EXHIBIT 4.1
INDENTURE
between
[PREFERRED CREDIT OWNER TRUST 199_-_,]
as Issuer
and
[BANKERS TRUST COMPANY,]
as Indenture Trustee
Dated as of [ ]
[PREFERRED CREDIT OWNER TRUST 199_-_]
Asset Backed Securities, Series 199_-_
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE.................2
SECTION 1.1. Definitions...........................................2
SECTION 1.2. Incorporation by Reference of Trust Indenture Act....12
SECTION 1.3. Rules of Construction................................13
ARTICLE II. THE NOTES.................................................13
SECTION 2.1. Form................................................13
SECTION 2.2. Execution, Authentication, Delivery and Dating......14
SECTION 2.3. Registration; Registration of Transfer and
Exchange.........................................15
SECTION 2.4. Mutilated, Destroyed, Lost or Stolen Notes..........16
SECTION 2.5. Persons Deemed Owner................................17
SECTION 2.6. Payment of Principal and Interest; Defaulted
Interest.........................................17
SECTION 2.7. Cancellation........................................18
SECTION 2.8. Authentication of Notes.............................19
SECTION 2.9. Release of Collateral...............................21
SECTION 2.10. Book-Entry Notes.....................................22
SECTION 2.11. Notices to Clearing Agency...........................23
SECTION 2.12. Definitive Notes.....................................23
SECTION 2.13. Tax Treatment.......................................24
ARTICLE III COVENANTS................................................24
SECTION 3.1. Payment of Principal and Interest...................24
SECTION 3.2. Maintenance of Office or Agency.....................25
SECTION 3.3. Money for Payments To Be Held in Trust..............25
SECTION 3.4. Existence...........................................27
SECTION 3.5. Protection of Indenture Trust Estate................27
SECTION 3.6. Annual Opinions as to Indenture Trust Estate........28
SECTION 3.7. Performance of Obligations; Servicing of Home
Loans............................................28
SECTION 3.8 Negative Covenants..................................31
SECTION 3.9. Annual Statement as to Compliance...................32
SECTION 3.10. Covenants of the Issuer..............................32
SECTION 3.11. Servicer's Obligations..............................33
SECTION 3.12. Restricted Payments.................................33
SECTION 3.13. Treatment of Notes as Debt for Tax Purposes.........33
SECTION 3.14. Notice of Events of Default.........................33
SECTION 3.15. Further Instruments and Acts........................33
ARTICLE IV SATISFACTION AND DISCHARGE.................................33
SECTION 4.1. Satisfaction and Discharge of Indenture............34
SECTION 4.2. Application of Trust Money.........................35
SECTION 4.3. Repayment of Moneys Held by Paying Agent...........35
ARTICLE V REMEDIES....................................................36
SECTION 5.1. Events of Default..................................36
SECTION 5.2. Acceleration of Maturity; Rescission and
Annulment.........................................37
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.................38
SECTION 5.4. Remedies; Priorities...............................41
SECTION 5.5. Optional Preservation of the Indenture Trust
Estate...........................................43
SECTION 5.6. Limitation of Suits................................43
SECTION 5.7. Unconditional Rights of Noteholders To
Receive Principal and Interest...................44
SECTION 5.8. Restoration of Rights and Remedies.................45
SECTION 5.9. Rights and Remedies Cumulative.....................45
SECTION 5.10. Delay or Omission Not a Waiver......................45
SECTION 5.11. Control by Noteholders..............................45
SECTION 5.12. Waiver of Past Defaults.............................46
SECTION 5.13. Undertaking for Costs...............................46
SECTION 5.14. Waiver of Stay or Extension Laws....................47
SECTION 5.15. Action on Notes.....................................47
SECTION 5.16. Performance and Enforcement of Certain
Obligations.......................................47
ARTICLE VI. THE INDENTURE TRUSTEE.....................................48
SECTION 6.1. Duties of Indenture Trustee.........................48
SECTION 6.2. Rights of Indenture Trustee.........................50
SECTION 6.3. Individual Rights of Indenture Trustee..............50
SECTION 6.4. Indenture Trustee's Disclaimer......................51
SECTION 6.5. Notice of Defaults..................................51
SECTION 6.6. Reports by Indenture Trustee to Holders.............51
SECTION 6.7. Compensation and Indemnity..........................51
SECTION 6.8. Replacement of Indenture Trustee....................52
SECTION 6.9. Successor Indenture Trustee by Merger...............53
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee..................................53
SECTION 6.11. Preferential Collection of Claims Against Issuer.....55
ARTICLE VII. NOTEHOLDERS' LISTS AND REPORTS...........................55
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders..........................55
SECTION 7.2. Preservation of Information; Communications
to Noteholders....................................55
SECTION 7.3. Reports by Issuer...................................56
SECTION 7.4. Reports by Indenture Trustee........................57
ARTICLE VIII. ACCOUNTS, DISBURSEMENTS AND RELEASES....................57
SECTION 8.1. Collection of Money.................................57
SECTION 8.2. Trust Accounts; Distributions.......................58
SECTION 8.3. General Provisions Regarding Accounts...............61
SECTION 8.4. Servicer's Monthly Statements.......................61
SECTION 8.5. Release of Indenture Trust Estate...................62
SECTION 8.6. Opinion of Counsel..................................62
ARTICLE IX............................................................63
SECTION 9.1. Supplemental Indentures Without Consent of
Noteholders.......................................63
SECTION 9.2. Supplemental Indentures with Consent of
Noteholders.......................................64
SECTION 9.3. Execution of Supplemental Indentures................66
SECTION 9.4. Effect of Supplemental Indenture....................66
SECTION 9.5. Conformity with Trust Indenture Act.................66
SECTION 9.6. Reference in Notes to Supplemental Indentures.......66
SECTION 9.7. Amendments to Trust Agreement.......................66
ARTICLE X. REDEMPTION OF NOTES.......................................67
SECTION 10.1. Redemption..........................................67
SECTION 10.2. Form of Redemption Notice...........................68
SECTION 10.3. Notes Payable on Redemption Date; Provision
for Payment of Indenture Trustee and Securities
Insurer...........................................69
ARTICLE XI. MISCELLANEOUS...........................................69
SECTION 11.1. Compliance Certificates and Opinions, etc...........69
SECTION 11.2. Form of Documents Delivered to Indenture
Trustee...........................................71
SECTION 11.3. Acts of Noteholders.................................72
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer,
Rating Agencies and Securities Insurer............72
SECTION 11.5. Notices to Noteholders; Waiver......................73
SECTION 11.6. [RESERVED].........................................74
SECTION 11.7. Conflict with Trust Indenture Act...................74
SECTION 11.8. Effect of Headings and Table of Contents............74
SECTION 11.9. Successors and Assigns..............................74
SECTION 11.10. Separability........................................74
SECTION 11.11. Benefits of Indenture..............................74
SECTION 11.12. Legal Holidays......................................74
SECTION 11.13. GOVERNING LAW.......................................75
SECTION 11.14. Counterparts........................................75
SECTION 11.15. Recording of Indenture..............................75
SECTION 11.16. Trust Obligation....................................75
SECTION 11.17. No Petition.........................................75
SECTION 11.18. Inspection..........................................76
SECTION 11.19. Grant of Noteholder Rights to Securities
Insurer..........................................76
SECTION 11.20. Third Party Beneficiary.............................76
SECTION 11.21. Suspension and Termination of Securities
Insurer's Rights...................................................76
TABLE OF CONTENTS
PAGE
EXHIBITS
SCHEDULE A - Schedule of Home Loans
EXHIBIT A-1 - Form of Class A-1 Note
EXHIBIT A-2 - Form of Class A-2 Note
EXHIBIT A-3 - Form of Class A-3 Note
EXHIBIT A-4 - Form of Class A-4 Note
EXHIBIT A-5 - Form of Class A-5 Note
EXHIBIT A-6 - Form of Class A-6 Note
EXHIBIT A-7 - Form of Class A-7 Note
EXHIBIT A-8 - Form of Class A-8 Note
INDENTURE dated as of ________________ between PREFERRED CREDIT OWNER TRUST
199_-_, a Delaware business trust (the "Issuer"), and [BANKERS TRUST COMPANY,] a
banking corporation, as trustee and not in its individual capacity (the
"Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the holders of the Issuer's [Class A-1 ___% Asset
Backed Notes (the "Class A-1 Notes"), Class A-2 ___% Asset Backed Notes (the
"Class A-2 Notes"), Class A-3 ____% Asset Backed Notes (the "Class A-3 Notes"),
Class A-4 ____% Asset Backed Notes (the "Class A-4 Notes"), Class A-5 7.25%
Asset Backed Notes (the "Class A-5 Notes"), Class A-6 7.60% Asset Backed Notes
(the "Class A-6 Notes"), Class A-7 ____% Asset Backed Notes (the "Class A-7
Notes") and Class A-8 ____% Asset Backed Notes (the "Class A-8 Notes") and,
together with the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class ▇- ▇ Notes, the Class A-5 Notes, the Class A-6, the Class A-7 Notes and
the Class A-8 Notes,] the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
Indenture Trustee for the benefit of the holders of the Notes, all of the
Issuer's right, title and interest in and to: (i) the Trust Estate (as defined
in the Sale and Servicing Agreement); (ii) all right, title and interest of the
Issuer in the Sale and Servicing Agreement (including the Issuer's right to
cause the Transferor and/or the Seller to repurchase Home Loans from the Issuer
under certain circumstances described therein); and (iii) all present and future
claims, demands, causes of action and choses in action in respect of any or all
of the foregoing and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion thereof, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the 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 Indenture Trustee on behalf of the holders of the
Notes, acknowledges such Grant, accepts the trusts hereunder and agrees to
perform its duties required in this Indenture to the best of its ability to the
end that the interests of the holders of the Notes may be adequately and
effectively protected. The Indenture Trustee agrees and acknowledges that the
Indenture Trustee's Home Loan Files will be held by the Custodian for the
benefit of the Indenture Trustee in Irvine, California. The Indenture Trustee
further agrees and acknowledges that each other item of Collateral that is
physically delivered to the Indenture Trustee will be held by the Indenture
Trustee in [Irvine, California.]
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. (a) Definitions. Except as otherwise specified herein or as
the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.3(a).
"Administration Agreement" means the Administration Agreement dated as of
_________________, among the Administrator, the Issuer and the Indenture
Trustee.
"Administrator" means [Bankers Trust Company,] a national banking
association, or any successor Administrator under the Administration Agreement.
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers delivered
by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter) and, so long as
the Administration Agreement is in effect, any Vice President or more senior
officer of the Administrator who is authorized to act for the Administrator in
matters relating to the Issuer and to be acted upon by the Administrator
pursuant to the Administration Agreement and who is identified on the list of
Authorized Officers delivered by the Administrator to the Indenture Trustee on
the Closing Date (as such list may be modified or supplemented from time to time
thereafter).
"Available Collection Amount" means, an amount equal to the sum of: (i) all
amounts received on the Home Loans or required to be paid by the Servicer, the
Transferor or the Seller during the related Due Period (exclusive of amounts not
required to be deposited in the Collection Account and amounts permitted to be
withdrawn by the Indenture Trustee from the Collection Account pursuant to
Section 5.01(d) of the Sale and Servicing Agreement) as reduced by any portion
thereof that may not be withdrawn therefrom pursuant to an order of a United
States bankruptcy court of competent jurisdiction imposing a stay pursuant to
▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code; (ii) in the case of a
Distribution Date relating to a Due Period that occurs prior to the end of the
Funding Period, an amount from the Capitalized Interest Account sufficient to
fund any shortfall in the Interest Distribution Amount attributable to the
amounts in the Pre-Funding Account; (iii) in the case of the Pre-Funding
Termination Distribution Date, amounts, if any, remaining in the Pre-Funding
Account at the end of the Funding Period (net of reinvestment income, which
shall be transferred to the Capitalized Interest Account); (iv) with respect to
the final Distribution Date or an early retirement of the Offered Securities
pursuant to Section 11.02 of the Sale and Servicing Agreement, the Termination
Price, and (v) any and all income or gain from investments in the Collection
Account.
"Basic Documents" means the Certificate of Trust, the Trust Agreement, this
Indenture, the Sale and Servicing Agreement, the Loan Sale Agreement, the
Administration Agreement, the Insurance Agreement, the Custodial Agreement, the
Note Depository Agreement, the Certificate Depository Agreement and other
documents and certificates delivered in connection therewith.
"Book-Entry Notes" means a beneficial interest in the [Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class A-5 Notes,
the Class A-6 Notes, the Class A-7 Notes and the Class A-8 Notes,] ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10.
"Business Day" means any day other than (i) a Saturday or a Sunday, or (ii)
a day on which banking institutions in New York City or the city in which the
principal office of the [Securities Insurer] or the corporate trust office of
the Indenture Trustee is located are authorized or obligated by law or executive
order to be closed.
"Certificate Depository Agreement" has the meaning specified in Section 1.1
of the Trust Agreement.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Class A-1 Final Scheduled Distribution Date" means the Distribution Date
occurring in ___________.
"Class A-1 Interest Rate" means ________% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
"Class A-1 Notes" means the Class A-1 ____% Asset Backed Notes,
substantially in the form of Exhibit A-1.]
"Class A-2 Final Scheduled Distribution Date" means the Distribution Date
occurring in __________.
