EXHIBIT 4.1
EXECUTION COPY
GMACM REVOLVING HOME EQUITY LOAN TRUST 1998-2,
Issuer,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
Indenture Trustee
------------------------
INDENTURE
------------------------
Dated as of September 25, 1998
HOME EQUITY LOAN-BACKED TERM NOTES
HOME EQUITY LOAN-BACKED VARIABLE FUNDING NOTES
EXECUTION COPY
Table of Contents
Page
ARTICLE I
Definitions
Section 1.01.Definitions.............................................2
Section 1.02.Incorporation by Reference of
Trust Indenture Act.....................................2
Section 1.03.Rules of Construction...................................2
ARTICLE II
Original Issuance of Notes
Section 2.01.Form....................................................4
Section 2.02.Execution, Authentication and Delivery..................4
ARTICLE III
Covenants
Section 3.01.Collection of Payments with Respect
to the Mortgage Loans...................................6
Section 3.02.Maintenance of Office or Agency.........................6
Section 0.00.Xxxxx for Payments to Be Held in Trust;
Paying Agent............................................6
Section 3.04.Existence...............................................7
Section 3.05.Payment of Principal and Interest;
Defaulted Interest......................................8
Section 0.00.Xxxxxxxxxx of Trust Estate..............................9
Section 3.07.Opinions as to Trust Estate............................10
Section 3.08.Performance of Obligations; Servicing Agreement........10
Section 3.09.Negative Covenants.....................................11
Section 3.10.Annual Statement as to Compliance......................11
Section 3.11.Recordation of Assignments.............................12
Section 3.12.Representations and Warranties
Concerning the Mortgage................................12
Section 3.13.Assignee of Record of the Mortgage Loans...............12
Section 3.14.Servicer as Agent and Bailee of the
Indenture Trustee......................................12
Section 3.15.Investment Company Act.................................12
Section 3.16.Issuer May Consolidate, etc............................13
Section 3.17.Successor or Transferee................................14
Section 0.00.Xx Other Business......................................15
Section 0.00.Xx Borrowing...........................................15
Section 3.20.Guarantees, Loans, Advances and Other Liabilities......15
Section 0.00.Xxxxxxx Expenditures...................................15
Section 3.22.Owner Trustee Not Liable for
Certificates or Related Documents......................15
Section 3.23.Restricted Payments....................................15
Section 3.24.Notice of Events of Default............................16
Section 3.25.Further Instruments and Acts...........................16
Section 3.26.Statements to Noteholders..............................16
Section 3.27.Determination of Note Rate.............................16
Section 3.28.Payments under the Policy..............................16
Section 3.29.Replacement Enhancement................................17
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01.The Notes; Increase of Maximum Variable
Funding Balance; Variable Funding Notes................18
Section 4.02.Registration of and Limitations on Transfer
and Exchange of Notes; Appointment of
Certificate Registrar..................................19
Section 4.03.Mutilated, Destroyed, Lost or Stolen Notes.............21
Section 4.04.Persons Deemed Owners..................................22
Section 4.05.Cancellation...........................................22
Section 4.06.Book-Entry Notes.......................................22
Section 4.07.Notices to Depository..................................23
Section 4.08.Definitive Notes.......................................23
Section 0.00.Xxx Treatment..........................................23
Section 4.10.Satisfaction and Discharge of Indenture................24
Section 4.11.Application of Trust Money.............................25
Section 4.12.Subrogation and Cooperation............................25
Section 4.13.Repayment of Monies Held by Paying Agent...............26
Section 4.14.Temporary Notes........................................26
ARTICLE V
Default and Remedies
Section 0.00.Xxxxxx of Default......................................27
Section 5.02.Acceleration of Maturity; Rescission and Annulment.....27
Section 5.03.Collection of Indebtedness and Suits
for Enforcement by Indenture Trustee...................28
Section 5.04.Remedies; Priorities...................................30
Section 5.05.Optional Preservation of the Trust Estate..............31
Section 5.06.Limitation of Suits....................................31
Section 5.07.Unconditional Rights of Noteholders to
Receive Principal and Interest.........................32
Section 5.08.Restoration of Rights and Remedies.....................32
Section 5.09.Rights and Remedies Cumulative.........................32
Section 5.10.Delay or Omission Not a Waiver.........................33
Section 5.11.Control by Noteholders.................................33
Section 5.12.Waiver of Past Defaults................................33
Section 5.13.Undertaking for Costs..................................34
Section 5.14.Waiver of Stay or Extension Laws.......................34
Section 0.00.Xxxx of Trust Estate...................................34
Section 5.16.Action on Notes........................................36
Section 5.17.Performance and Enforcement of Certain Obligations.....36
ARTICLE VI
The Indenture Trustee
Section 6.01.Duties of Indenture Trustee............................38
Section 6.02.Rights of Indenture Trustee............................39
Section 6.03.Individual Rights of Indenture Trustee.................39
Section 6.04.Indenture Trustee's Disclaimer.........................39
Section 6.05.Notice of Event of Default.............................40
Section 6.06.Reports by Indenture Trustee to Holders................40
Section 6.07.Compensation and Indemnity.............................40
Section 6.08.Replacement of Indenture Trustee.......................40
Section 6.09.Successor Indenture Trustee by Merger..................41
Section 6.10.Appointment of Co-Indenture Trustee
or Separate Indenture Trustee..........................42
Section 6.11.Eligibility; Disqualification..........................43
Section 6.12.Preferential Collection of Claims Against Issuer.......43
Section 6.13.Representations and Warranties.........................43
Section 6.14.Directions to Indenture Trustee........................44
Section 6.15.Indenture Trustee May Own Securities...................44
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01.Issuer to Furnish Indenture Trustee Names
and Addresses of Noteholders...........................45
Section 7.02.Preservation of Information;
Communications to Noteholders..........................45
Section 7.03.Reports by Issuer......................................45
Section 7.04.Reports by Indenture Trustee...........................46
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01.Collection of Money....................................47
Section 0.00.Xxxxx Accounts.........................................47
Section 8.03.Officer's Certificate..................................47
Section 8.04.Termination Upon Distribution to Noteholders...........48
Section 8.05.Release of Trust Estate................................48
Section 8.06.Surrender of Notes Upon Final Payment..................48
ARTICLE IX
Supplemental Indentures
Section 9.01.Supplemental Indentures Without Consent
of Noteholders.........................................49
Section 9.02.Supplemental Indentures With Consent of
Noteholders............................................50
Section 9.03.Execution of Supplemental Indentures...................51
Section 9.04.Effect of Supplemental Indenture.......................51
Section 9.05.Conformity with Trust Indenture Act....................52
Section 9.06.Reference in Notes to Supplemental Indentures..........52
ARTICLE X
Miscellaneous
Section 10.01. Compliance Certificates and Opinions, etc.........53
Section 10.02. Form of Documents Delivered to Indenture Trustee..54
Section 10.03. Acts of Noteholders...............................55
Section 10.04. Notices, etc., to Indenture Trustee,
Issuer, Enhancer and Rating Agencies..............56
Section 10.05. Notices to Noteholders; Waiver....................56
Section 10.06. Alternate Payment and Notice Provisions...........57
Section 10.07. Conflict with Trust Indenture Act.................57
Section 10.08. Effect of Headings................................57
Section 10.09. Successors and Assigns............................57
Section 10.10. Severability......................................57
Section 10.11. Benefits of Indenture.............................58
Section 10.12. Legal Holidays....................................58
Section 10.13. GOVERNING LAW.....................................58
Section 10.14. Counterparts......................................58
Section 10.15. Recording of Indenture............................58
Section 10.16. Issuer Obligation.................................58
Section 10.17. No Petition.......................................59
Section 10.18. Inspection........................................59
Signatures and Seals.........................................................81
Acknowledgments .............................................................82
EXHIBITS
Exhibit A-1 - Form of Term Notes
Exhibit A-2 - Form of Variable Funding Notes
Exhibit B - Form of 144A Investment Representation for Term Notes
and Capped Funding Notes
Exhibit C - Form of Investor Representation Letter for Term Notes
and Capped Funding Notes
Appendix A Definitions
This Indenture, dated as of September 25, 1998, is between GMACM
Revolving Home Equity Loan Trust 1998-2, a Delaware business trust, as issuer
(the "Issuer"), and Norwest Bank Minnesota, National Association, as indenture
trustee (the "Indenture Trustee").
WITNESSETH:
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Issuer's Series
1998-2 Home Equity Loan-Backed Term Notes and Home Equity Loan-Backed Variable
Funding Notes (together the "Notes").
GRANTING CLAUSE:
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Noteholders and the Enhancer, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created (a) the Initial Mortgage Loans and any Subsequent Mortgage Loans; (b)
all funds on deposit from time to time in the Note Payment Account and in all
proceeds thereof; (c) all funds on deposit from time to time in the Capitalized
Interest Account (other than any income thereon), the Pre-Funding Account and
the Funding Account;(d) the Policy and (e) all present and future claims,
demands, causes and choses in action in respect of any or all of the foregoing
and all payments on or under, and all proceeds of every kind and nature
whatsoever in respect of, any or all of the foregoing and all payments on or
under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The foregoing Grant shall inure to the benefit of the Enhancer in
respect of draws made on the Policy and amounts owing from time to time pursuant
to the Insurance Agreement (regardless of whether such amounts relate to the
Notes or the Certificates), and such Grant shall continue in full force and
effect for the benefit of the Enhancer until all such amounts owing to it have
been repaid in full.
The Indenture Trustee, as trustee on behalf of the Holders of the
Notes, acknowledges such Xxxxx, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
ARTICLE I
Definitions
Section 1.01. Definitions. For all purposes of this Indenture, except
as otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A, which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act (the
"TIA"), such provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
Section 1.03. Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) 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;
(c) "or" includes "and/or";
(d) "including" means "including without limitation";
(e) words in the singular include the plural and words in the plural
include the singular;
(f) the term "proceeds" has the meaning ascribed thereto in the UCC;
and
(g) any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
Original Issuance of Notes
Section 2.01. Form. The Term Notes and the Variable Funding Notes, in
each case together with the Indenture Trustee's certificate of authentication,
shall be in substantially the forms set forth in Exhibits A-1 and A-2,
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 the 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 such Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibits A-1 and A-2 are part of
the terms of this Indenture.
Section 2.02. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and
deliver Term Notes for original issue in an aggregate initial principal amount
of $175,000,000.00 and Variable Funding Notes for original issue in an aggregate
initial principal amount of zero. The Variable Funding Balance of the Variable
Funding Notes in the aggregate may not exceed the Maximum Variable Funding
Balance.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes, and the Term Notes shall be issuable in
minimum denominations of $25,000 and integral multiples of $1,000 in excess
thereof.
Each Variable Funding Note shall be initially issued with a Variable
Funding Balance of $0 or, if applicable, with a Variable Funding Balance in an
amount equal to the Balance Differential for the Collection Period related to
the Payment Date following the date of issuance of such Variable Funding Note
pursuant to Section 4.01(c).
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
ARTICLE III
Covenants
Section 3.01. Collection of Payments with Respect to the Mortgage
Loans. The Indenture Trustee shall establish and maintain with itself the Note
Payment Account in which the Indenture Trustee shall, subject to the terms of
this paragraph, deposit, on the same day as it is received from the Servicer,
each remittance received by the Indenture Trustee with respect to the Mortgage
Loans. The Indenture Trustee shall make all payments of principal of and
interest on the Notes, subject to Section 3.03 as provided in Section 3.05
herein from monies on deposit in the Note Payment Account.
Section 3.02. Maintenance of Office or Agency. The Issuer will maintain
in the City of Minneapolis, Minnesota, an office or agency where, subject to
satisfaction of conditions set forth herein, Notes may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Indenture Trustee to serve as its agent for the
foregoing purposes. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as
its agent to receive all such surrenders, notices and demands.
Section 3.03. Money for Payments to Be Held in Trust; Paying Agent. As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Note Payment
Account pursuant to Section 3.01 shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Note Payment Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section 3.03. The Issuer will cause each Paying Agent
other than the Indenture Trustee to execute and deliver to the Indenture Trustee
an instrument in which such Paying Agent shall agree with the Indenture Trustee
(and if the Indenture Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section 3.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided;
(b) give the Indenture Trustee and the Enhancer written notice of any
default by the Issuer of which it has actual knowledge in the making of any
payment required to be made with respect to the Notes;
(c) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture Trustee
all sums so held in trust by such Paying Agent;
(d) immediately resign as Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for 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;
(e) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith; and
(f) deliver to the Indenture Trustee a copy of the statement to
Noteholders prepared with respect to each Payment Date by the Servicer pursuant
to Section 4.01 of the Servicing Agreement.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee may also adopt and employ,
at the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Noteholders the Notes of which have been called but have not
been surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Noteholder).
