EXHIBIT 4.6
CITIGROUP MBN TRUST SERIES 20__-__
Issuer
and
[Name of Indenture Trustee]
INDENTURE TRUSTEE
--------------------------------------
INDENTURE
Dated as of _____ __, 20__
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MORTGAGE-BACKED NOTES
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS...............................................................................1
SECTION 1.01. Definitions............................................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act......................................2
SECTION 1.03. Rules of Construction..................................................................2
ARTICLE II ORIGINAL ISSUANCE OF NOTES................................................................3
SECTION 2.01. Form...................................................................................3
SECTION 2.02. Execution, Authentication and Delivery.................................................3
ARTICLE III COVENANTS.................................................................................4
SECTION 3.01. Collection of Payments with Respect to the Mortgage Loans..............................4
SECTION 3.02. Maintenance of Office or Agency........................................................4
SECTION 3.03. Money for Payments to be Held in Trust; Paying Agent...................................4
SECTION 3.04. Existence..............................................................................6
SECTION 3.05. Payment of Principal and Interest; Defaulted Interest..................................6
SECTION 3.06. Protection of Trust Estate.............................................................8
SECTION 3.07. Opinions as to Trust Estate............................................................9
SECTION 3.08. Performance of Obligations; Servicing Agreement........................................9
SECTION 3.09. Negative Covenants....................................................................10
SECTION 3.10. Annual Statement as to Compliance.....................................................11
SECTION 3.11. Recording of Assignments..............................................................11
SECTION 3.12. Representations and Warranties Concerning the Mortgage Loans..........................11
SECTION 3.13. Amendments to Servicing Agreement.....................................................11
SECTION 3.14. Master Servicer as Agent and Bailee of the Mortgage Loans Holder......................11
SECTION 3.15. Investment Company Act................................................................12
SECTION 3.16. Issuer May Consolidate, Etc...........................................................12
SECTION 3.17. Successor or Transferee...............................................................14
SECTION 3.18. No Other Business.....................................................................14
SECTION 3.19. No Borrowing..........................................................................14
SECTION 3.20. Guarantees, Loans, Advances and other Liabilities.....................................14
SECTION 3.21. Capital Expenditures..................................................................15
SECTION 3.22. [Reserved]............................................................................15
SECTION 3.23. Restricted Payments...................................................................15
SECTION 3.24. Notice of Events of Default...........................................................15
SECTION 3.25. Further Instruments and Acts..........................................................15
SECTION 3.26. Statements to Noteholders.............................................................15
SECTION 3.27. Determination of Note Interest Rate...................................................15
SECTION 3.28. Payments Under the Credit Enhancement Instrument......................................16
SECTION 3.29. Replacement Credit Enhancement Instrument.............................................16
ARTICLE IV THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE.......................................17
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SECTION 4.01. The Notes.............................................................................17
SECTION 4.02. Registration of and Limitations on Transfer and Exchange of Notes; Appointment of
Certificate Registrar.................................................................18
SECTION 4.03. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Lost or Stolen Notes............................................19
SECTION 4.04. Persons Deemed Owners.................................................................20
SECTION 4.05. Cancellation..........................................................................20
SECTION 4.06. Book-Entry Notes......................................................................20
SECTION 4.07. Notices to Depository.................................................................21
SECTION 4.08. Definitive Notes......................................................................21
SECTION 4.09. Tax Treatment.........................................................................22
SECTION 4.10. Satisfaction and Discharge of Indenture...............................................22
SECTION 4.11. Application of Trust Money............................................................23
SECTION 4.12. Subrogation and Cooperation...........................................................23
SECTION 4.13. Repayment of Monies Held by Paying Agent..............................................24
SECTION 4.14. Temporary Notes.......................................................................24
ARTICLE V DEFAULT AND REMEDIES.....................................................................25
SECTION 5.01. Events of Default.....................................................................25
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment....................................25
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.............26
SECTION 5.04. Remedies; Priorities..................................................................28
SECTION 5.05. Optional Preservation of the Trust Estate.............................................30
SECTION 5.06. Limitation of Suits...................................................................30
SECTION 5.07. Unconditional Rights of Noteholders to Receive Principal and Interest.................31
SECTION 5.08. Restoration of Rights and Remedies....................................................31
SECTION 5.09. Rights and Remedies Cumulative........................................................31
SECTION 5.10. Delay or Omission not a Waiver........................................................31
SECTION 5.11. Control by Noteholders................................................................32
SECTION 5.12. Waiver of Past Defaults...............................................................32
SECTION 5.13. Undertaking for Costs.................................................................33
SECTION 5.14. Waiver of Stay or Extension Laws......................................................33
SECTION 5.15. Sale of Trust Estate..................................................................33
SECTION 5.16. Action on Notes.......................................................................35
SECTION 5.17. Performance and Enforcement of Certain Obligations....................................35
ARTICLE VI THE INDENTURE TRUSTEE....................................................................36
SECTION 6.01. Duties of Indenture Trustee...........................................................36
SECTION 6.02. Rights of Indenture Trustee...........................................................37
SECTION 6.03. Individual Rights of Indenture Trustee................................................38
SECTION 6.04. Indenture Trustee's Disclaimer........................................................38
SECTION 6.05. Notice of Event of Default............................................................38
SECTION 6.06. Reports by Indenture Trustee to Holders...............................................38
SECTION 6.07. Compensation and Indemnity............................................................39
SECTION 6.08. Replacement of Indenture Trustee......................................................39
SECTION 6.09. Successor Indenture Trustee by Merger.................................................40
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SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.....................41
SECTION 6.11. Eligibility; Disqualification.........................................................42
SECTION 6.12. Preferential Collection o Claims Against Issuer.......................................42
SECTION 6.13. Representation and Warranty...........................................................42
SECTION 6.14. Directions To Indenture Trustee.......................................................43
SECTION 6.15. [ No Consent To Certain Acts Of Depositor.............................................43
SECTION 6.16. Indenture Trustee May Own Securities..................................................43
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS...........................................................43
SECTION 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders................43
SECTION 7.02. Preservation of Information; Communications to Noteholders............................44
SECTION 7.03. Reports by Issuer.....................................................................44
SECTION 7.04. Reports by Indenture Trustee..........................................................45
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES.....................................................45
SECTION 8.01. Collection of Money...................................................................45
SECTION 8.02. Trust Accounts........................................................................45
SECTION 8.03. Officer's Certificate.................................................................47
SECTION 8.04. Termination Upon Distribution to Noteholders..........................................47
SECTION 8.05. Release of Trust Estate...............................................................47
SECTION 8.06. Surrender of Notes Upon Final Payment.................................................47
ARTICLE IX SUPPLEMENTAL INDENTURES..................................................................48
SECTION 9.01. Supplemental Indentures Without Consent Of Noteholders................................48
SECTION 9.02. Supplemental Indentures with Consent of Noteholders...................................49
SECTION 9.03. Execution of Supplemental Indentures..................................................51
SECTION 9.04. Effect of Supplemental Indenture......................................................51
SECTION 9.05. Conformity with Trust Indenture Act...................................................51
SECTION 9.06. Reference in Notes to Supplemental Indentures.........................................51
ARTICLE X MISCELLANEOUS............................................................................52
SECTION 10.01. Compliance Certificates and Opinions, etc.............................................52
SECTION 10.02. Form of Documents Delivered to Indenture Trustee......................................54
SECTION 10.03. Acts of Noteholders...................................................................54
SECTION 10.04. Notices, etc., to Indenture Trustee, Issuer, Credit Enhancer and Rating Agencies......55
SECTION 10.05. Notices to Noteholders; Waiver........................................................56
SECTION 10.06. Alternate Payment and Notice Provisions...............................................56
SECTION 10.07. Conflict with Trust Indenture Act.....................................................57
SECTION 10.08. Effect of Headings....................................................................57
SECTION 10.09. Successors and Assigns................................................................57
SECTION 10.10. Separability..........................................................................57
SECTION 10.11. Benefits of Indenture.................................................................57
SECTION 10.12. Legal Holidays........................................................................57
SECTION 10.13. Governing Law.........................................................................58
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SECTION 10.14. Counterparts..........................................................................58
SECTION 10.15. Recording of Indenture................................................................58
SECTION 10.16. Issuer Obligation.....................................................................58
SECTION 10.17. No Petition...........................................................................59
SECTION 10.18. Inspection............................................................................59
SECTION 10.19. Authority of the Administrator........................................................59
EXHIBITS
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Exhibit A - Form of Notes
Appendix A Definitions
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This Indenture, dated as of _______________, between Citigroup
MBN Trust Series 20__ -__, a Delaware business trust, as Issuer (the "Issuer"),
and ____________________________, a ____________________________, as Indenture
Trustee (the "Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the Issuer's
Series 20__-_ Mortgage-Backed Notes (the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the
Closing Date, as trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created by (a) the Mortgage Loans and the proceeds thereof, (b) all funds on
deposit in the Funding Account, including all income from the investment and
reinvestment of funds therein, (c) all funds on deposit from time to time in the
Collection Account allocable to the Mortgage Loans excluding any investment
income from such funds; (d) all funds on deposit from time to time in the
Payment Account and in all proceeds thereof; (e) the Policy and (f) all present
and future claims, demands, causes and chooses in action in respect of any or
all of the foregoing and all payments on or under, and all proceeds of every
kind and nature whatsoever in respect of, any or all of the foregoing and all
payments on or under, and all proceeds of every kind and nature whatsoever in
the conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, checks, deposit accounts, rights to payment of any and every kind,
and other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing (collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as trustee on behalf of the Holders of
the Notes, acknowledges such ▇▇▇▇▇, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
For All purposes of this Indenture, except as otherwise
expressly provided herein or unless the context otherwise requires, capitalized
terms not otherwise defined
herein shall have the meanings assigned to such terms in the Definitions
attached hereto as Appendix A which is incorporated by reference herein. All
other capitalized terms used herein shall have the meanings specified herein.
SECTION 1.02. Incorporation by Reference of Trust Indenture
Act.
Whenever this Indenture refers to a provision of the Trust
Indenture Act (the "TIA"), the provision is incorporated by reference in and
made a part of this Indenture. The following TIA terms used in this Indenture
have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of
agreements or instruments) references
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to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and
assigns.
ARTICLE II
ORIGINAL ISSUANCE OF NOTES
SECTION 2.01. Form.
The Notes, together with the Indenture Trustee's certificate
of authentication, shall be in substantially the form set forth in Exhibit A,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may, consistently herewith, be determined by the officers executing
such Notes, as evidenced by their execution of the Notes. Any portion of the
text of any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the Authorized Officers executing such
Notes, as evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibit A are part of the
terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery.
The Notes shall be executed on behalf of the Issuer by any of
its Authorized Officers. The signature of any such Authorized Officer on the
Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate
and deliver Notes for original issue in an aggregate initial principal amount of
$___________.
Each Note shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes and the Notes shall be issuable in
the minimum initial Security Balances of $100,000 and in integral multiples of
$1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture
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Trustee by the manual signature of one of its authorized signatories, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
ARTICLE III
COVENANTS
SECTION 3.01. Collection of Payments with Respect to the
Mortgage Loans.
The Indenture Trustee shall establish and maintain with itself
a trust account (the "Payment Account") in which the Indenture Trustee shall,
subject to the terms of this paragraph, deposit, on the same day as it is
received from the Master Servicer, each remittance received by the Indenture
Trustee with respect to the Mortgage Loans. The Indenture Trustee shall make all
payments of principal of and interest on the Notes, subject to Section 3.03 as
provided in Section 3.05 herein from monies on deposit in the Payment Account.
SECTION 3.02. Maintenance of Office or Agency.
The Issuer will maintain in the [Borough of Manhattan, The
City of New York,] an office or agency where, subject to satisfaction of
conditions set forth herein, Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
SECTION 3.03. Money for Payments to be Held in Trust; Paying
Agent.
(a) As provided in Section 3.01, all payments of amounts due
and payable with respect to any Notes that are to be made from amounts withdrawn
from the Payment Account pursuant to Section 3.01 shall be made on behalf of the
Issuer by the Indenture Trustee or by the Paying Agent, and no amounts so
withdrawn from the Payment Account for payments of Notes shall be paid over to
the Issuer except as provided in this Section 3.03.
The Issuer will cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent it hereby so agrees), subject to the
provisions of this Section 3.03, that such Paying Agent will:
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(b) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and pay such sums to such Persons as herein provided;
(c) give the Indenture Trustee notice of any default by the
Issuer of which it has actual knowledge in the making of any payment required to
be made with respect to the Notes;
(d) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(e) immediately resign as Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying Agent
at the time of its appointment; and
(f) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds,
any money held by the Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
one year after such amount has become due and payable shall be discharged from
such trust and be paid to the Issuer on Issuer Request; and the Holder of such
Note shall thereafter, as an unsecured general creditor, look only to the Issuer
for payment thereof (but only to the extent of the amounts so paid to the
Issuer), and all liability of the Indenture Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuer cause to be
published once, in an Authorized Newspaper published in the English language,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Indenture Trustee may also adopt and employ, at the expense and direction of
the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to
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Holders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in monies due and payable but not
claimed is determinable from the records of the Indenture Trustee or of any
Paying Agent, at the last address of record for each such Holder).
SECTION 3.04. Existence.
The Issuer will keep in full effect its existence, rights and
franchises as a business trust under the laws of the State of Delaware (unless
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other state or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Mortgage Loans and each other instrument or agreement included in the
Trust Estate.
SECTION 3.05. Payment of Principal and Interest; Defaulted
Interest.
(a) On each Payment Date from amounts on deposit in the
Payment Account after making (x) any deposit to the Funding Account pursuant to
Section 8.02(b) and (y) any deposits to the Payment Account pursuant to Section
8.02(c)(ii) and Section 8.02(c)(i)(2), the Indenture Trustee shall pay to the
Noteholders, the Certificate Paying Agent, on behalf of the Certificateholders,
and to other Persons the amounts to which they are entitled as set forth below:
(b) To the Noteholders the sum of (a) one month's interest at
the Note Interest Rate on the Security Balances of Notes immediately prior to
such Payment Date and (b) any previously accrued and unpaid interest for prior
Payment Dates;
(c) if such Payment Date is after the Funding Period, to the
Noteholders, as principal on the Notes, the applicable Security Percentage of
the Principal Collection Distribution Amount and if such Payment Date is the
first Payment Date following the end of the Funding Period (if ending due to an
Amortization Event) or the Payment Date on which the Funding Period ends, to the
Noteholders as principal on the Notes the applicable Security Percentage of the
amount deposited from the Funding Account in respect of Security Principal
Collections;
(d) to the Noteholders, as principal on the Notes, from the
amount remaining on deposit in the Payment Account, up to the applicable
Security Percentage of Liquidation Loss Amounts for the related Collection
Period;
(e) to the Noteholders, as principal on the Notes, from the
amount remaining on deposit in the Payment Account, up to the applicable
Security Percentage of Carryover Loss Amounts;
(f) to the Credit Enhancer, in the amount of the premium for
the Credit Enhancement Instrument and for any Additional Credit Enhancement
Instrument;
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(g) to the Credit Enhancer, to reimburse it for prior draws
made on the Credit Enhancement Instrument and on any Additional Credit
Enhancement Instrument (with interest thereon as provided in the Insurance
Agreement);
(h) to the Noteholders, as principal on the Notes based on the
Security Balances from Security Interest Collections, up to the Special Capital
Distribution Amount for such Payment Date;
(i) to the Credit Enhancer, any other amounts owed to the
Credit Enhancer pursuant to the Insurance Agreement;
(j) [Reserved];
(k) to reimburse the Administrator for expenditures made on
behalf of the Issuer with respect to the performance of its duties under the
Indenture; and
(l) any remaining amount, to the Certificate Paying Agent, on
behalf of the Certificates.
PROVIDED, HOWEVER, in the event that on a Payment Date a Credit Enhancer Default
shall have occurred and be continuing then the priorities of distributions
described above will be adjusted such that payments of the Certificate
Distribution Amount and all other amounts to be paid to the Certificate Paying
Agent will not be paid until the full amount of interest and principal in
accordance with clauses (i), (x) and (ii) through (iv) above that are due on the
Notes on such Payment Date have been paid and PROVIDED, FURTHER, that on the
Final Scheduled Payment Date or other final Payment Date, the amount to be paid
pursuant to clause (ii) above shall be equal to the Security Balances of the
Securities immediately prior to such Payment Date.
On each Payment Date, the Certificate Paying Agent shall
deposit in the Certificate Distribution Account all amounts it received pursuant
to this Section 3.05 for the purpose of distributing such funds to the
Certificateholders.
The amounts paid to Noteholders shall be paid to each Class in
accordance with the Class Percentage as set forth in paragraph (b) below.
Interest will accrue on the Notes during an Interest Period on the basis of the
actual number of days in such Interest Period and a year assumed to consist of
360 days.
