and the
Rating Agency and meeting the requirements set forth in the Servicing Agreement.
Section 8.12 Opinion of Counsel.
The Trustee shall be entitled to receive at least five Business Days'
notice of any action to be taken pursuant to Section 8.06(a) (other than in
connection with releases of Mortgage Loans that were the subject of a Full
Prepayment of the type described in clause (i) of the definition of the term
"Full Prepayment") and 8.07, accompanied by copies of any instruments involved,
and the Trustee shall be entitled to receive an Opinion of Independent Counsel,
in form and substance reasonably satisfactory to the 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. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Trustee in connection with any such action.
Section 8.13 Appointment of Custodians.
The Trustee may, at no additional cost to the Issuer, with the consent of
the Issuer, appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee. Each Custodian shall (i) be a financial
institution supervised and regulated by the Comptroller of the Currency, the
Board of Governors of the Federal Reserve System, the Office of Thrift
Supervision, or the Federal Deposit Insurance Corporation; (ii) have combined
capital and surplus of at least $[ ]; (iii) be equipped with secure, fireproof
storage facilities, and have adequate controls on access to assure the safety
and security of the Mortgage Files; (iv) utilize in its custodial function
employees who are knowledgeable in the handling of mortgage documents and of the
functions of a mortgage document custodian; and (v) satisfy any other
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reasonable requirements that the Issuer may from time to time deem necessary to
protect the interests of Bondholders in the Mortgage Files. Each Custodian shall
be subject to the same obligations and standard of care as would be imposed on
the Trustee hereunder assuming the Trustee retained the Mortgage Files directly.
The appointment of one or more Custodians shall not relieve the Trustee from any
of its obligations hereunder, and the Trustee shall remain responsible for all
acts and omissions of any Custodian. If the Servicer is appointed as a Custodian
in accordance with this Section 8.13, it shall fulfill its servicing and
custodial duties and obligations through separate departments and, if it
maintains a trust department, shall fulfill its custodial duties and obligations
through such trust department.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of Bondholders.
Without the consent of the Holders of any Bonds, the Issuer and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) 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 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;
(2) to add to the conditions, limitations and restrictions on the
authorized amount, terms and purposes of the issuance, authentication and
delivery of any Bonds, as herein set forth, additional conditions,
limitations and restrictions thereafter to be observed;
(3) to evidence the succession of another Person to the Issuer,
and the assumption by any such successor of the covenants of the Issuer
herein and in the Bonds contained;
(4) to add to the covenants of the Issuer, for the benefit of the
Holders of all Bonds or to surrender any right or power herein conferred
upon the Issuer;
(5) to cure any ambiguity, to correct or supplement any provision
herein that may be defective or inconsistent with any other provision
herein, or to amend any other provisions with respect to matters or
questions arising under this Indenture, which shall not be inconsistent
with the provisions of this Indenture, provided that such action shall not
adversely affect in any material respect the interests of the Holders of
the Bonds; and provided, further, that the amendment shall not be deemed
to adversely affect in any material respect the interests of the Holders
of the Bonds if the Person requesting the
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amendment obtains a letter from the Rating Agency that the amendment would
not result in the downgrading or withdrawal of the ratings then assigned
to the Bonds;
(6) 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.
Section 9.02 Supplemental Indentures With Consent of Bondholders.