Section 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.
Section 3.05. Priority of Distributions; Defaulted Interest.
(a) In accordance with Section 3.03(a) of the Servicing Agreement, the
priority of distributions on each Payment Date is as follows:
(i) to the Note Payment Account, for payment to the
Noteholders by the Paying Agent, pro rata, interest for the related
Interest Period at the Note Rate on the related Note Balances of the
Notes immediately prior to such Payment Date, after giving effect to
any Policy Draw Amount deposited into the Note Payment Account pursuant
to Section 3.28(a)(i), excluding any Interest Shortfalls;
(ii) during the Amortization Periods, to the Note Payment
Account, for payment to the Noteholders by the Paying Agent, pro rata,
the Principal Distribution Amount for such Payment Date, after giving
effect to any amount on deposit in the Note Payment Account on such
Payment Date in respect of Section 3.28(a)(ii);
(iii) to the Enhancer, the amount of the Premium for the
Policy, with interest thereon as provided in the Insurance Agreement;
(iv) to the Enhancer, to reimburse it for prior draws made on
the Policy, with interest thereon as provided in the Insurance
Agreement;
(v) during the Revolving Period, to the Funding Account, the
amount (but not in excess of the amount, if any, of Excess Spread)
necessary to be applied on such Payment Date so that the Outstanding
Overcollateralization Amount for such Payment Date is not less than the
Overcollateralization Target Amount;
(vi) during the Amortization Periods, to the Note Payment
Account, for payment to the Noteholders by the Paying Agent, pro rata,
as principal, the amount (but not in excess of the amount, if any, of
Excess Spread) necessary to be applied on such Payment Date so that the
Outstanding Overcollateralization Amount for such Payment Date is not
less than the Overcollateralization Target Amount;
(vii) to the Enhancer, any other amounts owed to the Enhancer
pursuant to the Insurance Agreement;
(viii) to the Note Payment Account, for payment to the
Noteholders by the Paying Agent, pro rata, any Interest Shortfalls not
previously paid, together with interest thereon at the Note Rate (as
adjusted from time to time), based on the amount remaining unpaid with
respect thereto;
(ix) during the Amortization Periods, to the Indenture
Trustee, any amounts owing to the Indenture Trustee pursuant to Section
6.07 to the extent remaining unpaid;
(x) to the Noteholders, the amount of any Unpaid Principal
Amount, with interest thereon for the applicable Interest Periods at
the Note Rate (as adjusted from time to time); and
(xi) any remaining amount, to the Distribution Account, for
distribution to the Certificateholders by the Certificate Paying Agent;
provided, that such amounts may, at the direction of the Seller be
deposited instead into the Funding Account during the Revolving Period
in connection with any optional repurchase of Mortgage Loans by the
Servicer pursuant to Section 3.15 of the Servicing Agreement;
provided, that on the Final Payment Date, the amount to be paid pursuant to
clause (ii) above shall be equal to the sum of the Term Note Balance and the
Variable Funding Balance immediately prior to such Payment Date. For purposes of
the foregoing, the Note Balance of the Notes on each Payment Date during the
Amortization Periods will be reduced (any such reduction, an "Unpaid Principal
Amount") by the pro rata portion allocable to the related Notes of all
Liquidation Loss Amounts for such Payment Date, but only to the extent that such
Liquidation Loss Amounts are not otherwise covered by payments made pursuant to
clause (ii) above or by a draw on the Policy, and the Outstanding
Overcollateralization Amount is zero.
On each Payment Date, the Paying Agent shall apply, from amounts on
deposit in the Note Payment Account, the amounts and in the order of priority
set
forth above.
Amounts paid to Noteholders shall be paid in respect of the Term Notes
or Variable Funding Notes, as the case may be, in accordance with the applicable
percentage as set forth in paragraph (b) below. Any installment of interest or
principal payable on any Note that is punctually paid or duly provided for by
the Issuer on the applicable Payment Date shall be paid to the Holder of record
thereof on the immediately preceding Record Date by wire transfer to an account
specified in writing by such Holder reasonably satisfactory to the Indenture
Trustee, the amount required to be distributed to such Holder on such Payment
Date pursuant to such Holder's Notes; provided, that the Indenture Trustee shall
not pay to any such Holder any amounts required to be withheld from a payment to
such Holder by the Code.
(b) Principal of each Note shall be due and payable in full on the
Final Payment Date as provided in the applicable form of Note set forth in
Exhibits A-1 and A-2. All principal payments on the Term Notes and the Variable
Funding Notes shall be made pro rata to the Noteholders entitled thereto in
accordance with the related Percentage Interests represented thereby. Upon
written notice to the Indenture Trustee by the Issuer, the Indenture Trustee
shall notify the Person in the name of which a Note is registered at the close
of business on the Record Date preceding the Final Payment Date or other final
Payment Date, as applicable. Such notice shall be mailed no later than five
Business Days prior to the Final Payment Date or such other final Payment Date
and shall specify that payment of the principal amount and any interest due with
respect to such Note at the Final Payment Date or such other final Payment Date
will be payable only upon presentation and surrender of such Note, and shall
specify the place where such Note may be presented and surrendered for such
final payment.
Section 3.06. Protection of Trust Estate.
(a) The Issuer shall from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) cause the Trust to enforce any of the Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Trust
Estate against the claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture
Trustee shall not remove any portion of the Trust Estate that consists of money
or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the most recent Opinion of
Counsel delivered pursuant to Section 3.07 (or from the jurisdiction in which it
was held as described in the Opinion of Counsel delivered at the Closing Date
pursuant to Section 3.07(a), if no Opinion of Counsel has yet been delivered
pursuant to Section 3.07(b)) unless the Trustee shall have first received an
Opinion of Counsel to the effect that the lien and security interest created by
this Indenture with respect to such property will continue to be maintained
after giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.06.
Section 3.07. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee and the Owner Trustee an Opinion of Counsel at the expense of the Issuer
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements, as
are necessary to perfect and make effective the lien and security interest in
the Mortgage Loans and reciting the details of such action, or stating that, in
the opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before December 31st in each calendar year, beginning in
1999, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at
the expense of the Issuer either stating that, in the opinion of such counsel,
such action has been taken with respect to the recording, filing, re-recording
and refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and security interest in the Mortgage Loans and reciting the details of
such action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and the execution and filing of any financing statements and continuation
statements that will, in the opinion of such counsel, be required to maintain
the lien and security interest in the Mortgage Loans until December 31 in the
following calendar year.
Section 3.08. Performance of Obligations; Servicing Agreement.
(a) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer shall not take any action or permit any action to be
taken by others that would release any Person from any of such Person's
covenants or obligations under any of the documents relating to the Mortgage
Loans or under any instrument included in the Trust Estate, or that would result
in the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any of the documents relating to the
Mortgage Loans or any such instrument, except such actions as the Servicer is
expressly permitted to take in the Servicing Agreement.
(d) The Issuer may retain an administrator and may enter into contracts
with other Persons for the performance of the Issuer's obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.
Section 3.09. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(a) except as expressly permitted by this Indenture, sell, transfer,
exchange or otherwise dispose of the Trust Estate, unless directed to do so by
the Indenture Trustee;
(b) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly withheld
from such payments under the Code) or assert any claim against any present or
former Noteholder by reason of the payment of the taxes levied or assessed upon
any part of the Trust Estate;
(c) (i) 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, (ii) permit any lien, charge,
excise, claim, security interest, mortgage or other encumbrance (other than the
lien of this Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein or the
proceeds thereof or (iii) permit the lien of this Indenture not to constitute a
valid first priority security interest in the Trust Estate; or
(d) impair or cause to be impaired the Issuer's interest in the
Mortgage Loans, the Purchase Agreement or in any other Basic Document, if any
such action would materially and adversely affect the interests of the
Noteholders. Section 3.10. Annual Statement as to Compliance. The Issuer shall
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year ending on December 31,
1999), an Officer's Certificate stating, as to the Authorized Officer signing
such Officer's Certificate, that:
(a) a review of the activities of the Issuer during such year and of
its performance under this Indenture and the Trust Agreement has been made under
such Authorized Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under this
Indenture and the provisions of the Trust Agreement throughout such year, or, if
there has been a default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the nature and
status thereof.
Section 3.11. Recordation of Assignments. The Issuer shall enforce the
obligation of the Seller under the Purchase Agreement to submit or cause to be
submitted for recordation all Assignments of Mortgages within 60 days of receipt
of recording information by the Servicer.
Section 3.12. Representations and Warranties Concerning the Mortgage
Loans. The Indenture Trustee, as pledgee of the Mortgage Loans, shall have the
benefit of the representations and warranties made by the Seller in Section
3.1(a) and Section 3.1(b) of the Purchase Agreement concerning the Mortgage
Loans and the right to enforce the remedies against the Seller provided in such
Section 3.1(a) or Section 3.1(b) to the same extent as though such
representations and warranties were made directly to the Indenture Trustee.
Section 3.13. Assignee of Record of the Mortgage Loans. As pledgee of
the Mortgage Loans, the Indenture Trustee shall hold record title to the
Mortgage Loans by being named as payee in the endorsements of the Mortgage Notes
and assignee in the Assignments of Mortgage to be recorded under Section 2.1 of
the Purchase Agreement. Except as expressly provided in the Purchase Agreement
or in the Servicing Agreement with respect to any specific Mortgage Loan, the
Indenture Trustee shall not execute any endorsement or assignment or otherwise
release or transfer such record title to any of the Mortgage Loans until such
time as the remaining Trust Estate may be released pursuant to Section 8.05(b).
Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee.
Solely for purposes of perfection under Section 9-305 of the UCC or other
similar applicable law, rule or regulation of the state in which such property
is held by the Servicer, the Indenture Trustee hereby acknowledges that the
Servicer is acting as agent and bailee of the Indenture Trustee in holding
amounts on deposit in the Custodial Account pursuant to Section 3.02 of the
Servicing Agreement that are allocable to the Mortgage Loans, as well as the
agent and bailee of the Indenture Trustee in holding any Related Documents
released to the Servicer pursuant to Section 3.06(c) of the Servicing Agreement,
and any other items constituting a part of the Trust Estate which from time to
time come into the possession of the Servicer. It is intended that, by the
Servicer's acceptance of such agency pursuant to Section 3.02 of the Servicing
Agreement, the Indenture Trustee, as a pledgee of the Mortgage Loans, will be
deemed to have possession of such Related Documents, such monies and such other
items for purposes of Section 9-305 of the UCC of the state in which such
property is held by the Servicer.
Section 3.15. Investment Company Act. The Issuer shall not become an
"investment company" or under the "control" of an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
provided, however, that the Issuer shall be in compliance with this Section 3.15
if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions imposed
in such order.
Section 3.16. Issuer May Consolidate, etc.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any state or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee,
in form reasonably satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes and to
the Certificate Paying Agent, on behalf of the Certificateholders and
the performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
(iii) the Enhancer shall have consented thereto and each
Rating Agency shall have notified the Issuer that such transaction will
not cause a Rating Event, without taking into account the Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the
Enhancer) to the effect that such transaction will not have any
material adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any
filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America
or any state, (B) expressly assumes, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein,
(C) expressly agrees by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Holders of the Notes, (D) unless
otherwise provided in such supplemental indenture, expressly agrees to
indemnify, defend and hold harmless the Issuer against and from any
loss, liability or expense arising under or related to this Indenture
and the Notes and (E) expressly agrees by means of such supplemental
indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission (and any
other appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Enhancer shall have consented thereto, and each
Rating Agency shall have notified the Issuer that such transaction will
not cause a Rating Event, if determined without regard to the Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental indenture comply with
this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
Section 3.17. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.16(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.16(b), the Issuer shall be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.
Section 3.18. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Mortgage Loans and the issuance of the Notes and Certificates in the manner
contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.
Section 3.19. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.20. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture or the other Basic Documents, the Issuer shall
not make any loan or advance or credit to, or guarantee (directly or indirectly
or by an instrument having the effect of assuring another's payment or
performance on any obligation or capability of so doing or otherwise), endorse
or otherwise become contingently liable, directly or indirectly, in connection
with the obligations, stocks or dividends of, or own, purchase, repurchase or
acquire (or agree contingently to do so) any stock, obligations, assets or
securities of, or any other interest in, or make any capital contribution to,
any other Person.
