Exhibit 4.4
================================================================================
INDENTURE
between
[___________________],
not in its individual capacity but solely as Owner Trustee for
Compass Receivables Asset Funding Trust 200[_]-[__]
and
[__________],
as Indenture Trustee
Dated as of [__________]
COMPASS RECEIVABLES ASSET FUNDING TRUST 200[_]-[_]
Mortgage Loan Asset Backed Notes,
Series 200[_]-[_]
================================================================================
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I DEFINITIONS...................................................................................2
Section 1.1. Definitions............................................................................2
Section 1.2. Incorporation by Reference of Trust Indenture Act.....................................10
Section 1.3. Rules of Construction.................................................................11
ARTICLE II THE NOTES....................................................................................11
Section 2.1. Form..................................................................................11
Section 2.2. Execution, Authentication, Delivery and Dating........................................12
Section 2.3. Registration; Registration of Transfer and Exchange...................................12
Section 2.4. Mutilated, Destroyed, Lost or Stolen Notes............................................14
Section 2.5. Persons Deemed Owner..................................................................14
Section 2.6. Payment of Principal and Interest; Defaulted Interest.................................15
Section 2.7. Cancellation..........................................................................15
Section 2.8. [Reserved]............................................................................16
Section 2.9. Release of Trust Estate...............................................................16
Section 2.10. Book-Entry Notes......................................................................16
Section 2.11. Notices to Clearing Agency............................................................17
Section 2.12. Definitive Notes......................................................................17
Section 2.13. Tax Treatment.........................................................................18
Section 2.14. ERISA Representation..................................................................18
ARTICLE III COVENANTS....................................................................................18
Section 3.1. Payment of Principal and Interest.....................................................18
Section 3.2. Maintenance of Office or Agency.......................................................18
Section 3.3. Money for Payments To Be Held in Trust................................................19
Section 3.4. Existence.............................................................................20
Section 3.5. Protection of Trust Estate............................................................21
Section 3.6. Annual Opinions as to the Trust Estate................................................21
Section 3.7. Performance of Obligations; Servicing of Mortgage Loans...............................21
Section 3.8. Negative Covenants....................................................................23
Section 3.9. Annual Statement as to Compliance.....................................................24
Section 3.10. Covenants of the Owner Trustee........................................................25
Section 3.11. Servicer's Obligations................................................................25
Section 3.12. Restricted Payments...................................................................25
Section 3.13. Treatment of Notes as Debt for All Purposes...........................................26
Section 3.14. Notice of Events of Default...........................................................26
Section 3.15. Further Instruments and Acts..........................................................26
Section 3.16. Owner Trustee May Consolidate, etc....................................................26
Section 3.17. Successor or Transferee...............................................................28
Section 3.18. No Other Business.....................................................................28
Section 3.19. Guarantees, Loans, Advances and Other Liabilities.....................................28
Section 3.20. Capital Expenditures..................................................................29
Section 3.21. Representations and Warranties of the Owner Trustee...................................29
ARTICLE IV SATISFACTION AND DISCHARGE...................................................................29
Section 4.1. Satisfaction and Discharge of Indenture...............................................29
Section 4.2. Application of Trust Money............................................................30
Section 4.3. Repayment of Moneys Held by Paying Agent..............................................30
ARTICLE V REMEDIES.....................................................................................31
Section 5.1. Events of Default.....................................................................31
Section 5.2. Acceleration of Maturity; Rescission and Annulment....................................32
Section 5.3. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.............33
Section 5.4. Remedies; Priorities..................................................................35
Section 5.5. Optional Preservation of the Trust Estate.............................................37
Section 5.6. Limitation of Suits...................................................................37
Section 5.7. Unconditional Rights of Noteholders To Receive Principal and Interest.................38
Section 5.8. Restoration of Rights and Remedies....................................................38
Section 5.9. Rights and Remedies Cumulative........................................................38
Section 5.10. Delay or Omission Not a Waiver........................................................38
Section 5.11. Control by Noteholders................................................................38
Section 5.12. Waiver of Past Defaults...............................................................39
Section 5.13. Undertaking for Costs.................................................................39
Section 5.14. Waiver of Stay or Extension Laws......................................................40
Section 5.15. Action on Notes.......................................................................40
Section 5.16. Performance and Enforcement of Certain Obligations....................................40
ARTICLE VI THE INDENTURE TRUSTEE........................................................................41
Section 6.1. Duties of Indenture Trustee...........................................................41
Section 6.2. Rights of Indenture Trustee...........................................................43
Section 6.3. Individual Rights of Indenture Trustee................................................45
Section 6.4. Indenture Trustee's Disclaimer........................................................45
Section 6.5. Notice of Defaults....................................................................45
Section 6.6. Reports by Indenture Trustee to Holders...............................................45
Section 6.7. Reserved..............................................................................46
Section 6.8. Replacement of Indenture Trustee......................................................46
ii
Section 6.9. Successor Indenture Trustee by Merger.................................................47
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.....................47
Section 6.11. Eligibility; Disqualification.........................................................48
Section 6.12. Preferential Collection of Claims Against Owner Trustee...............................49
Section 6.13. Representations and Warranties........................................................49
Section 6.14. Directions to Indenture Trustee.......................................................49
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS...............................................................49
Section 7.1. Owner Trustee To Furnish Indenture Trustee Names and Addresses of Noteholders.........49
Section 7.2. Preservation of Information; Communications to Noteholders............................50
Section 7.3. Reports by Owner Trustee..............................................................50
Section 7.4. Reports by Indenture Trustee..........................................................51
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES.........................................................51
Section 8.1. Collection of Money...................................................................51
Section 8.2. Accounts; Distributions...............................................................51
Section 8.3. [Reserved]............................................................................52
Section 8.4. Servicer's Monthly Statements.........................................................52
Section 8.5. [Reserved]............................................................................52
Section 8.6. Opinion of Counsel....................................................................52
ARTICLE IX SUPPLEMENTAL INDENTURES......................................................................53
Section 9.1. Supplemental Indentures Without Consent of Noteholders................................53
Section 9.2. Supplemental Indentures with Consent of Noteholders...................................54
Section 9.3. Execution of Supplemental Indentures..................................................56
Section 9.4. Effect of Supplemental Indenture......................................................56
Section 9.5. Conformity with Trust Indenture Act...................................................56
Section 9.6. Reference in Notes to Supplemental Indentures.........................................56
ARTICLE X REDEMPTION OF NOTES..........................................................................57
Section 10.1. Early Termination.....................................................................57
Section 10.2. Mandatory Redemption..................................................................57
ARTICLE XI MISCELLANEOUS................................................................................59
Section 11.1. Compliance Certificates and Opinions, etc.............................................59
Section 11.2. Form of Documents Delivered to Indenture Trustee......................................61
Section 11.3. Acts of Noteholders...................................................................62
Section 11.4. Notices...............................................................................63
Section 11.5. Notices to Noteholders; Waiver........................................................63
iii
Section 11.6. Conflict with Trust Indenture Act.....................................................64
Section 11.7. Effect of Headings and Table of Contents..............................................64
Section 11.8. Successors and Assigns................................................................64
Section 11.9. Separability..........................................................................64
Section 11.10. Benefits of Indenture.................................................................64
Section 11.11. Legal Holidays........................................................................64
Section 11.12. GOVERNING LAW.........................................................................65
Section 11.13. Counterparts..........................................................................65
Section 11.14. Recording of Indenture................................................................65
Section 11.15. Trust Obligation......................................................................65
Section 11.16. No Petition...........................................................................65
Section 11.17. Inspection............................................................................66
Section 11.18. Inconsistencies With the Sale and Servicing Agreement.................................66
Section 11.19. Third-Party Beneficiaries.............................................................66
Section 11.20. Limited Recourse......................................................................66
Section 11.21. [Reserved]............................................................................67
Section 11.22. Limitation of Liability...............................................................67
EXHIBITS
SCHEDULE 1 - Perfection Representations, Warranties and Covenants
SCHEDULE A - Mortgage Loan Schedule
EXHIBIT A - Form of Class A Notes
EXHIBIT B - Form of Class M Notes
iv
INDENTURE dated as of [__________] between WILMINGTON TRUST COMPANY,
not on an individual basis but solely as owner trustee of COMPASS RECEIVABLES
ASSET FUNDING TRUST 200[_]-[_] (the "Owner Trustee"), and [__________], a
[__________], as indenture trustee and not in its individual capacity (the
"Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the holders of the Owner Trustee's Mortgage
Loan Asset Backed Notes, Series 200[_]-[_]:
GRANTING CLAUSE
Subject to the terms of this Indenture, the Owner Trustee hereby Grants
to the Indenture Trustee at the Closing Date, as Indenture Trustee for the
benefit of the holders of the Notes, all of the Owner Trustee's right, title and
interest in and to: (i) the Trust Estate; (ii) all right, title and interest of
the Owner Trustee in the Sale and Servicing Agreement, the Transfer Agreement
and the Mortgage Loan Purchase Agreement with respect to the Mortgage Loans
(including the Owner Trustee's right to cause the Seller or the Servicer to
repurchase Mortgage Loans from the Owner Trustee under certain circumstances
described therein); (iii) all present and future claims, demands, causes of
action and choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights
to payment of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing; (iv) the Collection
Account and all funds on deposit from time to time in the Collection Account
(exclusive of net earnings thereon); (v) all other property of the Trust from
time to time; and (vi) any and all proceeds of the foregoing (collectively the
"Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the holders of
the Notes, acknowledges the foregoing Grant, accepts the trusts hereunder in
good faith and without notice of any adverse claim or liens and agrees to
perform its duties required in this Indenture to the best of its ability to the
end that the interests of the holders of the Notes may be adequately and
effectively protected. The Indenture Trustee further agrees and acknowledges
that each item of Collateral that is physically delivered to the Indenture
Trustee will be held by the Indenture
Trustee in New York state or upon notice to the Owner Trustee in such other
state in which its Corporate Trust Office may be maintained.