With the consent of the Holders of Bonds representing not less than
[two-thirds] of the Bond Balance of all Outstanding Bonds by Act of said Holders
delivered to the Issuer and the Trustee, the Issuer and the Trustee may 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 Bonds under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Bond affected thereby:
(1) change the Stated Maturity of the final installment of the
principal of, or any installment of interest on, the Bonds or reduce the
principal amount thereof, the Bond Interest Rate thereon or the Redemption
Price with respect thereto, change the earliest date on which any Bond may
be redeemed at the option of the Issuer, change any place of payment
where, or the coin or currency in which, any Bond or any interest thereon
is payable, or impair the right to institute suit for the enforcement of
the payment of any installment of interest due on any Bond on or after the
Stated Maturity thereof or for the enforcement of the payment of the
entire remaining unpaid principal amount of any Bond on or after the
Stated Maturity of the final installment of the principal thereof (or, in
the case of redemption, on or after the applicable Optional Redemption
Date);
(2) reduce the percentage of the Bond Balance of the Outstanding
Bonds, 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 provisions of this Indenture or Defaults
hereunder and their consequences provided for in this Indenture;
(3) modify any of the provisions of this Section, Section 5.13 or
Section 5.17(b), except to increase any percentage specified therein or to
provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Outstanding Bond
affected thereby;
(4) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
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(5) permit the creation of any lien other than the lien of this
Indenture with respect to any part of the Trust Estate (except for
Permitted Encumbrances) or terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Bond of
the security afforded by the lien of this Indenture;
(6) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the Debt Service Requirement for any
Payment Date (including the calculation of any of the individual
components of such Debt Service Requirement) or to affect rights of the
Holders of the Bonds to the benefits of any provisions for the mandatory
redemption of Bonds contained herein; or
(7) incur any indebtedness, other than the Bonds, for which the
timing or amount of the payments on such indebtedness are in part
determined by the timing or amount of payments or projected payments on
assets in the Trust Estate or that would cause the Issuer or the Trust
Estate to be treated as a "taxable mortgage pool" within the meaning of
Code Section 7701(i).
The Trustee may in its discretion determine whether or not any Bonds would
be affected by any supplemental indenture and any such determination shall be
conclusive upon the Holders of all Bonds, whether theretofore or thereafter
authenticated and delivered hereunder. The Trustee shall not be liable for any
such determination made in good faith.
It shall not be necessary for any Act of Bondholders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Holders of the Bonds to which such supplemental indenture relates a notice
setting forth in general terms the substance of such supplemental indenture. Any
failure of the Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
Section 9.03 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
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Section 9.04 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Bonds to which such supplemental indenture relates that have theretofore been
or thereafter are authenticated and delivered hereunder shall be bound thereby.
Section 9.05 Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.
Section 9.06 Reference in Bonds to Supplemental Indentures.
Bonds authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and if required by the Trustee shall,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Issuer shall so determine, new Bonds so
modified as to conform, in the opinion of Trustee and the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Trustee in exchange for Outstanding Bonds.
Section 9.07 Amendments to Governing Documents.
The Trustee shall, upon Issuer Request, consent to any proposed amendment
to the Issuer's governing documents, or an amendment to or waiver of any
provision of any other document relating to the Issuer's governing documents,
such consent to be given without the necessity of obtaining the consent of the
Holders of any Bonds upon receipt by the Trustee of:
(i) an Opinion of Independent Counsel to the effect that such
amendment or waiver will not adversely affect the interests of the Holders
of the Bonds and that all conditions precedent to such consent specified
in this Section 9.07 have been satisfied;
(ii) an Officers' Certificate, to which such proposed amendment or
waiver shall be attached, stating that such attached copy is a true copy
of the proposed amendment or waiver and that all conditions precedent to
such consent specified in this Section 9.07 have been satisfied; and
(iii) written confirmation from the Rating Agency that the
implementation of the proposed amendment or waiver will not adversely
affect its rating of the Bonds.
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Notwithstanding the foregoing, the Trustee may decline to consent to a
proposed waiver or amendment that adversely affects its own rights, duties or
immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require that any Person
obtain the consent of the Trustee to any amendment or waiver or any provision of
any document where the making of such amendment or the giving of such waiver
without obtaining the consent of the Trustee is not prohibited by this Indenture
or by the terms of the document that is the subject of the proposed amendment or
waiver.
ARTICLE X.
REDEMPTION OF BONDS
Section 10.01 Redemption.
(a) All the Bonds may be redeemed in whole, but not in part, at
the option of the Issuer, on each Optional Redemption Date at the
Redemption Price provided, however, that funds in an amount equal to the
Redemption Price must have been deposited with the Trustee prior to the
Trustee's giving notice of such redemption pursuant to Section 10.02 or
the Issuer shall have complied with the requirements for satisfaction and
discharge of the Bonds specified in Section 4.01. If the Issuer shall
elect to redeem the Bonds pursuant to this Section 10.01, it shall furnish
notice of such election to the Trustee not later than [thirty (30)] days
prior to the Payment Date selected for such redemption, whereupon all such
Bonds shall be due and payable on such Payment Date upon the furnishing of
a notice pursuant to Section 10.02 to each Holder of such Bonds.