[Any installment of interest or principal, if any, payable on
any Note or Certificate that is punctually paid or duly provided for by the
Issuer on the applicable Payment Date shall, if such Holder holds Notes or
Certificates of an aggregate initial Principal Balance of at least $1,000,000,
be paid to each Holder of record on the preceding Record Date, by wire transfer
to an account specified in writing by such Holder reasonably satisfactory to the
Indenture Trustee as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee, by check to such
Noteholder mailed to such Holder's address as it appears in the Note Register
the amount required to be distributed to such Holder on such Payment Date
pursuant to such Holder's Securities; PROVIDED, HOWEVER, that the Indenture
Trustee shall
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not pay to such Holders any amount required to be withheld from a payment to
such Holder by the Code.]
(b) The principal of each Note shall be due and payable in
full on the Final Scheduled Payment Date for such Note as provided in the form
of Note set forth in Exhibit A. All principal payments on each Class of Notes
shall be made to the Noteholders of such Class entitled thereto in accordance
with the Percentage Interests represented by such Notes. Upon notice to the
Indenture Trustee by the Issuer, the Indenture Trustee shall notify the Person
in whose name a Note is registered at the close of business on the Record Date
preceding the Final Scheduled Payment Date or other final Payment Date. Such
notice shall be mailed no later than five Business Days prior to such Final
Scheduled Payment Date or other final Payment Date and shall specify that
payment of the principal amount and any interest due with respect to such Note
at the Final Scheduled Payment Date or other final Payment Date will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for such final payment.
SECTION 3.06. Protection of Trust Estate.
(a) The Issuer will from time to time execute and deliver all
such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(b) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(c) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(d) cause the Issuer to enforce any of the Mortgage Loans; or
(e) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Trust Estate against
the claims of all persons and parties.
(i) Except as otherwise provided in this Indenture, the
Indenture Trustee shall not remove any portion of the Trust Estate that
consists of money or is evidenced by an instrument, certificate or
other writing from the jurisdiction in which it was held at the date of
the most recent Opinion of Counsel delivered pursuant to Section 3.07
(or from the jurisdiction in which it was held as described in the
Opinion of Counsel delivered at the Closing Date pursuant to Section
3.07(a), if no Opinion of Counsel has yet been delivered pursuant to
Section 3.07(b) unless the Trustee shall have first received an Opinion
of Counsel to the effect that the lien and security interest created by
this Indenture with respect to such property will continue to be
maintained after giving effect to such action or actions.
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The Issuer hereby designates the Indenture Trustee its agent
and attorney-in-fact to execute any financing statement, continuation statement
or other instrument required to be executed pursuant to this Section 3.06.
SECTION 3.07. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall furnish to the
Indenture Trustee and the Owner Trustee an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with respect to
the recording and filing of this Indenture, any indentures supplemental hereto,
and any other requisite documents, and with respect to the execution and filing
of any financing statements and continuation statements, as are necessary to
perfect and make effective the lien and security interest in the Mortgage Loans
and reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and security interest
effective.
(b) On or before ___________ in each calendar year, beginning
in ____, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
at the expense of the Issuer either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and with respect to the execution and filing
of any financing statements and continuation statements as is necessary to
maintain the lien and security interest in the Mortgage Loans and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Mortgage Loans until December
31 in the following calendar year.
SECTION 3.08. Performance of Obligations; Servicing Agreement.
(a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Administrator to assist the Issuer in performing
its duties under this Indenture.
(c) The Issuer will not take any action or permit any action
to be taken by others which would release any Person from any of such Person's
covenants or obligations under any of the documents relating to the Mortgage
Loans or under any instrument included in the Trust Estate, or which would
result in the amendment,
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hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the documents relating to the Mortgage
Loans or any such instrument, except such actions as the Master Servicer is
expressly permitted to take in the Servicing Agreement. The Indenture Trustee,
as pledgee of the Mortgage Loans, shall be able to exercise the rights Issuer
and the Mortgage Loans holder, to direct the actions of the Master Servicer.
(i) The Issuer shall at all times retain an Administrator
(approved by the Credit Enhancer under the Administration Agreement)
and may enter into contracts with other Persons for the performance of
the Issuer's obligations hereunder, and performance of such obligations
by such Persons shall be deemed to be performance of such obligations
by the Issuer.
SECTION 3.09. Negative Covenants.
So long as any Notes are Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture, sell,
transfer, exchange or otherwise dispose of the Trust Estate, unless
directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate;
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or other wise arise upon or
burden the Trust Estate or any part thereof or any interest therein or
the proceeds thereof or (C) permit the lien of this Indenture not to
constitute a valid first priority security interest in the Trust
Estate; or
(iv) waive or impair, or fail to assert rights under, the
Mortgage Loans, or impair or cause to be impaired the Company's or the
Issuer's interest in the Mortgage Loans, the Mortgage Loan Purchase
Agreement or in any Basic Document, if any such action would materially
and adversely affect the interests of the Noteholders.
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SECTION 3.10. Annual Statement as to Compliance.
The Issuer will deliver to the Indenture Trustee, within 120
days after the end of each fiscal year of the Issuer (commencing with the fiscal
year ____), an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year
and of its performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.11. Recording of Assignments.
The Company shall cause the to exercise its right under the
Mortgage Loan Purchase Agreement with respect to the obligation of the Seller to
submit or cause to be submitted for recording all Assignments of Mortgages on or
prior to ______________ with respect to the Initial Loans and within 60 days
following the related Deposit Date with respect to any Additional Loans.
SECTION 3.12. Representations and Warranties Concerning the
Mortgage Loans.
The Indenture Trustee, as pledgee of the Mortgage Loans, has
the benefit of the representations and warranties made by the Seller in Section
[____] and Section [____] of the Mortgage Loan Purchase Agreement concerning the
Mortgage Loans and the right to enforce the remedies against the Seller provided
in such Section [____] or Section [____] to the same extent as though such
representations and warranties were made directly to the Indenture Trustee.
SECTION 3.13. Amendments to Servicing Agreement.
The Issuer covenants with the Indenture Trustee that it will
not enter into any amendment or supplement to the Servicing Agreement in
accordance with Section 8.01 of the Servicing Agreement without the prior
written consent of the Indenture Trustee. The Indenture Trustee, as pledgee of
the Mortgage Loans, may, in its discretion, decline to enter into or consent to
any such supplement or amendment if its own rights, duties or immunities shall
be adversely affected.
SECTION 3.14. Master Servicer as Agent and Bailee of the
Mortgage Loans Holder.
Solely for purposes of perfection under Section 9-305 of the
Uniform Commercial Code or other similar applicable law, rule or regulation of
the state in which
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such property is held by the Master Servicer, the Indenture Trustee hereby
acknowledges that the Master Servicer is acting as agent and bailee of the
Mortgage Loans holder in holding amounts on deposit in the Collection Account
pursuant to Section 3.02 of the Servicing Agreement, as well as its agent and
bailee in holding any Related Documents released to the Master Servicer pursuant
to Section 3.06(c) of the Servicing Agreement, and any other items constituting
a part of the Trust Estate which from time to time come into the possession of
the Master Servicer. It is intended that, by the Master Servicer's acceptance of
such agency pursuant to Section 3.02 of the Servicing Agreement, the Trustee, as
a secured party of the Mortgage Loans, will be deemed to have possession of such
Related Documents, such monies and such other items for purposes of Section
9-305 of the Uniform Commercial Code of the state in which such property is held
by the Master Servicer.
SECTION 3.15. Investment Company Act.
The Issuer shall not become an "investment company" or under
the "control" of an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (or any successor or amendatory
statute), and the rules and regulations thereunder (taking into account not only
the general definition of the term "investment company" but also any available
exceptions to such general definition); provided, however, that the Issuer shall
be in compliance with this Section 3.15 if it shall have obtained an order
exempting it from regulation as an "investment company" so long as it is in
compliance with the conditions imposed in such order.
SECTION 3.16. Issuer May Consolidate, Etc.
(a) The Issuer shall not consolidate or merge with or into any
other Person, unless:
(b) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any state or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form reasonably satisfactory
to the Indenture Trustee, the due and punctual payment of the principal of and
interest on all Notes and to the Certificate Paying Agent, on behalf of the
Certificateholders and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein;
(c) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
(d) the Rating Agencies shall have notified the Issuer that
such transaction shall not cause the rating of the Notes [or the Certificates]
to be reduced, suspended or withdrawn or to be considered by either Rating
Agency to be below investment grade without taking into account the Credit
Enhancement Instrument;
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(e) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer, any Noteholder or any Certificateholder;
(f) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(g) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this Article
III and that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act).
(h) The Issuer shall not convey or transfer any of its
properties or assets, including those included in the Trust Estate, to any
Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America
or any state, (B) expressly assumes, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein,
(C) expressly agrees by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Holders of the Notes, (D) unless
otherwise provided in such supplemental indenture, expressly agrees to
indemnify, defend and hold harmless the Issuer against and from any
loss, liability or expense arising under or related to this Indenture
and the Notes and (E) expressly agrees by means of such supplemental
indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission (and any
other appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that
such transaction shall not cause the rating of the Notes or the
Certificates to be reduced, suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
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(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental indenture comply with
this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
SECTION 3.17. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.16(a), the Person formed by or surviving such
consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein.
(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.16(b), the Issuer will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery of written notice to the Indenture Trustee of such conveyance or
transfer.
SECTION 3.18. No Other Business.
The Issuer shall not engage in any business other than
financing, purchasing, owning and selling and managing the Mortgage Loans and
the issuance of the Notes and Certificates in the manner contemplated by this
Indenture and the Basic Documents and all activities incidental thereto.
SECTION 3.19. No Borrowing.
The Issuer shall not issue, incur, assume, guarantee or
otherwise become liable, directly or indirectly, for any indebtedness except for
the Notes.
SECTION 3.20. Guarantees, Loans, Advances and other
Liabilities.
Except as contemplated by this Indenture or the Basic
Documents, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
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SECTION 3.21. Capital Expenditures.
The Issuer shall not make any expenditure (by long-term or
operating lease or otherwise) for capital assets (either realty or personally).
SECTION 3.22. [Reserved]
SECTION 3.23. Restricted Payments.
The Issuer shall not, directly or indirectly, (i) pay any
dividend or make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer,
(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; PROVIDED, HOWEVER, that the Issuer may make, or
cause to be made, (x) distributions to the Owner Trustee and the
Certificateholders as contemplated by, and to the extent funds are available for
such purpose under the Trust Agreement, (y) payments to the Master Servicer
pursuant to the terms of the Servicing Agreement and (z) payments to the
Indenture Trustee pursuant to Section 1(a)(ii) of the Administration Agreement.
The Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account except in accordance with this Indenture and the
Basic Documents.
SECTION 3.24. Notice of Events of Default.
The Issuer shall give the Indenture Trustee the Credit
Enhancer and the Rating Agencies prompt written notice of each Event of Default
hereunder and under the Trust Agreement.
SECTION 3.25. Further Instruments and Acts.
Upon request of the Indenture Trustee, the Issuer will execute
and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of this
Indenture.
SECTION 3.26. Statements to Noteholders.
The Indenture Trustee and the Certificate Registrar shall
forward by mail to each Noteholder and Certificateholder, respectively, the
Statement delivered to it pursuant to Section 4.01 of the Servicing Agreement.
SECTION 3.27. Determination of Note Interest Rate.
On the second LIBOR Business Day immediately preceding (i) the
Closing Date in the case of the first Interest Period and (ii) the first day of
each succeeding Interest Period, the Indenture Trustee shall determine LIBOR and
the Note Interest Rate for such Interest Period and shall inform the Issuer, the
Master Servicer and
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the Depositor at their respective facsimile numbers given to the Indenture
Trustee in writing thereof.
SECTION 3.28. Payments Under the Credit Enhancement
Instrument.
(a) On any Payment Date, other than a Dissolution Payment
Date, the Indenture Trustee on behalf of the Noteholders, and in its capacity as
Certificate Paying Agent on behalf of the Certificateholders shall make a draw
on the Credit Enhancement Instrument in an amount if any equal to the sum of (x)
the amount by which the interest accrued at the Note Interest Rate on the
Security Balance of the Notes exceeds the amount on deposit in the Payment
Account available to be distributed therefor on such Payment Date and (y) the
Guaranteed Principal Payment Amount (the "Credit Enhancement Draw Amount").
(b) The Indenture Trustee shall submit, if a Credit
Enhancement Draw Amount is specified in any Statement to Holders prepared by the
Master Servicer pursuant to Section 4.01 of the Servicing Agreement, the Notice
for Payment (as defined in the Credit Enhancement Instrument) in the amount of
the Credit Enhancement Draw Amount to the Credit Enhancer no later than 2:00
P.M., New York City time, on the second Business Day prior to the applicable
Payment Date. Upon receipt of such Credit Enhancement Draw Amount in accordance
with the terms of the Credit Enhancement Instrument, the Indenture Trustee shall
deposit such Credit Enhancement Draw Amount in the Payment Account for
distribution to Holders (and the Certificate Paying Agent on behalf of the
Certificates) pursuant to Section 3.05.
In addition, a draw may be made under the Credit Enhancement Instrument in
respect of any Avoided Payment (as defined in and pursuant to the terms and
conditions of the Credit Enhancement Instrument) and the Indenture Trustee shall
submit a Notice for Payment with respect thereto together with the other
documents required to be delivered to the Credit Enhancer pursuant to the Credit
Enhancement Instrument in connection with a draw in respect of any Avoided
Payment.
(c) In the event that any Additional Credit Enhancement
Instruments are issued pursuant to Section 4.01 and Section 2.02(B) of the
Insurance Agreement, the Indenture Trustee shall be authorized to make draws
thereon subject to the terms and conditions therein.
SECTION 3.29. Replacement Credit Enhancement Instrument.
In the event of a Credit Enhancer Default or if the claims
paying ability rating of the Credit Enhancer is downgraded and such downgrade
results in a downgrading of the then current rating of the Securities (in each
case, a "Replacement Event"), the Issuer, at its expense, in accordance with and
upon satisfaction of the conditions set forth in the Credit Enhancement
Instrument, including, without limitation, payment in full of all amounts owed
to the Credit Enhancer, may, but shall not be required to, substitute a new
surety bond or surety bonds for the existing Credit Enhancement Instrument or
may arrange for any other form of credit enhancement;
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PROVIDED, HOWEVER, that in each case the Notes shall be rated no lower than the
rating assigned by each Rating Agency to the Notes immediately prior to such
Replacement Event and the timing and mechanism for drawing on such new credit
enhancement shall be reasonably acceptable to the Indenture Trustee and provided
further that the premiums under the proposed credit enhancement shall not exceed
such premiums under the existing Credit Enhancement Instrument. It shall be a
condition to substitution of any new credit enhancement that there be delivered
to the Indenture Trustee (i) an Opinion of Counsel, acceptable in form to the
Indenture Trustee, from counsel to the provider of such new credit enhancement
with respect to the enforceability thereof and such other matters as the
Indenture Trustee may require and (ii) an Opinion of Counsel to the effect that
such substitution would not (a) adversely affect in any material respect the tax
status of the Notes or (b) cause the Issuer to be subject to a tax at the entity
level. Upon receipt of the items referred to above and payment of all amounts
owing to the Credit Enhancer and the taking of physical possession of the new
credit enhancement, the Indenture Trustee shall, within five Business Days
following receipt of such items and such taking of physical possession, deliver
the replaced Credit Enhancement Instrument to the Credit Enhancer. In the event
of any such replacement the Issuer shall give written notice thereof to the
Rating Agencies.
ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 4.01. The Notes.
The Notes shall be registered in the name of a nominee
designated by the Depository. Beneficial Owners will hold interests in the Notes
through the book-entry facilities of the Depository in minimum initial Principal
Balances of $1,000 and integral multiples of $1,000 in excess thereof.
The Indenture Trustee may for all purposes (including the
making of payments due on the Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Notes for the
purposes of exercising the rights of Holders of Notes hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive certificates for the Notes
as to which they are the Beneficial Owners. Requests and directions from, and
votes of, the Depository as Holder of the Notes shall not be deemed inconsistent
if they are made with respect to different Beneficial Owners. The Indenture
Trustee may establish a reasonable record date in connection with solicitations
of consents from or voting by Noteholders and give notice to the Depository of
such record date. Without the consent of the Issuer and the Indenture Trustee,
no Note may be transferred by the Depository except to a successor Depository
that agrees to hold such Note for the account of the Beneficial Owners.
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In the event the Depository Trust Company resigns or is
removed as Depository, the Indenture Trustee with the approval of the Issuer may
appoint a successor Depository. If no successor Depository has been appointed
within 30 days of the effective date of the Depository's resignation or removal,
each Beneficial Owner shall be entitled to certificates representing the Notes
it beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of
the Issuer by the Owner Trustee, not in its individual capacity but solely as
Owner Trustee, authenticated by the Note Registrar and delivered by the
Indenture Trustee to or upon the order of the Issuer.
SECTION 4.02. Registration of and Limitations on Transfer and
Exchange of Notes; Appointment of Certificate Registrar.
The Issuer shall cause to be kept at its Corporate Trust
Office a Note Register in which, subject to such reasonable regulations as it
may prescribe, the Note Registrar shall provide for the registration of Notes
and of transfers and exchanges of Notes as herein provided. Subject to the
restrictions and limitations set forth below, upon surrender for registration of
transfer of any Note at the Corporate Trust Office, the Indenture Trustee shall
execute and the Note Registrar shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Notes in authorized
initial Security Balances evidencing the same aggregate Percentage Interests.