"Class A-2 Interest Rate" means ____% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).
"Class A-2 Notes" means the Class A-2 ____% Asset Backed Notes,
substantially in the form of Exhibit A-.]
"Class A-3 Final Scheduled Distribution Date" means the Distribution Date
occurring in ______________.
"Class A-3 Interest Rate" means ____% per annum (computed on the basis of a
360 day year consisting of twelve 30-day months).
"Class A-3 Notes" means the Class A-3 ____% Asset Backed Notes,
substantially in the form of Exhibit A-3.
"Class A-4 Final Scheduled Distribution Date" means the Distribution Date
occurring in _______________.
"Class A-4 Interest Rate" means ____% per annum (computed on the basis of a
360 day year consisting of twelve 30-day months).
"Class A-4 Notes" means the Class A-4 ____% Asset Backed Notes,
substantially in the form of Exhibit A-4.]
"Class A-5 Final Scheduled Distribution Date" means the Distribution Date
occurring in ____________.
"Class A-5 Interest Rate" means ___% per annum (computed on the basis of a
360 day year consisting of twelve 30-day months).
"Class A-5 Notes" means the Class A-5 ___% Asset Backed Notes,
substantially in the form of Exhibit A-5.
"Class A-6 Final Scheduled Distribution Date" means the Distribution Date
occurring in ______________.
"Class A-6 Interest Rate" means ____% per annum (computed on the basis of a
360 day year consisting of twelve 30-day months).
"Class A-6 Notes" means the Class A-6 ____% Asset Backed Notes,
substantially in the form of Exhibit A-6.
"Class A-7 Final Scheduled Distribution Date" means the Distribution Date
occurring in _______________.
"Class A-7 Interest Rate" means ____% per annum (computed on the basis of a
360 day year consisting of twelve 30-day months).
"Class A-7 Notes" means the Class A-7 ____% Asset Backed Notes,
substantially in the form of Exhibit A-7.
"Class A-8 Final Scheduled Distribution Date" means the Distribution Date
occurring in ____________.
"Class A-8 Interest Rate" means ____% per annum (computed on the basis of a
360 day year consisting of twelve 30-day months).
["Class A-8 Notes" means the Class A-8 8.00% Asset Backed Notes,
substantially in the form of Exhibit A-8.]
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means __________________.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Company" means PREFERRED CREDIT CORPORATION, a California corporation or
any successor in interest thereto.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Agreement is located at
▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address as
the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Issuer, or the principal corporate trust office of any
successor Indenture Trustee at the address designated by such successor
Indenture Trustee by notice to the Noteholders and the Issuer.
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.12.
"Depository Institution" means any depository institution or trust company,
including the Indenture Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated A-1 by S&P and P-1 by Moody's (or comparable ratings if S&P and
Moody's are not the Rating Agencies).
"Distribution Date" means the 25th day of any month or if such 25th day is
not a Business Day, the first Business Day immediately following such day,
commencing in [ ].
"Due Period" means, with respect to any Distribution Date and any class of
Notes, the calendar month immediately preceding the month of such Distribution
Date.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
"Final Scheduled Distribution Date" means with respect to a Class of Notes
the respective Class A-1 Final Scheduled Distribution Date, Class A-2 Final
Scheduled Distribution Date, Class A-3 Final Scheduled Distribution Date, Class
A-4 Final Scheduled Distribution Date, Class A-5 Final Scheduled Distribution
Date, Class A-6 Final Scheduled Distribution Date, Class A-7 Final Scheduled
Distribution Date, or Class A-8 Final Scheduled Distribution Date.
"Grant" means mortgage, 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 this 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 the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the granting party or otherwise, and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register; provided that the exercise of any rights of
such Holder or Noteholder under this Indenture shall at all times be subject to
Section 11.19 hereto.
"Indenture Trust Estate" or "Trust Estate" means all money, instruments,
rights and other property that are subject or intended to be subject to the lien
and security interest of this Indenture for the benefit of the Noteholders
(including, without limitation, all Collateral Granted to the Indenture Trustee
pursuant to the Granting Clause), including all proceeds thereof.
"Indenture Trustee" means [Bankers Trust Company,] a national banking
corporation, as Indenture Trustee under this Indenture, or any successor
Indenture Trustee under this Indenture.
"Independent" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, any other obligor on the
Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1, 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.
"Interest Distribution Amount" means, on any Distribution Date, the sum of
the Noteholders' Interest Distributable Amount for each Class of Notes and the
Certificateholders' Interest Distributable Amount for such Distribution Date.
"Interest Rate" means the Class A-1 Interest Rate, the Class A-2 Interest
Rate, the Class A-3 Interest Rate, the Class A-4 Interest Rate, the Class A-5
Interest Rate, the Class A-6 Interest Rate, the Class A-7 Interest Rate or the
Class A-8 Interest Rate, as applicable.
"Issuer" means [PREFERRED CREDIT OWNER TRUST 199_-_] until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
Notes.
"Issuer Order" and "Issuer Request" mean a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"Moody's" means ▇▇▇▇▇'▇ Investor Service, Inc., or any successor thereto.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a Class
▇- ▇ Note, a Class A-5 Note, a Class A-6 Note, a Class A-7 Note or a Class A-8
Note, as applicable.
"Note Depository Agreement" means the agreement dated __________________,
among the Issuer, the Administrator, the Indenture Trustee and The Depository
Trust Company, as the initial Clearing Agency, relating to the Book Entry Notes.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 2.3.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer or the Administrator, under the circumstances described
in, and otherwise complying with, the applicable requirements of Section 11.1,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in this Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer or the Administrator.
"Opinion of Counsel" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be employees of or
counsel to the Issuer and who shall be satisfactory to the Indenture Trustee and
the [Securities Insurer], and which opinion or opinions shall be addressed to
the Indenture Trustee, as Indenture Trustee, and the [Securities Insurer] and
shall comply with any applicable requirements of Section 11.1 and shall be in
form and substance satisfactory to the Indenture Trustee and the [Securities
Insurer].
"Outstanding" means, with respect to any Note and as of the date of
determination, any Note theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or
provision for such notice has been made, satisfactory to the Indenture
Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser; provided, that in determining
whether the Holders of the requisite Outstanding Amount of the Notes
have given any request, demand, authorization, direction, notice,
consent, or waiver hereunder or under any Basic Document, Notes owned
by the Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent, or waiver, only
Notes that the Indenture Trustee knows to be so owned shall be so
disregarded. Notes so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act
with respect to such Notes and that the pledgee is not the Issuer, any
other obligor upon the Notes, the Seller or any Affiliate of any of
the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes, or
Class of Notes, as applicable, Outstanding at the date of determination.
"Owner Trustee" means [Wilmington Trust Company,] not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, or any successor
Owner Trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.11
and is authorized by the Issuer to make payments to and distributions from the
Note Distribution Account, including payment of principal of or interest on the
Notes on behalf of the Issuer.
"Payment Date" means a Distribution Date.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization, or government or any agency or political
subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.4 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Rating Agency Condition" means, with respect to any action to which a
Rating Agency Condition applies, that each Rating Agency shall have been given
10 days (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each of the Rating Agencies shall have notified the
Seller, the Servicer and the Issuer in writing that such action will not result
in a reduction or withdrawal of the then current rating of the Notes.
"Rating Agency" means either or both of (i) Standard & Poor's or (ii)
▇▇▇▇▇'▇. If no such organization or successor is any longer in existence,
"Rating Agency" shall be a nationally recognized statistical rating organization
or other comparable Person designated by the [Securities Insurer], notice of
which designation shall be given to the Issuer, the Indenture Trustee, the Owner
Trustee and the Servicer.
"Record Date" means, as to each Distribution Date, the last Business Day of
the month immediately preceding the month in which such Distribution Date
occurs.
"Redemption Date" means in the case of a redemption of the Notes pursuant
to Section 10.1 or a payment to Noteholders pursuant to Section 10.4, the
Distribution Date specified by the Servicer or the Issuer pursuant to Section
10.1 or 10.4, as applicable.
"Redemption Price" means in the case of a redemption of the Notes pursuant
to Section 10.1, an amount equal to the unpaid principal amount of the Notes
redeemed plus accrued and unpaid interest thereon at the respective Interest
Rates for each Class of Notes being so redeemed to but excluding the Redemption
Date, plus any unpaid Trust Fees and Expenses and all other amounts owed to the
[Securities Insurer] pursuant to the Insurance Agreement.
"Registered Holder" means the Person in whose name a Note is registered on
the Note Register on the applicable Record Date.
"Regular Principal Distribution Amount" means, on each Distribution Date,
an amount equal to the lesser of:
(A) the sum of the aggregate Class Principal Balance of the Notes
and the Certificate Principal Balance of the Certificates immediately
prior to such Distribution Date; and
(B) the greater of (1) the sum of (i) each scheduled payment of
principal collected by the Servicer in the related Due Period, (ii)
all partial and full principal prepayments applied by the Servicer
during such related Due Period, (iii) the principal portion of all Net
Liquidation Proceeds, Insurance Proceeds and Released Mortgaged
Property Proceeds received during the related Due Period, (iv) (a)
that portion of the purchase price of any repurchased Home Loan which
represents principal and (b) the principal portion of any Substitution
Adjustments required to be deposited in the Collection Account as of
the related Determination Date, (v) the amount of any Net Loan Losses
equal to the amount on deposit in the Reserve Account until such
amount is reduced to zero, and (vi) if the Overcollateralization
Amount is zero, the amount of any Net Loan Losses minus the sum of (a)
the amount included in clause (v) above for such Distribution Date and
(b) the amount of Net Loan Losses allocated to reduce the
Overcollateralization Amount to zero on such Distribution Date
pursuant to Section 5.09 of the Sale & Servicing Agreement, and (2)
the amount by which (i) the aggregate principal balance of the Offered
Securities as of the preceding Distribution Date (after giving effect
to all payments of principal on such preceding Distribution Date)
exceeds (ii) the Pool Principal Balance plus funds on deposit in the
Pre-Funding Account, each as of the immediately preceding
Determination Date; provided, however, that if such Distribution Date
is an Overcollateralization Stepdown Date, then with respect to the
distribution of principal to the Noteholders and Certificateholders
the foregoing amount in each case, will be reduced (but not less than
zero) by the Overcollateralization Reduction Amount, if any, for such
Distribution Date.
"Reserve Account" means, the account established and maintained pursuant to
Section 5.07 of the Sale and Servicing Agreement.
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers 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.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement dated
as of [ ], among the Issuer, Preferred Securitization Corporation, as Seller,
and, Advanta Mortgage Corp. USA, as Servicer, and the Indenture Trustee, as
Indenture Trustee and [Co-Owner Trustee.]
"Schedule of Home Loans" means the listing of the Home Loans set forth in
Schedule A, as supplemented as of each Subsequent Transfer Date and as of any
date on which a Deleted Home Loan has been repurchased from the Trust or
substituted with a Qualified Home Loan pursuant to Section 3.05 of the Sale and
Servicing Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" shall mean Preferred Securitization Corporation, in its capacity
as seller under the Sale and Servicing Agreement, and its successor in interest.
"Servicer" shall mean Advanta Mortgage Corp. USA in its capacity as
servicer under the Sale and Servicing Agreement, and any Successor Servicer
thereunder.
"Standard & Poor's means Standard & Poor's Ratings Group, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"State" means any one of the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ or
the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.7(e).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
(b) Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein have the
respective meanings set forth in the Sale and Servicing Agreement for all
purposes of this Indenture.
SECTION 1.2. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.3. Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented (as provided in such
agreements) and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated
therein; references to a Person are also to its permitted successors
and assigns.
ARTICLE II.
THE NOTES
SECTION 2.1.Form. The Notes shall be designated as the ["PREFERRED CREDIT
OWNER TRUST 199_-_ Asset Backed Notes, Series 199_-_".] The Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class ▇- ▇ Notes,
the Class A-6 Notes, the Class A-7 Notes and the Class A-8 Notes, in each case
together with the Indenture Trustee's certificate of authentication, shall be in
substantially the form set forth in Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇,
▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit A-7 and Exhibit A-8,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution thereof. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the officers executing such Notes, as evidenced by their execution of such
Notes.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit
A-5, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ and Exhibit A-8 are part of the terms of this
Indenture.
SECTION 2.2. Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Issuer by an Authorized Officer of the Owner
Trustee or the Administrator. The signature of any such Authorized Officer on
the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Owner Trustee or the Administrator shall
bind the Issuer, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Notes or did not hold such offices at the date of such Notes.
Subject to the satisfaction of the conditions set forth in Section 2.8, the
Indenture Trustee shall authenticate and deliver Class A-1 Notes for original
issue in an aggregate principal amount of [$_________,] Class A-2 Notes for
original issue in an aggregate principal amount of [$_________,] Class A-3 Notes
for original issue in an aggregate principal amount of [$_________,] Class A-4
Notes for original issue in an aggregate principal amount of [$_________,] Class
A-5 Notes for original issue in an aggregate principal amount of [$_________,]
Class A-6 Notes for original issue in an aggregate principal amount of
[$_________] and Class A-7 Notes for original issue in an aggregate principal
amount of [$_________] and Class A-8 Notes for original issue in an aggregate
principal amount of [$_________.] The aggregate principal amount of Class A-1
Notes, Class A-2 Notes, Class A- 3 Notes, Class A-4 Notes, Class A-5 Notes,
Class A-6 Notes, Class A-7 Notes and Class A-8 Notes outstanding at any time may
not exceed such respective amounts.