(b) Upon receipt of the notice from Issuer of its election to
redeem the Bonds pursuant to Section 10.01(a), the Trustee shall prepare
and deliver to the Issuer, no later than the related Optional Redemption
Date, a Payment Date Statement stating therein that it has determined that
the conditions to redemption at the option of the Issuer have been
satisfied and setting forth the amount, if any, to be withdrawn from the
Bond Account and paid to the Servicer as reimbursement for Nonrecoverable
Advances and such other information as may be required to accomplish such
redemption.
Section 10.02 Form of Redemption Notice.
Notice of redemption shall be given by the Trustee in the name of and at
the expense of the Issuer by first class mail, postage prepaid, mailed not less
than ten days prior to the Optional Redemption Date to each Holder of Bonds to
be redeemed, such Holders being determined as of the Record Date for such
Payment Date
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All notices of redemption shall state:
(1) the Optional Redemption Date;
(2) the Redemption Price at which the Bonds of such Series will be
redeemed,
(3) the fact of payment in full on such Bonds, the place where
such Bonds are to be surrendered for payment of the Redemption Price
(which shall be the office or agency of the Issuer to be maintained as
provided in Section 3.02), and that no interest shall accrue on such Bond
for any period after the date fixed for redemption.
Failure to give notice of redemption, or any defect therein, to any Holder of
any Bond selected for redemption shall not impair or affect the validity of the
redemption of any other Bond.
Section 10.03 Bonds Payable on Optional Redemption.
Notice of redemption having been given as provided in Section 10.02, the
Bonds to be redeemed shall, on the applicable Optional Redemption Date, become
due and payable at the Redemption Price and (unless the Issuer shall default in
the payment of the Redemption Price) no interest shall accrue on such Redemption
Price for any period after such Optional Redemption Date.
ARTICLE XI.
MISCELLANEOUS
Section 11.01 Compliance Certificates and Opinions.
(a) Upon any application or request by the Issuer to the Trustee
to take any action under any provision of this Indenture, the Issuer shall
furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent,
if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion
need be furnished.
(b) Every certificate, opinion or letter with respect to
compliance with a condition or covenant provided for in this Indenture,
including one furnished pursuant to specific requirements of this
Indenture relating to a particular application or request (other than
certificates provided pursuant to TIA Section 314(a)(4)) shall include and
shall be deemed to include (regardless of whether specifically stated
therein) the following:
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(1) a statement that each individual signing such
certificate, opinion or letter has read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate, opinion or letter are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him 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
individual, such condition or covenant has been complied with.
Section 11.02 Form of Documents Delivered to 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 the Issuer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
Opinion of Counsel may be based on the written opinion of other counsel, in
which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel's opinion and shall include a statement to the effect that such counsel
believes that such counsel and the Trustee may reasonably rely upon the opinion
of such other counsel.
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.
Wherever in this Indenture, in connection with any application or
certificate or report to the 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
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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 Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Section
6.01(b)(2).
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Trustee at the request or direction
of the Issuer, then, notwithstanding that the satisfaction of such condition is
a condition precedent to the Issuer's right to make such request or direction,
the Trustee shall be protected in acting in accordance with such request or
direction if it does not have knowledge of the occurrence and continuation of
such Default or Event of Default as provided in Section 6.01(d).
Section 11.03 Acts of Bondholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or
taken by Bondholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Bondholders in
person or by an agent 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 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 Bondholders signing such
instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 6.01) conclusive in favor of the
Trustee and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Whenever such execution is by an officer of a
corporation or a member of a partnership on behalf of such corporation or
partnership, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) The ownership of Bonds shall be proved by the Bond Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Bonds shall bind the
Holder of every Bond issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof, in respect of
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anything done, omitted or suffered to be done by the Trustee or the Issuer
in reliance thereon, whether or not: notation of such action is made upon
such Bonds.
Section 11.04 Notices, etc. to Trustee and Issuer.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Bondholders or other documents provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(1) the Trustee by any Bondholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with and received by the Trustee at its Corporate Trust
Office; or
(2) the Issuer by the Trustee or by any Bondholder shall be
sufficient for every purpose hereunder (except as provided in Section
5.01(3) and (4)) if in writing and mailed, first-class postage prepaid, to
the Issuer addressed to it at [3731 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇], or at any other address previously furnished in writing
to the Trustee by the Issuer.