Subject to the foregoing, at the option of the Noteholders,
Notes may be exchanged for other Notes of like tenor or, in each case in
authorized initial Principal Balances evidencing the same aggregate Percentage
Interests upon surrender of the Notes to be exchanged at the Corporate Trust
Office of the Note Registrar. Whenever any Notes are so surrendered for
exchange, the Indenture Trustee shall execute and the Note Registrar shall
authenticate and deliver the Notes which the Noteholder making the exchange is
entitled to receive. Each Note presented or surrendered for registration of
transfer or exchange shall (if so required by the Note Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer in form
reasonably satisfactory to the Note Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing with such signature
guaranteed by a commercial bank or trust company located or having a
correspondent located in the city of New York. Notes delivered upon any such
transfer or exchange will evidence the same obligations, and will be entitled to
the same rights and privileges, as the Notes surrendered.
No service charge shall be made for any registration of
transfer or exchange of Notes, but the Note Registrar shall require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and
exchange shall be cancelled by the Note Registrar and delivered to the Indenture
Trustee for subsequent destruction without liability on the part of either.
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The Issuer hereby appoints __________________________________
as Certificate Registrar to keep at its Corporate Trust Office a Certificate
Register pursuant to Section 3.09 of the Trust Agreement in which, subject to
such reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of Certificates and of transfers and exchanges
thereof pursuant to Section 3.05 of the Trust Agreement.
__________________________________ hereby accepts such appointment.
SECTION 4.03. Mutilated, Destroyed, Lost or Stolen Notes.
If (i) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer and the Indenture Trustee harmless, then, in the absence of notice to
the Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, and provided that the requirements of Section
8-405 of the UCC are met, the Issuer shall execute, and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Note, a replacement Note of the
same Class; provided, however, that if any such destroyed, lost or stolen Note,
but not a mutilated Note, shall have become or within seven days shall be due
and payable, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable without surrender thereof.
If, after the delivery of such replacement Note or payment of a destroyed, lost
or stolen Note pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such replacement Note was issued
presents for payment such original Note, the Issuer and the Indenture Trustee
shall be entitled to recover such replacement Note (or such payment) from the
Person to whom it was delivered or any Person taking such replacement Note from
such Person to whom such replacement Note was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section
4.03, the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
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The provisions of this Section 4.03 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 4.04. Persons Deemed Owners.
Prior to due presentment for registration of transfer of any
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name any Note is registered (as
of the day of determination) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any, on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and neither
the Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.
SECTION 4.05. Cancellation.
All Notes surrendered for payment, registration of transfer,
exchange or redemption shall, if surrendered to any Person other than the
Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly
cancelled by the Indenture Trustee. The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section 4.05, except as expressly permitted by
this Indenture. All cancelled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Request that they
be destroyed or returned to it; provided however, that such Issuer Request is
timely and the Notes have not been previously disposed of by the Indenture
Trustee.
SECTION 4.06. Book-Entry Notes.
The Notes, upon original issuance, will be issued in the form
of typewritten Notes representing the Book-Entry Notes, to be delivered to The
Depository Trust Company, the initial Depository, by, or on behalf of, the
Issuer. Such Notes shall initially be registered on the Note Register in the
name of Cede & Co., the nominee of the initial Depository, and no Beneficial
Owner will receive a Definitive Note representing such Beneficial Owner's
interest in such Note, except as provided in Section 4.08. Unless and until
definitive, fully registered Notes (the "Definitive Notes") have been issued to
Beneficial Owners pursuant to Section 4.08:
(i) the provisions of this Section 4.06 shall be in full force
and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Depository for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and
the giving of instructions or directions hereunder) as the sole holder
of the Notes, and shall have no obligation to the Owners of Notes;
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(iii) to the extent that the provisions of this Section 4.06
conflict with any other provisions of this Indenture, the provisions of
this Section 4.06 shall control;
(iv) the rights of Beneficial Owners shall be exercised only
through the Depository and shall be limited to those established by law
and agreements between such Owners of Notes and the Depository and/or
the Depository Participants. Unless and until Definitive Notes are
issued pursuant to Section 4.08, the initial Depository will make
book-entry transfers among the Depository Participants and receive and
transmit payments of principal of and interest on the Notes to such
Depository Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Security Balances of the
Notes, the Depository shall be deemed to represent such percentage only
to the extent that it has received instructions to such effect from
Beneficial Owners and/or Depository Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Notes and has delivered such instructions to the
Indenture Trustee.
SECTION 4.07. Notices to Depository.
Whenever a notice or other communication to the Note Holders
is required under this Indenture, unless and until Definitive Notes shall have
been issued to Beneficial Owners pursuant to Section 4.08, the Indenture Trustee
shall give all such notices and communications specified herein to be given to
Holders of the Notes to the Depository, and shall have no obligation to the
Beneficial Owners.
SECTION 4.08. Definitive Notes.
If (i) the Administrator advises the Indenture Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities with respect to the Notes and the Administrator is unable
to locate a qualified successor, (ii) the Administrator at its option advises
the Indenture Trustee in writing that it elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of an Event of
Default, Owners of Notes representing beneficial interests aggregating at least
a majority of the Security Balances of the Notes advise the Depository in
writing that the continuation of a book-entry system through the Depository is
no longer in the best interests of the Beneficial Owners, then the Depository
shall notify all Beneficial Owners and the Indenture Trustee of the occurrence
of any such event and of the availability of Definitive Notes to Beneficial
Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Depository,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Depository. None of the Issuer, the Note Registrar or the
Indenture Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of
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Definitive Notes, the Indenture Trustee shall recognize the Holders of the
Definitive Notes as Noteholders.
SECTION 4.09. Tax Treatment.
The Issuer has entered into this Indenture, and the Notes will
be issued, with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. The Issuer, by entering into this Indenture, and each Noteholder, by
its acceptance of its Note (and each Beneficial Owner by its acceptance of an
interest in the applicable Book-Entry Note), agree to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness of the Issuer.
SECTION 4.10. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect with
respect to the Notes except as to (i) rights of registration of transfer and
exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii)
rights of Noteholders to receive payments of principal thereof and interest
thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09, 3.16, 3.18 and 3.19, (v) the
rights, obligations and immunities of the Indenture Trustee hereunder (including
the rights of the Indenture Trustee under Section 6.07 and the obligations of
the Indenture Trustee under Section 4.11) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 4.03 and (ii) Notes for whose payment
money has theretofore been deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.03) have been delivered to the Indenture Trustee for
cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
a. have become due and payable,
b. will become due and payable at the Final Scheduled Payment Date
within one year, or
c. have been called for early redemption pursuant to Section 5.02.
and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or
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obligations guaranteed by the United States of America (which will mature prior
to the date such amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes and
Certificates then outstanding not theretofore delivered to the Indenture Trustee
for cancellation when due on the Final Scheduled Payment Date;
(B) the Issuer has paid or caused to be paid all other sums payable hereunder
and under the Insurance Agreement by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee and the Credit Enhancer an
Officer's Certificate, an Opinion of Counsel and each meeting the applicable
requirements of Section 10.01 each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with and, if the Opinion of Counsel relates to a deposit made in
connection with Section 4.10(A)(2)b. above, such opinion shall further be to the
effect that such deposit will not have any material adverse tax consequences to
the Issuer, any Noteholders or any Certificateholders.
SECTION 4.11. Application of Trust Money.
All monies deposited with the Indenture Trustee pursuant to
Section 4.10 hereof shall be held in trust and applied by it, in accordance with
the provisions of the Notes and this Indenture, to the payment, either directly
or through any Paying Agent or Certificate Paying Agent, as the Indenture
Trustee may determine, to the Holders of Securities, of all sums due and to
become due thereon for principal and interest; but such monies need not be
segregated from other funds except to the extent required herein or required by
law.
SECTION 4.12. Subrogation and Cooperation.
(a) The Issuer and the Indenture Trustee acknowledge that (i)
to the extent the Credit Enhancer makes payments under the Credit Enhancement
Instrument on account of principal of or interest on the Notes, the Credit
Enhancer will be fully subrogated to the rights of such Holders to receive such
principal and interest from the Issuer, and (ii) the Credit Enhancer shall be
paid such principal and interest but only from the sources and in the manner
provided herein and in the Insurance Agreement for the payment of such principal
and interest.
The Indenture Trustee shall cooperate in all respects with any
reasonable request by the Credit Enhancer for action to preserve or enforce the
Credit Enhancer's rights or interest under this Indenture or the Insurance
Agreement without limiting the rights of the Noteholders as otherwise set forth
in the Indenture, including, without limitation, upon the occurrence and
continuance of a default under the Insurance Agreement, a request to take any
one or more of the following actions:
(i) institute Proceedings for the collection of all amounts
then payable on the Notes, or under this Indenture in respect to the
Notes and all amounts payable under the Insurance Agreement enforce any
judgment obtained and collect from the Issuer monies adjudged due;
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(ii) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private Sales called and
conducted in any manner permitted by law;
(iii) file or record all Assignments that have not previously
been recorded;
(iv) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and
enforce the rights and remedies of the Credit Enhancer hereunder.
SECTION 4.13. Repayment of Monies Held by Paying Agent.
In connection with the satisfaction and discharge of this
Indenture with respect to the Notes, all monies then held by any Administrator
other than the Indenture Trustee under the provisions of this Indenture with
respect to such Notes shall, upon demand of the Issuer, be paid to the Indenture
Trustee to be held and applied according to Section 3.05 and thereupon such
Paying Agent shall be released from all further liability with respect to such
monies.
SECTION 4.14. Temporary Notes.
Pending the preparation of any Definitive Notes, the Issuer
may execute and upon its written direction, the Indenture Trustee may
authenticate and make available for delivery, temporary Notes that are printed,
lithographed, typewritten, photocopied or otherwise produced, in any
denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause
Definitive Notes to be prepared without unreasonable delay. After the
preparation of the Definitive Notes, the temporary Notes shall be exchangeable
for Definitive Notes upon surrender of the temporary Notes at the office or
agency of the Indenture Trustee, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Notes, the Issuer shall execute
and the Indenture Trustee shall authenticate and make available for delivery, in
exchange therefor, Definitive Notes of authorized denominations and of like
tenor and aggregate principal amount. Until so exchanged, such temporary Notes
shall in all respects be entitled to the same benefits under this Indenture as
Definitive Notes.
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ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.01. Events of Default.
"Event of Default," wherever used herein, shall have the
meaning provided in Article I; provided, however, that no Event of Default will
occur under clause (i) or clause (ii) of the definition of "Event of Default" if
the Issuer fails to make payments of principal of and interest on the Notes so
long as the Credit Enhancer makes payments sufficient therefore under the Credit
Enhancement Instrument.
The Issuer shall deliver to the Indenture Trustee and the
Credit Enhancer, within five days after learning of the occurrence of an Event
of Default, written notice in the form of an Officer's Certificate of any event
which with the giving of notice and the lapse of time would become an Event of
Default under clause (iii) of the definition of "Event of Default", its status
and what action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default should occur and be continuing or if
the Master Servicer shall purchase all of the Mortgage Loans pursuant to Section
8.08 of the Servicing Agreement, then and in every such case the Indenture
Trustee or the Holders of Notes representing not less than a majority of the
Security Balances of all Notes may declare the Notes to be immediately due and
payable, by a notice in writing to the Issuer (and to the Indenture Trustee if
given by Noteholders), and upon any such declaration the unpaid principal amount
of such Class of Notes, together with accrued and unpaid interest thereon
through the date of acceleration, shall become immediately due and payable.
Unless the prior written consent of the Credit Enhancer shall have been obtained
by the Indenture Trustee, the Payment Date upon which such accelerated payment
is due and payable shall not be a Payment Date under the Credit Enhancement
Instrument and the Indenture Trustee shall not be authorized under Section 3.29
to make a draw therefor.
At any time after such declaration of acceleration of maturity
with respect to an Event of Default has been made and before a judgment or
decree for payment of the money due has been obtained by the Indenture Trustee
as hereinafter in this Article V provided, the Holders of Notes representing a
majority of the Security Balances of all Notes, by written notice to the Issuer
and the Indenture Trustee, may waive the related Event of Default and rescind
and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on the Notes and
all other amounts that would then be due hereunder or upon the Notes if the
Event of Default giving rise to such acceleration had not occurred; and
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(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or
impair any right consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.
(a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable, the Issue shall, upon demand of the Indenture
Trustee, pay to it, for the benefit of the Holders of Notes and of the Credit
Enhancer, the whole amount then due and payable on the Notes for principal and
interest, with interest upon the overdue principal, and in addition thereto such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such
amounts upon such demand, the Indenture Trustee, in its own name and as trustee
of an express trust, subject to the provisions of Section 10.17 hereof may
institute a Proceeding for the collection of the sums so due and unpaid, and may
prosecute such Proceeding to judgment or final decree, and may enforce the same
against the Issuer or other obligor upon the Notes and collect in the manner
provided by law out of the property of the Issuer or other obligor the Notes,
wherever situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the
Indenture Trustee subject to the provisions of Section 10.17 hereof may, as more
particularly provided in Section 5.04, in its discretion, proceed to protect and
enforce its rights and the rights of the Noteholders and the Credit Enhancer, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or
any other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other
similar law, or in case a
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receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Issuer or its property or such other obligor or Person, or in
case of any other comparable judicial Proceedings relative to the Issuer or
other obligor upon the Notes, or to the creditors or property of the Issuer or
such other obligor, the Indenture Trustee, irrespective of whether the principal
of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Indenture Trustee (including any
claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Holders of Notes allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture
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Trustee to vote in respect of the claim of any Note holder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or proceedings
instituted by the Indenture Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and
also any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Holders of the Notes, and it shall
not be necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.04. Remedies; Priorities.
(a) If an Event of Default shall have occurred and be
continuing, the Indenture Trustee subject to the provisions of Section 10.17
hereof may do one or more of the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, and all amounts payable under the Insurance
Agreement, enforce any judgment obtained, and collect from the Issuer
and any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee, the Holders of the Notes and the
Credit Enhancer; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Principal Balances of the Notes and the Credit Enhancer, which consent will not
be unreasonably withheld, (B) the proceeds of such sale or liquidation
distributable to Holders are sufficient to discharge in full all amounts then
due and unpaid upon the Notes for principal and interest and to reimburse
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the Credit Enhancer for any amounts drawn under the Credit Enhancement
Instrument and any other amounts due the Credit Enhancer under the Insurance
Agreement or (C) the Indenture Trustee determines that the Mortgage Loans will
not continue to provide sufficient funds for the payment of principal of and
interest on the Notes as they would have become due if the Notes had not been
declared due and payable, and the Indenture Trustee obtains the consent of the
Credit Enhancer, which consent will not be unreasonably withheld, and of the
Holders of a majority of the aggregate Principal Balances of the Notes. In
determining such sufficiency or insufficiency with respect to clause (B) and
(C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of
an Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose. Notwithstanding the fore going, so long as an
Event of Servicer Termination has not occurred, any Sale of the Trust Estate
shall be made subject to the continued Servicing of the Mortgage Loans by the
Master Servicer as provided in the Servicing Agreement.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V, it shall pay out the money or property in the
following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.07;
SECOND: to each Class of Noteholders for amounts due and
unpaid on the related Class Notes for interest and to each Noteholder of such
Class in each case, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Class of Notes for interest
from amounts available in the Trust Estate for such Noteholders;
THIRD: to Holders of each Class of Notes for amounts due and
unpaid on the related Class of Notes for principal, from amounts available in
the Trust Estate for such Noteholders, and to each Noteholder of such Class in
each case ratably, without preference or priority of any kind, according to the
amounts due and payable on such Class of Notes for principal, until the Security
Balances of each Class of Notes is reduced to zero;
FOURTH: to the Issuer for amounts required to be distributed
to the Certificateholders in respect of interest and principal pursuant to the
Trust Agreement;
FIFTH: To the payment of all amounts due and owing to the
Credit Enhancer under the Insurance Agreement;
SIXTH: to the Issuer for amounts due under Article VIII of the
Trust Agreement; and
SEVENTH: to the payment of the remainder, if any to the Issuer
or any other person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date
for any payment to Noteholders pursuant to this Section 5.04. At least 15 days
before such record
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date, the Indenture Trustee shall mail to each Noteholder a notice that states
the record date, the payment date and the amount to be paid.
SECTION 5.05. Optional Preservation of the Trust Estate.
If the Notes have been declared to be due and payable under
Section 5.02 following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee may,
but need not, elect to take and maintain possession of the Trust Estate. It is
the desire of the parties hereto and the Noteholders that there be at all times
sufficient funds for the payment of principal of and interest on the Notes and
other obligations of the Issuer including payment to the Credit Enhancer, and
the Indenture Trustee shall take such desire into account when determining
whether or not to take and maintain possession of the Trust Estate. In
determining whether to take and maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
SECTION 5.06. Limitation of Suits.
No Holder of any Note shall have any right to institute any
Proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
and subject to the provisions of Section 10.17 hereof:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Security Balances
of the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute
such Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of a majority of the Security Balances of the Notes.