The Notes that are authenticated and delivered by the Indenture Trustee to
or upon the order of the Issuer on the Closing Date shall be dated [ ]. All
other Notes that are authenticated after the Closing Date for any other purpose
under the Indenture shall be dated the date of their authentication. The Notes
shall be issuable as registered Notes in the minimum denomination $100,000 and
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 Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
SECTION 2.3. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee initially shall be the "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Indenture Trustee prompt written notice
of the appointment of such Note Registrar and of the location, and any change in
the location, of the Note Register, and the Indenture Trustee shall have the
right to inspect the Note Register at all reasonable times and to obtain copies
thereof, and the Indenture Trustee shall have the right to rely upon a
certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.2, the Issuer
shall execute, and the Indenture Trustee shall authenticate and the Noteholder
shall obtain from the Indenture Trustee, in the name of the designated
transferee or transferees, one or more new Notes of the same Class in any
authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of the
same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, the Notes which the Noteholder making the exchange
is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.4 or Section 9.6 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer shall
not be required to make and the Note Registrar need not register transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to such Note.
SECTION 2.4. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be 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 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, or shall
have been called for redemption, instead of issuing a replacement Note, the
Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the Issuer
may require the payment by the Holder of such Note, other than the [Securities
Insurer], 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 in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 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 2.5. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the [Securities Insurer,] the
Indenture Trustee and any agent of the Issuer, the [Securities Insurer] or the
Indenture Trustee may treat the Person in whose name any Note is registered (as
of the day of determination) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any, on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and none of
the Issuer, the [Securities Insurer,] the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.6. Payment of Principal and Interest; Defaulted Interest.
(a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class A-5 Notes, the Class A-6 Notes, the Class A-7 Notes
and the Class A-8 Notes shall accrue interest at the Class A-1 Interest Rate,
the Class A-2 Interest Rate, the Class A-3 Interest Rate, the Class A-4 Interest
Rate, the Class A-5 Interest Rate, the Class A-6 Interest Rate, the Class A-7
Interest Rate and the Class A-8 Interest Rate, respectively, as set forth in
Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, A-7 and A-8, respectively, and such
interest shall be payable on each Distribution Date as specified therein,
subject to Section 3.1. Any installment of interest or principal, if any,
payable on any Note that is punctually paid or duly provided for by the Issuer
on the applicable Distribution Date shall be paid to the Person in whose name
such Note (or one or more Predecessor Notes) is registered on the Record Date by
check mailed first-class postage prepaid to such Person's address as it appears
on the Note Register on such Record Date, except that, unless Definitive Notes
have been issued pursuant to Section 2.12, with respect to Notes registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payment will be made by wire transfer in
immediately available funds to the account designated by such nominee and except
for the final installment of principal payable with respect to such Note on a
Distribution Date or on the applicable Final Scheduled Distribution Date for
such Class of Notes (and except for the Redemption Price for any Note called for
redemption pursuant to Section 10.1), which shall be payable as provided below.
The funds represented by any such checks returned undelivered shall be held in
accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of the Notes set forth in Exhibit
▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit
A-7 and Exhibit A-8. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes of a Class of Notes shall be due and payable, if not
previously paid, on the earlier of (i) the respective Final Scheduled
Distribution Date of such Class, (ii) the Redemption Date or (iii) the date on
which an Event of Default shall have occurred and be continuing, if the
Indenture Trustee or the Holders of Notes representing not less than a majority
of the Outstanding Amount of the Notes have declared the Notes to be immediately
due and payable in the manner provided in Section 5.2. All principal payments on
each Class of Notes shall be made pro rata to the Noteholders of such Class
entitled thereto. 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
Distribution Date on which the Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be mailed
or transmitted by facsimile prior to such final Distribution Date and shall
specify that such final installment will be payable only upon presentation and
surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such installment. A copy of such form
of notice shall be sent to the [Securities Insurer] by the Indenture Trustee.
Notices in connection with redemptions of Notes shall be mailed to Noteholders
as provided in Section 10.2.
SECTION 2.7. Cancellation. All Notes surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly canceled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly canceled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes canceled
as provided in this Section, except as expressly permitted by this Indenture.
All canceled Notes may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at the
time unless the Issuer shall direct by an Issuer Order that they be destroyed or
returned to it; provided, that such Issuer Order is timely and the Notes have
not been previously disposed of by the Indenture Trustee.
SECTION 2.8. Authentication of Notes. The Notes may be authenticated by the
Indenture Trustee, upon Issuer Request and upon receipt by the Indenture Trustee
of the following:
(a) An Issuer Order authorizing the execution and authentication of such
Notes by the Issuer.
(b) All of the items of Collateral constituting the Indenture Trust Estate,
which shall be delivered to the Indenture Trustee or its designee.
(c) An executed counterpart of the Trust Agreement.
(d) Opinions of Counsel addressed to the Indenture Trustee [and the
Securities Insurer] to the effect that:
(i) all instruments furnished to the Indenture Trustee as
conditions precedent to the authentication of the Notes by the
Indenture Trustee pursuant to the Indenture conform to the
requirements of this Indenture and constitute all the documents
required to be delivered hereunder for the Indenture Trustee to
authenticate the Notes;
(ii) all conditions precedent provided for in this Indenture
relating to the authentication of the Notes have been complied with;
(iii) the Owner Trustee has power and authority to execute,
deliver and perform its obligations under the Trust Agreement;
(iv) the Issuer has been duly formed is validly existing as a
business trust under the laws of the State of Delaware, 12 Del. C.
Section 3801, et seq., and has power, authority and legal right to
execute and deliver this Indenture, the Administration Agreement, the
Insurance Agreement and the Sale and Servicing Agreement;
(v) assuming due authorization, execution and delivery thereof by
the Indenture Trustee, the Indenture is the valid, legal and binding
obligation of the Issuer, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent or preferential conveyance and other similar
laws of general application affecting the rights of creditors
generally and to general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law);
(vi) the Notes, when executed and authenticated as provided
herein and delivered against payment therefor, will be the valid,
legal and binding obligations of the Issuer pursuant to the terms of
this Indenture, entitled to the benefits of this Indenture, and will
be enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent or
preferential conveyance and other similar laws of general application
affecting the rights of creditors generally and to general principles
of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(vii) the Trust Agreement authorizes the Issuer to Grant the
Indenture Trust Estate to the Trustee as security for the Notes and
the Owner Trustee has taken all necessary action under the Trust
Agreement to Grant the Indenture Trust Estate to the Indenture
Trustee;
(viii) this Indenture has been duly qualified under the Trust
Indenture Act of 1939;
(ix) this Indenture, together with the Grant of the Indenture
Trust Estate to the Indenture Trustee, creates a valid security
interest in the Indenture Trust Estate in favor of the Indenture
Trustee for the benefit of the Noteholders;
(x) such action has been taken with respect to delivery of
possession of the Indenture Trust Estate, and with respect to the
execution and filing of this Indenture and any financing statements as
are necessary to make effective and to perfect a first priority
security interest created by this Indenture in the Indenture Trust
Estate in favor of the Indenture Trustee, except that with respect to
the Debt Instruments, possession of such Debt Instruments must be
maintained by the Indenture Trustee or an agent of the Indenture
Trustee (other than the Issuer, an Affiliate of the Issuer, or a
"securities intermediary," as defined in Section 8.102 of the UCC, an
agent of the Indenture Trustee; and
(xi) no authorization, approval or consent of any governmental
body having jurisdiction in the premises which has not been obtained
by the Issuer is required to be obtained by the Issuer for the valid
issuance and delivery of the Notes, except that no opinion need be
expressed with respect to any such authorizations, approvals or
consents as may be required under any state securities "blue sky"
laws.
(e) An Officer's Certificate complying with the requirements of Section
11.1 and stating that:
(i) the Issuer is not in Default under this Indenture and the
issuance of the Notes applied for will not result in any breach of any
of the terms, conditions or provisions of, or constitute a default
under, the Trust Agreement, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Issuer is a party or by
which it is bound, or any order of any court or administrative agency
entered in any proceeding to which the Issuer is a party or by which
it may be bound or to which it may be subject, and that all conditions
precedent provided in this Indenture relating to the authentication
and delivery of the Notes applied for have been complied with;
(ii) the Issuer is the owner of all of the Home Loans, has not
assigned any interest or participation in the Home Loans (or, if any
such interest or participation has been assigned, it has been
released) and has the right to Grant all of the Home Loans to the
Indenture Trustee;
(iii) the Issuer has Granted to the Indenture Trustee all of its
right, title, and interest in the Indenture Trust Estate, and has
delivered or caused the same to be delivered to the Indenture Trustee;
(iv) attached thereto are true and correct copies of letters
signed by ▇▇▇▇▇'▇ and S&P confirming that each Class of the Notes and
the Certificates have been rated "Aaa" and "AAA" by ▇▇▇▇▇'▇ and S&P,
respectively; and
(v) all conditions precedent provided for in this Indenture
relating to the authentication of the Notes have been complied with.
(f) A fair value certificate from an Independent Person.
SECTION 2.9. Release of Collateral. (a) Subject to subsections (b) and (c)
hereof and Section 11.1 and the terms of the Basic Documents, the Indenture
Trustee shall release property from the lien of this Indenture only upon receipt
of an Issuer Request accompanied by an Officer's Certificate, an Opinion of
Counsel and Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(l) or an Opinion of Counsel in lieu of such Independent Certificates to
the effect that the TIA does not require any such Independent Certificates.
(b) The Servicer, on behalf of the Issuer, shall be entitled to obtain a
release from the lien of this Indenture for any Home Loan and the related
Mortgaged Property at any time (i) after a payment by the Transferor or the
Issuer of the Purchase Price of the Home Loan, (ii) after a Qualified Substitute
Home Loan is substituted for such Home Loan and payment of the Substitution
Adjustment, if any, (iii) after liquidation of the Home Loan in accordance with
Section 4.02 of the Sale and Servicing Agreement and the deposit of all
Recoveries thereon in the Collection Account, or (iv) upon the termination of a
Home Loan (due to, among other causes, a prepayment in full of the Home Loan and
sale or other disposition of the related Mortgaged Property), if the Issuer
delivers to the Indenture Trustee [and the Securities Insurer] an Issuer Request
(A) identifying the Home Loan and the related Mortgaged Property to be released,
(B) requesting the release thereof, (C) setting forth the amount deposited in
the Collection Account with respect thereto, and (D) certifying that the amount
deposited in the Collection Account (x) equals the Purchase Price of the Home
Loan, in the event a Home Loan and the related Mortgaged Property are being
released from the lien of this Indenture pursuant to item (i) above, (y) equals
the Substitution Adjustment related to the Qualified Substitute Home Loan and
the Deleted Home Loan released from the lien of the Indenture pursuant to item
(ii) above, or (z) equals the entire amount of Recoveries received with respect
to such Home Loan and the related Mortgaged Property in the event of a release
from the lien of this Indenture pursuant to items (iii) or (iv) above.
(c) The Indenture Trustee shall, if requested by the Servicer, temporarily
release or cause the Custodian to temporarily release to the Servicer the
Indenture Trustee's Home Loan File pursuant to the provisions of Section 7.02 of
the Sale and Servicing Agreement upon compliance by the Servicer of the
provisions thereof provided that the Indenture Trustee's Home Loan File shall
have been stamped to signify the Issuer's pledge to the Indenture Trustee under
the Indenture.
SECTION 2.10.Book-Entry Notes. The Notes, upon original issuance, will be
issued in the form of typewritten Notes representing the Book-Entry Notes, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Issuer. The Book-Entry Notes shall be registered initially on
the Note Register in the name of Cede & Co., the nominee of the initial Clearing
Agency, and no Owner thereof will receive a definitive Note representing such
Note Owner's interest in such Note, except as provided in Section 2.12. Unless
and until definitive, fully registered Notes (the "Definitive Notes") have been
issued to such Note Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the
sole holder of the Notes, and shall have no obligation to the Note
Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants pursuant to the Note Depository
Agreement. Unless and until Definitive Notes are issued pursuant to
Section 2.12, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to
such effect from Note Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in the Notes and has delivered such instructions
to the Indenture Trustee.
SECTION 2.11. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to such Note Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to such Note Owners.
SECTION 2.12. Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Book-Entry
Notes and the 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 Clearing Agency or (iii)
after the occurrence of an Event of Default, Owners of the Book-Entry Notes
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of such Notes advise the Clearing Agency in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of such Note Owners, then the Clearing Agency shall notify
all Note Owners and the Indenture Trustee of the occurrence of such event and of
the availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Notes representing the
Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
SECTION 2.13. Tax Treatment. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness of the Issuer secured by the Indenture Trust Estate. The Issuer,
by entering into this Indenture, and each Noteholder, by its acceptance of a
Note (and each Note Owner by its acceptance of an interest in the applicable
Book-Entry Note), agree to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness of the Issuer.
ARTICLE III.