Section 11.05 Notices and Reports to Bondholders; Waiver of Notices.
Where this Indenture provides for notice to Bondholders of any event or
the mailing of any report to Bondholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Bondholder affected by such event or to
whom such report is required to be mailed, at the address of such Bondholder as
it appears on the Bond Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Bondholders is mailed in
the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Bondholder
shall affect the sufficiency of such notice or report with respect to other
Bondholders, and any notice or report that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
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 Bondholders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Bondholders 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 Trustee shall be deemed to be a
sufficient giving of such notice.
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Section 11.06 Rules by Trustee.
The Trustee may make reasonable rules for any meeting of Bondholders.
Section 11.07 Conflict With Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this Indenture by any of the
provisions of the TIA, such required provision shall control.
Section 11.08 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 11.09 Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer shall bind
its successors and assigns, whether so expressed or not.
Section 11.10 Separability.
In case any provision in this Indenture or in the Bonds 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 Bonds, expressed or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any separate trustee or Co-trustee appointed under Section 6.14 and
the Bondholders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
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Section 11.12 Legal Holidays.
In any case where the date of any Payment Date, Optional Redemption Date
or any other date on which principal of or interest on any Bond is proposed to
be paid shall not be a Business Day, then (notwithstanding any other provision
of the Bonds 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 nominal date of any such Payment Date, Optional Redemption Date or
other date for the payment of principal of or interest on any Bond and no
interest shall accrue for the period from and after any such nominal date,
provided such payment is made in full on such next succeeding Business Day.
Section 11.13 Governing Law.
IN VIEW OF THE FACT THAT BONDHOLDERS ARE EXPECTED TO RESIDE IN MANY STATES
AND OUTSIDE THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH CERTAINTY THAT
THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAW OF A STATE HAVING A WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL
LAW RELEVANT TO TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND
EACH BOND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF [CALIFORNIA] APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
Section 11.14 Counterparts.
This instrument 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.
This Indenture is subject to recording in any appropriate public recording
offices, such recording to be effected by the Issuer and at its expense in
compliance with any Opinion of Counsel delivered pursuant to Section 2.11(c) or
3.06.
Section 11.16 Issuer Obligation.
No recourse may be taken, directly or indirectly, against any organizer,
the Issuer or the Trustee or of any predecessor or successor of the Issuer or
the Trustee with respect to the Issuer's obligations with respect to the Bonds
or the obligations of the Issuer or the Trustee under this Indenture or any
certificate or other writing delivered in connection herewith or therewith.
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Section 11.17 Inspection.
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Trustee, during the Issuer's normal business hours, to
examine all of 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 Accountants selected by the Trustee, and to discuss its affairs,
finances and accounts with its officers, employees and Independent Accountants
(and by this provision the Issuer hereby authorizes its Accountants to discuss
with such representatives such affairs, finances and accounts), all at such
reasonable times and as often as may be reasonably requested. Any expense
incident to the exercise by the Trustee of any right under this Section 11.17
shall be borne by the Issuer.
Section 11.18 Usury.
The amount of interest payable or paid on any Bond under the terms of this
Indenture shall be limited to an amount that shall not exceed the maximum
nonusurious rate of interest allowed by the applicable laws of the United States
or the State of California (whichever shall permit the higher rate), that could
lawfully be contracted for, charged or received (the "Highest Lawful Rate"). In
the event any payment of interest on any Bond exceeds the Highest Lawful Rate,
the Issuer stipulates that such excess amount will be deemed to have been paid
as a result of an error on the part of both the Trustee, acting on behalf of the
Holder of such Bond, and the Issuer, and the Holder receiving such excess
payment shall promptly, upon discovery of such error or upon notice thereof from
the Issuer or the Trustee, refund the amount of such excess or, at the option of
the Trustee, apply the excess to the payment of principal of such Bond, if any,
remaining unpaid. In addition, all sums paid or agreed to be paid to the Trustee
for the benefit of Holders of Bonds for the use, forbearance or detention of
money shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such Bonds.