It is understood and intended that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holders of Notes or to
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obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Security Balances of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.07. Unconditional Rights of Noteholders to Receive
Principal and Interest.
Notwithstanding any other provisions in this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
SECTION 5.08. Restoration of Rights and Remedies.
If the Indenture Trustee or any Noteholder has instituted any
Proceeding to enforce any right or remedy under this Indenture and such
Proceeding has been discontinued or abandoned for any reason or has been
determined adversely to the Indenture Trustee or to such Noteholder, then and in
every such case the Issuer, the Indenture Trustee and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders shall continue as though
no such Proceeding had been instituted.
SECTION 5.09. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the
Indenture Trustee or to the Noteholders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.10. Delay or Omission not a Waiver.
No delay or omission of the Indenture Trustee or any Holder of
any Note to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article V or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
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SECTION 5.11. Control by Noteholders.
The Holders of a majority of the Security Balances of Notes
shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee with respect to the
Notes or exercising any trust or power conferred on the Indenture Trustee;
provided that:
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of Section 5.04, any
direction to the Indenture Trustee to sell or liquidate the Trust
Estate shall be by Holders of Notes representing not less than 100% of
the Security Balances of Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee
by Holders of Notes representing less than 100% of the Security
Balances of Notes to sell or liquidate the Trust Estate shall be of no
force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction.
Notwithstanding the rights of Noteholders set forth in this
Section, subject to Section 6.01, the Indenture Trustee need not take any action
that it determines might involve it in liability or might materially adversely
affect the rights of any Noteholders not consenting to such action.
SECTION 5.12. Waiver of Past Defaults.
Prior to the declaration of the acceleration of the maturity
of the Notes as provided in Section 5.02, the Holders of Notes of not less than
a majority of the Security Balances of the Notes may waive any past Event of
Default and its consequences except an Event of Default (a) with respect to
payment of principal of or interest on any of the Notes or (b) in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the Holder of each Note or (c) the waiver of which would materially
and adversely affect the interests of the Credit Enhancer or modify its
obligation under the Credit Enhancement Instrument. In the case of any such
waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Event of Default or impair
any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom
shall be deemed to have been cured and not to have occurred, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereto.
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SECTION 5.13. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Note by such ▇▇▇▇▇▇'s acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Indenture
Trustee for any action taken, suffered or omitted by it as Indenture Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 5.13 shall not apply to
(a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any
Noteholder, or group of Noteholders, in each case holding in the aggregate more
than 10% of the Security Balances of the Notes or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note and in this
Indenture.
SECTION 5.14. Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead or in any manner
whatsoever, claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Issuer (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 5.15. Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a
"Sale") of any portion of the Trust Estate pursuant to Section 5.04 is expressly
subject to the provisions of Section 5.05 and this Section 5.15. The power to
effect any such Sale shall not be exhausted by any one or more Sales as to any
portion of the Trust Estate remaining unsold, but shall continue unimpaired
until the entire Trust Estate shall have been sold or all amounts payable on the
Notes and under this Indenture and under the Insurance Agreement shall have been
paid. The Indenture Trustee may from time to time postpone any public Sale by
public announcement made at the time and place of such Sale. The Indenture
Trustee hereby expressly waives its right to any amount fixed by law as
compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell
the Trust Estate, or any portion thereof, unless
(1) the Holders of all Notes and the Credit Enhancer
consent to or direct the Indenture Trustee to make, such Sale,
or
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(2) the proceeds of such Sale would be not less than
the entire amount which would be payable to the Noteholders
under the Notes and the Credit Enhancer in respect of amounts
drawn under the Credit Enhancement Instrument and any other
amounts due the Credit Enhancer under the Insurance Agreement,
in full payment thereof in accordance with Section 5.02, on
the Payment Date next succeeding the date of such Sale, or
(3) The Indenture Trustee determines, in its sole
discretion, that the conditions for retention of the Trust
Estate set forth in Section 5.05 cannot be satisfied (in
making any such determination, the Indenture Trustee may rely
upon an opinion of an Independent investment banking firm
obtained and delivered as provided in Section 5.05), and the
Credit Enhancer consents to such Sale, which consent will not
be unreasonably withheld and the Holders representing at least
66-2/3% of the Security Balances of the Notes consent to such
Sale.
The purchase by the Indenture
Trustee of all or any portion of the Trust Estate at
a private Sale shall not be deemed a Sale or other
disposition thereof for purposes of this Section
5.15(b).
(c) Unless the Holders and the Credit Enhancer have otherwise
consented or directed the Indenture Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater than the
amount described in paragraph (2) of subsection (b) of this Section 5.15 has not
been established by the Indenture Trustee and no Person bids an amount equal to
or greater than such amount, the Indenture Trustee shall bid an amount at least
$1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the
Trust Estate
(1) any Holder or Holders of Notes may bid for and
with the consent of the Credit Enhancer purchase the property
offered for sale, and upon compliance with the terms of sale
may hold, retain and possess and dispose of such property,
without further accountability, and may, in paying the
purchase money therefor, deliver any Notes or claims for
interest thereon in lieu of cash up to the amount which shall,
upon distribution of the net proceeds of such sale, be payable
thereon, and such Notes, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be
returned to the Holders thereof after being appropriately
stamped to show such partial payment;
(2) the Indenture Trustee may bid for and acquire the
property offered for Sale in connection with any Sale thereof,
and, subject to any requirements of, and to the extent
permitted by,
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applicable law in connection therewith, may purchase all or
any portion of the Trust Estate in a private sale, and, in
lieu of paying cash therefor, may make settlement for the
purchase price by crediting the gross Sale price against the
sum of (A) the amount which would be distributable to the
Holders of the Notes and Holders of Certificates and amounts
owing to the Credit Enhancer as a result of such Sale in
accordance with Section 5.04(b) on the Payment Date next
succeeding the date of such Sale and (B) the expenses of the
Sale and of any Proceedings in connection therewith which are
reimbursable to it, without being required to produce the
Notes in order to complete any such Sale or in order for the
net Sale price to be credited against such Notes, and any
property so acquired by the Indenture Trustee shall be held
and dealt with by it in accordance with the provisions of this
Indenture;
(3) the Indenture Trustee shall execute and deliver
an appropriate instrument of conveyance transferring its
interest in any portion of the Trust Estate in connection with
a Sale thereof;
(4) the Indenture Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the Issuer to
transfer and convey its interest in any portion of the Trust
Estate in connection with a Sale thereof, and to take all
action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale shall
be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or
see to the application of any monies.
SECTION 5.16. Action on Notes.
The Indenture Trustee's right to seek and recover judgment on
the Notes or under this Indenture shall not be affected by the seeking,
obtaining or application of any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee or the Noteholders shall be impaired by the recovery of any
judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b).
SECTION 5.17. Performance and Enforcement of Certain
Obligations.
(a) Promptly following a request from the Indenture Trustee to
do so and at the Administrator's expense, the Issuer in its capacity as holder
of the Mortgage Loans, shall take all such lawful action as the Indenture
Trustee may request to cause the Issuer to compel or secure the performance and
observance by the Seller and the Master
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Servicer, as applicable, of each of their obligations to the Issuer under or in
connection with the Mortgage Loan Purchase Agreement and the Servicing
Agreement, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Mortgage Loan
Purchase Agreement and the Servicing Agreement to the extent and in the manner
directed by the Indenture Trustee, as pledgee of the Mortgage Loans, including
the transmission of notices of default on the part of the Seller or the Master
Servicer thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by the Seller or the Master Servicer
of each of their obligations under the Mortgage Loan Purchase Agreement and the
Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee, as pledgee of the Mortgage Loans, subject to the rights of
the Credit Enhancer under the Servicing Agreement may, and at the direction
(which direction shall be in writing or by telephone (confirmed in writing
promptly thereafter)) of the Holders of 66-2/3% of the Security Balances of the
Notes shall, exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Seller or the Master Servicer under or in connection with the
Mortgage Loan Purchase Agreement and the Servicing Agreement, including the
right or power to take any action to compel or secure performance or observance
by the Seller or the Master Servicer, as the case may be, of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Mortgage Loan Purchase
Agreement and the Servicing Agreement, as the case may be, and any right of the
Issuer to take such action shall not be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however,
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the Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it (A) pursuant to Section 5.11 or (B)
from the Credit Enhancer, which it is entitled to give under any of the
Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on
any money received by it except as the Indenture Trustee may agree in writing
with the Issuer.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
SECTION 6.02. Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
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(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee, and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of, or for
the supervision of, any such agent, attorney, custodian or nominee appointed
with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Indenture Trustee's
conduct does not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
SECTION 6.03. Individual Rights of Indenture Trustee.
The Indenture Trustee in its individual or any other capacity
may become the owner or pledgee of Notes and may otherwise deal with the Issuer
or its Affiliates with the same rights it would have if it were not Indenture
Trustee. Any Administrator, Note Registrar, co-registrar or co-paying agent may
do the same with like rights. However, the Indenture Trustee must comply with
Sections 6.11 and 6.12.
SECTION 6.04. Indenture Trustee's Disclaimer.
The Indenture Trustee shall not be responsible for and makes
no representation as to the validity or adequacy of this Indenture or the Notes,
it shall not be accountable for the Issuer's use of the proceeds from the Notes,
and it shall not be responsible for any statement of the Issuer in the Indenture
or in any document issued in connection with the sale of the Notes or in the
Notes other than the Indenture Trustee's certificate of authentication.
SECTION 6.05. Notice of Event of Default.
If an Event of Default occurs and is continuing and if it is
known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee
shall give notice thereof to the Credit Enhancer. The Trustee shall mail to each
Noteholder notice of the Event of Default within 90 days after it occurs. Except
in the case of an Event of Default in payment of principal of or interest on any
Note, the Indenture Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of Noteholders.
SECTION 6.06. Reports by Indenture Trustee to Holders.
The Indenture Trustee shall deliver to each Noteholder such
information as may be required to enable such holder to prepare its federal and
state income tax
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returns. In addition, upon the Issuer's written request, the Indenture Trustee
shall promptly furnish information reasonably requested by the Issuer that is
reasonably available to the Indenture Trustee to enable the Issuer to perform
its federal and state income tax reporting obligations.
SECTION 6.07. Compensation and Indemnity.
The Issuer shall or shall cause the Administrator to pay to
the Indenture Trustee on each Payment Date reasonable compensation for its
services. The Indenture Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuer shall or shall
cause the Administrator to reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Issuer shall
or shall cause the Administrator to indemnify the Indenture Trustee against any
and all loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder. The Indenture Trustee shall notify the Issuer and the
Administrator promptly of any claim for which it may seek indemnity. Failure by
the Indenture Trustee to so notify the Issuer and the Administrator shall not
relieve the Issuer or the Administrator of its obligations hereunder. The Issuer
shall or shall cause the Administrator to defend any such claim, and the
Indenture Trustee may have separate counsel and the Issuer shall or shall cause
the Administrator to pay the fees and expenses of such counsel. Neither the
Issuer nor the Administrator need reimburse any expense or indemnify against any
loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section 6.07 shall survive the discharge of this Indenture.
When the Indenture Trustee incurs expenses after the occurrence of an Event of
Default specified in Section 5.01(iv) or (v) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title 11 of
the United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
SECTION 6.08. Replacement of Indenture Trustee.
No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee shall become effective until the
acceptance of appointment by the successor Indenture Trustee pursuant to this
Section 6.08. The Indenture Trustee may resign at any time by so notifying the
Issuer and the Credit Enhancer. The Holders of a majority of Security Balances
of the Notes may remove the Indenture Trustee by so notifying the Indenture
Trustee and the Credit Enhancer and may appoint a successor Indenture Trustee.
The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
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(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Issuer. Thereupon, the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly transfer all property
held by it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within
60 days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of Security Balances
of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section, the Issuer's and the Administrator's obligations under
Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. Successor Indenture Trustee by ▇▇▇▇▇▇.
If the Indenture Trustee consolidates with, merges or converts
into, or transfers all or substantially all its corporate trust business or
assets to, another corporation or banking association, the resulting, surviving
or transferee corporation without any further act shall be the successor
Indenture Trustee; provided, that such corporation or banking association shall
be otherwise qualified and eligible under Section 6.11. The Indenture Trustee
shall provide the Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes
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shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust Estate, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Indenture Trustee may consider necessary or desirable. No co-trustee or
separate trustee here under shall be required to meet the terms of eligibility
as a successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article VI.
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Each separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Indenture Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification.
The Indenture Trustee shall at all times satisfy the
requirements of TIA ss.310(a). The Indenture Trustee shall have a combined
capital and surplus of at least [$50,000,000] as set forth in its most recent
published annual report of condition and it or its parent shall have a long-term
debt rating of [Baa3] or better by [▇▇▇▇▇'▇]. The Indenture Trustee shall comply
with TIA ss.. 310(b), including the optional provision permitted by the second
sentence of TIA ss.. 310(b)(9); provided, however, that there shall be excluded
from the operation of TIA ss.. 310(b)(1) any indenture or indentures under which
other securities of the Issuer are outstanding if the requirements for such
exclusion set forth in TIA ss.. 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against
Issuer.
The Indenture Trustee shall comply with TIAss.. 311(a),
excluding any creditor relationship listed in TIAss.. 311(b). An Indenture
Trustee who has resigned or been removed shall be subject to TIAss.. 311(a) to
the extent indicated.
SECTION 6.13. Representation and Warranty.
The Indenture Trustee hereby represents that:
(i) The Indenture Trustee is duly organized and validly
existing as a corporation in good standing under the laws of the State
of ___________, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is presently conducted.
(ii) The Indenture Trustee has the power and authority to
execute and deliver this Indenture and to carry out its terms; and the
execution, delivery and performance of this Indenture have been duly
authorized by the Indenture Trustee by all necessary corporate action.
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(iii) The consummation of the transactions contemplated by
this Indenture and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the articles of incorporation or bylaws of the Indenture Trustee or any
agreement or other instrument to which the Indenture Trustee is a party
or by which it is bound
(iv) To the Indenture Trustee's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Indenture Trustee or its
properties: (A) asserting the invalidity of this Indenture (B) seeking
to prevent the consummation of any of the transactions contemplated by
this Indenture or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Indenture
Trustee of its obligations under, or the validity or enforceability of,
this Indenture.
SECTION 6.14. Directions to Indenture Trustee.
The Indenture Trustee is hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the
assets of the Trust in trust for the Noteholders;
(b) to issue, execute and deliver the Notes substantially in
the form prescribed by Exhibit A in accordance with the terms of this Indenture;
and
(c) to take all other actions as shall be required to be taken
by the terms of this Indenture.
SECTION 6.15. No Consent to Certain Acts of Depositor.
The Indenture Trustee shall not consent to any action proposed
to be taken by the Depositor pursuant to Article [_______] of the Depositor's
Restated Certificate of Incorporation.
SECTION 6.16. Indenture Trustee May Own Securities.
The Indenture Trustee, in its individual or any other capacity
may become the owner or pledgee of Securities with the same rights it would have
if it were not Indenture Trustee.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Issuer to Furnish Indenture Trustee Names and
Addresses of Noteholders.
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The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after each Record Date, a list, in
such form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date, (b) at such other
times as the Indenture Trustee and the Credit Enhancer may request in writing,
within 30 days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; provided, however, that so long as the Indenture Trustee
is the Note Registrar, no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01 upon receipt
of a new list so furnished.
(b) Noteholders may communicate pursuant to TIAss.. 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar
shall have the protection of TIAss.. 312(c).
SECTION 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee, and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA ss..
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) and by rules and regulations prescribed from time
to time by the Commission.
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(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of each year.
SECTION 7.04. Reports by Indenture Trustee.
If required by TIA ss.. 313(a), within 60 days after each
January 1 beginning with January 1, 20__, the Indenture Trustee shall mail to
each Noteholder as required by TIA ss.. 313(c) and to the Credit Enhancer a
brief report dated as of such date that complies with TIA ss.. 313(a). The
Indenture Trustee also shall comply with TIA ss.. 313(b).
A copy of each report at the time of its mailing to
Noteholders shall be filed by the Indenture Trustee with the Commission and each
stock exchange, if any, on which the Notes are listed. The Issuer shall notify
the Indenture Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money.
Except as otherwise expressly provided herein, the Indenture
Trustee may demand payment or delivery of, and shall receive and collect,
directly and without intervention or assistance of any fiscal agent or other
intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply
all such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of the
Trust Estate, the Indenture Trustee may take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.02. Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause
the Indenture Trustee to establish and maintain, in the name of the Indenture
Trustee, for the benefit of the Noteholders and the Certificate Paying Agent, on
behalf of the Certificateholders and the Credit Enhancer, the Payment Account as
provided in Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Payment
Account pursuant to the Servicing Agreement and all deposits therein pursuant to
this Indenture are for the benefit of the Noteholders and the Certificate Paying
Agent, on behalf of the Certificateholders and all investments made with such
monies including all income or
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other gain from such investments are for the benefit of the Master Servicer as
provided by the Servicing Agreement.
On each Payment Date during the Funding Period the Indenture
Trustee shall withdraw Net Principal Collections from the Payment Account and
deposit Net Principal Collections to the Funding Account.