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS.
(a) For all purposes of this Indenture, except as otherwise
expressly provided herein or unless the context otherwise requires, capitalized
terms not otherwise defined herein shall have the meanings assigned to such
terms in the Sale and Servicing Agreement. All other capitalized terms used
herein shall have the meanings specified herein.
"ACCRUAL PERIOD" shall have the meaning assigned thereto in the Sale
and Servicing Agreement.
"ACT" has the meaning specified in Section 11.3(a).
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AUTHORIZED OFFICER" means, with respect to the Owner Trustee and the
Servicer, any officer of the Owner Trustee or the Servicer, as applicable, who
is authorized to act for the Owner Trustee or the Servicer, as applicable, in
matters relating to the Owner Trustee and who is identified on the list of
Authorized Officers delivered by the Owner Trustee and the Servicer to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"BOOK-ENTRY NOTE" means any Note registered in the name of the
Depository or its nominee, ownership of which is reflected on the books of the
Depository or on the books of a Person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"BUSINESS DAY" has the meaning assigned thereto in the Sale and
Servicing Agreement.
"CERTIFICATE OF TRUST" means the certificate of trust of the Owner
Trustee substantially in the form of EXHIBIT A to the Trust Agreement.
2
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means [__________].
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Granting Clause of this
Indenture.
"COLLECTION ACCOUNT" means the Collection Account (as defined in the
Sale and Servicing Agreement) established by the Indenture Trustee.
"COMMISSION" shall mean the Securities and Exchange Commission.
"CORPORATE TRUST OFFICE" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Agreement is located at
[__________], Attention: [__________], or at such other address as the Indenture
Trustee may designate from time to time by notice to the Noteholders and the
Owner Trustee or the principal corporate trust office of any successor Indenture
Trustee at the address designated by such successor Indenture Trustee by notice
to the Noteholders and the Owner Trustee.
"DEFAULT" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"DEFINITIVE NOTES" has the meaning specified in Article II.
"DEPOSITORY INSTITUTION" means any depository institution or trust
company, including the Indenture Trustee, that (i) has short-term debt
obligations and long-term debt obligations at the time of any deposit therein
and throughout the time the interest is maintained that are rated at least
"[Baa3]" by Moody's and "[A-1]" by Standard & Poor's, and that the deposits in
such account are fully insured to the maximum extent provided by either the BIF
or the SAIF and which is any of (a) a federal savings and loan association duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (b) an institution duly organized, validly existing and in
good standing under the applicable banking laws of any state, (c) a national
banking association duly organized, validly existing and in good standing under
the federal banking laws or (d) a principal subsidiary of a bank holding
company. Such Depository
3
Institution shall have (x) a segregated trust account maintained with the
corporate trust department of a federal or state chartered depository or trust
company, having capital and surplus of not less than $[50,000,000], acting in
its fiduciary capacity or (y) an account otherwise acceptable to each Rating
Agency as evidenced by a letter from each Rating Agency to the Owner Trustee and
the Indenture Trustee, without reduction or withdrawal of the then current
ratings of the Notes.
"EVENT OF DEFAULT" has the meaning specified in Section 5.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
"FINAL PAYMENT DATE" means, with respect to any Note, the Payment Date
occurring in [__________].
"FITCH" means Fitch, Inc., or any successor thereto.
"GRANT" means mortgage, pledge, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create, and xxxxx x xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral with respect to any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the granting party or otherwise, and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note is
registered on the Note Register.
"INDENTURE TRUSTEE" means [__________], a [__________], as Indenture
Trustee under this Indenture, or any successor Indenture Trustee appointed
pursuant to the terms of this Indenture.
4
"INDEPENDENT" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Owner Trustee, any other
obligor on the Notes, the Transferor and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Owner Trustee, any such other obligor, the
Transferor or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Owner Trustee, any such other obligor, the Transferor or any
Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 herein,
made by an Independent appraiser or other expert appointed by an Owner Trustee
Order and approved by the Indenture Trustee in the exercise of reasonable care,
and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is Independent
within the meaning thereof.
"OWNER TRUSTEE" means Compass Receivables Asset Funding Trust
200[_]-[_] until a successor replaces it in accordance with the terms of the
Transaction Documents and, thereafter, means the successor.
"OWNER TRUSTEE ORDER" and "OWNER TRUSTEE REQUEST" mean a written order
or request signed in the name of the Owner Trustee by any one of its Authorized
Officers and delivered to the Indenture Trustee.
"LIBOR" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
"LIBOR BUSINESS DAY" shall have the meaning assigned thereto in the
Sale and Servicing Agreement.
"LIEN" shall mean any lien, pledge, encumbrance or security interest on
or in any particular asset or property.
"MAJORITY NOTEHOLDER" shall mean the Holder or Holders of Notes
representing at least 51% of the aggregate Note Principal Amount.
"MANDATORY REDEMPTION PRICE" as of any date of determination shall mean
an amount equal to the then current Note Principal Amount, together with any
unpaid Interest Carry Forward Amounts and Supplemental Interest Amounts, plus
one month's interest on such Note Principal Amount and any unpaid Interest Carry
Forward Amounts and Supplemental Interest Amounts at the Formula Rate.
5
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc., or any successor
thereto.
"MORTGAGE LOAN" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
"MORTGAGE LOAN SCHEDULE" means the listing of the Mortgage Loans set
forth in Schedule A, as supplemented as of any date on which a Defective
Mortgage Loan has been repurchased from the Trust or substituted with an
Eligible Substitute Mortgage Loan pursuant to the Sale and Servicing Agreement.
"NOTE" means any of the Notes.
"NOTE DEPOSITORY AGREEMENT" means the agreement dated [__________],
among the Owner Trustee, the Indenture Trustee and The Depository Trust Company,
as the initial Clearing Agency, relating to the Book-Entry Notes.
"NOTE OWNER" means, with respect to a Book-Entry Note, the Person who
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"NOTE RATE" with respect to the Notes shall have the meaning assigned
thereto in the Sale and Servicing Agreement.
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings
specified in Article II.
"NOTEHOLDER" means a Holder of a Note.
"NOTES" means any Mortgage Loan Asset Backed Notes, Series 200[_]-[_],
Class A or Class M, issued and executed by the Owner Trustee and authenticated
by the Indenture Trustee substantially in the form of EXHIBIT A or EXHIBIT B
hereto, as applicable.
"OBLIGATIONS" shall mean the Mortgage Loans.
"OFFICER'S CERTIFICATE" means a certificate signed by any Authorized
Officer of the Owner Trustee, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 herein,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in this Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Owner Trustee.
6
"OPINION OF COUNSEL" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be employees of
or counsel to the Owner Trustee and who shall be satisfactory to the Indenture
Trustee, and which opinion or opinions shall be addressed to the Indenture
Trustee, as Indenture Trustee, and shall comply with any applicable requirements
of Section 11.1 herein and shall be in form and substance satisfactory to the
Indenture Trustee.
"OUTSTANDING" means, with respect to any Note and as of the date of
determination, any Note theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or
provision for such notice has been made, satisfactory to the Indenture
Trustee);
(iii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser; and
(iv) Notes for which the Final Payment Date has occurred;
provided, however, in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent, or waiver hereunder or under any Transaction
Document, Notes owned by the Owner Trustee, any other obligor upon the Notes,
the Seller, the Transferor or any Affiliate of any of the foregoing Persons
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, or waiver, only
Notes that the Indenture Trustee knows to be so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Owner Trustee, any other obligor upon the Notes, the
Transferor or any Affiliate of any of the foregoing Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes
Outstanding at the date of determination.
7
"OWNER TRUSTEE" means [__________], not in its individual capacity but
solely as Owner Trustee under the Trust Agreement, its successors in interest
and any successor Owner Trustee under the Trust Agreement.
"OWNERSHIP INTEREST" shall have the meaning assigned thereto in the
Trust Agreement.
"PAYING AGENT" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 of this Agreement and is authorized by the Owner Trustee to make payments
to and distributions from the Collection Account, including payment of principal
of or interest on the Notes on behalf of the Owner Trustee.
"PAYMENT DATE" shall mean the [__] of each month or, if such day is not
a Business Day, then the next Business Day, beginning in [__________].
"PERFECTION REPRESENTATIONS" shall mean the representations contained
in Schedule 1 hereto.