*****
[SIGNATURES TO FOLLOW]
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IN WITNESS WHEREOF, the Issuer and the Trustee and the have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized, all as of the day and year first above written.
[ISSUER]
By:
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By:
Name:
Title:
95
SCHEDULE A
MORTGAGE LOAN SCHEDULE
Schedule A
96
EXHIBIT A
FORM OF BOND
97
UNLESS THIS BOND 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 BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUIRED 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.
THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF, AND THE ISSUER IS NOT OTHERWISE LIABLE FOR
PAYMENTS ON THIS BOND.
THIS BOND IS A GLOBAL BOND REPRESENTING THE OWNERSHIP OF THE ENTIRE CLASS OF
SECURITIES REFERRED TO BELOW. REGISTRATION OF ANY TRANSFER OF OWNERSHIP OF THIS
BOND MAY BE MADE ONLY IN WHOLE AND ONLY TO AN ENTITY THAT IS A "CLEARING
CORPORATION" AS DEFINED IN SECTION 8-102(3) OF THE UNIFORM COMMERCIAL CODE AS IN
EFFECT IN THE STATE OF NEW YORK.
[ISSUER]
ASSET-BACKED BONDS
SERIES [ ]-[ ]
DUE: [ ]
ACCRUAL DATE: [ ]
ISSUE DATE: [ ]
Bond Interest Rate [ ]%
$[ ] CUSIP NO. [ ]
CERTIFICATE NUMBER 001
[ISSUER], a corporation duly organized and existing under the laws
of the State [of Delaware] (herein referred to as the "Issuer"), for value
received hereby promises to pay to CEDE & CO. or registered assigns, solely from
proceeds of the Trust Estate as provided in the Indenture, the principal sum of
[ ] $[ ] and interest on the unpaid
98
principal amount thereof in monthly installments on the [ ] day of each month
or, if such day is not a Business Day, on the next succeeding Business Day (each
a "Payment Date"), commencing in [ ] and ending on or before [ ] (the "Stated
Maturity" of such final installment of principal), each such installment to be
in the amount of (i) this Bond's entitlement from the Bond Principal Payment
Amount on the related Payment Date, and (ii) interest (computed on the basis of
a 360-day year of twelve 30-day months) accrued at the per annum rate of [ ]%
during the related Interest Accrual Period on the Current Bond Balance, as of
the Determination Date immediately following such Interest Accrual Period.
Capitalized terms used in this Bond shall bear the same meaning as
ascribed thereto in the Indenture referred to on the reverse hereof.
This Bond is a non-recourse obligation of the Issuer. Principal of and
interest on this Bond are due and payable out of Available Funds on each Payment
Date as described in the Indenture. No amounts shall be due or payable from the
Issuer on any Payment Date except out of Available Funds, as described more
fully on the reverse hereof.
The principal of, and interest on, this Bond are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Bond shall be applied as set forth in the Indenture. No
interest shall accrue or be payable on any installment of principal or interest
which is not paid when and as due, except as provided in the Indenture referred
to on the reverse hereof.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Bond shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
99
IN WITNESS WHEREOF, [ISSUER] has caused this Bond to be duly executed this
____ day of ________, 199__.
ISSUER
By: _____________________________________
Name:
Title:
Attest:
By: __________________________________
Name:
Title:
100
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds referred to in the within-mentioned Indenture.
BANKERS TRUST OF CALIFORNIA, N.A., as Trustee
By: __________________________________
101
This Bond is one of a duly authorized issue of non-recourse Bonds of the Issuer,
designated as its Asset-Backed Bonds, Series 199__-__ (herein called the
"Bonds"), issued or to be issued under the Issuer's Indenture dated as of
________ __, 199__, (herein called the "Indenture") between the Issuer and
Bankers Trust Company of California, N.A., as trustee (the "Trustee", which term
includes any successor Trustee under the Indenture), to which Indenture
reference is hereby made for a statement of the respective rights thereunder of
the Issuer, the Trustee, and the Holders of the Bonds and the terms upon which
the Bonds are, and are to be, authenticated and delivered.
All terms used in this Bond which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
This Bond does not purport to summarize the Indenture and reference should be
made to the Indenture for the interests, rights and limitations of rights,
benefits, obligations and duties of the Holders of the Bonds thereunder, and the
rights, duties and immunities of the Trustee.