Section 3.21. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.22. Owner Trustee Not Liable for Certificates or Related
Documents. The recitals contained herein shall be taken as the statements of the
Issuer, and the Owner Trustee assumes no responsibility for the correctness of
the recitals contained herein. The Owner Trustee makes no representations as to
the validity or sufficiency of this Indenture or any other Basic Document, of
the Certificates (other than the signatures of the Owner Trustee on the
Certificates) or the Notes, or of any Related Documents. The Owner Trustee shall
at no time have any responsibility or liability with respect to the sufficiency
of the Trust Estate or its ability to generate the payments to be distributed to
Certificateholders under the Trust Agreement or the Noteholders under this
Indenture, including, the compliance by the Depositor or the Seller with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Certificate Paying Agent, the Certificate Registrar or the Indenture
Trustee taken in the name of the Owner Trustee.
Section 3.23. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; provided, however, that
the Issuer may make, or cause to be made, (x) distributions to the Owner Trustee
and the Certificateholders as contemplated by, and to the extent funds are
available for such purpose under, the Trust Agreement and (y) payments to the
Servicer pursuant to the terms of the Servicing Agreement. The Issuer will not,
directly or indirectly, make payments to or distributions from the Custodial
Account except in accordance with this Indenture and the other Basic Documents.
Section 3.24. Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Enhancer and the Rating Agencies prompt written notice of
each Event of Default hereunder and under the Trust Agreement.
Section 3.25. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer shall execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purposes of this Indenture.
Section 3.26. Statements to Noteholders. On each Payment Date, each of
the Indenture Trustee and the Certificate Registrar shall forward by mail to the
Enhancer, each Noteholder and each Certificateholder, respectively, the
Servicer's Certificate relating to such Payment Date delivered pursuant to
Section 4.01 of the Servicing Agreement.
Section 3.27. Determination of Note Rate. On the second LIBOR Business
Day immediately preceding (i) the Closing Date in the case of the first Interest
Period and (ii) the first day of each succeeding Interest Period, the Indenture
Trustee shall determine LIBOR and the Note Rate for such Interest Period and
shall inform the Issuer, the Servicer and the Depositor by means of the
Indenture Trustee's online service.
Section 3.28. Payments under the Policy.
(a) Subject to paragraph (c) below, on any Payment Date, the Indenture
Trustee shall make a draw on the Policy in an amount, if any, equal to the
Policy Draw Amount, as specified by the Servicer in writing to the Indenture
Trustee. The Indenture Trustee shall deposit or cause to be deposited such
Policy Draw Amount into the Note Payment Account on such Payment Date to the
extent such amount relates to clause (i) of the definition of "Policy Draw
Amount". To the extent such amount relates to clause (ii) of the definition of
"Policy Draw Amount", the Indenture Trustee shall (i) during the Revolving
Period, deposit such amount into the Funding Account as Principal Collections
and (ii) during the Amortization Periods, deposit such amount into the Note
Payment Account.
(b) The Indenture Trustee shall submit, if a Policy Draw Amount is
specified in any statement to Securityholders prepared pursuant to Section 4.01
of the Servicing Agreement, the Notice of Nonpayment and Demand for Payment of
Insured Amounts (in the form attached as Exhibit A to the Policy) to the
Enhancer no later than 3:00 p.m., New York City time, on the second Business Day
prior to the applicable Payment Date.
Section 3.29. Replacement Enhancement The Issuer (or the Servicer on
its behalf) may, at its expense, in accordance with and upon satisfaction of the
conditions set forth herein, but shall not be required to, obtain a surety bond,
letter of credit, guaranty or reserve account as a Permitted Investment for
amounts on deposit in the Capitalized Interest Account, or may arrange for any
other form of additional credit enhancement; provided, that after prior notice
thereto, no Rating Agency shall have informed the Issuer that a Rating Event
would occur as a result thereof (without taking the Policy into account), and
provided that the timing and mechanism for drawing on such additional
enhancement shall be reasonably acceptable to the Indenture Trustee and the
Enhancer. It shall be a condition to procurement of any such additional credit
enhancement that there be delivered to the Indenture Trustee and the Enhancer
(a) an Opinion of Counsel, acceptable in form to the Indenture Trustee and the
Enhancer, from counsel to the provider of such additional credit enhancement
with respect to the enforceability thereof and such other matters as the
Indenture Trustee or the Enhancer may require and (b) an Opinion of Counsel to
the effect that the procurement of such additional enhancement would not (i)
adversely affect in any material respect the tax status of the Notes or the
Certificates or (ii) cause the Issuer to be taxable as an association (or a
publicly traded partnership) for federal income tax purposes or to be classified
as a taxable mortgage pool within the meaning of Section 7701(i) of the Code.
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01. The Notes; Increase of Maximum Variable Funding Balance;
Variable Funding Notes.
(a) The Term Notes shall be registered in the name of a nominee
designated by the Depository. Beneficial Owners will hold interests in the Term
Notes through the book-entry facilities of the Depository in minimum initial
Term Note Balances of $25,000 and integral multiples of $1,000 in excess
thereof. The Capped Funding Notes will be issued as physical notes in fully
registered form in minimum initial Capped Funding Balances of $1,000,000 and
integral multiples of $100,000 in excess thereof, together with any additional
amount necessary to cover (i) the aggregate initial Capped Funding Balance of
the Capped Funding Notes surrendered at the time of the initial denominational
exchange thereof (with such initial Capped Funding Balance in each case being
deemed to be the Capped Funding Balance of the Capped Funding Notes at the time
of such initial denominational exchange thereof) or (ii) the aggregate initial
Capped Funding Balance of any Capped Funding Notes issued in an exchange
described in subsection (d) below.
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Term Notes for the
purposes of exercising the rights of Holders of Term Notes hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Term Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive certificates for the Term
Notes as to which they are the Beneficial Owners. Requests and directions from,
and votes of, the Depository as Holder of the Term Notes shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Noteholders and give notice to the
Depository of such record date. Without the consent of the Issuer and the
Indenture Trustee, no Term Note may be transferred by the Depository except to a
successor Depository that agrees to hold such Note for the account of the
Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Notes it
beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer
by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Note Registrar and delivered by the Indenture
Trustee to or upon the order of the Issuer.
(b) On each Payment Date, the aggregate Variable Funding Balance of the
Variable Funding Notes shall be increased by an amount equal to the Balance
Differential for such Payment Date, subject to the Maximum Variable Funding
Balance and the terms and conditions set forth below.
(c) The Variable Funding Note issued on the Closing Date shall bear the
Designation "VFN-1" and each new Variable Funding Note will bear sequential
numerical designations in the order of their issuance.
(d) Subject to the following conditions, the Variable Funding Notes may
be exchanged pursuant to Section 4.02 for one or more Capped Funding Notes. The
Indenture Trustee shall not be required to authenticate any such Capped Funding
Note unless a form of such Capped Funding Note has been provided by the Issuer
to the Indenture Trustee at the Issuer's expense. Prior to any such exchange,
the party requesting the exchange must provide an Opinion of Counsel, addressed
to the Enhancer, the Issuer and the Indenture Trustee, to the effect that the
Capped Funding Notes shall qualify for federal income tax purposes as
indebtedness of the Issuer and the Issuer will not be characterized as an
association (or a publicly traded partnership) taxable as a corporation or a
taxable mortgage pool within the meaning of Section 7701(i) of the Code. If
required by the Opinion of Counsel, the Capped Funding Notes may be issued
concurrently with a reduction in the Variable Funding Balance of the Variable
Funding Notes and an equivalent increase in the Certificate Balance of the
Certificates, pursuant to Section 3.12 of the Trust Agreement. Upon receipt of
the Opinion of Counsel, the Indenture Trustee shall issue Capped Funding Notes
with a Capped Funding Balances equal to the Capped Funding Balance permitted
under such Opinion of Counsel, in minimum denominations as set forth in
subsection (a) above. The Capped Funding Notes shall bear the designation
"Capped" in addition to any other applicable designation. Any Security Balance
not represented by either a Capped Funding Note or an increase in the
Certificate Balance of the Certificates referred to above shall result in the
issuance of a new Variable Funding Note having an initial Variable Funding
Balance equal to the excess of the outstanding Variable Funding Balance of the
Variable Funding Note so surrendered over the initial Capped Funding Balances of
the Capped Funding Notes and an increase in the Certificate Balance of the
Certificates referred to above. The Indenture Trustee and the Issuer agree to
cooperate with each other and the party requesting the exchange of Variable
Funding Notes for Capped Funding Notes, the Enhancer, the Depositor, the Seller
and the Owner Trustee and to cause no unreasonable delay in issuing Capped
Funding Notes in connection with this Section and Section 3.12 of the Trust
Agreement.
Section 4.02. Registration of and Limitations on Transfer and Exchange
of Notes; Appointment of Certificate Registrar. The Issuer shall cause to be
kept at the Indenture Trustee's Corporate Trust Office a Note Register in which,
subject to such reasonable regulations as it may prescribe, the Note Registrar
shall provide for the registration of Notes and of transfers and exchanges of
Notes as herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office, the Issuer shall execute, and the Note Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes in authorized initial Note Balances evidencing the same aggregate
Percentage Interests.
No Variable Funding Note, other than any Capped Funding Notes, may be
transferred. Subject to the provisions set forth below, Capped Funding Notes may
be transferred, provided that with respect to the initial transfer thereof by
the Seller prior written notification of such transfer shall have been given to
the Rating Agencies and to the Enhancer by the Seller.
No transfer, sale, pledge or other disposition of a Capped Funding Note
shall be made unless such transfer, sale, pledge or other disposition is exempt
from the registration requirements of the Securities Act, and any applicable
state securities laws or is made in accordance with said Act and laws. In the
event of any such transfer, the Indenture Trustee or the Issuer shall require
the transferee to execute either (i)(a) an investment letter in substantially
the form attached hereto as Exhibit B (or in such form and substance reasonably
satisfactory to the Indenture Trustee and the Issuer) which investment letters
shall not be an expense of the Owner Trustee, the Indenture Trustee, the
Servicer, the Depositor or the Issuer and which investment letter states that,
among other things, such transferee (a) is a "qualified institutional buyer" as
defined under Rule 144A, acting for its own account or the accounts of other
"qualified institutional buyers" as defined under Rule 144A, and (b) is aware
that the proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act, provided by Rule 144A or (ii) the
Indenture Trustee shall require the transferee to execute an investment letter
in substantially the form of Exhibit C acceptable to and in form and substance
reasonably satisfactory to the Issuer and the Indenture Trustee certifying to
the Issuer and the Indenture Trustee the facts surrounding such transfer, which
investment letter shall not be an expense of the Indenture Trustee or the
Issuer. Any Holder of a Capped Funding Note that does not execute such a
certificate or transfer letter shall be deemed to have made the representations
set forth therein. The Holder of a Capped Funding Note desiring to effect such
transfer shall, and does hereby agree to, indemnify the Indenture Trustee, the
Enhancer and the Issuer against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.
Subject to the foregoing, at the option of the Noteholders, Notes may
be exchanged for other Notes of like tenor, in each case in authorized initial
Note Balances evidencing the same aggregate Percentage Interests, upon surrender
of the Notes to be exchanged at the Corporate Trust Office of the Note
Registrar. With respect to any surrender of Capped Funding Notes for exchange,
the new Notes delivered in exchange therefor will bear the designation "Capped"
in addition to any other applicable designations. Whenever any Notes are so
surrendered for exchange, the Indenture Trustee shall execute and the Note
Registrar shall authenticate and deliver the Notes which the Noteholder making
the exchange is entitled to receive. Each Note presented or surrendered for
registration of transfer or exchange shall (if so required by the Note
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed by,
the Holder thereof or his attorney duly authorized in writing with such
signature guaranteed by a commercial bank or trust company located or having a
correspondent located in The City of New York. Notes delivered upon any such
transfer or exchange will evidence the same obligations, and will be entitled to
the same rights and privileges, as the Notes surrendered.
No service charge shall be imposed for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall
be cancelled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges thereof pursuant to
Section 3.05 of the Trust Agreement. The Indenture Trustee hereby accepts such
appointment.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same class; provided,
however, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven days shall be due and payable, instead
of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 4.05. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section 4.05, except as expressly
permitted by this Indenture. All cancelled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Request that they be destroyed or returned to it; provided, however, that such
Issuer Request is timely and the Notes have not been previously disposed of by
the Indenture Trustee.