"PERSON" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization, limited liability company, limited
liability partnership, or government or any agency or political subdivision
thereof.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Article II in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"RATING AGENCY CONDITION" means, with respect to certain actions
requiring prior Rating Agency consent, that each Rating Agency shall have been
given 10 days (or such shorter period as is acceptable to each Rating Agency)
prior notice thereof and that each of the Rating Agencies shall have notified
the Transferor and the Servicer in writing that such action will not result in a
reduction or withdrawal of the then current rating of the Notes.
"RATING AGENCY" means any of (i) Moody's or (ii) Standard & Poor's or
(iii) Fitch. If no such organization or successor is any longer in existence,
"Rating Agency" shall be a nationally recognized statistical rating organization
or other comparable person designated by the Seller, notice of which designation
shall have been given to the Indenture Trustee.
8
"RECORD DATE" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
"REDEMPTION DATE" means, in the case of a redemption of the Notes
pursuant to Section 10.1 or 10.2, the Payment Date specified by the Indenture
Trustee pursuant to Section 10.1 or 10.2, as applicable.
"REGISTERED HOLDER" means the Person in whose name a Note is registered
on the Note Register on the applicable Record Date.
"RESPONSIBLE OFFICER" shall have the meaning assigned thereto in the
Sale and Servicing Agreement.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement
dated as of [__________], among the Owner Trustee, the Seller, the Servicer and
the Indenture Trustee.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER" shall mean Compass Asset Acceptance Company, L.L.C., a
Delaware limited liability company, in its capacity as seller under the Sale and
Servicing Agreement, and its successor in interest.
"SERVICER" shall mean Compass Bank, in its capacity as servicer under
the Sale and Servicing Agreement, or any Successor Servicer appointed in
accordance with the terms of the Sale and Servicing Agreement.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., or any successor thereto.
"STATE" means any one of the 00 Xxxxxx xx xxx Xxxxxx Xxxxxx xx Xxxxxxx
or the District of Columbia.
"SUCCESSOR SERVICER" has the meaning specified in Section 3.7(e)
hereof.
"TRANSACTION DOCUMENTS" has the meaning set forth in the Sale and
Servicing Agreement.
"TRANSFEROR" shall have the meaning assigned thereto in the Sale and
Servicing Agreement.
"TRUST" means Compass Receivables Asset Funding Trust 200[_]-[__], a
New York common law trust established pursuant to the Trust Agreement, by and
through [____________], as the Owner Trustee..
9
"TRUST AGREEMENT" shall mean the Amended and Restated Trust Agreement
dated as of [__________] among Compass Bank, the Seller and the Owner Trustee,
as the same may be amended, supplemented or otherwise modified from time to
time.
"TRUST ESTATE" shall mean the assets subject to the Sale and Servicing
Agreement, the Mortgage Loan Purchase Agreement, the Transfer Agreement, the
Trust Agreement and this Indenture, assigned to the Indenture Trustee, which
assets consist of: (i) each Mortgage Loan and each Eligible Substitute Mortgage
Loan and its related Mortgage Note and other Mortgage File documents for each
Mortgage Loan and each Eligible Substitute Mortgage Loan, including such
Mortgage Loan's and such Eligible Substitute Mortgage Loan's Principal Balance
and all collections in respect thereof received after the Cut-Off Date or
Subsequent Cut-off Date, as applicable, (ii) such assets as shall from time to
time to be identified as deposited in the Collection Account (exclusive of net
earnings thereon), (iii) the Mortgage Notes and other Mortgage File documents
for the Mortgage Loans, (iv) any property that secured a Mortgage Loan and that
has become REO, (v) the interest of the Seller in certain hazard insurance
policies maintained by the Mortgagors or the Servicer in respect of the Mortgage
Loans and (vi) the proceeds of each of the foregoing.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
Section 1.2. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the Securities and Exchange Commission.
"INDENTURE SECURITIES" means the Notes.
"INDENTURE SECURITY HOLDER" means a Noteholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Indenture
Trustee.
"OBLIGOR" on the indenture securities means the Owner Trustee and any
other obligor on the indenture securities.
10
All other TIA terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
Section 1.3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented (as provided in such agreements)
and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and
assigns.
ARTICLE II
THE NOTES
Section 2.1. FORM. The Notes shall be designated as the "COMPASS
RECEIVABLES ASSET FUNDING TRUST 200[_]-[_], Mortgage Loan Asset Backed Notes,
Series 200[_]-[_]". Each Note shall be in substantially the form set forth in
EXHIBIT A or EXHIBIT B, as applicable, 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,
consistent herewith, be determined by the officers executing such Notes, as
evidenced by their execution thereof. Any portion of the text of any Note may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face of the Note.
11
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the officers executing such Notes, as evidenced by their execution of such
Notes.
The terms of the Notes are set forth in EXHIBIT A or EXHIBIT B hereto,
as applicable. The terms of the Notes are part of the terms of this Indenture.
Section 2.2. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Notes
shall be executed on behalf of the Owner Trustee by an Authorized Officer of the
Owner Trustee. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Owner Trustee shall bind the Owner
Trustee, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of such Notes.
Subject to the satisfaction of the conditions set forth in Section 2.8,
the Indenture Trustee shall upon receipt of an Owner Trustee Order, authenticate
and deliver the Notes for original issue in the principal amount equal to
$[__________], with $[__________] for the Class A Notes and $[__________] for
the Class M Notes. The aggregate principal amount of the Notes outstanding at
any time may not exceed such amounts.
The Notes that are authenticated and delivered by the Indenture Trustee
to or upon the order of the Owner Trustee on the Closing Date shall be dated
[__________]. All other Notes that are authenticated after the Closing Date for
any other purpose under the Indenture shall be dated the date of their
authentication. The Notes shall be issuable as registered Notes in the minimum
denomination of $[25,000] and multiples of $[1,000] in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
Section 2.3. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The
Owner Trustee shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Owner Trustee
shall provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee initially shall be the "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Owner Trustee shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties of
the Note Registrar.
12
If a Person other than the Indenture Trustee is appointed by the Owner
Trustee as Note Registrar, the Owner Trustee will give the Indenture Trustee
prompt written notice of the appointment of such Note Registrar and of the
location, and any change in the location, of the Note Register, and the
Indenture Trustee shall have the right to inspect the Note Register at all
reasonable times and to obtain copies thereof, and the Indenture Trustee shall
have the right to rely upon a certificate executed on behalf of the Note
Registrar by an Executive Officer thereof as to the names and addresses of the
Holders of the Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Owner Trustee to be maintained as provided in Section 3.2
hereof, the Owner Trustee on behalf of the Owner Trustee shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, in the name of the designated transferee or transferees, one
or more new Notes in any authorized denominations, of a like aggregate principal
amount.
At the option of the Holder, Notes may be exchanged for other Notes in
any authorized denominations, of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Owner Trustee shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Owner Trustee, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Owner Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.4 or Section 9.6 hereof not involving any
transfer.
13
Section 2.4. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be reasonably required by it to hold the Owner Trustee and the
Indenture Trustee harmless, then, in the absence of notice to the Owner Trustee,
the Note Registrar or the Indenture Trustee that such Note has been acquired by
a bona fide purchaser, an Authorized Officer of the Owner Trustee shall execute,
and upon its request the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note; provided, however, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become or within seven days shall be
due and payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Owner Trustee may pay such destroyed, lost or stolen Note
when so due or payable or upon the Redemption Date without surrender thereof.
If, after the delivery of such replacement Note or payment of a destroyed, lost
or stolen Note pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such replacement Note was issued
presents for payment such original Note, the Owner Trustee 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 Owner Trustee or the Indenture
Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 2.4, the
Owner Trustee may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 2.4 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Owner Trustee, whether or not
the mutilated, destroyed, lost or stolen Note shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 2.4 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.5. PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Owner Trustee, the Indenture Trustee
and any agent of the Owner Trustee or the Indenture Trustee may treat the Person
in whose name any Note is registered (as
14
of the day of determination) as the owner of such Note for the purpose of
receiving payments of principal of and interest on, if any, such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and none of
the Owner Trustee, the Indenture Trustee or any agent of the Owner Trustee or
the Indenture Trustee shall be affected by notice to the contrary.
Section 2.6. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
(a) Each Note shall accrue interest at the Note Rate and such
interest shall be payable on each Payment Date as specified in EXHIBIT A or
EXHIBIT B hereto, as applicable, subject to Section 3.1 hereof. Any installment
of interest or principal, if any, payable on any Note that is punctually paid or
duly provided for by the Owner Trustee on the applicable Payment Date shall be
paid to the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the Record Date in the manner set forth in Section 5.01(c) of the
Sale and Servicing Agreement.
(b) The principal of each Note shall be payable in
installments on each Payment Date as provided in the forms of the Notes set
forth in EXHIBIT A or EXHIBIT B hereto, as applicable. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable, if not previously paid, on the earliest of (i) the Final Payment Date,
(ii) the Redemption Date or (iii) the date on which an Event of Default shall
have occurred and be continuing, if the Indenture Trustee or the Holders of
Notes representing not less than 66 2/3% of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner provided
in Section 5.2 hereof. All principal payments on the Notes shall be in the
manner set forth in the Sale and Servicing Agreement. The Indenture Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Payment Date on which the Owner
Trustee expects that the final installment of principal of and interest on such
Note will be paid. Such notice shall be mailed or transmitted by facsimile prior
to such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 8.01 of the Sale and Servicing Agreement.