Payments of interest and principal, if any, on the Bonds will be made on each
Payment Date, commencing in ___________ 199__ out of Available Funds on such
Payment Date in the manner and in accordance with the priorities provided in the
Indenture to the Holders of record on the Record Date preceding such Payment
Date. The "Interest Accrual Period" with respect to a Payment Date is the one
month period ending on the last day of the month preceding each Payment Date.
The entire unpaid principal amount of the Bonds shall be due and payable, if not
then previously paid, on the Stated Maturity.
The Bonds are non-recourse obligations of the Issuer, as described in the
Indenture. The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of all of the Trust Estate which constitutes security
for the payment of the Bonds. All payments of principal of and interest on the
Bonds shall be made only from Available Funds on each Payment Date and the Trust
Estate granted as security for the Bonds. Each Holder hereof, by its acceptance
of this Bond, agrees that it will have recourse solely against such Trust Estate
for payments on the Bonds and that (i) the Issuer shall not otherwise be liable
for any amounts payable under the Bonds and (ii) neither the Issuer nor any of
its agents, officers, directors, employees or successors or assigns shall be
liable for any amounts payable, or performance due, under this Bond or the
Indenture (except for amounts payable solely from such Trust Estate).
If an Event of Default as defined in the Indenture shall occur and be
continuing, the Bonds may become or be declared due and payable in the manner
and with the effect provided in the Indenture. Following the acceleration of the
maturity of the Bonds, all amounts collected as proceeds of the Trust Estate
will be applied as described in the Indenture.
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The Bonds are not prepayable or redeemable at the option or direction of the
Issuer except that the Bonds are subject to redemption in whole, but not in
part, at the option of the Issuer on any Payment Date on or after the Payment
Date on which the Bond Balance is less than ___% of the initial Bond Balance.
Any such redemption at the option of the Issuer shall be at a price equal to
100% of the Current Bond Balance of the Bond to be so redeemed, together with
accrued interest and unpaid interest on such amount through the last day of the
month preceding the month in which such optional redemption occurs.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond may be registered on the Bond Register of the
Issuer, upon surrender of this Bond for registration of transfer at the office
or agency designated by the Issuer pursuant to the Indenture, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Bonds of authorized denominations and in
the same aggregate initial principal amount, will be issued to the designated
transferee or transferees.
Prior to the due presentment for registration of transfer of this Bond, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Bond is registered (i) on any Record Date, for
purposes of making payments, and (ii) on any other date for any other purpose,
as the owner hereof, whether or not this Bond be overdue, and neither the
Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer with the consent of the majority of the Holders of the Bonds
(with respect to the Bond Balance of all Bonds at the time Outstanding). The
Indenture also contains similar provisions permitting the majority of the
Holders of Bonds (with respect to the Bond Balance of the Bonds at the time
Outstanding) on behalf of the Holders of all the Bonds, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder, at the time of the giving thereof, of this Bond (or any one or more
Predecessor Bonds) shall be conclusive and binding upon such Holder and upon all
future holders of this Bond and of any Bond issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent or waiver is made upon this Bond. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of the Holders of the Bonds.
The Bonds are "Book Entry Bonds" which will be available to investors only
through the book entry facilities of The Depository Trust Company, and
Definitive Bonds will be available only under certain limited circumstances as
described in the Indenture.
103
AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THE BONDS
SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
[CALIFORNIA] APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
104
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT - __________ Custodian __________
(Cust) (Minor)
under Uniform Gifts to Minors Act
(State)
Additional abbreviations may also be used
though not in the above list.
----------------
FOR VALUE RECEIVED, the undersigned hereby
sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE _______________________________
Please print or typewrite name and address
including postal zip code of assignee
the within Bond and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________ attorney to transfer said Bond
on the books of the Issuer, with full power of substitution in the premises.
Dated: __________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within instrument in
every particular, without alteration or
enlargement or any change whatsoever
Authorized Signatory
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EXHIBIT B
MORTGAGE LOAN CONVEYANCE AGREEMENT
106
EXHIBIT C
LETTER OF REPRESENTATIONS TO THE DEPOSITORY TRUST COMPANY
107
EXHIBIT D
TRUSTEE'S FINAL CERTIFICATION