Section 4.06. Book-Entry Notes. The Term Notes, upon original issuance,
shall be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Depository,
by, or on behalf of, the Issuer. Such Term Notes shall initially be registered
on the Note Register in the name of Cede & Co., the nominee of the initial
Depository, and no Beneficial Owner shall receive a Definitive Note representing
such Beneficial Owner's interest in such Note, except as provided in Section
4.08. Unless and until definitive, fully registered Notes (the "Definitive
Notes") have been issued to Beneficial Owners pursuant to Section 4.08:
(a) the provisions of this Section 4.06 shall be in full force and
effect;
(b) the Note Registrar and the Indenture Trustee shall be entitled to
deal with the Depository for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of instructions
or directions hereunder) as the sole holder of the Term Notes, and shall have no
obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 4.06 conflict
with any other provisions of this Indenture, the provisions of this Section 4.06
shall control;
(d) the rights of Beneficial Owners shall be exercised only through the
Depository and shall be limited to those established by law and agreements
between such Owners of Term Notes and the Depository and/or the Depository
Participants. Unless and until Definitive Term Notes are issued pursuant to
Section 4.08, the initial Depository will make book-entry transfers among the
Depository Participants and receive and transmit payments of principal of and
interest on the Notes to such Depository Participants; and
(e) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Term Notes evidencing a
specified percentage of the Term Note Balances of the Term Notes, the Depository
shall be deemed to represent such percentage only to the extent that it has
received instructions to such effect from Beneficial Owners and/or Depository
Participants owning or representing, respectively, such required percentage of
the beneficial interest in the Term Notes and has delivered such instructions to
the Indenture Trustee.
Section 4.07. Notices to Depository. Whenever a notice or other
communication to the Holders of the Term Notes is required under this Indenture,
unless and until Definitive Term Notes shall have been issued to Beneficial
Owners pursuant to Section 4.08, the Indenture Trustee shall give all such
notices and communications specified herein to be given to Holders of the Term
Notes to the Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08. Definitive Notes. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Term Notes and the Indenture Trustee is
unable to locate a qualified successor, (ii) the Indenture Trustee elects to
terminate the book-entry system through the Depository, (iii) the Indenture
Trustee receives actual knowledge of a proposed transfer of a Term Note to an
"accredited investor" in accordance with Section 4.02 hereof, or (iv) after the
occurrence of an Event of Default, Beneficial Owners of Term Notes representing
beneficial interests aggregating at least a majority of the aggregate Term Note
Balance of the Term Notes advise the Depository in writing that the continuation
of a book-entry system through the Depository is no longer in the best interests
of the Beneficial Owners, then the Depository shall notify all Beneficial Owners
and the Indenture Trustee of the occurrence of any such event and of the
availability of Definitive Term Notes to Beneficial Owners requesting the same.
Upon surrender to the Indenture Trustee of the typewritten Term Notes
representing the Book-Entry Notes by the Depository (or Percentage Interest of
the Book-Entry Notes being transferred pursuant to clause (iii) above),
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Term Notes in accordance
with the instructions of the Depository. None of the Issuer, the Note Registrar
or the Indenture Trustee shall be liable for any delay in delivery of such
instructions, and each 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 4.09. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Notes
will qualify as indebtedness. The Issuer, by entering into this Indenture, and
each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness.
Section 4.10. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.11) and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 4.03 and (ii) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to the
Issuer or discharged from such trust, as provided in Section 3.03) have
been delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
a. have become due and payable,
b. will become due and payable at the Final Payment
Date within one year, or
c. have been declared immediately due and payable
pursuant to Section 5.02.
and the Issuer, in the case of a. or b. above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes
and Certificates then outstanding not theretofore delivered to the
Indenture Trustee for cancellation when due on the Final Payment Date;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder and under the Insurance Agreement by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee and the
Enhancer an Officer's Certificate and an Opinion of Counsel, each
meeting the applicable requirements of Section 10.01 and each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with
and, if the Opinion of Counsel relates to a deposit made in connection
with Section 4.10(A)(2)b. above, such opinion shall further be to the
effect that such deposit will not have any material adverse tax
consequences to the Issuer, any Noteholders or any Certificateholders.
Section 4.11. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the Holders
of Securities, of all sums due and to become due thereon for principal and
interest; but such monies need not be segregated from other funds except to the
extent required herein or required by law.
Section 4.12. Subrogation and Cooperation.
(a) The Issuer and the Indenture Trustee acknowledge that (i) to the
extent the Enhancer makes payments under the Policy on account of principal of
or interest on the Mortgage Loans, the Enhancer will be fully subrogated to the
rights the Noteholders to receive such principal of and interest on the Mortgage
Loans, and (ii) the Enhancer shall be paid such principal and interest only from
the sources and in the manner provided herein and in the Insurance Agreement for
the payment of such principal and interest.
The Indenture Trustee shall cooperate in all respects with any
reasonable request by the Enhancer for action to preserve or enforce the
Enhancer's rights or interest under this Indenture or the Insurance Agreement,
consistent with this Indenture and without limiting the rights of the
Noteholders as otherwise set forth in the Indenture, including upon the
occurrence and continuance of a default under the Insurance Agreement, a request
to take any one or more of the following actions:
(i) institute Proceedings for the collection of all amounts
then payable on the Notes or under this Indenture in respect to the
Notes and all amounts payable under the Insurance Agreement and to
enforce any judgment obtained and collect from the Issuer monies
adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private Sales (as defined in
Section 5.15 hereof) called and conducted in any manner permitted by
law;
(iii) file or record all assignments that have not previously
been recorded;
(iv) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Enhancer hereunder.
Following the payment in full of the Notes, the Enhancer shall continue
to have all rights and privileges provided to it under this Section and in all
other provisions of this Indenture, until all amounts owing to the Enhancer have
been paid in full.
Section 4.13. Repayment of Monies Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any 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 3.05; and thereupon, such Paying Agent shall be released
from all further liability with respect to such monies.
Section 4.14. Temporary Notes. Pending the preparation of any
Definitive Notes, the Issuer may execute and upon its written direction, the
Indenture Trustee may authenticate and make available for delivery, temporary
Notes that are printed, lithographed, typewritten, photocopied or otherwise
produced, in any denomination, substantially of the tenor of the Definitive
Notes in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of the
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the office or agency of the Indenture
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Issuer shall execute and the Indenture Trustee
shall authenticate and make available for delivery, in exchange therefor,
Definitive Notes of authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
ARTICLE V
Default and Remedies
Section 5.01. Events of Default. The Issuer shall deliver to the
Indenture Trustee and the Enhancer, within five days after learning of the
occurrence any event that with the giving of notice and the lapse of time would
become an Event of Default under clause (iii) of the definition of "Event of
Default" written notice in the form of an Officer's Certificate of its status
and what action the Issuer is taking or proposes to take with respect thereto.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default shall occur and be continuing, or if the Servicer shall
purchase all of the Mortgage Loans pursuant to Section 8.08 of the Servicing
Agreement, then and in every such case the Indenture Trustee, the Enhancer or
the Holders of Notes representing not less than a majority of the aggregate Note
Balance of the Notes, with the written consent of the Enhancer, may declare the
Notes to be immediately due and payable by a notice in writing to the Issuer
(and to the Indenture Trustee if given by Noteholders); and upon any such
declaration, the unpaid principal amount of the 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 with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter provided in this Article V, the Enhancer or the Holders of Notes
representing a majority of the aggregate Note Balance of the Notes, with the
written consent of the Enhancer, by written notice to the Issuer and the
Indenture Trustee, may in writing waive the related Event of Default and 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:
(i) all payments of principal of and interest on the
Notes and all other amounts that would then be due hereunder
or upon the Notes if the Event of Default giving rise to such
acceleration had not occurred;
(ii) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(iii) all Events of Default, other than the
nonpayment of the principal of the Notes that has become due
solely by such acceleration, have been cured or waived as
provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if default in the payment of (i) any
interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) the principal of or any installment
of the principal of any Note when the same becomes due and payable, the Issuer
shall, upon demand of the Indenture Trustee, pay to it, for the benefit of the
Noteholders, the entire amount then due and payable on the Notes for principal
and interest, with interest on the overdue principal, and in addition thereto
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.17 hereof, may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor on the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor on the Notes, wherever
situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default shall occur and be continuing, the Indenture
Trustee, subject to the provisions of Section 10.17 hereof, may, as more
particularly provided in Section 5.04, in its discretion proceed to protect and
enforce its rights and the rights of the Noteholders 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) If there shall be pending, relative to the Issuer or any other
obligor on the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or if 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 if there shall be any other comparable judicial Proceedings relative to the
Issuer or other any other obligor on the Notes, or relative to the creditors or
property of the Issuer or such other obligor, then the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise, and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the entire amount
of principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Indenture Trustee (including any
claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence,
willful misconduct or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Noteholders in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Noteholders allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event the Indenture Trustee shall
consent to the making of payments directly to such Noteholders, to pay to the
Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence, willful
misconduct or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture 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 Term Notes or the Variable Funding Notes,
as applicable.
(g) In any Proceedings to which the Indenture Trustee shall be a party
(including any Proceedings involving the interpretation of any provision of this
Indenture), the Indenture Trustee shall be held to represent all Noteholders,
and it shall not be necessary to make any Noteholder a party to any such
Proceedings.
Section 5.04. Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing, then
the Indenture Trustee, subject to the provisions of Section 10.17 hereof, with
the written consent of the Enhancer may, or, at the written direction of the
Enhancer, shall, do one or more of the following, in each case subject to
Section 5.05:
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, and all amounts payable under the Insurance
Agreement, enforce any judgment obtained, and collect from the Issuer
and any other obligor on the Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Enhancer, which consent will not be
unreasonably withheld, and the Holders of 100% of the aggregate Note Balance of
the Notes, (B) the proceeds of such sale or liquidation distributable to Holders
are sufficient to discharge in full all amounts then due and unpaid upon the
Notes for principal and interest and to reimburse the Enhancer for any amounts
drawn under the Policy and any other amounts due the Enhancer under the
Insurance Agreement or (C) the Indenture Trustee determines that the Mortgage
Loans will not continue to provide sufficient funds for the payment of principal
of and interest on the Notes as they would have become due if the Notes had not
been declared due and payable, and the Indenture Trustee obtains the consent of
the Enhancer, which consent will not be unreasonably withheld, and the Holders
of 66 2/3% of the aggregate Note Balance of the Notes. In determining such
sufficiency or insufficiency with respect to clause (B) and (C) above, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose. Notwithstanding the foregoing, provided that a
Servicing Default shall not have occurred, any Sale of the Trust Estate shall be
made subject to the continued servicing of the Mortgage Loans by the Servicer as
provided in the Servicing Agreement.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out such money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to the Noteholders for amounts due and unpaid on the related
Notes for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Notes for
interest from amounts available in the Trust Estate for such
Noteholders;
THIRD: to the Noteholders for amounts due and unpaid on the related
Notes for principal, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Notes for
principal, from amounts available in the Trust Estate for such
Noteholders, until the respective Note Balances of such Notes have been
reduced to zero;
FOURTH: to the payment of all amounts due and owing the Enhancer under
the Insurance Agreement;
FIFTH: to the Certificate Paying Agent for amounts due under Article
VIII of the Trust Agreement; and
SIXTH: to the payment of the remainder, if any, to the Issuer or any
other person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05. Optional Preservation of the Trust Estate. If the Notes
have been declared due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not (but shall at the written
direction of the Enhancer), elect to take and maintain possession of the Trust
Estate. It is the desire of the parties hereto and the Noteholders that there be
at all times sufficient funds for the payment of principal of and interest on
the Notes and other obligations of the Issuer including payment to the Enhancer,
and the Indenture Trustee shall take such desire into account when determining
whether or not to take and maintain possession of the Trust Estate. In
determining whether to take and maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
Section 5.06. Limitation of Suits. No Noteholder shall have any right
to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 10.17 hereof:
(a) such Holder shall have previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% of the aggregate Note Balance of
the Notes shall have made written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(c) such Holder or Holders shall have offered the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
by it in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute such Proceedings;
and
(e) no direction inconsistent with such written request shall have been
given to the Indenture Trustee during such 60-day period by the Holders of a
majority of the aggregate Note Balance of the Notes or by the Enhancer.