Section 2.7. CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by the Indenture Trustee. The Owner Trustee may
at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Owner Trustee may
have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Indenture Trustee. No Notes shall be authenticated in
lieu of or in exchange for any Notes canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Notes
15
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 Owner
Trustee shall direct by an Owner Trustee Order that they be destroyed or
returned to it; provided, that such Owner Trustee Order is timely and the Notes
have not been previously disposed of by the Indenture Trustee.
Section 2.8. [Reserved].
Section 2.9. RELEASE OF TRUST ESTATE.
(a) Except as otherwise provided in subsections (b) and (c) of this
Section 2.9 and Section 11.1 hereof and the terms of the Transaction Documents,
the Indenture Trustee shall release property from the lien of this Indenture
only upon receipt of an Owner Trustee Request accompanied by an Officer's
Certificate, an Opinion of Counsel and Independent Certificates in accordance
with TIA Sections 314(c) and 314(d)(l) or an Opinion of Counsel in lieu of such
Independent Certificates to the effect that the TIA does not require any such
Independent Certificates.
(b) The Servicer, on behalf of the Owner Trustee, shall be entitled to
obtain a release from the lien of this Indenture for any Mortgage Loan and the
related Mortgaged Property at any time in accordance with the provisions of
Section 3.08 of the Sale and Servicing Agreement.
(c) The Indenture Trustee shall, if requested by the Servicer,
temporarily release to the Servicer the Indenture Trustee's Mortgage File
pursuant to the provisions of Section 3.08 of the Sale and Servicing Agreement
upon compliance by the Servicer of the provisions thereof provided that the
Indenture Trustee's Mortgage File shall have been stamped to signify the Owner
Trustee's pledge to the Indenture Trustee under the Indenture.
Section 2.10. BOOK-ENTRY NOTES. The Notes, upon original issuance, will
be issued in the form of typewritten Notes representing the Book-Entry Notes, to
be delivered to The Depository Trust Company, the initial Clearing Agency or its
custodian, by, or on behalf of, the Owner Trustee. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the nominee
of the initial Clearing Agency, and no Note Owner thereof will receive a
definitive Note representing such Note Owner's interest in such Note, except as
provided in Section 2.12 below. Unless and until definitive, fully registered
Notes (the "Definitive Notes") have been issued to such Note Owners pursuant to
Section 2.12 below:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of
16
principal of and interest on the Notes and the giving of instructions
or directions hereunder) as the sole holder of the Notes, and shall
have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions of
this Section shall control;
(iv) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants pursuant to the Note Depository
Agreement. Unless and until Definitive Notes are issued pursuant to
Section 2.12 below, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such percentage
only to the extent that it has received instructions to such effect
from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Notes and has delivered such instructions to the
Indenture Trustee.
Section 2.11. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to such Note Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes, to the
Clearing Agency, and shall have no obligation to such Note Owners.
Section 2.12. DEFINITIVE NOTES. If (i) the Clearing Agency or the
Seller advises the Indenture Trustee in writing that the Clearing Agency is no
longer willing, qualified or able to properly discharge its responsibilities
with respect to the Book-Entry Notes and the Clearing Agency or the Seller,
Owner Trustee or Indenture Trustee is unable to locate a qualified successor,
(ii) the Seller at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default, Owners of the Book-Entry Notes
representing beneficial interests aggregating at least 51% of the Outstanding
Amount of such Notes advise the Clearing Agency in writing that the continuation
of a book-entry system through the Clearing Agency is no longer in the best
interests of such Note Owners, then the Clearing Agency shall notify all Note
Owners and the Indenture Trustee of the occurrence of such event and of the
availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten
17
Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Owner Trustee shall execute and the Indenture
Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Owner Trustee, the Note
Registrar or the Indenture Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Notes, the
Indenture Trustee shall recognize the Holders of the Definitive Notes as
Noteholders.
Section 2.13. TAX TREATMENT. The Owner Trustee has entered into this
Indenture, and the Notes will be issued, with the intention that, for all tax
purposes, the Notes will qualify as indebtedness secured by the Trust Estate.
The Owner Trustee, by entering into this Indenture, and each Noteholder, by its
acceptance of a Note (and each Note Owner by its acceptance of an interest in
the applicable Book-Entry Note), agree to treat the Notes for all purposes as
indebtedness of the Owner Trustee.
Section 2.14. ERISA REPRESENTATION. Each Person that acquires a Note
shall be required to represent, or in the case of a Book-Entry Note, will be
deemed to represent by its acceptance of the Note, that (i) it is not, and is
not acquiring the Note on behalf of or with "plan assets" (as determined under
U.S. Department of Labor Regulations found at 29 C.F.R. ss.2510.3-101 or
otherwise) of a Plan, or (ii) its acquisition and holding of the Note are
eligible for relief under Prohibited Transaction Class Exemption ("PTCE") 00-00,
XXXX 00-0, XXXX 91-38, XXXX 00-00, XXXX 96-23 or a similar exemption.
ARTICLE III
COVENANTS
Section 3.1. PAYMENT OF PRINCIPAL AND INTEREST. The Owner Trustee will
duly and punctually pay (or will cause to be duly and punctually paid) the
principal of and interest, if any, on the Notes in accordance with the terms of
the Notes and this Indenture. Without limiting the foregoing, the Indenture
Trustee shall, pursuant to Section 5.01 of the Sale and Servicing Agreement, pay
all amounts on deposit in the Collection Account on each Payment Date to the
Noteholders. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Owner Trustee to such Noteholder for all purposes of
this Indenture.
The Notes shall be non-recourse obligations of the Owner Trustee and
shall be limited in right of payment to amounts available from the Collateral,
as provided in this Indenture. The Owner Trustee shall not otherwise be liable
for payments on the Notes. If any other provision of this Indenture shall be
deemed to conflict with the provisions of this Section 3.1, the provisions of
this Section 3.1 shall control.
18
Section 3.2. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee will
maintain in New York an office or agency where Notes may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon
the Owner Trustee in respect of the Notes and this Indenture may be served. The
Owner Trustee hereby initially appoints the Indenture Trustee to serve as its
agent for the foregoing purposes. If at any time the Owner Trustee 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 Owner Trustee hereby
appoints the Indenture Trustee as its agent to receive all such surrenders,
notices and demands.
Section 3.3. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in
Section 8.2(a) and (b), all payments of amounts due and payable with respect to
any Notes that are to be remitted from amounts withdrawn from the Collection
Account pursuant to Section 8.2(c) shall be made on behalf of the Owner Trustee
by the Indenture Trustee or by the Paying Agent, and no amounts so withdrawn
from the Collection Account for payments on the Notes shall be paid over to the
Owner Trustee. The Owner Trustee hereby initially appoints the Indenture Trustee
to serve as Paying Agent with respect to the Notes and in accordance with
Section 3.9 of the Trust Agreement, and the Indenture Trustee hereby accepts and
acknowledges such appointment.
Any Paying Agent other than the Indenture Trustee shall be appointed by
Owner Trustee Order with written notice thereof to the Indenture Trustee. Any
Paying Agent appointed by the Owner Trustee shall be a Person who would be
eligible to be Indenture Trustee hereunder as provided in Section 6.11 hereof.
The Owner Trustee shall not appoint any Paying Agent (other than the Indenture
Trustee) which is not, at the time of such appointment, reasonably satisfactory
to the Seller.
The Owner Trustee will cause each Paying Agent to execute and deliver
to the Indenture Trustee an instrument in which such Paying Agent shall agree
with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent,
it hereby so agrees), subject to the provisions of this Section 3.3, that such
Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Owner Trustee (or any other obligor upon the Notes) of which a
Responsible Officer has actual knowledge in the making of any payment
required to be made with respect to the Notes;
19
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met
by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith; provided,
however, that with respect to withholding and reporting requirements
applicable to original issue discount (if any) on the Notes, the Owner
Trustee shall have first provided the calculations pertaining thereto
to the Indenture Trustee.
The Owner Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Owner
Trustee Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same terms as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any termination and release of a Trust Estate shall be done in
accordance with the provisions of Section 8.01 of the Sale and Servicing
Agreement.
Section 3.4. EXISTENCE.
(a) The Owner Trustee will keep in full effect its existence,
rights and franchises as a banking corporation under the laws of the State of
Delaware.
(b) Any successor to the Owner Trustee appointed pursuant to
Section 10.2 of the Trust Agreement shall be the successor Owner Trustee under
this Indenture without the execution or filing of any paper, instrument or
further act to be done on the part of the parties hereto.
(c) Upon any consolidation or merger of or other succession to
the Owner Trustee, the Person succeeding to the Owner Trustee under the Trust
Agreement may exercise every right and power of the Owner Trustee under this
Indenture with the same effect as if such Person had been named as the Owner
Trustee herein.