On each Payment Date, the Indenture Trustee shall distribute
all amounts on deposit in the Payment Account (after giving effect to the
withdrawal referred to in the preceding paragraph) to Noteholders in respect of
the Notes and in its capacity as Certificate Paying Agent to Certificateholders
in the order of priority set forth in Section 3.05 (except as otherwise provided
in Section 5.04(b).
The Master Servicer may direct the Indenture Trustee to invest
any funds in the Payment Account in Eligible Investments maturing no later than
the Business Day preceding each Payment Date and shall not be sold or disposed
of prior to the maturity. Unless otherwise instructed by the Master Servicer,
the Indenture Trustee shall invest all funds in the Payment Account in Eligible
Investments.
(c) On or before the Closing Date the Issuer shall open, at
the Corporate Trust Office, an account which shall be the "Funding Account". The
Master Servicer may direct the Indenture Trustee to invest any funds in the
Funding Account in Eligible Investments maturing no later than the Business Day
preceding each Payment Date and shall not be sold or disposed of prior to the
maturity. Unless otherwise instructed by the Master Servicer, the Indenture
Trustee shall invest all funds in the Payment Account in its Corporate Trust
Short Term Investment Fund so long as it is an Eligible Investment. During the
Funding Period, any amounts received by the Indenture Trustee in respect of Net
Principal Collections for deposit in the Funding Account, together with any
Eligible Investments in which such monies are or will be invested or reinvested
during the term of the Notes, shall be held by the Indenture Trustee in the
Funding Account as part of the Trust Estate, subject to disbursement and
withdrawal as herein provided: Amounts on deposit in the Funding Account in
respect of Net Principal Collections may be withdrawn on each Deposit Date and
(1) paid to the Issuer in payment for Additional Loans by the deposit of such
amount to the Collection Account and (2) at the end of the Funding Period any
amounts remaining in the Funding Account after the withdrawal called for by
clause (1) shall be deposited in the Payment Account to be included in the
payment of principal on the Payment Date that is the last day of the Funding
Period.
(d) (i) Any investment in the institution with which the
Funding Account is maintained may mature on such Payment Date and (ii) any other
investment may mature on such Payment Date if the Indenture Trustee shall
advance funds on such Payment Date to the Funding Account in the amount payable
on such investment on such Payment Date, pending receipt thereof to the extent
necessary to make distributions on the Notes and the Certificates) and shall not
be sold or disposed of prior to maturity.
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SECTION 8.03. Officer's Certificate.
The Indenture Trustee shall receive at least [seven] days
notice when requested by the Issuer to take any action pursuant to Section
8.05(a), accompanied by copies of any instruments to be executed, and the
Indenture Trustee shall also require, as a condition to such action, an
Officer's Certificate, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with.
SECTION 8.04. Termination Upon Distribution to Noteholders.
This Indenture and the respective obligations and
responsibilities of the Issuer and the Indenture Trustee created hereby shall
terminate upon the distribution to Noteholders, Certificate Paying Agent, on
behalf of the Certificateholders and the Indenture Trustee of all amounts
required to be distributed pursuant to Article III; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
the late ambassador of the United States to the Court of St. ▇▇▇▇▇, living on
the date hereof.
SECTION 8.05. Release of Trust Estate.
(a) Subject to the payment of its fees and expenses, the
Indenture Trustee may, and when required by the provisions of this Indenture
shall, execute instruments to release property from the lien of this Indenture,
or convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in Article VIII hereunder shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent,
or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are
no Notes Outstanding, (ii) all sums due the Indenture Trustee pursuant to this
Indenture have been paid, and (iii) all sums due the Credit Enhancer have been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture.
[(c) The Indenture Trustee shall release property from the
lien of this Indenture pursuant to this Section 8.05 only upon receipt of an
request from the Issuer accompanied by an [Officers' Certificate], [an Opinion
of Counsel,] and a letter from the Credit Enhancer, stating that the Credit
Enhancer has no objection to such request from the Issuer.]
SECTION 8.06. Surrender of Notes Upon Final Payment.
By acceptance of any Note, the Holder thereof agrees to
surrender such Note to the Indenture Trustee promptly, prior to such
Noteholder's receipt of the final payment thereon.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of the Holders of any Notes but with
the consent of the Credit Enhancer and prior notice to the Rating Agencies and
the Credit Enhancer, the Issuer and the Indenture Trustee, when authorized by an
Issuer Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture
(vi) to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided, that such action shall not materially and
adversely affect the interests of the Holders of the Notes;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(viii) 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
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the TIA or under any similar federal statute hereafter enacted and to
add to this Indenture such other provisions as may be expressly
required by the TIA;
provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
entering into such indenture supplement will not have any material adverse tax
consequences to the Noteholders.
The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by
an Issuer Request, may, also without the consent of any of the Holders of the
Notes but with the consent of the Credit Enhancer and prior notice to the Rating
Agencies and the Credit Enhancer, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, (i) adversely affect in any material respect the interests
of any Noteholder or (ii) cause the Issuer to be subject to an entity level tax.
SECTION 9.02. Supplemental Indentures with Consent of
Noteholders.
The Issuer and the Indenture Trustee, when authorized by an
Issuer Request, also may, with prior notice to the Rating Agencies and, with the
written consent of the Credit Enhancer and with the consent of the Holders of
not less than a majority of the Security Balances of each Class of Notes
affected thereby, by Act of such Holders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Note affected thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof or
the interest rate thereon, change the provisions of this Indenture
relating to the application of collections on, or the proceeds of the
sale of, the Trust Estate to payment of principal of or interest on the
Notes, or change any place of payment where, or the coin or currency in
which, any Note or the interest thereon is payable, or impair the right
to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor, as
provided in Article V, to the payment of any such amount due on the
Notes on or after the respective due dates thereof;
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(ii) reduce the percentage of the Security Balances of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception
in the definition of the term "Holder";
(iv) reduce the percentage of the Security Balances of the
Notes required to direct the Indenture Trustee to direct the Issuer to
sell or liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section 9.02 except to
increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the Basic Documents cannot
be modified or waived without the consent of the Holder of each Note
affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Payment Date (including
the calculation of any of the individual components of such
calculation); or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security
provided by the lien of this Indenture; and provided, further, that
such action shall not, as evidenced by an Opinion of Counsel, cause the
Issuer to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine whether
or not any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under
this Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.02, the
Indenture Trustee shall mail to the Holders of the Notes to which such amendment
or supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
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SECTION 9.03. Execution of Supplemental Indentures.
In executing, or permitting the additional trusts created by,
any supplemental indenture permitted by this Article IX or the modification
thereby of the trusts created by this Indenture, the Indenture Trustee shall be
entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture pursuant to
the provisions hereof, this Indenture shall be and shall be deemed to be
modified and amended in accordance therewith with respect to the Notes affected
thereby, and the respective rights, limitations of rights, obligations, duties,
liabilities and immunities under this Indenture of the Indenture Trustee, the
Issuer and the Holders of the Notes shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
SECTION 9.05. Conformity with Trust Indenture Act.
Every amendment of this Indenture and every supplemental
indenture executed pursuant to this Article IX shall conform to the requirements
of the Trust Indenture Act as then in effect so long as this Indenture shall
then be qualified under the Trust Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer or the Indenture Trustee shall so determine, new Notes so modified as to
conform, in the opinion of the Indenture Trustee and the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding
Notes.
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ARTICLE X
MISCELLANEOUS
SECTION 10.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Indenture Trustee and to the Credit Enhancer (i) an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and (ii) an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that, in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such
certificate or opinion has read or has caused to be read such
covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
signatory, such signatory has made such examination or
investigation as is necessary to enable such signatory to
express an informed opinion as to whether or not such covenant
or condition has been complied with;
(4) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been complied
with; and
(5) if the Signer of such Certificate or Opinion is
required to be Independent, the Statement required by the
definition of the term "Independent".
(b) (i) Prior to the deposit of any Collateral or other
property or securities with the Indenture Trustee that is to be made the basis
for the release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in Section
10.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (within 90 days of such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited.
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(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to
the Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set
forth in the certificates delivered pursuant to clause (i) above and
this clause (ii), is 10% or more of the Security Balances of the Notes,
but such a certificate need not be furnished with respect to any
securities so deposited, if the fair value thereof to the Issuer as set
forth in the related Officer's Certificate is less than $25,000 or less
than one percent of the Security Balances of the Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than property
as contemplated by clause (v) below or securities released from the
lien of this Indenture since the commencement of the then-current
calendar year, as set forth in the certificates required by clause
(iii) above and this clause (iv), equals 10% or more of the Security
Balances of the Notes, but such certificate need not be furnished in
the case of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the then Security Balances of the
Notes.
(v) Notwithstanding any provision of this Indenture, the
Issuer may, without compliance with the requirements of the other
provisions of this Section 10.01, (A) collect, sell or otherwise
dispose of the Mortgage Loans as and to the extent permitted or
required by the Basic Documents or (B) make cash payments out of the
Payment Account as and to the extent permitted or required by the Basic
Documents [, so long as the Issuer shall deliver to the Indenture
Trustee every six months, commencing _____________, an Officer's
Certificate of the Issuer stating that all the dispositions of
Collateral described in clauses (A) or (B) above that occurred during
the preceding six calendar months were in the ordinary course of the
Issuer's business and that the proceeds thereof were applied in
accordance with the Basic Documents].
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SECTION 10.02. Form of Documents Delivered to Indenture
Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller, the Issuer or the Administrator, stating that the information with
respect to such factual matters is in the possession of the Seller, the Issuer
or the Administrator, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Whenever in this Indenture, in connection with any application
or certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Article VI.
SECTION 10.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is
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hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any
such instrument or writing may be proved in any manner that the Indenture
Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note
Registrar.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 10.04. Notices, etc., to Indenture Trustee, Issuer,
Credit Enhancer and Rating Agencies.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Note holders or other documents provided or permitted
by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or act of Noteholders is to be
made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at the
Corporate Trust Office. The Indenture Trustee shall promptly transmit
any notice received by it from the Noteholders to the Issuer, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and
mailed first-class, postage prepaid to the Issuer addressed to:
Citigroup MBN Trust Series 20__-_____, in care of [Name of Owner
Trustee] ___________________________, ___________________,
________________________________, Attention of
_________________________________________ with a copy to the
Administrator at _______________________ Attention:
___________________, or at any other address previously furnished in
writing to the Indenture Trustee by the Issuer or the Administrator.
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee, or
(iii) the Credit Enhancer by the Issuer, the Indenture Trustee
or by any Noteholders shall be sufficient for every purpose hereunder
to in writing and mailed, first-class postage pre-paid, or personally
delivered or telecopied to: [Name of Credit Enhancer],
________________, ________, _______________,
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Attention: _________________, ___________________________, Telephone
______________. Telecopier ______________. The Credit Enhancer shall
promptly transmit any notice received by it from the Issuer, the
Indenture Trustee or the Noteholders to the Issuer or Indenture
Trustee, as the case may be.
Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered or mailed by certified mail, return receipt requested, to
(i) in the case of [Moody's], at the following address: [▇▇▇▇▇'▇ Investors
Service, Inc., ABS Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇] and (ii) in the case of [Standard & Poor's], at the following address:
[Standard & Poor's Ratings Group, ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention of Asset Backed Surveillance Department]; or as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.
SECTION 10.05. Notices to Noteholders; Waiver.
Where this Indenture provides for notice to Noteholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage prepaid to
each Noteholder affected by such event, at such Person's as it appears on the
Note Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given regardless of whether such notice is in fact actually
received.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute
an Event of Default.
SECTION 10.06. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the
Notes to the contrary, the Issuer may enter into any agreement with any Holder
of a Note providing
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for a method of payment, or notice by the Indenture Trustee or any Administrator
to such Holder, that is different from the methods provided for in this
Indenture for such payments or notices. The Issuer shall furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee shall
cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 10.07. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Indenture by
any of the provisions of the Trust Indenture Act, such required provision shall
control.
The provisions of TIA ▇▇.▇▇.. 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.
SECTION 10.08. Effect of Headings.
The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 10.09. Successors and Assigns.
All covenants and agreements in this Indenture and the Notes
by the Issuer shall bind its successors and assigns, whether so expressed or
not. All agreements of the Indenture Trustee in this Indenture shall bind its
successors, co-trustees and agents.
SECTION 10.10. Separability.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 10.11. Benefits of Indenture.
The Credit Enhancer and its successors and assigns shall be a
third-party beneficiary to the provisions of this Indenture. Nothing in this
Indenture or in the Notes, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, and the Noteholders, and
any other party secured hereunder, and any other Person with an ownership
interest in any part of the Trust Estate, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 10.12. Legal Holidays.
In any case where the date on which any payment is due shall
not be a Business Day, then (notwithstanding any other provision of the Notes or
this Indenture) payment need not be made on such date, but may be made on the
next succeeding
-57-
Business Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after any
such nominal date.
SECTION 10.13. Governing Law.
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.14. Counterparts.
This Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 10.15. Recording of Indenture.
If this Indenture is subject to recording in any appropriate
public recording offices, such recording is to be effected by the Issuer and at
its expense accompanied by an Opinion of Counsel (which may be counsel to the
Indenture Trustee or any other counsel reasonably acceptable to the Indenture
Trustee) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.
SECTION 10.16. Issuer Obligation.
No recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on
the Notes or under this Indenture or any certificate or other writing delivered
in connection herewith or therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of Article
VI, VII and VIII of the Trust Agreement.
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SECTION 10.17. No Petition.
The Indenture Trustee, by entering into this Indenture, and
each Noteholder, by accepting a Note, hereby covenant and agree that they will
not at any time institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
SECTION 10.18. Inspection.
The Issuer agrees that, on reasonable prior notice, it shall
permit any representative of the Indenture Trustee, during the Issuer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Issuer, to make copies and extracts therefrom, to cause such books
to be audited by Independent certified public accountants, and to discuss the
Issuer's affairs, finances and accounts with the Issuer's officers, employees,
and Independent certified public accountants, all at such reasonable times and
as often as may be reasonably requested. The Indenture Trustee shall and shall
cause its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
SECTION 10.19. Authority of the Administrator.
Each of the parties to this Indenture acknowledges that the
Issuer and the Owner Trustee have each appointed the Administrator to act as its
agent to perform the duties and obligations of the Issuer hereunder. Unless
otherwise instructed by the Issuer or the Owner Trustee, copies of all notices,
requests, demands and other documents to be delivered to the Issuer or the Owner
Trustee pursuant to the terms hereof shall be delivered to the Administrator.
Unless otherwise instructed by the Issuer or the Owner Trustee, all notices,
requests, demands and other documents to be executed or delivered, and any
action to be taken, by the Issuer or the Owner Trustee pursuant to the terms
hereof may be executed, delivered and/or taken by the Administrator pursuant to
the Administration Agreement.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
Citigroup MBN Trust Series 20__-_____, as
Issuer
By:________________________________
not in its individual capacity but solely
as Owner Trustee
By:________________________________
Name:
Title:
__________________________________,
as Indenture Trustee, as Certificate Paying
Agent and as Note Registrar
By:________________________________
Name:______________________________
Title:_____________________________
___________________________________
hereby accepts the
appointment as Certificate
Paying Agent pursuant to
Section 3.03 hereof and as
Certificate Registrar
pursuant to Section 4.02
hereof.
___________________________________
By:________________________________
Title:_____________________________
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared
______________, to me known, who being by me duly sworn, did depose and say,
that he resides at __________________, _______________________, that he is the
of the Owner Trustee, one of the corporations described in and which executed
the above instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his name
thereto by like order.
___________________________
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared
, to me known, who being by me duly sworn, did depose and say, that he resides
at ______________, that he is the ______________ of ________________, as
Indenture Trustee, one of the corporations described in and which executed the
above instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his name
thereto by like order.
___________________________
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared
, to me known, who being by me duly sworn, did depose and say, that he resides
at ______________, that he is an ________________ of _______________, as
Indenture Trustee, one of the corporations described in and which executed the
above instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his name
thereto by like order.
___________________________
Notary Public
[NOTARIAL SEAL]
APPENDIX A
DEFINITIONS
Adjustable Rate Mortgage Loan: A Mortgage Loan with a Mortgage
Rate that is subject to periodic adjustment calculated on the basis of the
Index, plus an applicable Gross Margin. Each Adjustable Rate Mortgage Loan is
secured by a first lien on the related Mortgaged Property.
Adjustment Date: As to each Adjustable Rate Mortgage Loan,
each date set forth in the related Mortgage Note on which an adjustment to the
interest rate on such Mortgage Loan becomes effective.
Administrative Fee: The amount of the fee payable to the Owner
Trustee together with the amount of the premium payable to the Note Insurer,
which will accrue at ______% per annum based on the Note Principal Balance of
the Notes.
Advance: As to any Mortgage Loan, any advance made by the
Master Servicer, pursuant to Section 4.04 of the Servicing Agreement.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
Appraised Value: The appraised value of a Mortgaged Property
based upon the lesser of (i) the appraisal made at the time of the origination
of the related Mortgage Loan, or (ii) the sales price of such Mortgaged Property
at such time of origination. With respect to a Mortgage Loan the proceeds of
which were used to refinance an existing mortgage loan, the appraised value of
the Mortgaged Property based upon the appraisal (as reviewed and approved by the
Seller) obtained at the time of refinancing.