It is understood and intended that no Noteholder 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 Noteholders or
to obtain or to seek to obtain priority or preference over any other Noteholders
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 Noteholders, each
representing less than a majority of the aggregate Note Balance of the Notes,
then the Indenture Trustee in its sole discretion may determine what action, if
any, shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07. Unconditional Rights of Noteholders to Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Enhancer or the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law, 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 Enhancer or any Noteholder to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
Section 5.11. Control by Noteholders. The Enhancer (so long as no
Enhancer Default exists) or the Holders of a majority of the aggregate Note
Balance of Notes with the consent of the Enhancer, 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 5.04, any direction to the
Indenture Trustee to sell or liquidate the Trust Estate shall be by the Enhancer
(so long as no Enhancer Default exists) or by the Holders of Notes representing
not less than 100% of the aggregate Note Balance of the Notes with the consent
of the Enhancer;
(c) if the conditions set forth in Section 5.05 shall have been
satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant
to such Section, then any direction to the Indenture Trustee by Holders of Notes
representing less than 100% of the aggregate Note Balance of the Notes to sell
or liquidate the Trust Estate shall be of no force 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 Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines
might involve it in liability or might materially adversely affect the rights of
any Noteholders not consenting to such action.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Enhancer (so long as no Enhancer Default exists) or the Holders of not less than
a majority of the aggregate Note Balance of the Notes, with the consent of the
Enhancer, may waive any past Event of Default and its consequences, except an
Event of Default (a) with respect to payment of principal of or interest on any
of the Notes or (b) in respect of a covenant or provision hereof that cannot be
modified or amended without the consent of the Holder of each Note. In the case
of any such waiver, the Issuer, the Indenture Trustee and the Noteholders shall
be restored to their respective former positions and rights hereunder; but no
such waiver shall extend to any subsequent or other Event of Default or impair
any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Section 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Noteholder by such Noteholder's acceptance of the related Note
shall be deemed to have agreed, that any court may in its discretion require, in
any Proceeding for the enforcement of any right or remedy under this Indenture,
or in any Proceeding against the Indenture Trustee for any action taken,
suffered or omitted by it as Indenture Trustee, the filing by any party litigant
in such Proceeding of an undertaking to pay the costs of such Proceeding, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such Proceeding,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 5.13 shall not apply to
(a) any Proceeding instituted by the Indenture Trustee, (b) any Proceeding
instituted by any Noteholder, or group of Noteholders, in each case holding in
the aggregate more than 10% of the aggregate Note Balance of the Notes or (c)
any Proceeding instituted by any Noteholder for the enforcement of the payment
of principal of or interest on any Note on or after the respective due dates
expressed in such Note and in this Indenture.
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
Section 5.15. Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a "Sale") of any
portion of the Trust Estate pursuant to Section 5.04 is expressly subject to the
provisions of Section 5.05 and this Section 5.15. The power to effect any such
Sale shall not be exhausted by any one or more Sales as to any portion of the
Trust Estate remaining unsold, but shall continue unimpaired until the entire
Trust Estate shall have been sold or all amounts payable on the Notes and under
this Indenture and under the Insurance Agreement shall have been paid. The
Indenture Trustee may from time to time postpone any public Sale by public
announcement made at the time and place of such Sale. The Indenture Trustee
hereby expressly waives its right to any amount fixed by law as compensation for
any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless:
(i) the Holders of all Notes and the Enhancer consent to, or
direct the Indenture Trustee to make, such Sale,
(ii) the proceeds of such Sale would be not less than the
entire amount that would be payable to the Noteholders under the Notes,
the Certificateholders under the Certificates and the Enhancer in
respect of amounts drawn under the Policy and any other amounts due the
Enhancer under the Insurance Agreement, in full payment thereof in
accordance with Section 5.02, on the Payment Date next succeeding the
date of such Sale, or
(iii) the Indenture Trustee determines, in its sole
discretion, that the conditions for retention of the Trust Estate set
forth in Section 5.05 cannot be satisfied (in making any such
determination, the Indenture Trustee may rely upon an opinion of an
Independent investment banking firm obtained and delivered as provided
in Section 5.05), and the Enhancer consents to such Sale (which consent
shall not be unreasonably withheld), and the Holders of Notes
representing at least 66-2/3% of the aggregate Note Balance of the
Notes consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) Unless the Noteholders and the Enhancer shall have otherwise
consented or directed the Indenture Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater than the
amount described in paragraph (ii) of subsection (b) of this Section 5.15 has
not been established by the Indenture Trustee and no Person bids an amount equal
to or greater than such amount, then the Indenture Trustee shall bid an amount
at least $1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(i) any Noteholder may bid for and, with the consent of the
Enhancer, purchase the property offered for sale, and upon compliance
with the terms of sale may hold, retain and possess and dispose of such
property, without further accountability, and may, in paying the
purchase money therefor, deliver any Notes or claims for interest
thereon in lieu of cash up to the amount which shall, upon distribution
of the net proceeds of such sale, be payable thereon, and such Notes,
in case the amounts so payable thereon shall be less than the amount
due thereon, shall be returned to the Holders thereof after being
appropriately stamped to show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the
property offered for Sale in connection with any Sale thereof and,
subject to any requirements of, and to the extent permitted by,
applicable law in connection therewith, may purchase all or any portion
of the Trust Estate in a private sale. In lieu of paying cash therefor,
the Indenture Trustee may make settlement for the purchase price by
crediting the gross Sale price against the sum of (A) the amount that
would be distributable to the Noteholders and the Certificateholders
and amounts owing to the Enhancer as a result of such Sale in
accordance with Section 5.04(b) on the Payment Date next succeeding the
date of such Sale and (B) the expenses of the Sale and of any
Proceedings in connection therewith that are reimbursable to it,
without being required to produce the Notes in order to complete any
such Sale or in order for the net Sale price to be credited against
such Notes, and any property so acquired by the Indenture Trustee shall
be held and dealt with by it in accordance with the provisions of this
Indenture;
(iii) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Trust Estate in connection with a Sale thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Issuer to transfer and convey its
interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale; and
(v) no purchaser or transferee at such a Sale shall be bound
to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any monies.
Section 5.16. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate
or upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.04(b).
Section 5.17. Performance and Enforcement of Certain Obligations.
(a) Promptly following a written request from the Enhancer or the
Indenture Trustee, with the written consent of the Enhancer, to do so, the
Issuer, in its capacity as owner of the Mortgage Loans, shall, with the written
consent of the Enhancer, take all such lawful action as the Indenture Trustee
may request to cause the Issuer to compel or secure the performance and
observance by the Seller and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Purchase Agreement and
the Servicing Agreement, and to exercise any and all rights, remedies, powers
and privileges lawfully available to the Issuer under or in connection with the
Purchase Agreement and the Servicing Agreement to the extent and in the manner
directed by the Indenture Trustee, as pledgee of the Mortgage Loans, including
the transmission of notices of default on the part of the Seller or the 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 Purchase Agreement and the Servicing Agreement.
(b) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee, as pledgee of the Mortgage Loans, subject to the rights of
the Enhancer under the Servicing Agreement, may, and at the direction (which
direction shall be in writing or by telephone (confirmed in writing promptly
thereafter)) of the Holders of 66 2/3% of the aggregate Note Balance 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
Purchase Agreement and the Servicing Agreement, including the right or power to
take any action to compel or secure performance or observance by the Seller or
the 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 Purchase Agreement and the Servicing Agreement, as
the case may be, and any right of the Issuer to take such action shall not be
suspended. In connection therewith, as determined by the Indenture Trustee, the
Issuer shall take all actions necessary to effect the transfer of the Mortgage
Loans to the Indenture Trustee.
ARTICLE VI
The Indenture Trustee
Section 6.01. Duties of Indenture Trustee.
(a) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent Person would exercise 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; provided, however, that 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 (a)
of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.11 or any
direction from the Enhancer that the Enhancer is entitled to give under
any of the Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
(h) With respect to each Payment Date, on the Business Day following
the related Determination Date, the Indenture Trustee shall forward or cause to
be forwarded by mail to the Enhancer and the Servicer, a statement setting
forth, to the extent applicable, (i) during the Pre-Funding Period, the
Pre-Funded Amount as of such Payment Date and any transfers of funds in
connection therewith, and (ii) during the Revolving Period, the amount of
Principal Collections to be deposited into the Funding Account in respect of
such Payment Date, and the amount on deposit in the Funding Account as of such
Payment Date, after giving effect to any amounts so deposited therein.
Section 6.02. Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Indenture
Trustee need not investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on any such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Indenture Trustee must comply with Sections 6.11 and 6.12.
Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be (i) responsible for and makes no representation as to the validity
or adequacy of this Indenture or the Notes, (ii) accountable for the Issuer's
use of the proceeds from the Notes or (iii) responsible for any statement of the
Issuer in this 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 thereon.
Section 6.05. Notice of Event of Default. If an Event of Default shall
occur and be continuing, and if such Event of Default is known to a Responsible
Officer of the Indenture Trustee, then the Indenture Trustee shall give notice
thereof to the Enhancer. The Indenture Trustee shall mail to each Noteholder
notice of such Event of Default within 90 days after it occurs. Except in the
case of an Event of Default with respect to the payment of principal of or
interest on any Note, the Indenture Trustee may withhold such notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding such notice is in the interests of the Noteholders.
Section 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such Noteholder to prepare its federal and state income tax returns. In
addition, upon Issuer Request, the Indenture Trustee shall promptly furnish such
information reasonably requested by the Issuer that is reasonably available to
the Indenture Trustee to enable the Issuer to perform its federal and state
income tax reporting obligations.
Section 6.07. Compensation and Indemnity. The Indenture Trustee shall
be compensated and indemnified by the Servicer in accordance with Section 6.06
of the Servicing Agreement, and all amounts owing the Indenture Trustee
hereunder in excess of such amount shall be paid solely as provided in Section
3.05 hereof (subject to the priorities set forth therein). The Indenture
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall reimburse the Indenture Trustee
for all reasonable out-of-pocket expenses incurred or made by it, including
costs of collection, in addition to the compensation for its services. Such
expenses shall include the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer shall indemnify the Indenture Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Indenture Trustee shall notify the Issuer promptly of any claim
for which it may seek indemnity. Failure by the Indenture Trustee to so notify
the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer
shall defend any such claim, and the Indenture Trustee may have separate counsel
and the Issuer shall pay the fees and expenses of such counsel. The Issuer is
not obligated to reimburse any expense or indemnify against any loss, liability
or expense incurred by the Indenture Trustee through the Indenture Trustee's own
willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of an Event of Default
specified in clause (iv) or (v) of the definition thereof with respect to the
Issuer, such expenses are intended to constitute expenses of administration
under Title 11 of the United States Code or any other applicable federal or
state bankruptcy, insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer and the Enhancer. The Enhancer
or the Holders of a majority of aggregate Note Balance of the Notes may remove
the Indenture Trustee by so notifying the Indenture Trustee and the Enhancer (if
given by such Noteholders) and may appoint a successor Indenture Trustee. The
Issuer shall remove the Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(d) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee with the consent of
the Enhancer, which consent shall not be unreasonably withheld. In addition, the
Indenture Trustee shall resign to avoid being directly or indirectly controlled
by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and 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 the Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, then the retiring
Indenture Trustee, the Issuer or the Holders of a majority of aggregate Note
Balance 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 obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.09. Successor Indenture Trustee by Xxxxxx. 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, then the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies with written notice of any such transaction occurring after the Closing
Date.
If at the time of any such succession by merger, conversion or
consolidation, any of the Notes shall have been authenticated but not delivered,
then any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated. If at such 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 that it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at such time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Issuer, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust Estate, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Indenture Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 6.11, and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA ss. 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it or its
parent shall have a long-term debt rating of A or better by Xxxxx'x. The
Indenture Trustee shall comply with TIA ss. 310(b), including the optional
provision permitted by the second sentence of TIA ss. 310(b)(9); provided,
however, that there shall be excluded from the operation of TIA ss. 310(b)(1)
any indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee that has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13. Representations and Warranties. The Indenture Trustee
hereby represents and warrants that:
(a) The Indenture Trustee is duly organized, validly existing and in
good standing under the laws of the United States of America with power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is currently conducted.
(b) The Indenture Trustee has the power and authority to execute and
deliver this Indenture and to carry out its terms; and the execution, delivery
and performance of this Indenture have been duly authorized by the Indenture
Trustee by all necessary corporate action.