20
Section 3.5. PROTECTION OF TRUST ESTATE. The Owner Trustee will from
time to time execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) provide further assurance with respect to a Grant of all
or any portion of the related Trust Estate;
(ii) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iv) enforce any rights with respect to the Trust Estate; or
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Trust
Estate against the claims of all persons and parties.
Section 3.6. ANNUAL OPINIONS AS TO THE TRUST ESTATE.
On or before [__________] in each calendar year, beginning in 200[_],
the Owner Trustee shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until [__________] of the following calendar
year.
Section 3.7. PERFORMANCE OF OBLIGATIONS; SERVICING OF MORTGAGE LOANS.
(a) The Owner Trustee will not take any action and will use
its best efforts not to permit any action to be taken by others that would
release any Person from any of such Person's material covenants or obligations
under any instrument or agreement included in the
21
Trust Estate or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such instrument or agreement, except as expressly provided
in this Indenture, the Sale and Servicing Agreement or such other instrument or
agreement.
(b) The Owner Trustee may contract with or otherwise obtain
the assistance of other Persons to assist it in performing its duties under this
Indenture, and any performance of such duties by a Person identified to the
Indenture Trustee in an Officer's Certificate of the Owner Trustee shall be
deemed to be action taken by the Owner Trustee.
(c) The Owner Trustee will punctually perform and observe all
of its obligations and agreements contained in this Indenture, the Transaction
Documents and in the instruments and agreements included in the Trust Estate,
including but not limited to (i) filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of this
Indenture, the Mortgage Loan Purchase Agreement and the Sale and Servicing
Agreement and (ii) recording or causing to be recorded all Mortgages,
Assignments of Mortgage, all intervening Assignments of Mortgage and all
assumption and modification agreements required to be recorded by the terms of
the Sale and Servicing Agreement and the Mortgage Loan Purchase Agreement, in
accordance with and within the time periods provided for in this Indenture
and/or the Sale and Servicing Agreement, as applicable. Except as otherwise
expressly provided therein, the Owner Trustee shall not waive, amend, modify,
supplement or terminate any Transaction Document or any provision thereof
without the consent of the Indenture Trustee and the Majority Noteholder or such
other percentage of Noteholders as is set forth in the applicable Transaction
Document.
(d) Subject to the terms of the Sale and Servicing Agreement,
if the Owner Trustee shall have knowledge of the occurrence of an Servicer
Termination Event under the Sale and Servicing Agreement, the Owner Trustee
shall promptly notify the Indenture Trustee, the Seller, the Servicer and the
Rating Agencies thereof, and shall specify in such notice the action, if any,
the Servicer is taking with respect of such default. If such a Servicer
Termination Event shall arise from the failure of the Servicer to perform any of
its duties or obligations under the Sale and Servicing Agreement with respect to
the Mortgage Loans, the Owner Trustee shall take all reasonable steps available
to it to remedy or cause to be remedied such failure.
(e) Subject to the terms of the Sale and Servicing Agreement,
as promptly as possible after the giving of notice of termination to the
Servicer of the Servicer's rights and powers pursuant to Section 7.01 of the
Sale and Servicing Agreement, a successor Servicer (the "Successor Servicer")
shall be appointed pursuant to Section 7.02 of the Sale and Servicing Agreement.
If the Indenture Trustee shall succeed to the Servicer's duties as servicer of
the Mortgage Loans as provided herein, it shall do so in its individual capacity
and not in its capacity as Indenture Trustee and, accordingly, the provisions of
Article VI hereof shall be inapplicable to
22
the Indenture Trustee in its duties as successor Servicer and the servicing of
the Mortgage Loans. In case the Indenture Trustee shall become successor
Servicer under the Sale and Servicing Agreement, the Indenture Trustee shall be
entitled to appoint as Successor Servicer any one of its Affiliates, provided
that it shall be fully liable for the actions and omissions of such Affiliate in
such capacity as Successor Servicer.
(f) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Owner Trustee agrees (i) that it will not,
without the prior written consent of the Indenture Trustee (which consent shall
not be unreasonably withheld), amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of the Trust Estate (except to the extent
otherwise provided in the Sale and Servicing Agreement or the other Transaction
Documents), or waive timely performance or observance by the Servicer or the
Seller under the Sale and Servicing Agreement; and (ii) that any such amendment
(not otherwise provided in the Sale and Servicing Agreement or the other
Transaction Documents) shall not (A) reduce in any manner the amount of, or
delay the timing of, collections of payments on mortgage loans, (B) reduce in
any manner the amount of, or delay the timing of, payments that are required to
be made on a Note without the consent of the affected Noteholder, (C) impair the
right of any Noteholder to institute suit for the enforcement of the provisions
of the Agreement, or (D) reduce the aforesaid percentage of the Notes that is
required to consent to any such amendment, without the consent of the Holders of
all the outstanding Notes. If any such amendment, modification, supplement or
waiver shall be so consented to by the Indenture Trustee and the Noteholders,
the Owner Trustee agrees, promptly following a request by the Indenture Trustee
to do so, to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as the Indenture Trustee
may deem necessary or appropriate in the circumstances.
Section 3.8. NEGATIVE COVENANTS. So long as any Notes are Outstanding,
the Owner Trustee shall not:
(i) except as expressly permitted by this Indenture or the
Sale and Servicing Agreement, sell, transfer, exchange or otherwise
dispose of any of the properties or assets of the Owner Trustee,
including those included in the Trust Estate, unless directed to do so
by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the related
Trust Estate;
23
(iii) engage in any business or activity other than as
permitted by the Trust Agreement or other than in connection with, or
relating to, the issuance of Notes pursuant to this Indenture and the
Ownership Interest pursuant to the Trust Agreement, or amend the Trust
Agreement as in effect on the Closing Date other than in accordance
with Section 11.1 thereof;
(iv) issue debt obligations under any other indenture;
(v) incur or assume any indebtedness or guaranty any
indebtedness of any Person, except for such indebtedness as may be
incurred by the Owner Trustee in connection with the issuance of the
Notes pursuant to this Indenture or as otherwise may be permitted by
the Transaction Documents;
(vi) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person;
(vii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein or
the proceeds thereof (other than tax liens, mechanics' liens and other
liens that arise by operation of law, in each case on any of the
Mortgaged Properties and arising solely as a result of an action or
omission of the related Mortgagor) or (C) permit the lien of this
Indenture not to constitute a valid first priority (other than with
respect to any such tax, mechanics' or other lien) security interest in
the Trust Estate;
(viii) [reserved]; or
(ix) take any other action or fail to take any action which
may cause the Owner Trustee to be treated as (a) an association
pursuant to Section 7701 of the Code and the corresponding regulations,
(b) a publicly traded partnership taxable as a corporation pursuant to
Section 7704 of the Code and the corresponding regulations or (c) a
taxable mortgage pool pursuant to Section 7701(i) of the Code and the
corresponding regulations.
Section 3.9. ANNUAL STATEMENT AS TO COMPLIANCE. The Servicer, on behalf of
the Owner Trustee, will deliver to the Indenture Trustee, within 120 days after
the end of each fiscal year of the Owner Trustee (commencing with the fiscal
year 200[_]), an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that:
24
(i) a review of the activities of the Owner Trustee during
such year and of its performance under this Indenture has been made
under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Owner Trustee has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
Section 3.10. COVENANTS OF THE OWNER TRUSTEE.
All covenants of the Owner Trustee in this Indenture are covenants of
the Owner Trustee and are not covenants of the Owner Trustee. The Owner Trustee
is, and any successor Owner Trustee under the Trust Agreement will be, entering
into this Indenture solely as Owner Trustee under the Trust Agreement and not in
its respective individual capacity, and in no case whatsoever shall the Owner
Trustee or any such successor Owner Trustee be personally liable on, or for any
loss in respect of, any of the statements, representations, warranties or
obligations of the Owner Trustee hereunder, as to all of which the parties
hereto agree to look solely to the property of the Owner Trustee.
Section 3.11. SERVICER'S OBLIGATIONS. The Owner Trustee shall cause the
Servicer to comply with its obligations under the terms of the Sale and
Servicing Agreement.
Section 3.12. RESTRICTED PAYMENTS. The Owner Trustee 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 Owner Trustee or otherwise with respect to any ownership or equity
interest or security in or of the Owner Trustee or to the Servicer, (ii) redeem,
purchase, retire or otherwise acquire for value any such ownership or equity
interest or security or (iii) set aside or otherwise segregate any amounts for
any such purpose; provided, however, that the Owner Trustee may make, or cause
to be made (x) payments or distributions to the Servicer, the Indenture Trustee,
the Owner Trustee, the Ownership Interest and the Noteholders as contemplated
by, and to the extent funds are available for such purpose under, the Sale and
Servicing Agreement or the Trust Agreement. The Owner Trustee will not, directly
or indirectly, make or cause to be made payments to or distributions from the
Collection Account except in accordance with this Indenture and the Transaction
Documents.
25
Section 3.13. TREATMENT OF NOTES AS DEBT FOR ALL PURPOSES.
The Owner Trustee shall treat the Notes as indebtedness for all
purposes.