COVENANTS
SECTION 3.1. Payment of Principal and Interest. The Issuer will duly and
punctually pay (or will cause to be duly and punctually paid) the principal of
and interest, if any, on the Notes in accordance with the terms of the Notes and
this Indenture. Without limiting the foregoing, subject to and in accordance
with Section 8.2(c), the Issuer will cause to be distributed all amounts on
deposit in the Note Distribution Account on a Distribution Date deposited
therein pursuant to the Sale and Servicing Agreement (i) for the benefit of the
Class A-1 Notes, to the Class A-1 Noteholders, (ii) for the benefit of the Class
A-2 Notes, to the Class A-2 Noteholders, (iii) for the benefit of the Class A-3
Notes, to the Class A-3 Noteholders, (iv) for the benefit of the Class A-4
Notes, to the Class A-4 Noteholders, (v) for the benefit of the Class A-5 Notes,
to the Class A-5 Noteholders, (vi) for the benefit of the Class A-6 Notes, to
the Class A-6 Noteholders, (vii) for the benefit of the Class A-7 Notes, to the
A-7 Noteholders, and (viii) for the benefit of the Class A-8 Notes, to the Class
A-8 Noteholders. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
The Notes shall be non-recourse obligations of the Issuer and shall be
limited in right of payment to amounts available from the Indenture Trust Estate
and any amounts received by the Indenture Trustee under the Guaranty Policy in
respect of the Notes, as provided in this Indenture. The Issuer shall not
otherwise be liable for payments on the Notes. If any other provision of this
Indenture shall be deemed to conflict with the provisions of this Section 3.1,
the provisions of this Section 3.1 shall control.
SECTION 3.2. Maintenance of Office or Agency. The Issuer will or will cause
the Administrator to maintain in the Borough of Manhattan, The City of New York,
an office or agency where Notes may be surrendered for registration of transfer
or exchange, and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Issuer hereby initially appoints
the Administrator to serve as its agent for the foregoing purposes and to serve
as Paying Agent with respect to the Certificates. The Issuer will give prompt
written notice to the Indenture Trustee of the location, and of any change in
the location, of any such office or agency. If at any time the Issuer shall fail
to maintain any such office or agency or shall fail to furnish the Indenture
Trustee with the address thereof, such surrenders, notices and demands may be
made or served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
SECTION 3.3. Money for Payments To Be Held in Trust. As provided in Section
8.2(a ) and (b), all payments of amounts due and payable with respect to any
Notes that are to be made from amounts withdrawn from the Collection Account and
the Note Distribution Account pursuant to Section 8.2(c) shall be made on behalf
of the Issuer by the Indenture Trustee or by the Paying Agent, and no amounts so
withdrawn from the Collection Account and the Note Distribution Account for
payments of Notes shall be paid over to the Issuer except as provided in this
Section.
On or before the third Business Day preceding each Distribution Date and
Redemption Date, the Indenture Trustee shall deposit or cause to be deposited in
the Note Distribution Account an aggregate sum sufficient to pay the amounts due
on such Distribution Date or Redemption Date under the Notes, such sum to be
held in trust for the benefit of the Persons entitled thereto, and (unless the
Paying Agent is the Indenture Trustee) shall promptly notify the Indenture
Trustee of its action or failure so to act.
Any Paying Agent shall be appointed by Issuer Order with written notice
thereof to the Indenture Trustee and the [Securities Insurer]. Any Paying Agent
appointed by the Issuer shall be a Person who would be eligible to be Indenture
Trustee hereunder as provided in Section 6.11. The Issuer shall not appoint any
Paying Agent (other than the Indenture Trustee) which is not, at the time of
such appointment, a Depository Institution.
The Issuer will cause each Paying Agent other than the Administrator 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, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Indenture Trustee and the [Securities Insurer]
notice of any default by the Issuer (or any other obligor upon the
Notes) of which it has actual knowledge in the making of any payment
required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to
the Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be
met by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith; provided,
however, that with respect to withholding and reporting requirements
applicable to original issue discount (if any) on the Notes, the
Issuer shall have first provided the calculations pertaining thereto
to the Indenture Trustee.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same 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 or abandoned
property, 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 two years 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 a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, 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 shall also adopt and employ, at the expense and direction
of the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been surrendered for redemption or
whose right to or interest in moneys 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 3.4. Existence.
(a) Subject to Section 3.4(b), 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 Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
(b) Any successor to the Owner Trustee appointed pursuant to Section 10.2
of the Trust Agreement shall be the successor Owner Trustee under this Indenture
without the execution or filing of any paper, instrument or further act to be
done on the part of the parties hereto.
(c) Upon any consolidation or merger of or other succession to the Owner
Trustee, the Person succeeding to the Owner Trustee under the Trust Agreement
may exercise every right and power of the Owner Trustee under this Indenture
with the same effect as if such Person had been named as the Owner Trustee
herein.
SECTION 3.5. Protection of Indenture Trust Estate. The Issuer will from
time to time and upon the direction of the [Securities Insurer] execute and
deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(i) provide further assurance with respect to the Grant of all or
any portion of the Indenture Trust Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any rights with respect to the Collateral; or
(v) preserve and defend title to the Indenture Trust Estate and
the rights of the Indenture Trustee, the Noteholders and the
[Securities Insurer] in such Indenture Trust Estate against the claims
of all persons and parties.
The Issuer hereby designates the Administrator its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.5.
SECTION 3.6. Annual Opinions as to Indenture Trust Estate. On or before
April 15th in each calendar year, beginning in [199_,] the Issuer shall furnish
to the Indenture Trustee an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements as
is necessary to maintain the lien and security interest created by this
Indenture and reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that will, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Indenture until April 15th of the following calendar year.
SECTION 3.7. Performance of Obligations; Servicing of Home Loans.
(a) The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Indenture Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with or otherwise obtain the assistance of
other Persons (including, without limitation, the Administrator under the
Administration Agreement) to assist it in performing its duties under this
Indenture, and any performance of such duties by a Person identified to the
Indenture Trustee [and the Securities Insurer] 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 Servicer and the Administrator to assist the
Issuer in performing its duties under this Indenture. The Administrator must at
all times be the same person as the Indenture Trustee.
(c) 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 Indenture Trust Estate, including but
not limited to (i) filing or causing to be filed all UCC financing statements
and continuation statements required to be filed by the terms of this Indenture
and the Sale and Servicing Agreement and (ii) recording or causing to be
recorded all Mortgages, Assignments of Mortgage, all intervening Assignments of
Mortgage and all assumption and modification agreements required to be recorded
by the terms of the Sale and Servicing Agreement, in accordance with and within
the time periods provided for in this Indenture and/or the Sale and Servicing
Agreement, as applicable. Except as otherwise expressly provided therein, the
Issuer shall not waive, amend, modify, supplement or terminate any Basic
Document or any provision thereof without the consent of the Indenture Trustee,
the [Securities Insurer,] and the Holders of at least a majority of the
Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of an Event of
Default under the Sale and Servicing Agreement, the Issuer shall promptly notify
the Indenture Trustee, [the Securities Insurer] and the Rating Agencies thereof,
and shall specify in such notice the action, if any, the Issuer is taking with
respect of such default. If such an Event of Default shall arise from the
failure of the Servicer to perform any of its duties or obligations under the
Sale and Servicing Agreement with respect to the Home Loans, the Issuer shall
take all reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination to
the Servicer of the Servicer's rights and powers pursuant to Section 10.01 of
the Sale and Servicing Agreement, the Issuer, upon the prior written consent of
or upon the direction of the [Securities Insurer], shall appoint a successor
servicer (the "Successor Servicer"), and such Successor Servicer shall accept
its appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. The Indenture Trustee may resign as the
Servicer by giving written notice of such resignation to the Issuer and in such
event will be released from such duties and obligations, such release not to be
effective until the date a new servicer enters into a servicing agreement with
the Issuer as provided below. Upon delivery of any such notice to the Issuer,
the Issuer shall obtain a new servicer as the Successor Servicer under the Sale
and Servicing Agreement.
Any Successor Servicer other than the Indenture Trustee shall (i) satisfy the
criteria specified in Section 9.04(b) of the Sale and Servicing Agreement and
(ii) enter into a servicing agreement with the Issuer having substantially the
same provisions as the provisions of the Sale and Servicing Agreement applicable
to the Servicer. If within 30 days after the delivery of the notice referred to
above, the Issuer shall not have obtained such a new servicer, the Indenture
Trustee may appoint, or may petition a court of competent jurisdiction to
appoint, a Successor Servicer. In connection with any such appointment, the
Indenture Trustee may make such arrangements for the compensation of such
successor as it and such successor shall agree, subject to the limitations set
forth below and in the Sale and Servicing Agreement, and in accordance with
Section 10.02 of the Sale and Servicing Agreement, the Issuer shall enter into
an agreement with such successor for the servicing of the Home Loans (such
agreement to be in form and substance satisfactory to the Indenture Trustee [and
the Securities Insurer]). If the Indenture Trustee shall succeed to the
Servicer's duties as servicer of the Home Loans as provided herein, it shall do
so in its individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI hereof shall be inapplicable to the
Indenture Trustee in its duties as successor Servicer and the servicing of the
Home Loans. In case the Indenture Trustee shall become successor Servicer under
the Sale and Servicing Agreement, the Indenture Trustee shall be entitled to
appoint as Servicer any one of its Affiliates, provided that it shall be fully
liable for the actions and omissions of such Affiliate in such capacity as
Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant to
the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee [and the Securities Insurer]. As soon as a successor Servicer is
appointed and approved by the [Securities Insurer], the Issuer shall notify the
Indenture Trustee of such appointment, specifying in such notice the name and
address of such successor Servicer.
(g) Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees (i) that it will not, without the prior
written consent of the Indenture Trustee and the [Securities Insurer,] or, if a
Securities Insurer Default has occurred and is continuing, the Holders of at
least a majority in Outstanding Amount of the Notes, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
(except to the extent otherwise provided in the Sale and Servicing Agreement) or
the Basic Documents, or waive timely performance or observance by the Servicer
or the Seller under the Sale and Servicing Agreement; and (ii) that any such
amendment shall not (A) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions that are required to be made
for the benefit of the Noteholders or (B) reduce the aforesaid percentage of the
Notes that is required to consent to any such amendment, without the consent of
the Holders of all the outstanding Notes. If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee [and the
Securities Insurer] or, if a Securities Insurer Default has occurred and is
continuing, such Holders, the Issuer agrees, promptly following a request by the
Indenture Trustee [or the Securities Insurer] to do so, to execute and deliver,
in its own name and at its own expense, such agreements, instruments, consents
and other documents as the Indenture Trustee may deem necessary or appropriate
in the circumstances.
SECTION 3.8. Negative Covenants. So long as any Notes are Outstanding, the
Issuer shall not:
(i) except as expressly permitted by this Indenture, the Loan
Sale Agreement or the Sale and Servicing Agreement, sell, transfer,
exchange or otherwise dispose of any of the properties or assets of
the Issuer, including those included in the Indenture Trust Estate,
unless directed to do so by the Indenture Trustee or the [Securities
Insurer];
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Indenture
Trust Estate;
(iii) engage in any business or activity other than as permitted
by the Trust Agreement or other than in connection with, or relating
to, the issuance of Notes pursuant to this Indenture, or amend the
Trust Agreement as in effect on the Closing Date other than in
accordance with Section 11.1 thereof,
(iv) issue debt obligations under any other indenture;
(v) incur or assume any indebtedness or guaranty any indebtedness
of any Person, except for such indebtedness as may be incurred by the
Issuer in connection with the issuance of the Notes pursuant to this
Indenture;
(vi) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person;
(vii) (A) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect
to the Notes under this Indenture except as may be expressly permitted
hereby, (B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture)
to be created on or extend to or otherwise arise upon or burden the
Indenture Trust Estate or any part thereof or any interest therein or
the proceeds thereof (other than tax liens, mechanics' liens and other
liens that arise by operation of law, in each case on any of the
Mortgaged Properties and arising solely as a result of an action or
omission of the related Obligor) or (C) permit the lien of this
Indenture not to constitute a valid first priority (other than with
respect to any such tax, mechanics' or other lien) security interest
in the Indenture Trust Estate;
(viii) remove the Administrator without cause unless the Rating
Agency Condition shall have been satisfied in connection with such
removal; or
(ix) take any other action or fail to take any action which may
cause the Issuer to be taxable as (a) an association pursuant to
Section 7701 of the Code and the corresponding regulations or (b) as a
taxable mortgage pool pursuant to Section 7701(i) of the Code and the
corresponding regulations.
SECTION 3.9. Annual Statement as to Compliance. The Issuer will deliver to
the Indenture Trustee [and the Securities Insurer], within 120 days after the
end of each fiscal year of the Issuer (commencing with the fiscal year 199_), an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and
of its performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a
default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.10. Covenants of the Issuer.
All covenants of the Issuer in this Indenture are covenants of the Issuer
and are not covenants of the Owner Trustee. The Owner Trustee is, and any
successor Owner Trustee under the Trust Agreement will be, entering into this
Indenture solely as Owner Trustee under the Trust Agreement and not in its
respective individual capacity, and in no case whatsoever shall the Owner
Trustee or any such successor Owner Trustee be personally liable on, or for any
loss in respect of, any of the statements, representations, warranties or
obligations of the Issuer hereunder, as to all of which the parties hereto agree
to look solely to the property of the Issuer.
SECTION 3.11. Servicer's Obligations. The Issuer shall cause the Servicer
to comply with Sections 5.01, 6.01, 7.07 and Article IX of the Sale and
Servicing Agreement.