(c) The consummation of the transactions contemplated by this Indenture
and the fulfillment of the terms hereof do not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the articles of organization or bylaws
of the Indenture Trustee or any agreement or other instrument to which the
Indenture Trustee is a party or by which it is bound.
(d) To the Indenture Trustee's best knowledge, there are no Proceedings
or investigations pending or threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Indenture Trustee or its properties (A) asserting the invalidity of
this Indenture, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Indenture or (C) seeking any determination or
ruling that might materially and adversely affect the performance by the
Indenture Trustee of its obligations under, or the validity or enforceability
of, this Indenture.
(e) The Indenture Trustee does not have notice of any adverse claim (as
such terms are used in Section 8-302 of the UCC in effect in the State of
Delaware) with respect to the Mortgage Loans.
Section 6.14. Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the assets of
the Trust in trust for the Noteholders and the Enhancer;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibit A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
Section 6.15. Indenture Trustee May Own Securities. The Indenture
Trustee, in its individual or any other capacity, may become the owner or
pledgee of Securities with the same rights it would have if it were not
Indenture Trustee.
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer shall furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after each Record Date, a list, in
such form as the Indenture Trustee may reasonably require, of the names and
addresses of the Noteholders as of such Record Date, and (b) at such other times
as the Indenture Trustee and the Enhancer may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that for so long as the Indenture Trustee is the
Note Registrar, no such list need be furnished.
Section 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.01 and the names and addresses of the Noteholders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIAss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA ss. 312(c).
Section 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA ss.
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) and by rules and regulations prescribed from time
to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.04. Reports by Indenture Trustee. If required by TIA ss.
313(a), within 60 days after each January 1, beginning with January 1, 1999, the
Indenture Trustee shall mail to each Noteholder as required by TIA ss. 313(c)
and to the Enhancer a brief report dated as of such date that complies with TIA
ss. 313(a). The Indenture Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission, if required, and each
stock exchange, if any, on which the Term Notes are listed. The Issuer shall
notify the Indenture Trustee if and when the Term Notes are listed on any stock
exchange.
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02. Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause the
Indenture Trustee to establish and maintain, in the name of the Indenture
Trustee, for the benefit of the Noteholders and the Enhancer, the Note Payment
Account as provided in Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Note Payment Account
pursuant to the Servicing Agreement and all deposits therein pursuant to this
Indenture are for the benefit of the Noteholders, and all investments made with
such monies, including all income or other gain from such investments, are for
the benefit of the Indenture Trustee as provided in the Servicing Agreement.
On each Payment Date, the Indenture Trustee shall distribute all
amounts on deposit in the Note Payment Account to the Noteholders in respect of
the Notes and, in its capacity as Certificate Paying Agent, to the
Certificateholders from the Distribution Account in the order of priority set
forth in Section 3.05 (except as otherwise provided in Section 5.04(b)).
The Indenture Trustee may invest any funds in the Note Payment Account
in Permitted Investments selected by the Indenture Trustee maturing no later
than the Business Day preceding the next succeeding Payment Date (except that
(i) any investment in the institution with which the Note Payment Account is
maintained may mature on such Payment Date and (ii) any other investment may
mature on such Payment Date if the Indenture Trustee shall advance funds on such
Payment Date to the Note Payment Account in the amount payable on such
investment on such Payment Date, pending receipt thereof to the extent necessary
to make distributions on the Notes) and shall not be sold or disposed of prior
to the maturity.
Section 8.03. Officer's Certificate. The Indenture Trustee shall
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.05(a), accompanied by copies of any instruments to
be executed, and the Indenture Trustee shall also require, as a condition to
such action, an Officer's Certificate, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with.
Section 8.04. Termination Upon Distribution to Noteholders. This
Indenture and the respective obligations and responsibilities of the Issuer and
the Indenture Trustee created hereby shall terminate upon the distribution to
the Noteholders, the Certificate Paying Agent on behalf of the
Certificateholders and the Indenture Trustee of all amounts required to be
distributed pursuant to Article III; provided, however, that in no event shall
the trust created hereby continue beyond the expiration of 21 years from the
death of the survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
Section 8.05. Release of Trust Estate.
(a) Subject to the payment of its fees and expenses, the Indenture
Trustee may, and when required by the provisions of this Indenture, shall,
execute instruments to release property from the lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No Person relying upon an instrument executed by the Indenture Trustee as
provided in Article VIII hereunder shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent,
or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding, (ii) all sums due the Indenture Trustee pursuant to this Indenture
have been paid and (iii) all sums due the Enhancer have been paid, release any
remaining portion of the Trust Estate that secured the Notes from the lien of
this Indenture.
(c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of an Issuer Request
accompanied by an Officers' Certificate and a letter from the Enhancer stating
that the Enhancer has no objection to such request from the Issuer.
(d) The Indenture Trustee shall, at the request of the Issuer or the
Depositor, surrender the Policy to the Enhancer for cancellation, upon final
payment of principal of and interest on the Notes.
Section 8.06. Surrender of Notes Upon Final Payment. By acceptance of
any Note, the Holder thereof agrees to surrender such Note to the Indenture
Trustee promptly, prior to such Noteholder's receipt of the final payment
thereon.
ARTICLE IX
Supplemental Indentures
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies and the Enhancer, the Issuer and the Indenture
Trustee, when authorized by an Issuer Request, at any time and from time to
time, may enter into one or more indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as in force at the date of
the execution thereof), in form satisfactory to the Indenture Trustee, for any
of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Noteholders or the Enhancer, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture;
(vi) to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided, that such action shall not materially and
adversely affect the interests of the Noteholders or the Enhancer;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(viii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA;
provided, however, that no such supplemental indenture shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel to the
effect that the execution of such supplemental indenture will not give rise to
any material adverse tax consequence to the Noteholders.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, without the consent of any Noteholder but with prior notice to the
Rating Agencies and the Enhancer, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Noteholders under this Indenture;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, (i) adversely affect in any material respect the interests of any
Noteholder or the Enhancer or (ii) cause the Issuer to be subject to an entity
level tax.
Section 9.02. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, may,
with prior notice to the Rating Agencies and with the consent of the Enhancer
and the Holders of not less than a majority of the Note Balances of each Class
of Notes affected thereby, by Act of such Holders delivered to the Issuer and
the Indenture Trustee, enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Noteholders under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Note affected thereby:
(a) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof or the Note Rate
thereon, change the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate to payment of
principal of or interest on the Notes, or change any place of payment where, or
the coin or currency in which, any Note or the interest thereon is payable, or
impair the right to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes on or after the
respective due dates thereof;
(b) reduce the percentage of the Note Balances of the Notes, the
consent of the Holders of which is required for any such supplemental indenture,
or the consent of the Holders of which is required for any waiver of compliance
with certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of
the term "Outstanding" or modify or alter the exception in the definition of the
term "Holder";
(d) reduce the percentage of the aggregate Note Balance of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
(e) modify any provision of this Section 9.02 except to increase any
percentage specified herein or to provide that certain additional provisions of
this Indenture or the other Basic Documents cannot be modified or waived without
the consent of the Holder of each Note affected thereby;
(f) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the amount of any payment of interest or principal due
on any Note on any Payment Date (including the calculation of any of the
individual components of such calculation); or
(g) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Trust Estate or,
except as otherwise permitted or contemplated herein, terminate the lien of this
Indenture on any property at any time subject hereto or deprive the Holder of
any Note of the security provided by the lien of this Indenture; and provided
further, that such action shall not, as evidenced by an Opinion of Counsel,
cause the Issuer to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders (as defined in
Section 10.03) under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive and,
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Noteholders shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as in
effect at the time of such amendment or supplement so long as this Indenture
shall then be qualified under the Trust Indenture Act.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee,
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
Miscellaneous
Section 10.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee and to the Enhancer (i) an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with;
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with; and
(v) if the signer of such certificate or opinion is required
to be Independent, the statement required by the definition of the term
"Independent".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(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 aggregate Note Balance 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 aggregate Note Balance of the Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall 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 aggregate
Note Balance 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 aggregate Note Balance of the
Notes.
(v) Notwithstanding any provision of this Indenture, the
Issuer may, without compliance with the requirements of the other
provisions of this Section 10.01, (A) collect upon, sell or otherwise
dispose of the Mortgage Loans as and to the extent permitted or
required by the Basic Documents or (B) make cash payments out of the
Note Payment Account as and to the extent permitted or required by the
Basic Documents, so long as the Issuer shall deliver to the Indenture
Trustee every six months, commencing December 31, 1998, an Officer's
Certificate of the Issuer stating that all the dispositions of
Collateral described in clauses (A) or (B) above that occurred during
the preceding six calendar months were in the ordinary course of the
Issuer's business and that the proceeds thereof were applied in
accordance with the Basic Documents.
Section 10.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Seller or the Issuer, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 10.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
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 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section 10.03.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
Section 10.04. Notices, etc., to Indenture Trustee, Issuer, Enhancer
and Rating Agencies. 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. The
Indenture Trustee shall promptly transmit any notice received by it from the
Noteholders to the Issuer,
(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: GMACM Revolving Home Equity Loan
Trust 1998-2, in care of the Owner Trustee, or at any other address previously
furnished in writing to the Indenture Trustee by the Issuer. The Issuer shall
promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee, or
(c) the Enhancer by the Issuer, the Indenture Trustee or by any
Noteholders shall be sufficient for every purpose hereunder to in writing and
mailed, first-class postage pre-paid, or personally delivered or telecopied to:
Ambac Assurance Corporation, Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxx Xxxxxxx, telecopier number (000) 000-0000. The
Enhancer shall promptly transmit any notice received by it from the Issuer, the
Indenture Trustee or the Noteholders to the Issuer or Indenture Trustee, as the
case may be.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified mail, return receipt requested, to (i) in the case of
Moody's, at the following address: Xxxxx'x Investors Service, Inc., ABS
Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ii) in
the case of Standard & Poor's, at the following address: Standard & Poor's, 00
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed
Surveillance Department; or, as to each of the foregoing Persons, at such other
address as shall be designated by written notice to the other foregoing Persons.
Section 10.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Person's 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 regardless of
whether such notice is in fact actually received.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
Section 10.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Noteholder providing for a method of
payment, or notice by the Indenture Trustee to such Noteholder, that is
different from the methods provided for in this Indenture for such payments or
notices. The Issuer shall furnish to the Indenture Trustee a copy of each such
agreement and the Indenture Trustee shall cause payments to be made and notices
to be given in accordance with such agreements.
Section 10.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA xx.xx. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 10.08. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 10.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
Section 10.10. Severability. In case any provision in this Indenture or
in the Notes shall be held invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby.
Section 10.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, the Enhancer, and
any other party secured hereunder, and any other Person with an ownership
interest in any part of the Trust Estate, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 10.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 10.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 10.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which counsel may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
Section 10.16. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their respective individual capacities), and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity. For
all purposes of this Indenture, in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.
Section 10.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by its acceptance of a Note, hereby
covenant and agree that they will not at any time institute against the
Depositor or the Issuer, or join in any institution against the Depositor or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Notes, this Indenture or any of the other Basic Documents.
Section 10.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
GMACM REVOLVING HOME EQUITY LOAN
TRUST 1998-2,
as Issuer
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee
By:__________________________________________
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Indenture Trustee
By:__________________________________________
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
xxxxxx accepts the appointment as Paying
Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section
4.02 hereof.
By:______________________________________
Name:
Title:
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this ___ day of September 1998, before me personally appeared
_________, to me known, who being by me duly sworn, did depose and say, that
[he][she] resides at ________, that [he][she] is the __________ of the
Wilmington Trust Company, the Owner Trustee, one of the corporations described
in and which executed the above instrument; that [he][she] knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation; and that [he][she] signed [his][her] name thereto by like order.
________________________________
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of September, 1998, before me personally appeared
_______, to me known, who being by me duly sworn, did depose and say, that
[he][she] resides at __________; that [he][she] is the _________ of Norwest Bank
Minnesota, National Association, as Indenture Trustee, one of the corporations
described in and which executed the above instrument; that [he][she] knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation; and that [he][she] signed [his][her] name thereto by like
order.
________________________________
Notary Public
NOTORIAL SEAL
EXHIBIT A-1
FORM OF TERM NOTES
UNLESS THIS TERM 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 TERM 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 TERM NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS TERM NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS TERM NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE OR
GMAC MORTGAGE GROUP, INC. OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS
EXPRESSLY PROVIDED IN THE INDENTURE OR THE OTHER BASIC DOCUMENTS.