Section 3.14. NOTICE OF EVENTS OF DEFAULT. The Owner Trustee shall give
the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder, each default on the part of the Servicer of its
obligations under the Sale and Servicing Agreement and each default on the part
of the Seller of its obligations under the Sale and Servicing Agreement.
Section 3.15. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee, the Owner Trustee will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
Section 3.16. OWNER TRUSTEE MAY CONSOLIDATE, ETC.
(a) The Owner Trustee shall not consolidate or merge with or
into any other Person, unless:
(i) the Person (if other than the Owner Trustee) 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 Paying Agent, on behalf of the holder of the
Ownership Interest and the performance or observance of every
agreement and covenant of this Indenture on the part of the
Owner Trustee 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) each Rating Agency shall have notified the Owner
Trustee that such transaction will not cause a reduction or
withdrawal by a Rating Agency of its then current rating of
the Notes;
(iv) the Owner Trustee 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 Owner
Trustee or any Noteholder;
26
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been
taken; and
(vi) the Owner Trustee 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 Owner Trustee shall not convey or transfer any of its
properties or assets, including those included in any Trust Estate, to any
Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Owner Trustee, 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 Owner Trustee 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
Owner Trustee 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) each Rating Agency shall have notified the Owner
Trustee that such transaction will not cause a reduction or
withdrawal by a Rating Agency of its then current rating of
the Notes;
(iv) the Owner Trustee shall have received an Opinion of
Counsel (and shall have delivered copies thereof to the
Indenture Trustee) to the effect that such
27
transaction will not have any material adverse tax consequence
to the Owner Trustee 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 Owner Trustee 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 Owner Trustee in
accordance with Section 3.16(a) above, the Person formed by or surviving such
consolidation or merger (if other than the Owner Trustee) shall succeed to, and
be substituted for, and may exercise every right and power of, the Owner Trustee
under this Indenture with the same effect as if such Person had been named as
the Owner Trustee herein.
(b) Upon a conveyance or transfer of all the assets and
properties of the Owner Trustee pursuant to Section 3.16(b) above, the Owner
Trustee shall be released from every covenant and agreement (except such
obligations that survive such transfer) of this Indenture to be observed or
performed on the part of the Owner Trustee 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 Owner Trustee shall not engage in
any business other than financing, purchasing, owning, selling and managing the
Mortgage Loans and the issuance of the Notes in the manner contemplated by this
Indenture and the Transaction Documents and all activities incidental thereto.
Section 3.19. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by this Indenture or the other Transaction Documents, the Owner
Trustee 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.
28
Section 3.20. CAPITAL EXPENDITURES. Except as permitted by the
Transaction Documents, the Owner Trustee shall not make any expenditure (by
long-term or operating lease or otherwise) for capital assets (either realty or
personalty).
Section 3.21. REPRESENTATIONS AND WARRANTIES OF THE OWNER TRUSTEE. The
Perfection Representations shall be part of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1. SATISFACTION AND DISCHARGE OF INDENTURE. Subject to and in
accordance with Section 8.01 of the Sale and Servicing Agreement, this Indenture
shall cease to be of further effect with respect to the Notes (except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8 and
3.10 hereof, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.7
hereof and the obligations of the Indenture Trustee under Section 4.2 hereof)
and (vi) the rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of them),
and the Indenture Trustee, on demand of and at the expense of the Owner Trustee,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to the Notes, when all of the following have
occurred:
(A) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section 2.4
and (ii) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Owner Trustee and thereafter repaid to the Owner Trustee or
discharged from such trust, as provided in Section 3.3 above)
have been delivered to the Indenture Trustee for cancellation;
or
(2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation
a. have become due and payable,
b. will become due and payable within one year
prior to the Final Payment Date, or
29
c. are to be called for redemption within one
year under arrangements satisfactory to the Indenture
Trustee for the giving of notice of redemption by the
Indenture Trustee in the name, and at the expense, of
the Owner Trustee,
and the Owner Trustee, in the case of a., b. or c. above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture Trustee cash
or direct obligations of or obligations guaranteed by the United States of
America (which will mature prior to the date such amounts are payable), in trust
for such purpose, in an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the Indenture Trustee
for cancellation when due to the Final Payment Date or Redemption Date (if Notes
shall have been called for redemption pursuant to Section 10.1 hereof) and all
amounts due and owing the Indenture Trustee have been paid, as the case may be;
(B) the later of (a) twelve months after payment in full of
all outstanding obligations under the Notes, (b) the payment in full of
all unpaid fees and expenses of the Indenture Trustee hereunder and the
other Transaction Documents, (c) the date on which the Owner Trustee
has paid or caused to be paid all other sums payable hereunder by the
Owner Trustee and (d) the date on which the final resolution of any
litigation against the Owner Trustee regarding a preference claim under
the United States Bankruptcy Code (11 U.S.C.) has occurred; and
(C) the Owner Trustee has delivered to the Indenture Trustee
an Officer's Certificate, an Opinion of Counsel and (if required by the
TIA or the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements
of Section 11.1(a) hereof and, subject to Section 11.2 hereof, each
stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture with respect to the
Notes have been complied with.
Section 4.2. APPLICATION OF TRUST MONEY. All moneys deposited with the
Indenture Trustee pursuant to Sections 3.3 and 4.1 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Sale and Servicing
Agreement, to the payment, either directly or through any Paying Agent to the
Holders of the particular Notes for the payment or redemption of which such
moneys have been deposited with the Indenture Trustee, of all sums due and to
become due thereon for principal and interest; but such moneys need not be
segregated from other funds except to the extent required herein or in the Sale
and Servicing Agreement or required by law.
Section 4.3. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with
30
respect to such Notes shall, upon demand of the Owner Trustee, be paid to the
Indenture Trustee to be held and applied according to Section 3.3 above and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.
ARTICLE V
REMEDIES
Section 5.1. EVENTS OF DEFAULT. "Event of Default," wherever used
herein, means with respect to the Notes any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any interest on any Note when
the same becomes due and payable, and continuance of such default for a period
of five (5) days; or
(b) default in the payment in full of the principal of the
Note Principal Amount on the Final Payment Date which default continues for a
period of five (5) days; or
(c) default in the observance or performance of any covenant
or agreement of the Owner Trustee made in this Indenture (other than a covenant
or agreement, a default in the observance or performance of which is elsewhere
in this Section 5.1 specifically dealt with) that has a material adverse effect
on the Noteholders, or any representation or warranty of the Owner Trustee made
in this Indenture, the Sale and Servicing Agreement or in any certificate or
other writing delivered pursuant hereto or in connection herewith proving to
have been incorrect in any material respect as of the time when the same shall
have been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation or warranty
was incorrect shall not have been eliminated or otherwise cured, for a period of
60 days after there shall have been given, by registered or certified mail, to
the Owner Trustee by the Indenture Trustee or to the Owner Trustee and the
Indenture Trustee by the Holders of at least 51% of the Outstanding Amount of
the Notes, a written notice specifying such default or incorrect representation
or warranty and requiring it to be remedied and stating that such notice is a
notice of Default hereunder; or
(d) [Reserved]; or
(e) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Owner Trustee or any
substantial part of the Trust Estate in an involuntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
31
sequestrator or similar official of the Owner Trustee or for any substantial
part of the Trust Estate, or ordering the winding-up or liquidation of the Owner
Trustee's affairs, and such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or
(f) the commencement by the Owner Trustee of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by the Owner Trustee to the entry
of an order for relief in an involuntary case under any such law, or the consent
by the Owner Trustee to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Owner Trustee or for any substantial part of the Trust Estate, or the making
by the Owner Trustee of any general assignment for the benefit of creditors, or
the failure by the Owner Trustee generally to pay its debts as such debts become
due, or the taking of any action by the Owner Trustee in furtherance of any of
the foregoing.
The Owner Trustee shall deliver to the Indenture Trustee and the
Transferor within five days after the occurrence thereof, written notice in the
form of an Officer's Certificate of any event which with the giving of notice
and the lapse of time would become an Event of Default under clause (c) above,
its status and what action the Owner Trustee is taking or proposes to take with
respect thereto.
Section 5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing of which a Responsible Officer
of the Indenture Trustee has knowledge, then and in every such case the
Indenture Trustee, upon the prior written direction of the Holders of Notes
representing not less than 66 2/3% of the Outstanding Amount of the Notes, may
declare all the Notes to be immediately due and payable, by a notice in writing
to the Owner Trustee (and to the Indenture Trustee if given by Noteholders), and
upon any such declaration the unpaid principal amount of such Notes, together
with accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Majority Noteholder, by written notice to the Owner Trustee and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:
(i) the Owner Trustee has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on all
Notes and all other amounts that would then be due hereunder
or upon such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
32
(B) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12 below.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) The Owner Trustee covenants that if (i) default occurs in
the payment of any interest on any Note when the same becomes due and payable,
and such default continues for a period of five days, or (ii) default occurs in
the payment of the principal of or any installment of the principal of any Note
when the same becomes due and payable, and such default continues for a period
of five days, the Owner Trustee will, upon demand of the Indenture Trustee, pay
to the Indenture Trustee for the benefit of the Holders of the Notes, the whole
amount then due and payable on such Notes for principal and interest, with
interest upon the overdue principal and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue installments of interest at
the rate borne by the Notes and in addition thereto such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee.