SECTION 3.12. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, (x)
distributions to the Servicer, the Indenture Trustee, the Owner Trustee, the
Securityholders and the holders of the Residual Interest as contemplated by, and
to the extent funds are available for such purpose under, the Sale and Servicing
Agreement or the Trust Agreement and (y) payments to the Indenture Trustee
pursuant to Section 1(a)(ii) of the Administration Agreement. The Issuer will
not, directly or indirectly, make or cause to be made payments to or
distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.
SECTION 3.13. Treatment of Notes as Debt for Tax Purposes.
The Issuer shall, and shall cause the Administrator to, treat the Notes as
indebtedness for all federal and state tax purposes.
SECTION 3.14. Notice of Events of Default. The Issuer shall give the
Indenture Trustee, [the Securities Insurer] and the Rating Agencies prompt
written notice of each Event of Default hereunder, each default on the part of
the Servicer or the Seller of its obligations under the Sale and Servicing
Agreement and each default on the part of the Transferor or the Seller of its
obligations under the Loan Sale Agreement.
SECTION 3.15. Further Instruments and Acts. Upon request of the Indenture
Trustee [or the Securities Insurer], the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
ARTICLE IV.
SATISFACTION AND DISCHARGE
SECTION 4.1. 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 3.3, 3.4, 3.5, 3.8 and
3.10 hereof, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.7 and
the obligations of the Indenture Trustee under Section 4.2) and (vi) the rights
of Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them), and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when all of the following have occurred:
(A) either
(1) all Notes theretofore authenticated and
delivered (other than (i) Notes that have
been destroyed, lost or stolen and that have
been replaced or paid as provided in Section
2.4 and (ii) Notes for whose payment money
has theretofore been deposited in trust or
segregated and held in trust by the Issuer
and thereafter repaid to the Issuer or
discharged from such trust, as provided in
Section 3.3) 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
Class A-8 Final Scheduled
Distribution Date within one year, or
c. are to be called for redemption within
one year under arrangements
satisfactory to the Indenture Trustee
for the giving of notice of
redemption by the Indenture Trustee
in the name, and at the expense, of
the Issuer, and the Issuer, in the
case of a., b. or c. above, has
irrevocably deposited or caused to be
irrevocably deposited with the
Indenture Trustee cash or direct
obligations of or obligations
guaranteed by the United States of
America (which will mature prior to
the date such amounts are payable),
in trust for such purpose, in an
amount sufficient to pay and
discharge the entire indebtedness on
such Notes not theretofore delivered
to the Indenture Trustee for
cancellation when due to the
applicable Final Scheduled
Distribution Date of such Class of
Notes or Redemption Date (if Notes
shall have been called for redemption
pursuant to Section 10.1), as the case
may be;
(B) the later of (a) eighteen months after payment in full of all
outstanding obligations under the Securities, (b) the payment in full of all
unpaid Trust Fees and Expenses and all sums owing to the [Securities Insurer]
under the Insurance Agreement and (c) the date on which the Issuer has paid or
caused to be paid all other sums payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the Indenture
Trustee) an Independent Certificate from a firm of certified public accountants,
each meeting the applicable requirements of Section 11.1(a) and, subject to
Section 11.2, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture with respect to the
Notes have been complied with.
SECTION 4.2. Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Sections 3.3 and 4.1 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for the
payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.3. Repayment of Moneys Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
moneys then held by any Paying Agent other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.3 and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
ARTICLE V.
REMEDIES
SECTION 5.1. Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest on any Note when the same
becomes due and payable; or
(b) default in the payment of the principal of or any installment of the
principal of any Note when the same becomes due and payable; or
(c) default in the observance or performance of any covenant or agreement
of the Issuer made in this Indenture (other than a covenant or agreement, a
default in the observance or performance of which is elsewhere in this Section
specifically dealt with), or any representation or warranty of the Issuer made
in this Indenture, the Insurance Agreement, the Sale and Servicing Agreement or
in any certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the time
when the same shall have been made, and such default shall continue or not be
cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 30 days after there shall have been given, by
registered or certified mail, to the Issuer by the Indenture Trustee or to the
Issuer and the Indenture Trustee by the Holders of at least 25% of the
Outstanding Amount of the Notes, a written notice specifying such default or
incorrect representation or warranty and requiring it to be remedied and stating
that such notice is a notice of Default hereunder; or
(d) default in the observance or performance of any covenant or agreement
of the Company made in the Trust Agreement or any representation or warranty of
the Company made in the Trust Agreement, proving to have been incorrect in any
material respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or condition in
respect of which such misrepresentation or warranty was incorrect shall not have
been eliminated or otherwise cured, for a period of 30 days after there shall
have been given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the 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;
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the Indenture 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 Indenture
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
(f) the commencement by the Issuer of a voluntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or the consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Issuer or for any substantial
part of the Indenture Trust Estate, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer generally
to pay its debts as such debts become due, or the taking of any action by the
Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee and the [Securities
Insurer,] within five days after the occurrence thereof, written notice in the
form of an Officer's Certificate of any event which with the giving of notice
and the lapse of time would become an Event of Default under clauses (c) and (d)
above, its status and what action the Issuer is taking or proposes to take with
respect thereto.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee, at the direction or upon the prior written consent of the
[Securities Insurer] or the Holders of Notes representing not less than a
majority of the Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
unpaid principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Holders of Notes representing a majority of the Outstanding Amount of the Notes,
by written notice to the Issuer and the Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(a) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
a. all payments of principal of and
interest on all Notes and all other
amounts that would then be due
hereunder or upon such Notes if the
Event of Default giving rise to such
acceleration had not occurred; and
b. all sums paid or advanced by the
Indenture Trustee hereunder and the
reasonable compensation, expenses,
disbursements and advances of the
Indenture Trustee and its agents and
counsel; and
(b) 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 5.3. 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 Issuer will, upon demand of the Indenture Trustee
and at the direction of the [Securities Insurer,] pay to the Indenture Trustee,
for the benefit of the Holders of the Notes and the [Securities Insurer,] the
whole amount then due and payable on such Notes for principal and interest, with
interest upon the overdue principal and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue installments of interest at
the rate borne by the Notes and in addition thereto such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee [and the Securities Insurer] and their respective 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, shall at the direction of the [Securities Insurer,] and if a [Securities
Insurer] Default has occurred and is continuing, the Indenture Trustee may and
shall at the direction of the majority of the Holders of the Notes, institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon such Notes and collect in the manner provided
by law out of the property of the Issuer or other obligor upon such Notes,
wherever situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee
shall, at the direction of the [Securities Insurer,] and if a [Securities
Insurer] Default has occurred and is continuing, the Indenture Trustee may and
shall at the direction of the majority of the Holders of the Notes, as more
particularly provided in Section 5.4, in its discretion, proceed to protect and
enforce its rights and the rights of the [Securities Insurer] and the
Noteholders, by such appropriate Proceedings as the Indenture Trustee shall deem
most effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Indenture Trust Estate, Proceedings under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, upon the direction of the [Securities Insurer], 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, each predecessor Indenture Trustee and the [Securities
Insurer,] 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), the [Securities Insurer] 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 moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders, [the Securities Insurer] and 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,
[the Securities Insurer] or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property; and any
trustee, receiver, liquidator, custodian or other similar official in any such
Proceeding is hereby authorized by each of such Noteholders and [the Securities
Insurer] 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 [and the Securities Insurer], to pay to the Indenture Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture Trustee
except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder [or the Securities Insurer] any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof [or the Securities Insurer] or to authorize the Indenture Trustee
to vote in respect of the claim of any Noteholder in any such proceeding except,
as aforesaid, to vote for the election of a trustee in bankruptcy or similar
Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes [and the Securities Insurer].
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 5.4. Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall, at the direction of the [Securities Insurer,] and if a
[Securities Insurer] Default has occurred and is continuing, the Indenture
Trustee may and at the direction of a majority of the Holders of the Notes shall
do one or more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or under this
Indenture with respect thereto, whether by declaration or otherwise, enforce any
judgment obtained, and collect from the Issuer and any other obligor upon such
Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Indenture 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 Securities Insurer] or the Noteholders; and
(iv) sell the Indenture Trust Estate or any portion thereof or rights or
interest therein in a commercially reasonable manner, at one or more public or
private sales called and conducted in any manner permitted by law; provided,
however, that the Indenture Trustee may not sell or otherwise liquidate the
Indenture Trust Estate following an Event of Default, unless (A) the Holders of
100% of the Outstanding Amount of the Notes consent thereto, (B) the proceeds of
such sale or liquidation distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon such Notes for principal
and interest or (C) the Indenture Trustee determines that the Indenture Trust
Estate will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due if the
Notes had not been declared due and payable, and the Indenture Trustee obtains
the consent of Holders of 66-2/3% of the Outstanding Amount 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
Indenture Trust Estate for such purpose.
(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 the
Indenture Trustee Fee then due and any costs or
expenses incurred by it in connection with the
enforcement of the remedies provided for in this
Article V and to the Owner Trustee for the Owner
Trustee Fee then due;
[SECOND: to [the Securities Insurer] for the
Guaranty Insurance Premium then due and unpaid;]
THIRD: to the Servicer for the Servicing Fee
then due and unpaid;
FOURTH: to the Custodian for the Custodian Fee
then due and unpaid;
FIFTH: to Noteholders for amounts due and unpaid
on the Notes for interest (including any premium),
pro rata, according to the amounts due and payable
on the Notes for interest (including any premium);
SIXTH: to Holders of the Class A-1 Notes for
amounts due and unpaid on the Class A-1 Notes for
principal, pro rata, according to the amounts due and
payable on the Class A-1 Notes for principal, until
the Outstanding Amount of the Class A-1 Notes is
reduced to zero;
SEVENTH: to Holders of the Class A-2 Notes for
amounts due and unpaid on the Class A-2 Notes for
principal, pro rata, according to the amounts due
and payable on the Class A-2 Notes for principal,
until the Outstanding Amount of the Class A-2 Notes
is reduced to zero;
EIGHTH: to Holders of the Class A-3 Notes for
amounts due and unpaid on the Class A-3 Notes for
principal, pro rata, according to the amounts due and
payable on the Class A-3 Notes for principal, until
the Outstanding Amount of the Class A-3 Notes is
reduced to zero;
NINTH: to Holders of the Class A-4 Notes for
amounts due and unpaid on the Class A-4 Notes for
principal, pro rata, according to the amounts due and
payable on the Class A-4 Notes for principal, until
the Outstanding Amount of the Class A-4 Notes is
reduced to zero;
TENTH: to Holders of the Class A-5 Notes for
amounts due and unpaid on the Class A-5 Notes for
principal, pro rata, according to the amounts due and
payable on the Class A-5 Notes for principal, until
the Outstanding Amount of the Class A-5 Notes is
reduced to zero;
ELEVENTH: to Holders of the Class A-6 Notes for
amounts due and unpaid on the Class A-6 Notes for
principal, pro rata, according to the amounts due
and payable on the Class A-6 Notes for principal,
until the Outstanding Amount of the Class A-6 Notes
is reduced to zero;
TWELFTH: to Holders of the Class A-7 Notes for
amounts due and unpaid on the Class A-7 Notes for
principal, pro rata, according to the amounts due
and payable on the Class A-7 Notes for principal,
until the Outstanding Amount of the Class A-7 Notes
is reduced to zero;
THIRTEENTH: to Holders of the Class A-8 Notes
for amounts due and unpaid on the Class A-8 Notes
for principal, pro rata, according to the amounts
due and payable on the Class A-8 Notes for principal,
until the Outstanding Amount of the Class A-8 Notes
is reduced to zero;
FOURTEENTH: to the Owner Trustee or Co-Owner
Trustee, as applicable, for amounts required to be
distributed to the Certificateholders pursuant to
the Trust Agreement;
[FIFTEENTH: to [the Securities Insurer] for any
amounts then due and payable under the Insurance
Agreement;]
SIXTEENTH: to the Servicer for any amounts then
due and payable as the Servicing Advance
Reimbursement Amount under the Sale and Servicing
Agreement; and
SEVENTEENTH: to the Owner Trustee or Co-Owner
Trustee, as applicable, for any amounts to be
distributed, pro rata, to the holders of the
Residual Interest.
The Indenture Trustee may fix a record date and payment date for any
payment to be made to the Noteholders pursuant to this Section. At least 15 days
before such record date, the Indenture Trustee shall mail to each Noteholder,
[the Securities Insurer] and the Issuer a notice that states the record date,
the payment date and the amount to be paid.
SECTION 5.5. Optional Preservation of the Indenture Trust Estate. If the
Notes have been declared to be due and payable under Section 5.2 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
maintain possession of the Indenture 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 the Indenture
Trustee shall take such desire into account when determining whether or not to
maintain possession of the Indenture Trust Estate. In determining whether to
maintain possession of the Indenture 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 Indenture Trust Estate for such
purpose.
SECTION 5.6. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder for so long as a [Securities Insurer] Default has not occurred
or is not continuing and if a [Securities Insurer] Default has occurred and is
continuing, unless:
(a) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% of the Outstanding Amount of the Notes
have made written request to the Indenture Trustee to institute such Proceeding
in respect of such Event of Default in its own name as Indenture Trustee
hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such Proceedings; and
(e) no direction inconsistent with such written request has been given to
the Indenture Trustee during such 60-day period by the Holders of a majority of
the Outstanding Amount of the Notes.