GMACM REVOLVING HOME EQUITY LOAN TRUST 1998-2
Home Equity Loan-Backed Term Note
Registered Principal Amount:
$175,000,000
No. R-1 Note Rate: Floating
CUSIP NO. 361856 AC1
GMACM Revolving Home Equity Loan Trust 1998-2, a business trust duly
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to Cede & Co. or
its registered assigns, the principal sum of one hundred and seventy-five
million dollars ($175,000,000), payable on each Payment Date in an amount equal
to the Percentage Interest specified above of the aggregate amount, if any,
payable from the Note Payment Account in respect of principal of the Term Notes
pursuant to Section 3.05 of the indenture dated as of September 25, 1998 (the
"Indenture"), between the Issuer and Norwest Bank Minnesota, National
Association, as indenture trustee (the "Indenture Trustee"); provided, however,
that the entire unpaid principal amount of this Term Note shall be due and
payable on the Payment Date in September 2028, to the extent not previously paid
on a prior Payment Date. Capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto in Appendix A to the Indenture.
Interest on the Term Notes will be paid monthly on each Payment Date at
the Note Rate for the related Interest Period subject to limitations that may
result in Interest Shortfalls (as further described in the Indenture). The Note
Rate for each Interest Period will be a floating rate equal to the least of (i)
LIBOR plus 0.22% per annum (or, on any Payment Date on which the aggregate Term
Note Balance is less than 10% of the initial Term Note Balance, LIBOR plus 0.44%
per annum), (ii) the Net Loan Rate and (iii) 14.5% per annum. LIBOR for each
applicable Interest Period will be determined on the second LIBOR Business Day
immediately preceding (i) the Closing Date in the case of the first Interest
Period and (ii) the first day of each succeeding Interest Period by the
Indenture Trustee as set forth in the Indenture. All determinations of LIBOR by
the Indenture Trustee shall, in the absence of manifest error, be conclusive for
all purposes, and each holder of this Term Note, by accepting this Term Note,
agrees to be bound by such determination. Interest on this Term Note will accrue
for each Payment Date from the most recent Payment Date on which interest has
been paid (in the case of the first Payment Date, from the Closing Date) to but
excluding such Payment Date. Interest will be computed on the basis of the
actual number of days in each Interest Period and a year assumed to consist of
360 days. Principal of and interest on this Term Note shall be paid in the
manner specified on the reverse hereof.
Principal of and interest on this Term 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 Term Note shall be applied first to interest due and
payable on this Term Note as provided above and then to the unpaid principal of
this Term Note.
Reference is made to the further provisions of this Term Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Term Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Term
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.
This Term Note is one of a duly authorized issue of Term Notes of the
Issuer, designated as its Home Equity Loan-Backed Term Notes (the "Term 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 Term Notes. The Term Notes are subject to all terms of the
Indenture.
The Term Notes and the Variable Funding Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
This Term Note is entitled to the benefits of an irrevocable and
unconditional financial guaranty insurance policy issued by Ambac Assurance
Corporation.
Principal of and interest on this Term Note will be payable on each
Payment Date, commencing on October 19, 1998, as described in the Indenture.
"Payment Date" means the eighteenth day of each month, or, if any such date is
not a Business Day, then the next succeeding Business Day.
The entire unpaid principal amount of this Term Note shall be due and
payable in full on the Payment Date in September 2028 pursuant to the Indenture,
to the extent not previously paid on a prior Payment Date. Notwithstanding the
foregoing, if an Event of Default shall have occurred and be continuing, then
the Indenture Trustee, the Enhancer or the Holders of Notes representing not
less than a majority of the aggregate Note Balance of the Notes, with the
consent of the Enhancer, may declare the Notes to be immediately due and payable
in the manner provided in Section 5.02 of the Indenture. All principal payments
on the Term Notes shall be made pro rata to the Holders of Term Notes entitled
thereto.
Any installment of interest or principal, if any, payable on any Note
that is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall, if the related Noteholder holds Notes of an aggregate
initial Note Balance of at least $1,000,000, be paid to such Noteholder on the
preceding Record Date, by wire transfer to an account specified in writing by
such Noteholder reasonably satisfactory to the Indenture Trustee as of the
preceding Record Date or, in all other cases or if no such instructions have
been delivered to the Indenture Trustee, by check to such Noteholder mailed to
such Noteholder's address as it appears in the Note Register, the amount
required to be distributed to such Noteholder on such Payment Date pursuant to
such Noteholder's Notes; provided, however, that the Indenture Trustee shall not
pay to such Noteholder any amount required to be withheld from a payment to such
Noteholder by the Code. Any reduction in the principal amount of this Term Note
(or any one or more predecessor Term Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Term Note and of
any Term 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 Term Note on a Payment Date, then the
Indenture Trustee, in the name of and on behalf of the Issuer, will notify the
Person who was the registered Holder hereof as of the Record Date preceding such
Payment Date by notice mailed or transmitted by facsimile prior to such Payment
Date, and the amount then due and payable shall be payable only upon
presentation and surrender of this Term Note at the address specified in such
notice of final payment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Term Note may be registered on the Note
Register upon surrender of this Term Note for registration of transfer at the
Corporate Trust Office of the Indenture Trustee, 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 Xxxxxx'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, and thereupon one or more
new Term Notes in authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this Term
Note, but the Note Registrar shall require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
registration of transfer or exchange of this Term Note.
Each Holder or Beneficial Owner of a Term Note, by its acceptance of a
Term Note, or, in the case of a Beneficial Owner of a Term Note, a beneficial
interest in a Term Note, covenants and agrees that no recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee, the Seller, the Servicer, the Depositor or the Indenture Trustee on the
Term Notes or under the Indenture or any certificate or other writing delivered
in connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture Trustee
or the Owner Trustee in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Holder or Beneficial Owner of a Term Note, by its acceptance of a
Term Note or, in the case of a Beneficial Owner of a Term Note, a beneficial
interest in a Term Note, covenants and agrees by accepting the benefits of the
Indenture that such Holder or Beneficial Owner will not at any time institute
against the Depositor, the Seller, the Servicer, GMAC Mortgage Group, Inc. or
the Issuer, or join in any institution against the Depositor, the Seller, the
Servicer, GMAC Mortgage Group, Inc. 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 Term Notes, the Indenture or the other Basic
Documents.
The Issuer has entered into the Indenture and this Term Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Term Notes will qualify as indebtedness of the
Issuer. Each Holder of a Term Note, by its acceptance of a Term Note (and each
Beneficial Owner of a Term Note by its acceptance of a beneficial interest in a
Term Note), agrees to treat the Term 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 Term
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in the name of which this Term Note is
registered (as of the day of determination or as of such other date as may be
specified in the Indenture) as the owner hereof for all purposes, whether or not
this Term 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 therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the Holders of the Term Notes
under the Indenture at any time by the Issuer and the Indenture Trustee with the
consent of the Enhancer and the Holders of Notes representing a majority of the
aggregate Note Balance of the Notes then Outstanding and with prior notice to
the Rating Agencies. The Indenture also contains provisions permitting the
Holders of Notes representing specified percentages of the Notes Balances of the
Notes, on behalf of the Holders of all 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 Term Note (or any one of more predecessor Term Notes) shall be conclusive
and binding upon such Holder and upon all future Holders of this Term Note and
of any Term 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 Term Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Term Notes issued thereunder
but with prior notice to the Rating Agencies and the Enhancer.
The term "Issuer" as used in this Term Note includes any successor or
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Term Notes under the Indenture.
The Term Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Term Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflicts 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 Term 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 Term
Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company in its
individual capacity, Norwest Bank Minnesota, National Association 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 Term
Note or the performance of, or the failure to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Holder of this
Term Note, by its acceptance hereof, agrees that, except as expressly provided
in the Basic Documents, in the case of an Event of Default under the Indenture,
such Holder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Term Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Term Note to be duly executed.
GMACM REVOLVING HOME EQUITY LOAN
TRUST 1998-2
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee
Dated: September ___, 1998
By: _____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Term Notes referred to in the within-mentioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Indenture Trustee
Dated: September ___, 1998
By:____________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
_________________________________
(name and address of assignee)
the within Term Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ___________________________, attorney, to transfer said
Term Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:_________________ ______________________*/
Signature Guaranteed:
______________________*/
EXHIBIT A-2
FORM OF VARIABLE FUNDING NOTES
THIS VARIABLE FUNDING NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO
SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE INDENTURE REFERRED TO
HEREIN.
THE PRINCIPAL OF THIS VARIABLE FUNDING NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS
VARIABLE FUNDING NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.
THIS VARIABLE FUNDING NOTE DOES NOT REPRESENT AN INTEREST IN OR
OBLIGATION OF THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE,
THE OWNER TRUSTEE OR GMAC MORTGAGE GROUP, INC. OR ANY OF THEIR RESPECTIVE
AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE INDENTURE OR THE OTHER BASIC
DOCUMENTS.
GMACM REVOLVING HOME EQUITY LOAN TRUST 1998-2
Home Equity Loan-Backed Variable Funding Note
Registered Maximum Variable
Funding Balance: $35,000,000
VFN-1 Note Rate: Floating
GMACM Revolving Home Equity Loan Trust 1998-2, a business trust duly
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to GMAC Mortgage
Corporation or its registered assigns, the principal amount set forth on
Schedule A attached hereto (or otherwise owing hereunder as determined pursuant
to the Indenture as defined below), payable on each Payment Date in an amount
equal to the pro rata portion allocable hereto (based on the Variable Funding
Balances of all Variable Funding Notes immediately prior to such Payment Date)
of the aggregate amount, if any, payable from the Note Payment Account in
respect of principal on the Variable Funding Notes pursuant to Section 3.05 of
the indenture dated as of September 25, 1998 (the "Indenture"), between the
Issuer and Norwest Bank Minnesota, National Association, as indenture trustee
(the "Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Variable Funding Note shall be due and payable on the Payment
Date in September 2028, to the extent not previously paid on a prior Payment
Date. Capitalized terms used herein that are not otherwise defined have the
meanings ascribed thereto in Appendix A to the Indenture.
Interest on this Variable Funding Note will be paid monthly on each
Payment Date at the Note Rate for the related Interest Period, subject to
limitations that may result in Interest Shortfalls (as further described in the
Indenture). The Note Rate for each Interest Period will be a floating rate equal
to the least of (i) LIBOR plus 0.22% per annum (or, on any Payment Date on which
the aggregate Term Note Balance is less than 10% of the initial Term Note
Balance, LIBOR plus 0.44% per annum), (ii) the Net Loan Rate and (iii) 14.5% per
annum. All determinations of LIBOR by the Indenture Trustee shall, in the
absence of manifest error, be conclusive for all purposes, and each Holder of
this Variable Funding Note, by accepting this Variable Funding Note, agrees to
be bound by such determination. Interest on this Variable Funding Note will
accrue for each Payment Date from the most recent Payment Date on which interest
has been paid (or, in the case of the First Payment Date, from the Closing Date)
to but excluding such Payment Date. Interest will be computed on the basis of
the actual number of days in each Interest Period and a year assumed to consist
of 360 days. Principal of and interest on this Variable Funding Note shall be
paid in the manner specified on the reverse hereof.
Principal of and interest on this Variable Funding 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 Variable Funding Note shall be applied first to
interest due and payable on this Variable Funding Note as provided above and
then to the unpaid principal of this Variable Funding Note.
Reference is made to the further provisions of this Variable Funding
Note set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Variable Funding Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this
Variable Funding 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.
This Variable Funding Note is one of a duly authorized issue of
Variable Funding Notes of the Issuer, designated as its Home Equity Loan-Backed
Variable Funding Notes (herein called the "Variable Funding Notes"), all issued
under the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Variable Funding Notes. The Variable Funding Notes are subject to all terms
of the Indenture.
The Variable Funding Notes and the Term Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
This Variable Funding Note is entitled to the benefits of an
irrevocable and unconditional financial guaranty insurance policy issued by
Ambac Assurance Corporation.
Principal of and interest on this Variable Funding Note will be payable
on each Payment Date, commencing on October 19, 1998, as described in the
Indenture. "Payment Date" means the eighteenth day of each month, or, if any
such day is not a Business Day, then the next succeeding Business Day.