Assignment of Mortgage: An assignment of Mortgage, notice of
transfer or equivalent instrument, in recordable form, which is sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to reflect of record the sale of the Mortgage, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county, if permitted by law.
Authorized Newspaper: A newspaper of general circulation in
the Borough of Manhattan, The City of New York, printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
A-1
Authorized Officer: With respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).
Available Funds: As to any Payment Date, an amount equal to
the amount on deposit in the Payment Account on such Payment Date and available
for distribution to the Noteholders (minus, if the Notes have been declared due
and payable following an Event of Default on such Payment Date, any amounts owed
to the Indenture Trustee by the Issuer pursuant to Section 6.07 of the
Indenture).
Available Funds Cap Carry-Forward Amount: With respect to the
Notes and any Payment Date, an amount equal to the sum of (x) the amount, if
any, by which (a) the lesser of (1) the amount payable if clause (i) of the
definition of Note Interest Rate is used to calculate interest and (2) the
amount payable if the Maximum Note Interest Rate is used to calculate interest
exceeds (b) the amount payable if clause (ii) of the definition of Note Interest
Rate is used to calculate interest and (y) the interest accrued during the prior
Interest Period on the amount of any Available Funds Cap Carry-Forward Amount
immediately prior to such Payment Date, calculated on the basis of a 360-day
year and the actual number of days elapsed and using the Note Interest Rate
applicable to such Payment Date minus (z) the aggregate of all amounts
distributed to the Noteholders on all prior Payment Dates pursuant to Section
3.05(v) of the Indenture.
Available Funds Interest Rate: As to any Payment Date, a per
annum rate equal to the lesser of (x) the fraction, expressed as a percentage,
the numerator of which is (i) an amount equal to (A) 1/12 of the aggregate
Principal Balance of the then outstanding Mortgage Loans times the weighted
average of the Expense Adjusted Mortgage Rates on the then outstanding Mortgage
Loans minus (B) the Administrative Fee for such Payment Date, and the
denominator of which is (ii) an amount equal to (A) the then outstanding
aggregate Note Principal Balance of the Notes multiplied by (B) the actual
number of days elapsed in the related Interest Period divided by 360 and (y) the
Maximum Note Interest Rate.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basic Documents: The Trust Agreement, the Certificate of
Trust, the Indenture, the Mortgage Loan Purchase Agreement, the Insurance
Agreement, the Servicing Agreement, and the other documents and certificates
delivered in connection with any of the above.
Beneficial Owner: With respect to any Note, the Person who is
the beneficial owner of such Note as reflected on the books of the Depository or
on the books of a Person maintaining an account with such Depository (directly
as a Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).
A-2
Book-Entry Notes: Beneficial interests in the Notes, ownership
and transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the City of New York, Delaware or
California or in the city in which the corporate trust offices of the Indenture
Trustee or the Note Insurer are located, are required or authorized by law to be
closed.
Business Trust Statute: Chapter 38 of Title 12 of the Delaware
Code, 12 Del. ▇▇▇▇▇▇.▇▇.. 3801 et seq., as the same may be amended from time to
time.
Cash Liquidation: As to any defaulted Mortgage Loan other than
a Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.
Certificate Distribution Account: The account or accounts
created and maintained pursuant to Section 3.10(d) of the Trust Agreement. The
Certificate Distribution Account shall be an Eligible Account.
Certificate Paying Agent: The meaning specified in Section
3.10 of the Trust Agreement.
Certificate Percentage Interest: With respect to each
Certificate, the Certificate Percentage Interest on the face thereof.
Certificate Register: The register maintained by the
Certificate Registrar in which the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates.
Certificate Registrar: Initially, the Indenture Trustee, in
its capacity as Certificate Registrar, or any successor to the Indenture Trustee
in such capacity.
Certificate of Trust: The Certificate of Trust filed for the
Trust pursuant to Section 3810(a) of the Business Trust Statute.
Certificates: The Southern Pacific Secured Assets Corp.,
Mortgage-Backed Certificates, Series 20__-_, evidencing the beneficial ownership
interest in the Issuer and executed by the Owner Trustee in substantially the
form set forth in Exhibit A to the Trust Agreement.
Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register. Owners of Certificates that have been
pledged in good faith may be regarded as Holders if the pledgee establishes to
the satisfaction of the Indenture Trustee or the Owner Trustee, as the case may
be, the pledgee's right so to act with
A-3
respect to such Certificates and that the pledgee is not the Issuer, any other
obligor upon the Certificates or any Affiliate of any of the foregoing Persons.
Closing Date: ______ __, 20__.
Code: The Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
Collateral: The meaning specified in the Granting Clause of
the Indenture.
Collection Account: The account or accounts created and
maintained pursuant to Section 3.06(d) of the Servicing Agreement. The
Collection Account shall be an Eligible Account.
Combined Loan-To-Value Ratio: With respect to any Mortgage
Loan and any date, the percentage equivalent of a fraction, the numerator of
which is the Cut-Off Date Principal Balance of such Mortgage Loan and the
denominator of which is the outstanding principal balance as of the date of the
origination of such Mortgage Loan of any mortgage loan or mortgage loans that
are secured by liens on the Mortgaged Property that are senior or subordinate to
the Mortgage and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Compensating Interest: With respect to any Determination Date,
an amount equal to the lesser of (i) the aggregate amount of Prepayment Interest
Shortfall for the related Prepayment Period and (ii) the Servicing Fee for such
Determination Date.
Converted Mortgage Loan: Any Convertible Mortgage Loan with
respect to which the interest rate borne by such Mortgage Loan has been
converted from an adjustable interest rate to a fixed interest rate.
Convertible Mortgage Loan: Any Adjustable Rate Mortgage Loan
which by its terms grants to the related Mortgagor the option to convert the
interest rate borne by such Mortgage Loan from an adjustable interest rate to a
fixed interest rate.
Converting Mortgage Loan: Any Convertible Mortgage Loan with
respect to which the related Mortgagor has given notice of his intent to convert
from an adjustable interest rate to a fixed interest rate and prior to the
conversion of such Mortgage Loan.
Corporate Trust Office: With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Note Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at
____________, __________, ______, __________ _____, Attention: ________ ___
______, except that for purposes of Section 4.02 of the Indenture and Section
3.09 of the Trust Agreement, such term shall include the Indenture Trustee's
office or agency at _______________, ________, ________ _____, Attention:
___________ _________. With respect to the Owner Trustee, the principal
corporate
A-4
trust office of the Owner Trustee at which at any particular time its corporate
trust business shall be administered, which office at the date of the execution
of this Trust Agreement is located at ________________________, ______
____________, ________________________, __________, ________ _____, Attention:
________________________________.
Cut-Off Date: With respect to the Mortgage Loans, ______ 1,
20__.
Cut-Off Date Principal Balance: With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the opening of business on the
last day of the related Due Period immediately prior to the Cut-Off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
Default: Any occurrence which is or with notice or the lapse
of time or both would become an Event of Default.
Deficiency Amount: The meaning provided in the Note Insurance
Policy.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
scheduled Monthly Payment that constitutes a permanent forgiveness of principal,
which valuation or reduction results from a proceeding under the Bankruptcy
Code.
Definitive Notes: The meaning specified in Section 4.06 of the
Indenture.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced with an Eligible Substitute Mortgage Loan.
Depositor: Southern Pacific Secured Assets Corp., a California
corporation, or its successor in interest.
Depository or Depository Agency: The Depository Trust Company
or a successor appointed by the Indenture Trustee with the approval of the
Depositor. Any successor to the Depository shall be an organization registered
as a "clearing agency" pursuant to Section 17A of the Exchange Act and the
regulations of the Securities and Exchange Commission thereunder.
Depository Participant: A Person for whom, from time to time,
the Depository effects book-entry transfers and pledges of securities deposited
with the Depository.
A-5
Determination Date: With respect to any Payment Date, the 15th
of the related month, or if the 15th day of such month is not a Business Day,
the immediately preceding Business Day.
Due Date: The first day of the month of the related Payment
Date.
Due Period: With respect to any Mortgage Loan and Due Date,
the period commencing on the second day of the month preceding the month of such
Payment Date (or, with respect to the first Due Period, the day following the
Cut-Off Date) and ending on the related Due Date.
Eligible Account: An account that is any of the following: (i)
maintained with a depository institution the short term deposits of which have
been rated by each Rating Agency in its highest rating available, or (ii) an
account or accounts in a depository institution in which such accounts are fully
insured to the limits established by the FDIC, PROVIDED that any deposits not so
insured shall, to the extent acceptable to the Note Insurer and each Rating
Agency, as evidenced in writing, be maintained such that (as evidenced by an
Opinion of Counsel delivered to the Indenture Trustee, the Note Insurer and each
Rating Agency) the Indenture Trustee have a claim with respect to the funds in
such account or a perfected first security interest against any collateral
(which shall be limited to Eligible Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution with which such account is maintained, or (iii) in the case of the
Collection Account, either (A) a trust account or accounts maintained at the
Corporate Trust Department of the Indenture Trustee or (B) an account or
accounts maintained at the Corporate Trust Department of the Indenture Trustee,
as long as its short term debt obligations are rated P-1 by ▇▇▇▇▇'▇ and A-1 by
Standard & Poor's or better and its long term debt obligations are rated A2 by
▇▇▇▇▇'▇ and A by Standard & Poor's or better, or (iv) in the case of the
Collection Account and the Payment Account, a trust account or accounts
maintained in the corporate trust division of the Indenture Trustee, or (v) an
account or accounts of a depository institution acceptable to each Rating Agency
as evidenced in writing by each Rating Agency that use of any such account as
the Collection Account or the Payment Account will not reduce the rating
assigned to any of the Securities by such Rating Agency below investment grade
without taking into account the Note Insurance Policy and acceptable to the Note
Insurer as evidenced in writing.
Eligible Investments: One or more of the following:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America, the Federal Home Mortgage
Corporation, the Federal National Mortgage Association, the Federal
Home Loan Banks or any agency or instrumentality of the United States
of America the obligations of which are backed by the full faith and
credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit
of, banker's acceptances issued by or federal funds sold by any
depository institution or trust company (including the Indenture
Trustee or its agent acting in their
A-6
respective commercial capacities) incorporated under the laws of the
United States of America or any State thereof and subject to
supervision and examination by federal and/or state authorities, so
long as at the time of such investment or contractual commitment
providing for such investment, such depository institution or trust
company has a short term unsecured debt rating in the highest available
rating category of each of the Rating Agencies and provided that each
such investment has an original maturity of no more than 365 days, and
(B) any other demand or time deposit or deposit which is fully insured
by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as a
principal) rated "A" or higher by S&P and A2 or higher by ▇▇▇▇▇'▇;
provided, however, that collateral transferred pursuant to such
repurchase obligation must (A) be valued weekly at current market price
plus accrued interest, (B) pursuant to such valuation, equal, at all
times, 105% of the cash transferred by the Indenture Trustee in
exchange for such collateral and (C) be delivered to the Indenture
Trustee or, if the Indenture Trustee is supplying the collateral, an
agent for the Indenture Trustee, in such a manner as to accomplish
perfection of a security interest in the collateral by possession of
certificated securities;
(iv) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any State thereof which has a long term unsecured debt
rating in the highest available rating category of each of the Rating
Agencies at the time of such investment;
(v) commercial paper having an original maturity of less than
365 days and issued by an institution having a short term unsecured
debt rating in the highest available rating category of each of the
Rating Agencies at the time of such investment;
(vi) a guaranteed investment contract approved by each of the
Rating Agencies and the Note Insurer and issued by an insurance company
or other corporation having a long term unsecured debt rating in the
highest available rating category of each of the Rating Agencies at the
time of such investment;
(vii) money market funds having ratings in the highest
available long-term rating category of each of the Rating Agencies at
the time of such investment; any such money market funds which provide
for demand withdrawals being conclusively deemed to satisfy any
maturity requirement for Eligible Investments set forth in the
Indenture; and
(viii) any investment approved in writing by each of the
Rating Agencies and the Note Insurer.
A-7
The Indenture Trustee may purchase from or sell to itself or
an affiliate, as principal or agent, the Eligible Investments listed above.
PROVIDED, HOWEVER, that each such instrument shall be acquired
in an arm's length transaction and no such instrument shall be an Eligible
Investment if it represents, either (1) the right to receive only interest
payments with respect to the underlying debt instrument or (2) the right to
receive both principal and interest payments derived from obligations underlying
such instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity greater than 120% of the yield to
maturity at par of such underlying obligations; PROVIDED FURTHER, HOWEVER, that
each such instrument acquired shall not be acquired at a price in excess of par.
Eligible Substitute Mortgage Loan: A Mortgage Loan substituted
by the Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officer's Certificate delivered to the
Indenture Trustee, (i) have an outstanding principal balance, after deduction of
the principal portion of the monthly payment due in the month of substitution
(or in the case of a substitution of more than one Mortgage Loan for a Deleted
Mortgage Loan, an aggregate outstanding principal balance, after such
deduction), not in excess of the outstanding principal balance of the Deleted
Mortgage Loan (the amount of any shortfall to be deposited by the Seller in the
Collection Account in the month of substitution); (ii) comply with each
representation and warranty set forth in clauses (ii) through (lxxvii) of
Section 3.1(b) of the Mortgage Loan Purchase Agreement other than clauses (ii),
(iii), (v)-(xi), (xiii)-(xiv), (l), (lxvi), (lxviii), (lxxi)- (lxxiii); (iii)
have a Mortgage Rate and Gross Margin no lower than and not more than 1% per
annum higher than the Mortgage Rate and Gross Margin, respectively, of the
Deleted Mortgage Loan as of the date of substitution; (iv) have a Combined
Loan-to-Value Ratio at the time of substitution no higher than that of the
Deleted Mortgage Loan at the time of substitution; (v) have a remaining term to
stated maturity not greater than (and not more than one year less than) that of
the Deleted Mortgage Loan and (vi) not be 30 days or more delinquent.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default: With respect to the Indenture, any one of
the following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) a default in (a) the payment of the Interest Payment
Amount or the Principal Payment Amount with respect to a Payment Date
on such Payment Date or (b) the Subordination Increase Amount or the
Available Funds Cap Carry-Forward Amount, but only, with respect to
clause (b), to the extent funds are available to make such payment as
provided in the Indenture; or
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(ii) the failure by the Issuer on the Final Scheduled Payment
Date to reduce the Note Principal Balance to zero; or
(iii) there occurs a default in the observance or performance
of any covenant or agreement of the Issuer made in the Indenture, or
any representation or warranty of the Issuer made in the Indenture or
in any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or
condition in respect of which such representation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer
and the Indenture Trustee by the Note Insurer, or if a Note Insurer
Default exists the Holders of at least 25% of the Outstanding Amount of
the Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating
that such notice is a notice of default hereunder; or
(iv) there occurs the filing of a decree or order for relief
by a court having jurisdiction in the premises in respect of the Issuer
or any substantial part of the Trust Estate in an involuntary case
under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Trust Estate,
or ordering the winding-up or liquidation of the Issuer's affairs, and
such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or
(v) there occurs the commencement by the Issuer of a voluntary
case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by the
Issuer to the entry of an order for relief in an involuntary case under
any such law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the assets of the Trust Estate, or the making by the Issuer of
any general assignment for the benefit of creditors, or the failure by
the Issuer generally to pay its debts as such debts become due, or the
taking of any action by the Issuer in furtherance of any of the
foregoing.
Event of Servicer Termination: With respect to the Servicing
Agreement, a Servicing Default as defined in Section 6.01 of the Servicing
Agreement.
Excess Subordination Amount: With respect to any Payment Date,
the excess, if any, of (a) the Subordination Amount that would apply on such
Payment Date after taking into account all distributions to be made on such
Payment Date (exclusive of any reductions thereto attributable to Subordination
Reduction Amounts on such Payment Date) over (b) the Required Subordination
Amount for such Payment Date.
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Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
Expense Adjusted Mortgage Rate: For any Mortgage Loan, the
rate equal to the then applicable Mortgage Rate thereon minus the sum of (i) the
Minimum Spread and (ii) the Servicing Fee Rate and (iii) the Indenture Trustee
Fee Rate.
Expenses: The meaning specified in Section 7.02 of the Trust
Agreement.
FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Final Scheduled Payment Date: The Payment Date occurring in
_________ 202_.
Fixed Rate Mortgage Loan: Any Mortgage Loan with a fixed rate
of interest.
FNMA: The Federal National Mortgage Association, or any
successor thereto.
Foreclosure Profit: With respect to a Liquidated Mortgage
Loan, the amount, if any, by which (i) the aggregate of its Net Liquidation
Proceeds exceeds (ii) the related Principal Balance (plus accrued and unpaid
interest thereon at the applicable Mortgage Rate from the date interest was last
paid through the date of receipt of the final Liquidation Proceeds) of such
Liquidated Mortgage Loan immediately prior to the final recovery of its
Liquidation Proceeds.