It is understood and intended that no one or more Holders of Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Outstanding Amount 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 5.7. Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective Final Scheduled Distribution Date thereof expressed in such Note or
in this Indenture (or, in the case of redemption, on or after the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder.
SECTION 5.8. Restoration of Rights and Remedies. If the Indenture Trustee,
[the Securities Insurer] 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, the [Securities Insurer] or to such Noteholder, then and in
every such case the Issuer, the Indenture Trustee, [the Securities Insurer] and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.
SECTION 5.9. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, [the Securities Insurer] or
to the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee, [the Securities Insurer] or any Holder of any Note to
exercise any right or remedy accruing upon any Default or Event of Default shall
impair any such right or remedy or constitute a waiver of any such Default or
Event of Default or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Indenture Trustee, [the Securities Insurer] or
to the Noteholders may be exercised from time to time, and as often as may be
deemed expedient, by the Indenture Trustee, [the Securities Insurer] or by the
Noteholders, as the case may be, subject, in each case, however, to the right of
[the Securities Insurer] to control any such right and remedy, except as
provided in Section 11.21.
SECTION 5.11. Control by Noteholders. The Holders of a majority of the
Outstanding Amount of the Notes shall have the right to direct the time, method
and place of conducting any Proceeding for any remedy available to the Indenture
Trustee with respect to the Notes or exercising any trust or power conferred on
the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture;
(b) subject to the express terms of Section 5.4, any direction to the
Indenture Trustee to sell or liquidate the Indenture Trust Estate shall be by
Holders of Notes representing not less than 100% of the Outstanding Amount of
the Note;
(c) if the conditions set forth in Section 5.5 have been satisfied and the
Indenture Trustee elects to retain the Indenture Trust Estate pursuant to such
Section, then any direction to the Indenture Trustee by Holders of Notes
representing less than 100% of the Outstanding Amount of the Notes to sell or
liquidate the Indenture Trust Estate shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of the [Securities Insurer] and the Noteholders
set forth in this Section, subject to Section 6.1, the Indenture Trustee need
not take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.2, the
Holders of Notes representing not less than a majority of the Outstanding Amount
of the Notes may waive any past Default or Event of Default and its consequences
except a Default (a) in the payment of principal of or interest on any of the
Notes or (b) in respect of a covenant or provision hereof that cannot be
modified or amended without the consent of the [Securities Insurer] or the
Holder of each Note, as applicable. In the case of any such waiver, the Issuer,
the Indenture Trustee, [the Securities Insurer] and the Holders of the Notes
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee or [the Securities Insurer], (b) any suit instituted by any
Noteholder, or group of Noteholders, in each case holding in the aggregate more
than 10% of the Outstanding Amount of the Notes or (c) any suit instituted by
any Noteholder for the enforcement of the payment of principal of or interest on
any Note on or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Indenture Trust Estate or
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.4(b).
SECTION 5.16. 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 shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller and the Servicer, as applicable, of each of their obligations to
the Issuer under or in connection with the Sale and Servicing Agreement or by
the Seller of its obligations under or in connection with the Loan Sale
Agreement, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale and
Servicing Agreement to the extent and in the manner directed by the Indenture
Trustee, including the transmission of notices of default on the part of the
Seller or the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Servicer of each of their obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee 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 Outstanding Amount of the Notes shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Seller or the Servicer
under or in connection with the Sale and Servicing Agreement, or against the
Seller under or in connection with the Loan Sale Agreement, including the right
or power to take any action to compel or secure performance or observance by the
Seller or the Servicer, as the case may be, of each of their obligations to the
Issuer thereunder and to give any consent, request, notice, direction, approval,
extension, or waiver under the Sale and Servicing Agreement or the Loan Sale
Agreement, as the case may be, and any right of the Issuer to take such action
shall be suspended.
ARTICLE VI.
THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the Indenture
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(f) Money held in trust by the Indenture Trustee shall be segregated from
other funds except to the extent permitted by law or the terms of this Indenture
or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it; provided, however, that the Indenture Trustee shall
not refuse or fail to perform any of its duties hereunder solely as a result of
nonpayment of its normal fees and expenses and further provided that nothing in
this Section 6.1(g) shall be construed to limit the exercise by the Indenture
Trustee of any right or remedy permitted under this Indenture or otherwise in
the event of the Issuer's failure to pay the Indenture Trustee's fees and
expenses pursuant to Section 6.7. In determining that such repayment or
indemnity is not reasonably assured to it, the Indenture Trustee must consider
not only the likelihood of repayment or indemnity by or on behalf of the Issuer
but also the likelihood of repayment or indemnity from amounts payable to it
from the Indenture Trust Estate pursuant to Section 6.7.
(h) 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 6.2. Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Indenture
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee.
(d) The Indenture Trustee shall not be liable for (i) any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that such action or omission by the
Indenture Trustee does not constitute willful misconduct, negligence or bad
faith; or (ii) any willful misconduct or gross negligence on the part of the
Custodian.
(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 6.3. Individual Rights of Indenture Trustee. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.4. 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, shall not be accountable for the
Issuer's use of the proceeds from the Notes, or responsible for any statement of
the Issuer in the Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Indenture Trustee's certificate
of authentication.
SECTION 6.5. Notice of Defaults. If a Default occurs and is continuing and
if it is known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail to the [Securities Insurer] and each Noteholder notice of the
Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant to
the mandatory redemption provisions of such 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 6.6. Reports by Indenture Trustee to Holders. The Indenture Trustee
shall deliver to each Noteholder such information as may be required to enable
such holder to prepare its federal and state income tax returns.
SECTION 6.7. Compensation and Indemnity. As compensation for its services
hereunder, the Indenture Trustee shall be entitled to receive, on each
Distribution Date, the Indenture Trustee's Fee pursuant to Section 8.2(c) hereof
(which compensation shall not be limited by any law on compensation of a trustee
of an express trust) and shall be entitled to reimbursement for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Issuer agrees
to cause the Servicer to indemnify the Indenture Trust Estate and 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 Servicer promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer and the Servicer shall
not relieve the Issuer of its obligations hereunder. The Issuer shall or shall
cause the Servicer to defend any such claim, and the Indenture Trustee may have
separate counsel and the Issuer shall or shall cause the Servicer to pay the
fees and expenses of such counsel. Neither the Issuer nor the Servicer 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 shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(e) or (f) 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 6.8. Replacement of Indenture Trustee. No resignation or removal of
the Indenture Trustee and no appointment of a successor Indenture Trustee shall
become effective until the acceptance of appointment by the successor Indenture
Trustee pursuant to this Section. The Indenture Trustee may resign at any time
by so notifying the Issuer [and the Securities Insurer]. The Holders of a
majority in Outstanding Amount of the Notes may remove the Indenture Trustee by
so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuer shall remove the Indenture Trustee upon the prior written
consent of the [Securities Insurer] if:
(a) the Indenture Trustee fails to comply with Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(d) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of 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 acceptable to the
[Securities Insurer].
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, [the Securities Insurer] and to
the Issuer. Thereupon the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall have
all the rights, powers and duties of the Indenture Trustee under this Indenture.
The successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly transfer all property
held by it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the
Notes may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, 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 6.7
shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the [Securities
Insurer] and 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 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 Indenture Trust Estate may at the time be located, the Indenture
Trustee shall have the power, with the prior written consent of the [Securities
Insurer], 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 Indenture 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 hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co- trustee or separate trustee shall be required under
Section 6.8 hereof; provided that the Indenture Trustee shall deliver notice of
any such co-trustee or separate trustee to the [Securities Insurer].
(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
Indenture Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Indenture
Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co- trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, jointly with the Indenture
Trustee, subject to all the provisions of this Indenture, specifically including
every provision of this Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11 Eligibility; Disqualification. The Indenture Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of A or better by Moody's or shall otherwise
be acceptable to Moody's. The Indenture Trustee shall comply with TIA Section
310(b), including the optional provision permitted by the second sentence of TIA
Section 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VII.
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after the earlier of (i) each Record Date
and (ii) three months after the last Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Holders of Notes as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
SECTION 7.2. Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.1 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 7.1 upon receipt of
a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the
protection of TIA Section 312(c).
SECTION 7.3 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee [and the Securities Insurer], 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 Securities Insurer] and the
Commission in accordance with the rules and regulations prescribed from time to
time by the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations;
and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Noteholders described in TIA Section 313(c)) such
summaries of any information, documents and reports required to be filed by the
Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) and by rules and
regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.
SECTION 7.4. Reports by Indenture Trustee. If required by TIA Section
313(a), within 60 days after each [February 1] beginning with [February 1,
1997,] the Indenture Trustee shall mail to the [Securities Insurer] and to each
Noteholder as required by TIA Section 313(c) a brief report dated as of such
date that complies with TIA Section 313(a). The Indenture Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each securities exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any securities exchange.
ARTICLE VIII.
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of Money.
(a) General. 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
Indenture Trust Estate, the Indenture Trustee may, and upon written request of
the [Securities Insurer] shall, take such action as may be appropriate to
enforce such payment or performance, including the institution and prosecution
of appropriate Proceedings. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture and any right
to proceed thereafter as provided in Article V.
[(b) Claims Under Guaranty Policy. The Notes and the Certificates will be
insured by the Guaranty Policy pursuant to the terms set forth therein,
notwithstanding any provisions to the contrary contained in this Indenture or
the Sale and Servicing Agreement. All amounts received under the Guaranty Policy
shall be used solely for the payment to Securityholders of principal and
interest on the Notes and the Certificates.]
SECTION 8.2. Trust Accounts; Distributions.
(a) On or prior to the Closing Date, the Issuer shall cause the Servicer to
establish and maintain, in the name of the Indenture Trustee for the benefit of
the Noteholders, or the Co-Owner Trustee for the benefit of the
Certificateholders, the Trust Accounts as provided in ARTICLE V of the Sale and
Servicing Agreement. The Indenture Trustee or Co- Owner Trustee shall deposit
amounts into the Trust Accounts in accordance with the terms hereof, the Sale
and Servicing Agreement and the Servicer's Monthly Remittance Report.
(b) On or before the third Business Day prior to each Distribution Date,
the Indenture Trustee shall withdraw from the Collection Account, the
Pre-Funding Account, the Capitalized Interest Account and the Reserve Account,
as applicable, the Available Collection Amount and the Reserve Account
Withdrawal Amount, if any, with respect to the preceding Due Period pursuant to
Section 5.01(b)(2) of the Sale and Servicing Agreement and will deposit such
amount into the Note Distribution Account. No later than the second Business Day
prior to each Distribution Date, to the extent funds are available in the Note
Distribution Account, the Indenture Trustee shall either retain funds in the
Note Distribution Account or make the withdrawals from the Note Distribution
Account and deposits into the other Trust Accounts for distribution on such
Distribution Date as required pursuant to Section 5.01(c) of the Sale and
Servicing Agreement.
(c) On each Distribution Date and Redemption Date, to the extent funds are
available in the Note Distribution Account, the Indenture Trustee shall make the
following distributions from the amounts on deposit in the Note Distribution
Account in the following order of priority (except as otherwise provided in
Section 5.4(b)):
(i) (A) to the Servicer, an amount equal to the Servicing
Compensation (net of any amounts retained prior to deposit into the
Collection Account pursuant to Section 5.01(b)(1) of the Sale and
Servicing Agreement) and all unpaid Servicing Compensation from prior
due periods, (B) to the [Securities Insurer], an amount equal to the
Guaranty Insurance Premium and all unpaid Guaranty Insurance Premiums
from prior Due Periods, (C) to the Indenture Trustee, an amount equal
to the Indenture Trustee Fee and all unpaid Indenture Trustee Fees
from prior Due Periods, (D) to the Owner Trustee, an amount equal to
the Owner Trustee Fee and all unpaid Owner Trustee Fees from prior Due
Periods, and (E) to the Custodian, an amount equal to the Custodian
Fee and all unpaid Custodian Fees from prior Due Periods;
(ii) only to the extent of funds withdrawn from the Pre- Funding
Account and deposited in the Note Distribution Account by the
Indenture Trustee pursuant to Section 5.03(c) of the Sale and
Servicing Agreement (net of any amount deposited in the Certificate
Distribution Account from the Note Distribution Account for
distribution to Certificateholders pursuant to Subsection 5.01(c)(ii)
of the Sale and Servicing Agreement), pro rata, to the Holders of the
Class A-1 Notes, the Holders of the Class A-2 Notes, the Holders of
the Class A-3 Notes, the Holders of the Class A-4 Notes, the Holders
of the Class A-5 Notes, the Holders of the Class A-6 Notes, the
Holders of the Class A-7 Notes and the Holders of the Class A-8 Notes
based on the Class Principal Balance of each such Class, in each case
to reduce the Class Principal Balance of each such Class; provided
that if the amount of such funds equals or is less than $50,000, then
such amount shall be distributed sequentially to the Holders of each
Class of Notes, in ascending order of their respective Class
designations, to reduce the respective Class Principal Balances
thereof;
(iii) to the Holders of each Class of the Notes, the Noteholders'
Interest Distributable Amount for such Distribution Date; provided,
that if there are not sufficient funds in the Note Distribution
Account to pay the entire amount of accrued and unpaid interest then
due on the Notes, the amount in the Note Distribution Account shall be
applied to the payment of such interest on the Notes pro rata on the
basis of the total such interest due on the Notes;
(iv) to the Holders of the Class A-1 Notes, the Noteholders'
Principal Distributable Amount until the Outstanding Amount of the
Class A-1 Notes is reduced to zero;
(v) to the Holders of the Class A-2 Notes, the remaining
Noteholders' Principal Distributable Amount after distributions
pursuant to clause (iv) above until the Outstanding Amount of the
Class A-2 Notes is reduced to zero;
(vi) to the Holders of the Class A-3 Notes, the remaining
Noteholders' Principal Distributable Amount after distributions
pursuant to clauses (iv) and (v) above until the Outstanding Amount of
the Class A-3 Notes is reduced to zero;
(vii) to the Holders of the Class A-4 Notes, the remaining
Noteholders' Principal Distributable Amount after distributions
pursuant to clauses (iv) through (vi) above until the Outstanding
Amount of the Class A-4 Notes is reduced to zero;
(viii) to the Holders of the Class A-5 Notes, the remaining
Noteholders' Principal Distributable Amount after distributions
pursuant to clauses (iv) through (vii) above until the Outstanding
Amount of the Class A-5 Notes is reduced to zero;
(ix) to the Holders of the Class A-6 Notes, the remaining
Noteholders' Principal Distributable Amount after distributions
pursuant to clauses (iv) through (viii) above until the Outstanding
Amount of the Class A-6 Notes is reduced to zero;
(x) to the Holders of the Class A-7 Notes, the remaining
Noteholders' Principal Distributable Amount after distributions
pursuant to clauses (iv) through (ix) above until the Outstanding
Amount of the Class A-7 Notes is reduced to zero; and
(xi) to the Holders of the Class A-8 Notes, the remaining
Noteholders' Principal Distributable Amount after distributions
pursuant to clauses (iv) through (x) above until the Outstanding
Amount of the Class A-8 Notes is reduced to zero.