The entire unpaid principal amount of this Variable Funding Note shall
be due and payable in full on the Payment Date in September 2028 pursuant to the
Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, then the Indenture Trustee, the Enhancer or the Holders of Notes
representing not less than a majority of the aggregate Note Balance of the
Notes, with the consent of the Enhancer, may declare the Notes to be immediately
due and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Variable Funding Notes shall be made pro rata to the
Holders of Variable Funding Notes entitled thereto.
Payments of interest on this Variable Funding Note due and payable on
each Payment Date, together with the installment of principal, if any, to the
extent not in full payment of this Variable Funding Note, shall be made by check
mailed to the Person whose name appears as the registered Holder of this
Variable Funding Note (or one or more Predecessor Notes) on the Note Register as
of the close of business on each Record Date. Any reduction in the principal
amount of this Variable Funding Note (or any one or more predecessor Variable
Funding Notes) effected by any payments made on any Payment Date shall be
binding upon all future holders of this Variable Funding Note and of any
Variable Funding Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Variable Funding Note on a
Payment Date, then the Indenture Trustee, in the name of and on behalf of the
Issuer, will notify the Person who was the registered Holder hereof as of the
Record Date preceding such Payment Date by notice mailed or transmitted by
facsimile prior to such Payment Date and the amount then due and payable shall
be payable only upon presentation and surrender of this Variable Funding Note at
the address specified in such notice of final payment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Variable Funding Note may be registered on
the Note Register upon surrender of this Variable Funding Note for registration
of transfer at the Corporate Trust Office of the Indenture Trustee, duly
endorsed by, and accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Variable Funding Notes in authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No
service charge will be charged for any registration of transfer or exchange of
this Variable Funding Note, but the Note Registrar shall require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of this Variable
Funding Note.
Each Holder of a Variable Funding Note, by its acceptance of a Variable
Funding Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Variable
Funding Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Holder of a Variable Funding Note covenants and agrees by
accepting the benefits of the Indenture that such Holder will not at any time
institute against the Depositor, the Seller, the Servicer, GMAC Mortgage Group,
Inc. or the Issuer, or join in any institution against the Depositor, the
Seller, the Servicer, GMAC Mortgage Group, Inc. 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 Variable Funding Notes, the Indenture or
the other Basic Documents.
No transfer, sale, pledge or other disposition of a Variable Funding
Note shall be made unless such transfer, sale, pledge or other disposition is
exempt from the registration requirements of the Securities Act, and any
applicable state securities laws or is made in accordance with said Act and
laws. In the event of any such transfer, the Indenture Trustee or the Issuer
shall require the transferee to execute either (i)(a) an investment letter in
substantially the form attached hereto as Exhibit B (or in such form and
substance reasonably satisfactory to the Indenture Trustee and the Issuer) which
investment letters shall not be an expense of the Trust, the Owner Trustee, the
Indenture Trustee, the Servicer, the Depositor or the Issuer and which
investment letter states that, among other things, such transferee (a) is a
"qualified institutional buyer" as defined under Rule 144A, acting for its own
account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (b) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the Securities Act,
provided by Rule 144A or (ii) the Indenture Trustee shall require the transferee
to execute an investment letter in substantially the form of Exhibit C hereto,
acceptable to and in form and substance reasonably satisfactory to the Issuer
and the Indenture Trustee certifying to the Issuer and the Indenture Trustee the
facts surrounding such transfer, which investment letter shall not be an expense
of the Indenture Trustee or the Issuer. Any Holder of a Variable Funding Note
that does not execute such a certificate or transfer letter shall be deemed to
have made the representations set forth therein. The Holder of a Variable
Funding Note desiring to effect such transfer shall, and does hereby agree to,
indemnify the Indenture Trustee, the Enhancer and the Issuer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
The Issuer has entered into the Indenture and this Variable Funding
Note is issued with the intention that, for federal, state and local income,
single business and franchise tax purposes, the Variable Funding Notes will
qualify as indebtedness of the Issuer. Each Holder of a Variable Funding Note,
by its acceptance of a Variable Funding Note, agrees to treat the Variable
Funding Notes for federal, state and local income, single business and franchise
tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Variable Funding Note, the Issuer, the Indenture Trustee and any agent of the
Issuer or the Indenture Trustee may treat the Person in whose name this Variable
Funding Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Variable Funding Note be overdue, and none of the Issuer,
the Indenture Trustee or any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the Holders of the Variable
Funding Notes under the Indenture at any time by the Issuer and the Indenture
Trustee with the consent of the Enhancer and the Holders of Notes representing a
majority of the aggregate Note Balance of the Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes representing specified percentages of the
aggregate Note Balance of the Notes, on behalf of the Holders of all 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 Variable Funding Note (or any one of
more predecessor Variable Funding Notes) shall be conclusive and binding upon
such Holder and upon all future Holders of this Variable Funding Note and of any
Variable Funding Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Variable Funding Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Variable Funding Notes
issued thereunder but with prior notice to the Rating Agencies and the Enhancer.
The term "Issuer" as used in this Variable Funding Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Variable Funding Notes under the Indenture.
The Variable Funding Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Variable Funding Note and the Indenture shall be construed in
accordance with the laws of the State of New York, without reference to its
conflicts 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 Variable
Funding Note or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Variable Funding Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company in its
individual capacity, Norwest Bank Minnesota, National Association 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 Variable
Funding Note or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Holder of this
Variable Funding Note by its acceptance hereof agrees that, except as expressly
provided in the Basic Documents, in the case of an Event of Default under the
Indenture, such Holder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Variable Funding Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not in its
individual capacity, has caused this Variable Funding Note to be duly executed.
GMACM REVOLVING HOME EQUITY LOAN TRUST
1998-2
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee
Dated: September ___, 1998
By: _______________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Variable Funding Notes referred to in the within mentioned
Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: September ___, 1998
By:__________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
___________________________________
(name and address of assignee)
the within Variable Funding Note and all rights thereunder, and hereby
irrevocably constitutes and appoints _____________________, attorney, to
transfer said Variable Funding Note on the books kept for registration thereof,
with full power of substitution in the premises.
Dated:_____________________ _______________________*/
Signature Guaranteed:
_______________________//
SCHEDULE A
GMACM REVOLVING HOME EQUITY LOAN TRUST 1998-2
Home Equity Loan-Backed Variable Funding Note
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Date Percentage Interest Principal Payment Variable Funding Authorized Signature
Balance Outstanding of Indenture Trustee
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EXHIBIT B
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
The undersigned buyer (the "Buyer"), intends to acquire the Rule 144A
Securities described above from the seller (the "Seller").
1. The Buyer warrants and represents to, and covenants with, the
Indenture Trustee and the Issuer (as defined in the indenture dated as of
September 25, 1998 (the "Indenture"), between GMACM Revolving Home Equity Loan
Trust 1998-2, as Issuer, and Norwest Bank Minnesota, National Association, as
Indenture Trustee, pursuant to Section 4.02 of the Indenture, as follows:
a. The Buyer understands that the Rule 144A Securities
have not been registered under the 1933 Act or the securities laws of
any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information
regarding the Rule 144A Securities that it has requested from the
Seller, the Indenture Trustee, the Owner Trustee or the Servicer.
d. Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any
other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities,
any interest in the Rule 144A Securities or any other similar
security from, or otherwise approached or negotiated with respect to
the Rule 144A Securities, any interest in the Rule 144A Securities or
any other similar security with, any person in any manner, or made
any general solicitation by means of general advertising or in any
other manner, or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the 1933 Act or that
would render the disposition of the Rule 144A Securities a violation
of Section 5 of the 1933 Act or require registration pursuant
thereto, nor will it act, nor has it authorized or will it authorize
any person to act, in such manner with respect to the Rule 144A
Securities.
e. The Buyer is a "qualified institutional buyer" as that
term is defined in Rule 144A under the 1933 Act and has completed
either of the forms of certification to that effect attached hereto
as Annex 1 or Annex 2. The Buyer is aware that the sale to it is
being made in reliance on Rule 144A. The Buyer is acquiring the Rule
144A Securities for its own account or the accounts of other
qualified institutional buyers, understands that such Rule 144A
Securities may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A, or (ii) pursuant
to another exemption from registration under the 1933 Act.
2. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
IN WITNESS WHEREOF, the Buyer has executed this document as of the date
set forth below.
____________________________
Print Name of Buyer
By:_________________________
Name:
Title:
Taxpayer Identification:
No._________________________
Date:_______________________
ANNEX 1 TO EXHIBIT B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $______________________** in securities
(except for the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in accordance with
Rule 144A) and (ii) the Buyer satisfies the criteria in the category marked
below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended.
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a state or territory or the District
of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a state, its political subdivisions, or any agency
or instrumentality of the state or its political subdivisions, for
the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974, as amended.
___ Investment Adviser. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940, as amended.
___ SBIC. The Buyer is a Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958, as amended.
___ Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940, as amended.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or
H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Rule 144A
Securities are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
____________________________
Print Name of Buyer
By:_________________________
Name:
Title:
Date:_______________________
ANNEX 2 TO EXHIBIT B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser (as
defined below).
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $________________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $______________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers (each, an "Adviser") that are
affiliated (by virtue of being majority owned subsidiaries of the same parent or
because one investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) bank deposit notes and certificates of deposit,
(iii) loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
____________________________
Print Name of Buyer
By:_________________________
Name:_______________________
Title:______________________
IF AN ADVISER:
____________________________
Print Name of Buyer
Date:_______________________
EXHIBIT C
FORM OF INVESTOR REPRESENTATION LETTER
----------, ----
GMACM Revolving Home Equity Loan Trust 1998-2
c/o Wilmington Trust Company, as Owner Trustee
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-0070
Attention: Corporate Trust Administration
Re: Home Equity Loan-Backed Capped Funding Notes,
Series 1998-2
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Ladies and Gentlemen:
__________________ (the "Purchaser") intends to purchase from
_________________ (the "Seller") $___________ Capped Funding Notes of Series
1998-2 (the "Notes"), issued pursuant to the indenture dated as of September 25,
1998 (the "Indenture"), between GMACM Revolving Home Equity Loan Trust 1998-2,
as issuer (the "Issuer"), and Norwest Bank Minnesota, National Association, as
indenture trustee (the "Indenture Trustee"). Capitalized terms used herein that
are not otherwise defined shall have the meanings ascribed thereto in Appendix A
to the Indenture. The Purchaser hereby certifies, represents and warrants to,
and covenants with, the Issuer and the Indenture Trustee that:
1. The Purchaser understands that (a) the Notes have not been
and will not be registered or qualified under the Securities Act of
1933, as amended (the "Act") or any state securities law, (b) the
Company is not required to so register or qualify the Notes, (c) the
Notes may be resold only if registered and qualified pursuant to the
provisions of the Act or any state securities law, or if an exemption
from such registration and qualification is available, (d) the
Indenture contains restrictions regarding the transfer of the Notes and
(e) the Notes will bear a legend to the foregoing effect.
2. The Purchaser is acquiring the Notes for its own account
for investment only and not with a view to or for sale in connection
with any distribution thereof in any manner that would violate the Act
or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such matters
related to securities similar to the Notes, such that it is capable of
evaluating the merits and risks of investment in the Notes, (b) able to
bear the economic risks of such an investment and (c) an "accredited
investor" within the meaning of clauses (1), (2), (3) or (7) of Rule
501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an
opportunity to review a copy of the Indenture and such other
information concerning the Notes, the Mortgage Loans and the Company as
has been requested by the Purchaser from the Company or the Seller and
is relevant to the Purchaser's decision to purchase the Notes. The
Purchaser has had any questions arising from such review answered by
the Company or the Seller to the satisfaction of the Purchaser.
5. The Purchaser has not and will not nor has it authorized or
will it authorize any person to (a) offer, pledge, sell, dispose of or
otherwise transfer any Note, any interest in any Note or any other
similar security to any person in any manner, (b) solicit any offer to
buy or to accept a pledge, disposition of other transfer of any Note,
any interest in any Note or any other similar security from any person
in any manner, (c) otherwise approach or negotiate with respect to any
Note, any interest in any Note or any other similar security with any
person in any manner, (d) make any general solicitation by means of
general advertising or in any other manner or (e) take any other
action, that (as to any of (a) through (e) above) would constitute a
distribution of any Note under the Act, that would render the
disposition of any Note a violation of Section 5 of the Act or any
state securities law, or that would require registration or
qualification pursuant thereto. The Purchaser will not sell or
otherwise transfer any of the Notes, except in compliance with the
provisions of the Indenture.
Very truly yours,
__________________________
By:_______________________
Name:_____________________
Title:____________________
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Term
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.
/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within
Variable Funding 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.
** Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