(b) In case the Owner Trustee shall fail forthwith to pay such
amounts upon such demand, the Indenture Trustee shall at the direction of
Holders of 66 2/3% of the Outstanding Amount of the Notes institute a Proceeding
for the collection of the sums so due and unpaid, and may prosecute such
Proceeding to judgment or final decree, and may enforce the same against the
Owner Trustee or other obligor upon such Notes and collect in the manner
provided by law out of the property of the Owner Trustee or other obligor upon
such Notes, wherever situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the
Indenture Trustee may, and shall at the written direction of the Holders of 66
2/3% of the Outstanding Amount of the Notes, as more particularly provided in
Section 5.4 below, proceed to protect and enforce its rights and the rights of
the Noteholders 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
33
any other proper remedy or legal or equitable right vested in the Indenture
Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Owner
Trustee or any other obligor upon the Notes or any Person having or claiming an
ownership interest in the Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Owner Trustee or its property or such
other obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Owner Trustee or other obligor upon the Notes, or to the
creditors or property of the Owner Trustee or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section 5.3, shall be entitled and empowered by intervention
in such Proceedings:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect
of the Notes and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee, each predecessor
Indenture Trustee and its agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee (except as a result of
negligence or bad faith)), and of the Noteholders allowed in
such Proceedings;
(ii) unless prohibited by applicable law and regulations,
to vote on behalf of the Holders of Notes in any election of a
trustee, a standby trustee or Person performing similar
functions in any such Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute
all amounts received with respect to the claims of the
Noteholders and the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have
the claims of the Indenture Trustee or the Holders of Notes
allowed in any judicial proceedings relative to the Owner
Trustee, its creditors and its property; and any trustee,
receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such
Noteholders to make payments to the Indenture Trustee and, in
the event that the Indenture Trustee shall consent to the
making of payments directly
34
to such Noteholders, to pay to the Indenture Trustee such
amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and
all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence
or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or Proceedings
instituted by the Indenture Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and
also any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Noteholders, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.
Section 5.4. REMEDIES; PRIORITIES.
(a) If an Event of Default shall have occurred and be
continuing of which a Responsible Officer of the Indenture Trustee has actual
knowledge, the Indenture Trustee at the direction of Holders of 66 2/3% of the
Outstanding Amount of the Notes shall do one or more of the following (subject
to Section 5.5 below):
(i) institute Proceedings in its own name and as
trustee of an express trust for the collection of all amounts
then payable on the related Notes or under this Indenture with
respect thereto, whether by declaration or otherwise, enforce
any judgment obtained, and collect from the Owner Trustee and
any other obligor upon such Notes moneys adjudged due;
35
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect
to the Trust Estate;
(iii) exercise any remedies of a secured party under
the UCC and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee or
the related Noteholders; and
(iv) sell the Trust Estate or any portion thereof or
rights or interest therein in a commercially reasonable
manner, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Holders of 100% of the Outstanding
Amount of the Notes, (B) the proceeds of such sale or liquidation distributable
to the Noteholders are sufficient to discharge in full all amounts then due and
unpaid upon such Notes for principal and interest or (C) the Indenture Trustee
determines that the Trust Estate will not continue to provide sufficient funds
for the payment of principal of and interest on the Notes as they would have
become due if the Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of the Holders of 66-2/3% of the Outstanding Amount
of the Notes. In determining such sufficiency or insufficiency with respect to
clauses (B) and (C) above, the Indenture Trustee may, but need not, obtain and
rely upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V, the Indenture Trustee and the Paying Agent shall pay
out the money or property in the following order:
FIRST: to the Indenture Trustee for any costs or
expenses incurred by it in connection with the enforcement of
the remedies provided for in this Article V;
SECOND: to the Noteholders for amounts due and unpaid
on the Notes for interest (including Supplemental Interest
Amounts) and principal, according to the priority set forth in
Section 5.01 of the Sale and Servicing Agreement and the
amounts due and payable on such Notes;
THIRD: to the Paying Agent, as applicable, for any
amounts to be distributed, to the holder of the Ownership
Interest, in the manner set forth in Section 5.01 of the Sale
and Servicing Agreement.
36
The Indenture Trustee may fix a record date and payment date for any
payment to be made to the Noteholders pursuant to this Section 5.4. At least 15
days before such record date, the Indenture Trustee shall mail to each
Noteholder and the Owner Trustee a notice that states the record date, the
payment date and the amount to be paid.
Section 5.5. OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Notes
have been declared to be due and payable under Section 5.2 above following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not (but shall at
the written direction of Holders of 66 2/3% of the Outstanding Amount of the
Notes), elect to maintain possession of the Trust Estate. It is the desire of
the parties hereto and the Noteholders that there be at all times sufficient
funds for the payment of principal of and interest on the Notes (although the
parties hereto understand that there exists the possibility of a shortfall in
collections of the Mortgage Loans), and the Indenture Trustee shall take such
desire into account when determining whether or not to maintain possession of
the Trust Estate. In determining whether to maintain possession of the
Collateral, 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 Collateral for such purpose.
Section 5.6. LIMITATION OF SUITS. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% of the Outstanding Amount
of the Notes have made written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute such
Proceedings; and
(e) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the Majority
Noteholder.
37
It is understood and intended that no Noteholders shall have any right
in any manner whatever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other Noteholders or
to obtain or to seek to obtain priority or preference over any other Holders or
to enforce any right under this Indenture, except in the manner herein provided.
Section 5.7. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due date thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) to
the extent funds are available therefor out of the Trust Estate and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder.
Section 5.8. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Owner Trustee,
the Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
Section 5.9. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Indenture Trustee or any Noteholder to exercise any right or remedy accruing
upon any Default or Event of Default shall impair any such right or remedy or
constitute a waiver of any such Default or Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the
Indenture Trustee 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 Holders of 66 2/3% of the
Outstanding Amount of the Notes shall have the right to direct the time, method
and place of conducting any
38
Proceeding for any remedy available to the Indenture Trustee with respect to the
Notes or exercising any trust or power conferred on the Indenture Trustee;
provided that:
(a) such direction shall not be in conflict with any rule of
law or with this Indenture;
(b) subject to the express terms of Section 5.4 above, any
direction to the Indenture Trustee to sell or liquidate the Trust Estate shall
be in writing by the Holders of Notes representing not less than 100% of the
Outstanding Amount of the Notes;
(c) if the conditions set forth in Section 5.5 above have been
satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant
to such Section 5.5, then any direction to the Indenture Trustee by Holders of
Notes representing less than 100% of the Outstanding Amount of the Notes to sell
or liquidate the Trust Estate shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of the Noteholders set forth in this Section
5.11, subject to Section 6.1 hereof, the Indenture Trustee need not take any
action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
Section 5.12. WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.2 above, the
Majority Noteholder may waive any past Default or Event of Default and its
consequences except a Default (a) in the payment of principal of or interest on
any of the Notes or (b) in respect of a covenant or provision hereof that cannot
be modified or amended without the consent of the Holder of each Note. In the
case of any such waiver, the Owner Trustee, the Indenture Trustee and the
Holders of the Notes shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
Section 5.13. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy
39
under this Indenture, or in any suit against the Indenture Trustee for any
action taken, suffered or omitted by it as Indenture Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to (a) any suit
instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
Section 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Owner Trustee
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 Owner Trustee (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Indenture Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 5.15. ACTION ON NOTES. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Owner Trustee 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 Owner Trustee. Any money or property
collected by the Indenture Trustee shall be applied in accordance with Section
5.4(b) above.
Section 5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee,
the Owner Trustee shall take all such lawful action as the Indenture Trustee may
request to compel or secure the performance and observance by the Seller and the
Servicer, as applicable, of each of their obligations to the Owner Trustee under
or in connection with the Sale and Servicing Agreement, and to exercise any and
all rights, remedies, powers and privileges lawfully available to the Owner
Trustee under or in connection with the Sale and Servicing Agreement to the
extent and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Seller or the Servicer
thereunder and the institution of legal or administrative
40
actions or proceedings to compel or secure performance by the Seller or the
Servicer of each of their obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing) of the Holders of 66 2/3% of the Outstanding Amount shall, exercise all
rights, remedies, powers, privileges and claims of the Owner Trustee against the
Seller or the Servicer under or in connection with the Sale and Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Seller, the Servicer, as the case may be, of
each of their obligations to the Owner Trustee thereunder and to give any
consent, request, notice, direction, approval, extension, or waiver under the
Sale and Servicing Agreement, and any right of the Owner Trustee to take such
action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.1. DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in
this Indenture and no implied covenants or obligations shall
be read into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Indenture Trustee and conforming to the requirements of this
Indenture; however, the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture. If any such
instrument is found not to conform in any material respect to
the requirements of this Agreement, the Indenture Trustee
shall notify the Noteholders of such instrument in the event
that the Indenture Trustee, after so requesting, does not
receive a satisfactory corrected instrument.
41
(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section 6.1;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer
unless it is proved that the Indenture Trustee was negligent
in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith
in accordance with a direction received by it pursuant to
Section 5.11 above.