(d) On each Distribution Date and each Redemption Date, to the extent of
the interest of the Indenture Trustee in the Certificate Distribution Account
(as described in Section 5.08(a) of the Sale and Servicing Agreement), the
Indenture Trustee hereby authorizes the Owner Trustee, the Co-Owner Trustee or
the Paying Agent, as applicable, to make the distributions from the Certificate
Distribution Account as required pursuant to Section 5.06(c) of the Sale and
Servicing Agreement.
(e) The Indenture Trustee shall make claims under the Guaranty Policy
pursuant to Section 5.02 of the Sale and Servicing Agreement and in accordance
with the Guaranty Policy. The Indenture Trustee shall deposit any Guaranteed
Payment received from the Security Insurer in the Note Distribution Account for
the portion of the Guaranteed Payment payable on the related Class of Notes or
in the Certificate Distribution Account for the portion of the Guaranteed
Payment payable on the related Certificate. For claims under the Guaranty Policy
for a Deficiency Amount, on the related Distribution Date, the Indenture Trustee
shall distribute such amount based upon the portion of the Interest Distribution
Amount and the portion of the Regular Distribution Amount payable on the related
Class of Note to the Holders of such Class of Note and payable on the related
Certificate to such Certificateholders in accordance with the terms of the Sale
and Servicing Agreement. For claims under the Guaranty Policy for a Preference
Amount, the Indenture Trustee shall distribute such amount in accordance with
the terms of the Guaranty Policy, All amounts received under the Guaranty Policy
shall be used solely for the payment to Securityholders of principal and
interest on the related Class of Notes and the Certificates, as applicable.
SECTION 8.3. General Provisions Regarding Accounts.
(a) So long as no Default or Event of Default shall have occurred and be
continuing, all or a portion of the funds in the Trust Accounts shall be
invested in Permitted Investments and reinvested by the Indenture Trustee at the
direction of the Affiliated Holder in accordance with the provisions of ARTICLE
V of the Sale and Servicing Agreement. All income or other gain from investments
of moneys deposited in the Trust Accounts shall be deposited by the Indenture
Trustee into the Note Distribution Account, and any loss resulting from such
investments shall be charged to such account. The Issuer will not direct the
Indenture Trustee to make any investment of any funds or to sell any investment
held in any of the Trust Accounts unless the security interest Granted and
perfected in such account will continue to be perfected in such investment or
the proceeds of such sale, in either case without any further action by any
Person, and, in connection with any direction to the Indenture Trustee to make
any such investment or sale, if requested by the Indenture Trustee, the Issuer
shall deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the
Indenture Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in any way
be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give investment directions for
any funds on deposit in the Trust Accounts to the Indenture Trustee by 11:00
a.m. Eastern Time (or such other time as may be agreed by the Issuer and
Indenture Trustee) on any Business Day or (ii) a Default or Event of Default
shall have occurred and be continuing with respect to the Notes but the Notes
shall not have been declared due and payable pursuant to Section 5.2 or (iii) if
such Notes shall have been declared due and payable following an Event of
Default, amounts collected or receivable from the Indenture Trust Estate are
being applied in accordance with Section 5.5 as if there had not been such a
declaration, then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Trust Accounts in one or more
Eligible Investments.
SECTION 8.4. Servicer's Monthly Statements.
On each Distribution Date, the Indenture Trustee shall deliver the
Servicer's Monthly Statement (as defined in the Sale and Servicing Agreement)
with respect to such Distribution Date to the [DTC,] the Rating Agencies,[ and
the Securities Insurer].
SECTION 8.5. Release of Indenture Trust Estate.
(a) Subject to the payment of its fees and expenses pursuant to Section
6.7, 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 this Article VIII shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due to (i) the Certificateholders pursuant to Section
5.06(c) of the Sale and Servicing Agreement, (ii) the Servicer pursuant to
Section 8.2(c)(i)(A) hereof, (iii) the [Securities Insurer] pursuant to Section
8.2(c)(i)(B) hereof, the Indenture Trustee pursuant to Section 8.2(c)(i)(C)
hereof, the Owner Trustee pursuant to Section 8.2(c)(i)(D) hereof, and the
Custodian pursuant to Section 8.2(c)(i)(E) hereof have been paid, release any
remaining portion of the Indenture Trust Estate that secured the Notes from the
lien of this Indenture and release to the Issuer or any other Person entitled
thereto any funds then on deposit in the Trust Accounts. The Indenture Trustee
shall release property from the lien of this Indenture pursuant to this
Subsection (b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.1.
SECTION 8.6. Opinion of Counsel. The Indenture Trustee [and the Securities
Insurer] shall receive at least seven days notice when requested by the Issuer
to take any action pursuant to Section 8.5(a), accompanied by copies of any
instruments involved, and the Indenture Trustee shall also require, as a
condition to such action, an Opinion of Counsel, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding that
all conditions precedent to the taking of such action have been complied with
and such action will not materially and adversely impair the security for the
Notes or the rights of the Noteholders in contravention of the provisions of
this Indenture; provided, however, that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Indenture Trust
Estate. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice
to the Rating Agencies and with the prior written consent of the [Securities
Insurer], the Issuer and the Indenture Trustee, when authorized by an Issuer
Order, 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 or to make any other provisions with
respect to matters or questions arising under this Indenture or in any
supplemental indenture; provided, that such action shall not adversely affect
the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one trustee,
pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this Indenture
under the TIA or under any similar federal statute hereafter enacted and to add
to this Indenture such other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, with the prior written consent of
the [Securities Insurer], when authorized by an Issuer Order, may, also without
the consent of any of the Holders of the Notes but with prior consent of the
Rating Agencies, 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 (i) an Opinion of Counsel
or (ii) satisfaction of the Rating Agency Condition, adversely affect in any
material respect the interests of any Noteholder.
SECTION 9.2. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior consent of the Rating Agencies, the [Securities Insurer] and with the
consent of the Holders of not less than a majority of the Outstanding Amount of
the Notes, by Act of such Holders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby and the [Securities Insurer] if affected
thereby:
(a) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest rate
thereon or the Redemption Price with respect thereto, change the provisions of
this Indenture relating to the application of collections on, or the proceeds of
the sale of, the Indenture 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 (or, in the case of redemption, on or after the Redemption Date);
(b) reduce the percentage of the Outstanding Amount of the Notes, the
consent of the Holders of which is required for any such supplemental indenture,
or the consent of the Holders of which is required for any waiver of compliance
with certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of the
term "Outstanding";
(d) reduce the percentage of the Outstanding Amount of the Notes required
to direct the Indenture Trustee to direct the Issuer to sell or liquidate the
Indenture Trust Estate pursuant to Section 5.4;
(e) modify any provision of this Section except to increase any percentage
specified herein or to provide that certain additional provisions of this
Indenture or the Basic Documents cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby;
(f) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the amount of any payment of interest or principal due
on any Note on any Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the
Holders of Notes to the benefit of any provisions for the mandatory redemption
of the Notes contained herein; or
(g) permit the creation of any lien ranking prior to or on a parity with
the lien of this Indenture with respect to any part of the Indenture Trust
Estate or, except as otherwise permitted or contemplated herein, terminate the
lien of this Indenture on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
In connection with requesting the consent of the Noteholders pursuant to
this Section, 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. It shall not be
necessary for any Act of Noteholders under this Section to approve the
particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, 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 9.4. 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 9.5. Conformity with Trust Indenture Act. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.
SECTION 9.6. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the 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.
SECTION 9.7. Amendments to Trust Agreement. Subject to Section 11.1 of the
Trust Agreement, the Indenture Trustee shall, upon Issuer Order, consent to any
proposed amendment to the Trust Agreement or an amendment to or waiver of any
provision of any other document relating to the Trust Agreement, such consent to
be given without the necessity of obtaining the consent of the Holders of any
Notes upon satisfaction of the requirements under Section 11.1 of the Trust
Agreement.
Nothing in this Section shall be construed to require that any Person
obtain the consent of the Indenture Trustee to any amendment or waiver or any
provision of any document where the making of such amendment or the giving of
such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the subject
of the proposed amendment or waiver.
ARTICLE X.
REDEMPTION OF NOTES
SECTION 10.1. Redemption.
(a) The Affiliated Holder may, at its option, effect an early redemption of
the Notes on or after any Distribution Date on which the Pool Principal Balance
declines to 15% or less of the Pool Principal Balance of the Initial Home Loans
and Subsequent Home Loans conveyed to the Trust as of their respective Cut-Off
Dates. The Affiliated Holder shall effect such early redemption by directing the
Indenture Trustee to sell all of the Home Loans to a person that is not an
Affiliate of the Affiliated Holder, the Seller, or the Servicer at a price not
less than the Redemption Price. In addition, the Affiliated Holder may, at its
option, effect an early redemption of the Notes on or after any Distribution
Date on which the Pool Principal Balance declines to 10% or less of the Pool
Principal Balance of the Initial Home Loans and Subsequent Home Loan conveyed to
the Trust as of their respective Cut-Off Dates. In connection with any such
optional termination, to the extent that sufficient proceeds are not available
from the sale of the Home Loans or the termination of the Trust, the Affiliated
Holder will pay the outstanding fees and expenses, if any, of the Indenture
Trustee, the Issuer, [the Securities Insurer], the Custodian, and the Servicer.
[In addition, subject to Section 11.19, on any date on or after which (i)
____% or more (based on Net Loan Losses) of the Home Loans have become Defaulted
Home Loans on a cumulative basis and (ii) the Overcollateralization Amount has
been reduced to zero or an amount less than zero, then the [Securities Insurer]
may, at its option, effect an early retirement of the Securities and termination
of this Agreement.]
Any such redemption by the Affiliated Holder [or the Securities Insurer, as
applicable,] shall be accomplished by the Affiliated Holder [or the Securities
Insurer, as applicable,] depositing or causing to be deposited into the
Collection Account by 10:00 A.M. New York City time on the third Business Day
prior to the Redemption Date the amount of the Redemption Price. On the same day
that the Redemption Price is deposited into the Collection Account, the
Redemption Price and any amounts then on deposit in the Collection Account
(other than any amounts not required to have been deposited therein pursuant to
Section 5.01(b)(1) of the Sale and Servicing Agreement) shall be transferred to
the Note Distribution Account for distribution to the Noteholders on the
Redemption Date; and any amounts received with respect to the Home Loans and
Foreclosure Properties subsequent to such transfer shall belong to the Servicer
[or the Securities Insurer], as applicable. For purposes of calculating the
Required Distribution Amount for the Redemption Date, amounts transferred to the
Note Distribution Account pursuant to the immediately preceding sentence on the
Determination Date immediately preceding such final Distribution Date shall in
all cases be deemed to have been received during the related Due Period, and
such transfer shall be made pursuant to Section 5.01(c) of the Sale and
Servicing Agreement.
The Servicer or the Issuer shall furnish the Rating Agencies and the
[Securities Insurer] notice of any such redemption in accordance with Section
10.2.
SECTION 10.2. Form of Redemption Notice.
(a) Notice of redemption under Section 10.1 shall be given by the Indenture
Trustee by first-class mail, postage prepaid, or by facsimile mailed or
transmitted not later than 10 days prior to the applicable Redemption Date to
each Holder of Notes, as of the close of business on the Record Date preceding
the applicable Redemption Date, at such Holder's address or facsimile number
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency
of the Issuer to be maintained as provided in Section 3.2).