▇▇▇▇▇: Pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of such collateral or other agreement or
instrument and all other moneys payable thereunder, to give and receive notices
and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party is
or may be entitled to do or receive thereunder or with respect thereto.
Gross Margin: With respect to any Adjustable Rate Mortgage
Loan, the percentage set forth as the "Gross Margin" for such Mortgage Loan on
the Mortgage Loan Schedule, as adjusted from time to time in accordance with the
terms of the Servicing Agreement.
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Indemnified Party: The meaning specified in Section 7.02 of
the Trust Agreement.
Indenture: The indenture dated as of ______ 1, 20__, between
the Issuer, as debtor, and the Indenture Trustee, as Indenture Trustee.
Indenture Trustee: ____________________________________, a
national banking association, and its successors and assigns or any successor
indenture trustee appointed pursuant to the terms of the Indenture.
Indenture Trustee Fee: With respect to each Mortgage Loan and
any Payment Date the product of (i) the Indenture Trustee Fee Rate divided by 12
and (ii) the Principal Balance of such Mortgage Loans as of such date.
Indenture Trustee Fee Rate: _____% per annum.
Independent: When used with respect to any specified Person,
the Person (i) is in fact independent of the Issuer, any other obligor on the
Notes, the Seller, the Issuer, the Depositor and any Affiliate of any of the
foregoing Persons, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Seller, the Issuer, the Depositor or any Affiliate of any of the foregoing
Persons and (iii) is not connected with the Issuer, any such other obligor, the
Seller, the Issuer, the Depositor or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Independent Certificate: A certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is Independent
within the meaning thereof.
Index: With respect to any Adjustable Rate Mortgage Loan,
index for the adjustment of the Mortgage Rate set forth as such on the related
Mortgage Note.
Initial Note Principal Balance: With respect to the Notes,
$______________.
Initial Subservicer: _____________, a __________ corporation.
Insolvency Event: With respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or
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liquidation of such Person's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (b) the
commencement by such Person of a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or the consent by
such Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for such Person or for any substantial part of its property,
or the making by such Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay its debts as such
debts become due or the admission by such Person in writing (as to which the
Indenture Trustee shall have notice) of its inability to pay its debts
generally, or the adoption by the Board of Directors or managing member of such
Person of a resolution which authorizes action by such Person in furtherance of
any of the foregoing.
Insurance Agreement: The insurance and reimbursement agreement
dated as of _____ 1, 20__, among the Master Servicer, the Seller, the Depositor,
the Issuer, Indenture Trustee and the Note Insurer, including any amendments and
supplements thereto.
Insurance Proceeds: Proceeds paid by any insurer (other than
the Note Insurer) pursuant to any insurance policy covering a Mortgage Loan
which are required to be remitted to the Master Servicer, or amounts required to
be paid by the Master Servicer pursuant to the Servicing Agreement, net of any
component thereof (i) covering any expenses incurred by or on behalf of the
Master Servicer in connection with obtaining such proceeds, (ii) that is applied
to the restoration or repair of the related Mortgaged Property, (iii) released
to the Mortgagor in accordance with the Master Servicer's normal servicing
procedures or (iv) required to be paid to any holder of a mortgage senior to
such Mortgage Loan.
Insured Payment: Shall have the meaning set forth in the Note
Insurance Policy.
Interest Determination Date: With respect to any Interest
Period, the second London Business Day preceding the commencement of such
Interest Period.
Interest Payment Amount: With respect to any Payment Date, an
amount equal to interest accrued during the related Interest Period on the Note
Principal Balance thereof at the then-applicable Note Interest Rate, minus any
Prepayment Interest Shortfalls and Relief Act Shortfalls to the extent not
covered by the Master Servicer by Compensating Interest for such Payment Date.
Interest Period: With respect to any Payment Date other than
the first Payment Date, the period beginning on the preceding Payment Date and
ending on the day preceding such Payment Date, and in the case of the first
Payment Date, the period beginning on the Closing Date and ending on the day
preceding the first Payment Date.
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Interest Rate Adjustment Date: With respect to each Mortgage
Loan, the date or dates on which the Mortgage Rate is adjusted in accordance
with the related Mortgage Note.
Issuer: The Southern Pacific MBN Trust Series 20__-1, a
Delaware business trust, or its successor in interest.
Issuer Request: A written order or request signed in the name
of the Issuer by any one of its Authorized Officers and approved in writing by
the Note Insurer, so long as no Note Insurer Default exists and delivered to the
Indenture Trustee.
Libor Business Day: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the State of New York,
Delaware or California, or in the city of London, England are required or
authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority right or interest or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the UCC
(other than any such financing statement filed for informational purposes only)
or comparable law of any jurisdiction to evidence any of the foregoing;
PROVIDED, HOWEVER, that any assignment pursuant to Section 6.02 of the Servicing
Agreement shall not be deemed to constitute a Lien.
Lifetime Rate Cap: With respect to each Mortgage Loan with
respect to which the related Mortgage Note provides for a lifetime rate cap, the
maximum Mortgage Rate permitted over the life of such Mortgage Loan under the
terms of such Mortgage Note, as set forth on the Mortgage Loan Schedule and
initially as set forth on Exhibit A to the Servicing Agreement.
Liquidated Mortgage Loan: With respect to any Payment Date,
any Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified in the Servicing Agreement,
as of the end of the related Prepayment Period that substantially all
Liquidation Proceeds which it reasonably expects to recover with respect to the
disposition of the related REO Property have been recovered.
Liquidation Expenses: Out-of-pocket expenses (exclusive of
overhead) which are incurred by or on behalf of the Master Servicer in
connection with the liquidation of any Mortgage Loan and not recovered under any
insurance policy, such expenses including, without limitation, legal fees and
expenses, any unreimbursed amount expended (including, without limitation,
amounts advanced to correct defaults on any mortgage loan which is senior to
such Mortgage Loan and amounts advanced to keep current or pay off a mortgage
loan that is senior to such Mortgage Loan) respecting the related Mortgage Loan
and any related and unreimbursed expenditures for real estate
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property taxes or for property restoration, preservation or insurance against
casualty loss or damage.
Liquidation Proceeds: Proceeds (including Insurance Proceeds
but not including amounts drawn under the Note Insurance Policy) received in
connection with the liquidation of any Mortgage Loan or related REO Property,
whether through trustee's sale, foreclosure sale or otherwise.
Loan Year: With respect to any Mortgage Loan, the one year
period commencing on the day succeeding the origination of such Mortgage Loan
and ending on the anniversary date of such Mortgage Loan, and each annual period
thereafter.
London Business Day: Any day on which banks in the City of
London, England are open and conducting transactions in United States dollars.
Lost Note Affidavit: With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost or destroyed and has
not been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note).
Master Servicer: _______________________, a __________
corporation, and its successors and assigns.
Master Servicing Fee: With respect to each Mortgage Loan and
any Payment Date the product of (i) the Master Servicing Fee Rate divided by 12
and (ii) the Principal Balance of such Mortgage Loans as of such date.
Master Servicing Fee Rate: With respect to each Mortgage Loan,
____% per annum.
Maximum Note Interest Rate: With respect to any Payment Date,
the per annum rate equal to the fraction, expressed as a percentage, the
numerator of which is (i) an amount equal to (A) 1/12 of the aggregate Principal
Balance of the then outstanding Mortgage Loans times the weighted average of the
Expense Adjusted Maximum Mortgage Rates on the then outstanding Mortgage Loans
minus (B) the Administrative Fee for such Payment Date, and the denominator of
which is (ii) an amount equal to (A) the aggregate Note Principal Balance of the
Notes multiplied by (B) the actual number of days elapsed in the related
Interest Period divided by 360.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the maximum Mortgage Rate.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the minimum Mortgage Rate.
Minimum Spread: ____% per annum.
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Monthly Payment: With respect to any Mortgage Loan (including
any REO Property) and any Due Date, the payment of principal and interest due
thereon in accordance with the amortization schedule at the time applicable
thereto (after adjustment, if any, for partial Prepayments and for Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than a Deficient
Valuation, or similar proceeding or any moratorium or similar waiver or grace
period).
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in
interest.
Mortgage: The mortgage, deed of trust or other instrument
creating a first or second lien on an estate in fee simple interest in real
property securing a Mortgage Loan.
Mortgage File: The file containing the Related Documents
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to the Mortgage Loan Purchase
Agreement or the Servicing Agreement.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated as of the Cut-Off Date, between the Seller, as seller, and the
Purchaser, as purchaser, with respect to the Mortgage Loans, dated as of ______
1, 20__.
Mortgage Loan Schedule: With respect to any date, the schedule
of Mortgage Loans held by the Issuer on such date. The initial schedule of
Mortgage Loans as of the Cut-Off Date is the schedule set forth in Exhibit A of
the Servicing Agreement, which schedule sets forth as to each Mortgage Loan
(i) the loan number and name of the Mortgagor;
(ii) the street address, city, state and zip code of the
Mortgaged Property;
(iii) the Mortgage Rate;
(iv) the Maximum Rate;
(v) the maturity date;
(vi) the original principal balance;
(vii) the first payment date;
(viii) the type of Mortgaged Property;
(ix) the Monthly Payment in effect as of the Cut-Off Date;
(x) the Cut-off Date Principal Balance;
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(xi) the occupancy status;
(xii) the purpose of the Mortgage Loan;
(xiii) the Appraised Value of the Mortgaged Property;
(xiv) the original term to maturity;
(xv) the paid-through date of the Mortgage Loan;
(xvi) the Loan-to-Value Ratio; and
(xvii) whether or not the Mortgage Loan was underwritten
pursuant to a limited documentation program.
The Mortgage Loan Schedule shall also set forth the total of
the amounts described under (ix) above for all of the Mortgage Loans.
Mortgage Loans: At any time, collectively, all Mortgage Loans
that have been sold to the Depositor under the Mortgage Loan Purchase Agreement
or substituted for pursuant to Section 2.1 and 3.1 of the Mortgage Loan Purchase
Agreement and transferred and conveyed to the Issuer, in each case together with
the Related Documents, and that remain subject to the terms thereof.
Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor under a Mortgage Loan.
Mortgage Rate: With respect to any Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan.
Mortgaged Property: The underlying property, including real
property and improvements thereon, securing a Mortgage Loan.
Mortgagor: The obligor or obligors under a Mortgage Note.
Net Liquidation Proceeds: With respect to any Liquidated
Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses.
Net Monthly Excess Cashflow: For any Payment Date, the amount
of Available Funds and any Insured Payment remaining after distributions
pursuant to clauses (i) through (iii) of Section 3.05 of the Indenture (minus
any Insured Payment and any Subordination Reduction Amount).
Net Mortgage Rate: With respect to any Mortgage Loan and any
day, the related Mortgage Rate less the sum of the related Servicing Fee Rate,
the Administrative Fee Rate and the Indenture Trustee Fee Rate.
Nonrecoverable Advance: Any advance (i) which was previously
made or is proposed to be made by the Master Servicer; and (ii) which, in the
good faith judgment
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of the Master Servicer, will not or, in the case of a proposed advance, would
not, be ultimately recoverable by the Master Servicer from Liquidation Proceeds,
Insurance Proceeds or future payments on any Mortgage Loan.
Note Insurance Policy: The bond guaranty insurance policy
number 21885, issued by the Note Insurer to the Indenture Trustee for the
benefit of the Noteholders.
Note Insurer: MBIA Insurance Corporation, a New York insurance
company, any successor thereto or any replacement bond insurer substituted
pursuant to Section 3.29 of the Indenture.
Note Insurer Default: The existence and continuance of any of
the following: (a) a failure by the Note Insurer to make a payment required
under the Note Insurance Policy in accordance with its terms; or (b)(i) the Note
Insurer (A) files any petition or commences any case or proceeding under any
provision or chapter of the Bankruptcy Code or any other similar federal or
state law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (B) makes a general assignment for the benefit of its creditors,
or (C) has an order for relief entered against it under the Bankruptcy Code or
any other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization which is final and nonappealable;
or (ii) a court of competent jurisdiction, the New York Department of Insurance
or other competent regulatory authority enters a final and nonappealable order,
judgment or decree (A) appointing a custodian, trustee, agent or receiver for
the Note Insurer or for all or any material portion of its property or (B)
authorizing the taking of possession by a custodian, trustee, agent or receiver
of the Note Insurer (or the taking of possession of all or any material portion
of the property of the Note Insurer).
Note Interest Rate: With respect to each Payment Date after
the first Payment Date, a floating rate equal to the lesser of (i) with respect
to each Payment Date up to and including the Payment Date in _________ 200_,
One-Month LIBOR plus ____%, and with respect to each Payment Date thereafter,
One-Month LIBOR plus ____% and (ii) the Available Funds Interest Rate with
respect to such Payment Date. The Note Interest Rate for the first Payment Date
will equal ____% per annum.
Note Owner: The Beneficial Owner of a Note.
Note Percentage: With respect to any Payment Date and any
Note, the ratio expressed as a percentage of the Note Principal Balance of such
Note to the aggregate Note Principal Balance of all Notes immediately prior to
such Payment Date.
Note Principal Balance: With respect to any Note, the initial
Note Principal Balance thereof minus all amounts distributed in respect of
principal with respect to such Note.
Note Register: The register maintained by the Note Registrar
in which the Note Registrar shall provide for the registration of Notes and of
transfers and exchanges of Notes.
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Note Registrar: The Indenture Trustee, in its capacity as Note
Registrar.
Noteholder: The Person in whose name a Note is registered in
the Note Register, except that, any Note registered in the name of the
Depositor, the Issuer or the Indenture Trustee or any Affiliate of any of them
shall be deemed not to be outstanding and the registered holder will not be
considered a Noteholder or holder for purposes of giving any request, demand,
authorization, direction, notice, consent or waiver under the Indenture or the
Trust Agreement provided that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that the Indenture Trustee or
the Owner Trustee knows to be so owned shall be so disregarded. Owners of Notes
that have been pledged in good faith may be regarded as Holders if the pledgee
establishes to the satisfaction of the Indenture Trustee or the Owner Trustee
the pledgee's right so to act with respect to such Notes and that the pledgee is
not the Issuer, any other obligor upon the Notes or any Affiliate of any of the
foregoing Persons. Any bonds on which payments are made under the Note Insurance
Policy shall be deemed Outstanding until the Note Insurer has been reimbursed
with respect thereto and the Note Insurer shall be deemed the Noteholder thereof
to the extent of such unreimbursed payment.
Notes: The Notes designated as the "Notes" in the Indenture.
Officer's Certificate: With respect to the Master Servicer, a
certificate signed by the President, Managing Director, a Director, a Vice
President or an Assistant Vice President, of the Master Servicer and delivered
to the Indenture Trustee. With respect to the Issuer, a certificate signed by
any Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, and delivered to the Indenture Trustee. Unless otherwise specified,
any reference in the Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
One-Month LIBOR: With respect to any Interest Period, the rate
determined by the Indenture Trustee on the related Interest Determination Date
on the basis of the offered rates of the Reference Banks for one-month United
States dollar deposits, as such rates appear on the Reuters Screen LIBO Page, as
of 11:00 a.m. (London time) on such Interest Determination Date. On each
Interest Determination Date, One-Month LIBOR for the related Interest Period
will be established by the Indenture Trustee as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations, One-Month LIBOR for
the related Interest Period shall be the arithmetic mean of such
offered quotations (rounded upwards if necessary to the nearest whole
multiple of 1/16%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for
the related Interest Period shall be the higher of (i) One-Month LIBOR
as determined on the previous Interest Determination Date and (ii) the
Reserve Interest Rate.
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Opinion of Counsel: A written opinion of counsel acceptable to
Note Insurer who may be in-house counsel for the Master Servicer if acceptable
to the Indenture Trustee, the Note Insurer and the Rating Agencies or counsel
for the Depositor, as the case may be.
Original Specified Subordination Amount: An amount equal to
____% of the aggregate Principal Balance of the Mortgage Loans as of the Cut-Off
Date.
Original Value: Except in the case of a refinance Mortgage
Loan, the lesser of the Appraised Value or sales price of Mortgaged Property at
the time a Mortgage Loan is closed, and for a refinance Mortgage Loan, the
Original Value is the value of such property set forth in an appraisal
acceptable to the Master Servicer.
Outstanding: With respect to the Notes, as of the date of
determination, all Notes theretofore executed, authenticated and delivered under
this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes
have been executed, authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a holder in due course;
all Notes that have been paid with funds provided under the Note Insurance
Policy shall be deemed to be Outstanding until the Note Insurer has been
reimbursed with respect thereto.
Owner Trust: The Southern Pacific MBN Trust Series 20__-1 to
be created pursuant to the Trust Agreement.
Owner Trust Estate: The corpus of the Issuer created by the
Trust Agreement which consists of items in Section 2.01 of the Trust Agreement.
Owner Trustee: ________________________ and its successors and
assigns or any successor owner trustee appointed pursuant to the terms of the
Trust Agreement.
Owner Trustee Fee:
Owner Trustee Fee Rate: ______% per annum.
Paying Agent: Any paying agent or co-paying agent appointed
pursuant to Section 3.03 of the Indenture, which initially shall be the
Indenture Trustee.
Payment Account: The account established by the Indenture
Trustee pursuant to Section 8.02 of the Indenture and Section 4.03 of the
Servicing Agreement. The Payment Account shall be an Eligible Account.