Notice of redemption of the Notes shall be given by the Indenture Trustee
in the name of the Issuer and at the expense of the Servicer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Note shall not
impair or affect the validity of the redemption of any other Note.
SECTION 10.3. Notes Payable on Redemption Date; Provision for Payment of
Indenture Trustee and Securities Insurer. The Notes or portions thereof to be
redeemed shall, following notice of redemption as required by Section 10.2 (in
the case of redemption pursuant to Section 10.1), on the Redemption Date become
due and payable at the Redemption Price and (unless the Issuer shall default in
the payment of the Redemption Price) no interest shall accrue on the Redemption
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Price. The Issuer may not redeem the
Notes unless, (i) all outstanding obligations under the Notes have been paid in
full and (ii) the Indenture Trustee has been paid all amounts to which it is
entitled hereunder [and the Securities Insurer has been paid all Securities
Insurer Reimbursement Amounts to which it is entitled as of the applicable
Redemption Date.]
ARTICLE XI.
MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture Trustee
to take any action under any provision of this Indenture, the Issuer shall
furnish to the Indenture Trustee (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, 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; and
(4) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property
or securities with the Indenture Trustee that is to be made the basis
for the release of any property or securities subject to the lien of
this Indenture, the Issuer shall, in addition to any obligation
imposed in Section 11.1(a) or elsewhere in this Indenture, furnish to
the Indenture Trustee an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair
value (within 90 days of such deposit) to the Issuer of the Collateral
or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (i) above,
the Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of
the securities to be so deposited and of all other such securities
made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set
forth in the certificates delivered pursuant to clause (i) above and
this clause (ii), is 10% or more of the Outstanding Amount of the
Notes, but such a certificate need not be furnished with respect to
any securities so deposited, if the fair value thereof to the Issuer
as set forth in the related Officer's Certificate is less than $25,000
or less than one percent of the Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released from
the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person
the proposed release will not impair the security under this Indenture
in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (iii) above,
the Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair 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 Outstanding Amount of
the Notes, but such certificate need not be furnished in the case of
any release of property or securities if the fair value thereof as set
forth in the related Officer's Certificate is less than $25,000 or
less than one percent of the then Outstanding Amount of the Notes.
SECTION 11.2. Form of Documents Delivered to Indenture Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate of an Authorized Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Servicer, the Seller, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, 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 11.3. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Noteholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Noteholders in person or by agents duly appointed
in writing; and except as herein otherwise expressly provided such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and subject to Section 6.1) conclusive in favor of the
Indenture Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any manner that the Indenture Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer, Rating Agencies
[and Securities Insurer]. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or permitted
by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or act of Noteholders is to be
made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed first-class,
postage prepaid to the Issuer addressed to: [Preferred Credit Owner Trust
199__-_], in care of [Wilmington Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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.
[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., Residential
Mortgage 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.]
Notices required to be given to the [Securities Insurer] 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 the following address:
[MBIA Insurance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Insured Portfolio Management - Structured Finance (IPM-SF),] or at such other
address as shall be designated by written notice to the other parties.
SECTION 11.5. Notices to Noteholders; Waiver. Where this Indenture provides
for notice to Noteholders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class, postage prepaid to each Noteholder affected by such event, at his
address as it appears on the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Noteholders is given by mail, neither the failure to
mail such notice nor any defect in any notice so mailed to any particular
Noteholder shall affect the sufficiency of such notice with respect to other
Noteholders, and any notice that is mailed in the manner herein provided shall
conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event of
Default.
SECTION 11.6. [RESERVED].
SECTION 11.7. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9. Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10. Separability. In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Indenture Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture, except that the [Securities Insurer] is an
express third party beneficiary to this Indenture as provided in Section 11.20.
SECTION 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Seller, the Servicer, the
Affiliated Holder or the Issuer, or join in any institution against the Seller,
the Servicer, the Affiliated Holder 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 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or the
[Securities Insurer], during the Issuer's normal business hours, to examine all
the books of account, records, reports and other papers of the Issuer, to make
copies and extracts therefrom, to cause such books to be audited by Independent
certified public accountants, and to discuss the Issuer's affairs, finances and
accounts with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
SECTION 11.19. Grant of Noteholder Rights to Securities Insurer. In
consideration for the guarantee of the Notes by the [Securities Insurer]
pursuant to the Guaranty Policy, the Noteholders hereby grant to the [Securities
Insurer] the right to act as the holder of 100% of the outstanding Notes for the
purpose of exercising the rights of the holders of the Notes hereunder,
including the voting rights of such holders, but excluding those rights
requiring the consent of all such holders under Section 9.2 and any rights of
such holders to distributions under Section 8.2 hereof; provided that the
preceding grant of rights to the [Securities Insurer] by the Noteholders shall
be subject to Section 11.21 hereof. The rights of the [Securities Insurer] to
direct certain actions and consent to certain actions of the Noteholders
hereunder will terminate at such time as the Class Principal Balances of all
Classes of Notes have been reduced to zero [and the Securities Insurer] has been
reimbursed for all Guaranteed Payments and any other amounts owed under the
Guaranty Policy and the Insurance Agreement [and the Securities Insurer] has no
further obligation under the Guaranty Policy.
SECTION 11.20. Third Party Beneficiary. The parties hereto acknowledge that
the [Securities Insurer] is an express third party beneficiary hereof entitled
to enforce any rights reserved to it hereunder as if it were actually a party
hereto.
SECTION 11.21. Suspension and Termination of Securities Insurer's Rights.
(a) During the continuation of a Securities Insurer Default, rights granted
or reserved to the [Securities Insurer] hereunder shall vest instead in the
Noteholders; provided that the [Securities Insurer] shall be entitled to any
distributions in reimbursement of the Securities Insurer Reimbursement Amount,
the [Securities Insurer] shall retain those rights under Section 9.2 hereof to
consent to any supplement to this Indenture.
(b) At such time as either (i) the Class Principal Balances of each Class
of Notes have been reduced to zero or (ii) the Guaranty Policy has been
terminated following a Securities Insurer Default, and in either case of (i) or
(ii) the [Securities Insurer]has been reimbursed for all Guaranteed Payments and
any other amounts owed under the Guaranty Policy and the Insurance Agreement
[(and the Securities Insurer no longer has any obligation under the Guaranty
Policy, except for breach thereof by the Securities Insurer)], then the rights
and benefits granted or reserved to the [Securities Insurer] hereunder
(including the rights to direct certain actions and receive certain notices)
shall terminate and the Noteholders shall be entitled to the exercise of such
rights and to receive such benefits of the [Securities Insurer] following such
termination to the extent that such rights and benefits are applicable to the
Noteholders.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
[PREFERRED CREDIT OWNER TRUST
199_-_]
By: [Wilmington Trust Company]
not in its individual
capacity but
solely as Owner Trustee
By: ---------------------------
Name: [------------------]
Title: [------------------]
[BANKERS TRUST COMPANY,]
as Indenture Trustee
By:
----------------------------------------
Name:
Title:
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ________________, known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
[WILMINGTON TRUST COMPANY,] not in its individual capacity, but solely as Owner
Trustee on behalf of [PREFERRED CREDIT OWNER TRUST 199_-_,] a Delaware business
trust, and that such person executed the same as the act of said business trust
for the purpose and consideration therein expressed, and in the capacities
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of _________, 1997.
------------------------------
Notary Public in and for the
State of
New York
(Seal)
My commission expires:
------------------
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ____________________, known to
me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of [BANKERS TRUST
COMPANY,] a national banking association, and that such person executed the same
as the act of said corporation for the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of _________, 1997.
-----------------------------
Notary Public in and for the
State of
New York
(Seal)
My commission expires:
------------------
SCHEDULE A
(To be Provided at the Closing and Supplemented on each Subsequent Transfer
Date on which Subsequent [Home] Loans are transferred to the Trust)
Available upon request to the Indenture Trustee
EXHIBIT A-1
(FORM OF CLASS A-1 NOTE)
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE
FACE HEREOF.
$------------
No. ____ CUSIP NO. [ ]
[PREFERRED CREDIT OWNER TRUST 199_-_]
CLASS A-1 ____% ASSET BACKED NOTES
[PREFERRED CREDIT OWNER TRUST 199_-_,] a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of ___________________________ DOLLARS and
NO/100 CENTS ($__________) payable on each Distribution Date in an amount equal
to the result obtained by multiplying (i) a fraction the numerator of which is
$[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE] and the denominator of which is
$__________ by (ii) the aggregate amount, if any, payable from the Distribution
Account in respect of principal on the Class A-1 Notes pursuant to Section
8.2(c)(iv) of the Indenture dated as of _________________, between the Issuer
and [Bankers Trust Company,] a national banking association, as Indenture
Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the earlier of (i) the
Distribution Date occurring in ____ ____ (the "Class A-1 Final Scheduled
Distribution Date"), (ii) the Redemption Date, if any, pursuant to Section
10.1(a) of the Indenture or (iii) the date on which an Event of Default shall
have occurred and be continuing, if the Indenture Trustee or the Holders of
Notes representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2. Capitalized terms used but not defined herein are
defined in Article I of the Indenture, which also contains rules as to
construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown above
on each Distribution Date until the principal of this Note is paid or made
available for payment in full, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date). Interest on this Note will
accrue for each Distribution Date during the calendar month preceding such
Distribution Date (each, a "Due Period"). Interest will be computed on the basis
of a 360-day year of twelve 30-day months. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date:
PREFERRED CREDIT OWNER TRUST
199_-_
By: [Wilmington Trust Company,]
not in its individual
capacity but
solely as Owner Trustee
under the
Trust Agreement,
By:
---------------------------
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes
designated above and referred to in the within-mentioned Indenture.
Date:
[BANKERS TRUST COMPANY,]
not in its individual capacity but
solely as Indenture Trustee,
By:
------------------------------
Authorized Signatory
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 ____% Asset Backed Notes (herein called the "Class
A-1 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Class A-1 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, Class A-3 Notes, Class A-4 Notes,
the Class A-5 Notes, the Class A-6 Notes, the Class A-7 Notes and the Class A-8
Notes (collectively, the "Notes") are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the 20th
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing [ .]
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Class A-1 Final Scheduled Distribution
Date and the Redemption Date, if any, pursuant to Section 10.1(a) of the
Indenture. Notwithstanding the foregoing, the entire unpaid principal amount of
the Notes shall be due and payable on the date on which an Event of Default
shall have occurred and be continuing and the Indenture Trustee, at the
direction or upon the prior written consent of the [Securities Insurer] or the
Holders of the Notes representing not less than a majority of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable in
the manner provided in Section 5.2 of the Indenture. All principal payments on
the Class A-1 Notes shall be made pro rata to the Class A-1 Noteholders entitled
thereto.
[MBIA Insurance Corporation,] as the [Securities Insurer], has issued a
Guaranty Policy in the name of the Indenture Trustee for the benefit of the Note
Owners, which policy guarantees payments on each Distribution Date to the
Indenture Trustee for the benefit of the Note Owners of the related Noteholders'
Distributable Amount then payable on the Notes. Unless a Securities Insurer
Default shall be continuing, the [Securities Insurer] shall be deemed to be the
Holder of 100% of each Class of the outstanding Notes for the purpose of
exercising the rights, including voting rights, of the Holders of each Class of
the Notes under the Indenture. In addition, on each Distribution Date, after the
Note Owners have been paid all amounts to which they are entitled, the
[Securities Insurer] will be entitled to be reimbursed for any unreimbursed
Guaranteed Payments and any other amounts owed under the Guaranty Policy.]
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Indenture Trustee, in the name of and on behalf of the Issuer, will notify the
Person who was the Registered Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed or transmitted by facsimile prior to such
Distribution Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
As provided in the Indenture and the Sale and Servicing Agreement, the
Class A-1 Notes may be redeemed (a) in whole, but not in part, at the option of
the Affiliated Holder, on any Distribution Date on and after the date on which
the Pool Balance is less than or equal to 15% of the Pool Principal Balance of
the Initial Home Loans and the Subsequent Home Loans conveyed to the Trust as of
the respective Cut-off Dates and (b) in part on the Distribution Date on which
the Funding Period ends (or on the Distribution Date immediately following the
last day of the Funding Period, if the Funding Period does not end on a
Distribution Date), in the manner and to the extent described in the Indenture
and the Sale and Servicing Agreement in the event that any amount remains on
deposit in the Pre-Funding Account after giving effect to the purchase of all
Subsequent Home Loans, including any such purchase on such Redemption Date.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and thereupon one or more new Notes of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees by accepting
the benefits of the Indenture that such Noteholder or Note Owner will not at any
time institute against the Seller or the Issuer, or join in any institution
against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each
Note Owner by acceptance of a beneficial interest in a Note), agrees to treat
the Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes, on behalf of the
Holders of all the Notes, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note (or
any one or more Predecessor Notes) shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The Indenture
also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws
of the State of New York, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of the Issuer in its individual capacity,
the Owner Trustee in its individual capacity, any owner of a beneficial interest
in the Issuer, or any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on this Note or performance of, or omission to perform,
any of the covenants, obligations or indemnifications contained in the
Indenture. The Holder of this Note by its acceptance hereof agrees that, except
as expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number
of assignee:
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FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
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(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints , attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: _______________*/
Signature Guaranteed:
_____________________*/
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.