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Payment Date: The 25th day of each month, or if such day is
not a Business Day, then the next Business Day.
Percentage Interest: With respect to any Note, the percentage
obtained by dividing the Note Principal Balance of such Note by the aggregate of
the Note Principal Balances of all Notes. With respect to any Certificate, the
percentage on the face thereof.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pool Balance: With respect to any date, the aggregate of the
Principal Balances of all Mortgage Loans as of such date.
Preference Amount: Any amount previously distributed to an
Owner on the Notes that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
Premium Amount: The amount of premium due to the Note Insurer
in accordance with the terms of the Insurance Agreement.
Prepayment Interest Shortfall: As to any Payment Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in full during the related Prepayment
Period, an amount equal to the excess of interest accrued during the related
Prepayment Period at the Net Mortgage Rate on the Principal Balance of such
Mortgage Loan over the amount of interest (adjusted to the Net Mortgage Rate)
paid by the Mortgagor for such Prepayment Period to the date of such Principal
Prepayment in full or (b) a partial Prepayment during the prior calendar month,
an amount equal to interest accrued during the related Prepayment Period at the
Net Mortgage Rate on the amount of such partial Prepayment.
Prepayment Period: As to any Payment Date, the calendar month
preceding the month of distribution.
Primary Insurance Policy: Each primary policy of mortgage
guaranty insurance issued by a Qualified Insurer or any replacement policy
therefor.
Principal Balance: With respect to any Mortgage Loan or
related REO Property, at any given time, (i) the Cut-off Date Principal Balance
of the Mortgage Loan, minus (ii) the sum of (a) the principal portion of the
Monthly Payments due with respect to such Mortgage Loan or REO Property during
each Due Period ending prior to the most recent Payment Date which were received
or with respect to which an Advance was made, and (b) all Principal Prepayments
with respect to such Mortgage Loan or REO Property, and all Insurance Proceeds,
Liquidation Proceeds and REO Proceeds, to the extent applied by the Master
Servicer as recoveries of principal in accordance with the
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Servicing Agreement with respect to such Mortgage Loan or REO Property, and (c)
any Realized Loss with respect thereto for any previous Payment Date.
Principal Payment Amount: With respect to any Payment Date (a)
other than the Final Scheduled Payment Date, and the first Payment Date
following any acceleration of the Notes following an Event of Default, the
lesser of (a) the sum of the Available Funds remaining after distributions
pursuant to clause (i) of Section 3.05 of the Indenture and any portion of any
Insured Payment for such Payment Date representing a Subordination Deficit and
(b) the sum of:
(1) the principal portion of all Monthly Payments
received during the related Due Period or advanced on
each Mortgage Loan;
(2) the Principal Balance of any Mortgage Loan
repurchased during the related Prepayment Period (or
deemed to have been so repurchased) pursuant to the
Mortgage Loan Purchase Agreement or Section 3.18 of
the Servicing Agreement and the amount of any
Substitution Adjustment Amounts during the related
Prepayment Period;
(3) the principal portion of all other unscheduled
collections (including, without limitation, Principal
Prepayments in full, partial Prepayments, Insurance
Proceeds, Liquidation Proceeds and REO Proceeds)
received during the related Prepayment Period to the
extent applied by the Master Servicer as payments or
recoveries of principal of the related Mortgage Loan;
(4) any Insured Payment made with respect to any
Subordination Deficit; and
MINUS
(5) the amount of any Subordination Reduction Amount for
such Payment Date;
and (b) with respect to the Final Scheduled Payment Date, and the first Payment
Date following any acceleration of the Notes following an Event of Default, the
amount necessary to reduce the Note Principal Balance to zero.
Principal Prepayment: Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment.
Proceeding: Any suit in equity, action at law or other
judicial or administrative proceeding.
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Purchase Price: The meaning specified in Section 2.2(a) of the
Mortgage Loan Purchase Agreement.
Purchaser: Southern Pacific Secured Assets Corp., a California
corporation, and its successors and assigns.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as
an insurer by the Master Servicer and as a FNMA-approved mortgage insurer.
Rating Agency: Any nationally recognized statistical rating
organization, or its successor, that rated the Notes at the request of the
Depositor at the time of the initial issuance of the Notes. Initially, ▇▇▇▇▇'▇
or Standard & Poor's. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, designated by the Note Insurer
so long as no Note Insurer Default exists, notice of which designation shall be
given to the Indenture Trustee. References herein to the highest short term
unsecured rating category of a Rating Agency shall mean A-1 or better in the
case of Standard & Poor's and P-1 or better in the case of ▇▇▇▇▇'▇ and in the
case of any other Rating Agency shall mean such equivalent ratings. References
herein to the highest long-term rating category of a Rating Agency shall mean
"AAA" in the case of Standard & Poor's and "Aaa" in the case of ▇▇▇▇▇'▇ and in
the case of any other Rating Agency, such equivalent rating.
Realized Loss: With respect to each Mortgage Loan (or REO
Property) as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Principal Balance of the Mortgage
Loan (or REO Property) as of the date of Cash Liquidation or REO Disposition,
plus (ii) interest (and REO Imputed Interest, if any) at the Net Mortgage Rate
from the Due Date as to which interest was last paid or advanced to Noteholders
up to the last day of the month in which the Cash Liquidation (or REO
Disposition) occurred on the Principal Balance of such Mortgage Loan (or REO
Property) outstanding during each Due Period that such interest was not paid or
advanced, minus (iii) the proceeds, if any, received during the month in which
such Cash Liquidation (or REO Disposition) occurred, to the extent applied as
recoveries of interest at the Net Mortgage Rate and to principal of the Mortgage
Loan, net of the portion thereof reimbursable to the Master Servicer or any
Subservicer with respect to related Advances or expenses as to which the Master
Servicer or Subservicer is entitled to reimbursement thereunder but which have
not been previously reimbursed. With respect to each Mortgage Loan which has
become the subject of a Deficient Valuation, the difference between the
principal balance of the Mortgage Loan outstanding immediately prior to such
Deficient Valuation and the principal balance of the Mortgage Loan as reduced by
the Deficient Valuation. With respect to each Mortgage Loan which has
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become the object of a Debt Service Reduction, the amount of such Debt Service
Reduction.
Record Date: With respect to the Notes and any Payment Date,
the last day of the calendar month preceding such Payment Date.
Reference Banks: Bankers Trust Company, ▇▇▇▇▇▇▇'▇ Bank PLC,
The Bank of Tokyo and National Westminster Bank PLC and their successors in
interest; PROVIDED that if any of the foregoing banks are not suitable to serve
as a Reference Bank, then any leading banks selected by the Indenture Trustee
which are engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London, (ii)
not controlling, under the control of or under common control with the Company
or any Affiliate thereof, (iii) whose quotations appear on the Reuters Screen
LIBO Page on the relevant Interest Determination Date and (iv) which have been
designated as such by the Indenture Trustee.
Registered Holder: The Person in whose name a Note is
registered in the Note Register on the applicable Record Date.
Related Documents: With respect to each Mortgage Loan, the
documents specified in Section 2.1(b) of the Mortgage Loan Purchase Agreement
and any documents required to be added to such documents pursuant to the
Mortgage Loan Purchase Agreement, the Trust Agreement, Indenture or the
Servicing Agreement.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
Relief Act Shortfall: For any Payment Date, as to any Payment
Date and any Mortgage Loan (other than a Mortgage Loan relating to an REO
Property) any shortfalls relating to the Relief Act or similar legislation or
regulations.
REO Acquisition: The acquisition by the Master Servicer on
behalf of the Indenture Trustee for the benefit of the Noteholders of any REO
Property pursuant to Section 3.13 of the Servicing Agreement.
REO Disposition: As to any REO Property, a determination by
the Master Servicer that it has received substantially all Insurance Proceeds,
Liquidation Proceeds, REO Proceeds and other payments and recoveries (including
proceeds of a final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO Property.
REO Imputed Interest: As to any REO Property, for any period,
an amount equivalent to interest (at the Net Mortgage Rate that would have been
applicable to the related Mortgage Loan had it been outstanding) on the unpaid
principal balance of the Mortgage Loan as of the date of acquisition thereof for
such period.
REO Proceeds: Proceeds, net of expenses, received in respect
of any REO Property (including, without limitation, proceeds from the rental of
the related Mortgaged
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Property) which proceeds are required to be deposited into the Collection
Account only upon the related REO Disposition.
REO Property: A Mortgaged Property that is acquired by the
Issuer in foreclosure or by deed in lieu of foreclosure.
Repurchase Event: With respect to any Mortgage Loan, either
(i) a discovery that, as of the Closing Date the related Mortgage was not a
valid lien on the related Mortgaged Property subject only to (A) the lien of any
prior mortgage indicated on the Mortgage Loan Schedule, (B) the lien of real
property taxes and assessments not yet due and payable, (C) covenants,
conditions, and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage and such other
permissible title exceptions as are permitted and (D) other matters to which
like properties are commonly subject which do not materially adversely affect
the value, use, enjoyment or marketability of the related Mortgaged Property or
(ii) with respect to any Mortgage Loan as to which the Seller delivers an
affidavit certifying that the original Mortgage Note has been lost or destroyed,
a subsequent default on such Mortgage Loan if the enforcement thereof or of the
related Mortgage is materially and adversely affected by the absence of such
original Mortgage Note.
Repurchase Price: With respect to any Mortgage Loan required
to be repurchased on any date pursuant to the Mortgage Loan Purchase Agreement
or purchased by the Master Servicer pursuant to the Servicing Agreement, an
amount equal to the sum, without duplication, of (i) 100% of the Principal
Balance thereof (without reduction for any amounts charged off) and (ii) unpaid
accrued interest at the Mortgage Rate on the outstanding principal balance
thereof from the Due Date to which interest was last paid by the Mortgagor to
the first day of the month following the month of purchase plus (iii) the amount
of Advances and any unreimbursed Servicing Advances or unreimbursed Advances
made with respect to such Mortgage Loan plus (iv) any other amounts owed to the
Master Servicer or the Subservicer pursuant to Section 3.07 of the Servicing
Agreement not included in clause (iii) of this definition.
Required Subordination Amount: With respect to any Payment
Date occurring from the initial Payment Date and ending on the later of (i) the
date on which the aggregate Principal Balance of the Mortgage Loans is 50% of
the initial aggregate Principal Balance of the Mortgage Loans and (ii) the 30th
Payment Date, the greater of:
(a) the Original Specified Subordination Amount; and
(b) two times the excess of (1) 50% of the aggregate Principal
Balance of the Mortgage Loans which are 91 or more days delinquent (including
Mortgage Loans in foreclosure and REO Properties) as of such date over (2) two
times the current Net Monthly Excess Cash Flow for such Payment Date; and
with respect to any Payment Date thereafter, the greatest of:
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(a) the lesser of (1) the Original Specified Subordination
Amount and (2) two times ____% times the aggregate Note Principal Balance as of
such Payment Date;
(b) two times the excess of (A) 50% of the aggregate Principal
Balance of the Mortgage Loans which are 91 or more days delinquent (including
Mortgage Loans in foreclosure and REO Properties) as of such date over (B) two
times the current Net Monthly Excess Cash Flow for such Payment Date;
(c) 0.5% of the Cut-Off Date Principal Balance of the Mortgage
Loans; and
(d) an amount equal to the outstanding balance of the four
largest Mortgage Loans as of the Cut-Off Date;
PROVIDED, HOWEVER, that if (x) a Servicer Default has occurred and is continuing
as of such Payment Date, and such Servicer Default has not been waived by the
Note Insurer or (y) a claim has been made on the Note Insurance Policy by the
Indenture Trustee, the Required Subordination Amount shall not decrease on any
Payment Date.
Reserve Interest Rate: With respect to any Interest
Determination Date, the rate per annum that the Indenture Trustee determines to
be either (i) the arithmetic mean (rounded upwards if necessary to the nearest
whole multiple of 1/16%) of the three-month United States dollar lending rates
which New York City banks selected by the Indenture Trustee are quoting on the
relevant Interest Determination Date to the principal London offices of leading
banks in the London interbank market or (ii) in the event that the Indenture
Trustee can determine no such arithmetic mean, the lowest three-month United
States dollar lending rate which New York City banks selected by the Indenture
Trustee are quoting on such Interest Determination Date to leading European
banks.
Responsible Officer: With respect to the Indenture Trustee,
any officer of the Indenture Trustee with direct responsibility for the
administration of the Trust Agreement and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
Security: Any of the Certificates or Notes.
Securityholder or Holder: Any Noteholder or a
Certificateholder.
Security Instrument: A written instrument creating a valid
first lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.
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Seller: _______________________, a __________ corporation, and
its successors and assigns.
Servicing Account: The separate trust account created and
maintained by the Master Servicer or each Subservicer with respect to the
Mortgage Loans or REO Property, which shall be an Eligible Account, for
collection of taxes, assessments, insurance premiums and comparable items as
described in Section 3.08 of the Servicing Agreement.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in connection with a default,
delinquency or other unanticipated event in the performance by the Master
Servicer of its servicing obligations, including, without duplication, but not
limited to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of any REO Property and (iv)
compliance with the obligations under Sections 3.10, 3.11, 3.13 of the Servicing
Agreement.
Servicing Agreement: The Servicing Agreement dated as of
______ 1, 20__, between the Master Servicer and the Issuer.
Servicing Certificate: A certificate completed and executed by
a Servicing Officer on behalf of the Master Servicer in accordance with Section
4.01 of the Servicing Agreement.
Servicing Default: The meaning assigned in Section 6.01 of the
Servicing Agreement.
Servicing Fee: With respect to any Mortgage Loan, the sum of
the related Master Servicing Fee and the related Subservicing Fee.
Servicing Fee Rate: With respect to any Mortgage Loan, the sum
of the related Master Servicing Fee Rate and the Subservicing Fee Rate.
Servicing Officer: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and specimen signature appear on a list of servicing officers
furnished to the Indenture Trustee (with a copy to the Note Insurer) by the
Master Servicer, as such list may be amended from time to time.
Single Note: A Note in the amount of $1,000.
Standard & Poor's: Standard & Poor's Ratings Service, or its
successor in interest.
Subordination Amount: As of any Payment Date, the excess, if
any, of (x) the sum of the aggregate Principal Balances of the Mortgage Loans as
of the close of business on the last day of the related Due Period as of such
Payment Date over (y) the
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Note Principal Balance of the Notes as of such Payment Date (and following the
making of all distributions on such Payment Date)
Subordination Deficit: With respect to any Payment Date, the
amount, if any, by which (x) the aggregate Note Principal Balance of the Notes
as of such Payment Date, and following the making of all distributions to be
made on such Payment Date (except for any payment to be made as to principal
from proceeds of the Note Insurance Policy), exceeds (y) the aggregate Principal
Balances of the Mortgage Loans as of the close of business on the preceding Due
Date on such Payment Date.
Subordination Increase Amount: With respect to any Payment
Date, the amount of any Net Monthly Excess Cashflow (including any Subordination
Reduction Amount) available in the Payment Account to increase the Subordination
Amount up to the Required Subordination Amount.
Subordination Reduction Amount: With respect to any Payment
Date, an amount equal to the lesser of (a) the Excess Subordination Amount and
(b) the principal collections received by the Master Servicer with respect to
the prior Due Period.
Subservicer: Any Person with whom the Master Servicer has
entered into a Subservicing Agreement as a Subservicer by the Master Servicer
and acceptable to the Note Insurer and the Indenture Trustee, including the
Initial Subservicers.
Subservicing Account: An Eligible Account established or
maintained by a Sub-servicer as provided for in Section 3.06(e) of the Servicing
Agreement.
Subservicing Agreement: The written contract between the
Master Servicer and any Subservicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02 of the Servicing Agreement.
Subservicing Fee: With respect to each Mortgage Loan and any
date of determination, the product of (i) the Subservicing Fee Rate divided by
12 and (ii) the Principal Balance of such Mortgage Loans as of such date.
Subservicing Fee Rate: For any date of determination, ____%
per annum.
Substitution Adjustment Amount: With respect to any Eligible
Substitute Mortgage Loan, the amount as defined in Section 2.03 of the Servicing
Agreement.
Telerate Screen Page 3750: The display designated as page 3750
on the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks). If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered, such
other service for displaying One-Month LIBOR or comparable rates as may be
selected by the Issuer after consultation with the Indenture Trustee), the rate
will be the Reference Bank Rate.
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Treasury Regulations: Regulations, including proposed or
temporary Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Trust Agreement: The Trust Agreement dated as of ______ 1,
20__ between the Owner Trustee and the Depositor.
Trust Estate: The meaning specified in the Granting Clause of
the Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939,
as amended from time to time, as in effect on any relevant date.
UCC: The Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
Weighted Average Net Mortgage Rate: With respect to the
Mortgage Loans in the aggregate, and any Due Date, the average of the Net
Mortgage Rate for each Mortgage Loan as of the last day of the related Due
Period weighted on the basis of the related Principal Balances outstanding as of
the last day of the related Due Period for each Mortgage Loan as determined by
the Master Servicer in accordance with the Master Servicer's normal servicing
procedures.