(d) Every provision of this Indenture that in any way relates
to the Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section 6.1.
(e) The Indenture Trustee shall not be liable for interest on
any money received by it except as the Indenture Trustee may agree in writing
with the Owner Trustee.
(f) Money held in trust by the Indenture Trustee shall be
segregated from other funds except to the extent permitted by law or the terms
of this Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it; and none of the provisions contained in this
Indenture shall in any event require the Indenture Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer, the Owner Trustee or Transferor under this Indenture except during
such time, if any, as the Indenture Trustee shall be the successor to, and be
vested with the rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Indenture.
(h) The Indenture Trustee shall challenge or cause to be
challenged any attempt at substantive consolidation of the assets and
liabilities of the Owner Trustee with those of any Owner (as the term "Owner" is
defined in the Trust Agreement) in connection with any insolvency proceeding of
the Owner Trustee.
42
(i) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section 6.1 and to the provisions of
the TIA.
(j) Subject to the other provisions of this Indenture and
without limiting the generality of this Section 6.1, the Indenture Trustee shall
have no duty (A) to see to any recording, filing, or depositing of this
Indenture or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to see to the
maintenance of any such recording or filing or depositing or to any rerecording,
refiling or redepositing of any thereof, (B) to see to any insurance, (C) to see
to the payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Estate other than from funds available in the
Collection Account, (D) to confirm or verify the contents of any reports or
certificates of the Owner Trustee or Servicer delivered to the Indenture Trustee
pursuant to this Indenture believed by the Indenture Trustee to be genuine and
to have been signed or presented by the proper party or parties.
(k) The Indenture Trustee shall not be required to take notice
or be deemed to have notice or knowledge of any default (except an event of
nonpayment) or Event of Default unless a Responsible Officer of the Indenture
Trustee shall have received written notice or obtained actual knowledge thereof.
In the absence of receipt of such notice or actual knowledge, the Indenture
Trustee may conclusively assume that there is no default or Event of Default.
Section 6.2. RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting on any resolution,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper person. The Indenture Trustee need not investigate any fact or matter
stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require and shall be entitled to receive an Officer's Certificate or an
Opinion of Counsel. The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on an Officer's Certificate or
Opinion of Counsel.
(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.
43
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that such action or omission by
the Indenture Trustee does not constitute willful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel selected by it with due care with respect to legal
matters relating to this Indenture, the Notes and the Transaction Documents to
which it is a party, shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Indenture Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Indenture or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Noteholders, pursuant to the
provisions of this Indenture, unless such Noteholders shall have offered to the
Indenture Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Indenture Trustee of the obligation, upon the
occurrence of an Event of Default of which a Responsible Officer of the
Indenture Trustee shall have actual knowledge (which has not been cured), to
exercise such of the rights and powers vested in it by this Indenture, and to
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(g) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by the Majority Noteholder; provided, however, that if the payment within a
reasonable time to the Indenture Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to taking any such action. The reasonable expense of
every such examination shall be paid by the Owner Trustee or, if paid by the
Indenture Trustee, shall be repaid by the Owner Trustee upon demand.
(h) The right of the Indenture Trustee to perform any
discretionary act enumerated in this Indenture shall not be construed as a duty,
and the Indenture Trustee shall not be answerable for other than its negligence
or willful misconduct in the performance of such act.
(i) The Indenture Trustee shall not be required to give any
bond or surety in respect of the execution of the Trust Fund created hereby or
the powers granted hereunder.
44
(j) The Indenture Trustee shall have no liability in
connection with the malfeasance or nonfeasance by the Owner Trustee or the
Servicer. The Indenture Trustee shall have no liability in connection with
compliance by the Owner Trustee or the Servicer with statutory or regulatory
requirements related to the Collateral or the Trust Estate. The Indenture
Trustee shall not make or be deemed to have made any representations or
warranties with respect to the Collateral or the Trust Estate or the validity or
sufficiency of any assignment of the Collateral or the Trust Estate to the
Indenture Trustee.
(k) In the event that the Indenture Trustee is also acting as
Paying Agent or Registrar hereunder, the rights, protection, immunities and
indemnities afforded to the Indenture Trustee pursuant to this Article VI shall
also be afforded to such Paying Agent or Registrar.
Section 6.3. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Owner Trustee or its Affiliates with
the same rights it would have if it were not Indenture Trustee. Any Paying
Agent, Note Registrar, co-registrar or co-paying agent may do the same with like
rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12
below.
Section 6.4. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be (i) responsible for and makes no representation as to the validity
or adequacy of this Indenture or the Notes, (ii) shall not be accountable for
the Owner Trustee's use of the proceeds from the Notes or (iii) responsible for
any statement of the Owner Trustee in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
Section 6.5. NOTICE OF DEFAULTS. If a Default occurs and is continuing
and if it is actually known to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall mail to each Noteholder, the Servicer, the Owner
Trustee and the Seller notice of the Default within 30 days after it occurs at
the expense of the Owner Trustee. Except in the case of a Default in payment of
principal of or interest on any Note, the Indenture Trustee may withhold the
notice to the Noteholders if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Noteholders. The Indenture Trustee shall not be charged with the
knowledge of an Event of Default unless a Responsible Officer has received
written notice or has actual knowledge thereof.
Section 6.6. REPORTS BY INDENTURE TRUSTEE TO HOLDERS. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns. In
addition, upon Owner Trustee Request, the Indenture Trustee shall promptly
furnish such information reasonably requested by the Owner Trustee that
45
is reasonably available to the Indenture Trustee to enable the Owner Trustee to
perform its federal and state income tax reporting obligations.
Section 6.7. [RESERVED].
Section 6.8. REPLACEMENT OF INDENTURE TRUSTEE. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section. The Indenture Trustee may
resign at any time by so notifying the Owner Trustee. The Majority Noteholder
may remove the Indenture Trustee by so notifying the Indenture Trustee and the
Seller and may appoint a successor Indenture Trustee. The Owner Trustee shall
remove the Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11
below;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(d) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Owner
Trustee shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Owner Trustee.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 30 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Owner Trustee or the Majority Noteholder may petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee.
46
If the Indenture Trustee fails to comply with Section 6.11 below, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Section 6.9. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11 below.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
Section 6.10. APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE.
(a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust Estate, or any part hereof, and, subject to the other
provisions of this Section 6.10, such powers, duties, obligations, rights and
trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 below and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Indenture Trustee shall be conferred or
imposed upon and exercised or performed by the Indenture
Trustee and such separate trustee or co-trustee jointly
47
(it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be
incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder;
and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, jointly with
the Indenture Trustee, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording protection to, the Indenture
Trustee. Every such instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Indenture Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee. The Indenture Trustee
shall remain primarily liable for all actions of a co-trustee.
Section 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. The Indenture
Trustee shall comply with TIA Section 310(b), including the optional provision
permitted by the second sentence of TIA Section 310(b)(9); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities of the Owner Trustee are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
48
Section 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST OWNER TRUSTEE.
The Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). An Indenture Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
Section 6.13. REPRESENTATIONS AND WARRANTIES. The Indenture Trustee
hereby represents and warrants that:
(a) The Indenture Trustee is duly organized, validly existing
and in good standing under the laws of [__________], with power and authority to
own its properties and to conduct its business as such properties are currently
owned and such business is currently conducted.
(b) The Indenture Trustee has the power and authority to
execute and deliver this Indenture and to carry out its terms; and the
execution, delivery and performance of this Indenture have been duly authorized
by the Indenture Trustee by all necessary corporate action.
(c) The consummation of the transactions contemplated by this
Indenture and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the certificate of
incorporation or bylaws of the Indenture Trustee or any agreement or other
instrument to which the Indenture Trustee is a party or by which it is bound.
Section 6.14. DIRECTIONS TO INDENTURE TRUSTEE. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the
assets of the Trust in trust for the Noteholders;
(b) to authenticate and deliver the Notes substantially in the
form prescribed by EXHIBIT A or EXHIBIT B hereto, as applicable, 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.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.1. OWNER TRUSTEE TO FURNISH INDENTURE TRUSTEE NAMES AND
ADDRESSES OF NOTEHOLDERS. The Owner Trustee will furnish or cause to be
furnished to the Indenture Trustee (a) not more than five days after the earlier
of (i) each Record Date and (ii) three months after the
49
last Record Date, a list, in such form as the Indenture Trustee may reasonably
require, of the names and addresses of the Noteholders as of such Record Date,
(b) at such other times as the Indenture Trustee may request in writing, within
30 days after receipt by the Owner Trustee of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; provided, however, that so long as the Indenture Trustee
is the Note Registrar, no such list shall be required to be furnished.
Section 7.2. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Noteholders
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.1 above and the names and addresses of Noteholders received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.1 upon receipt of
a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Owner Trustee, the Indenture Trustee and the Note
Registrar shall have the protection of TIA Section 312(c).
Section 7.3. REPORTS BY OWNER TRUSTEE.
(a) The Owner Trustee shall:
(i) file with the Indenture Trustee, within 15 days after
the Owner Trustee is required to file the same with the
Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the
Owner Trustee may be required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with the rules and regulations prescribed from time
to time by the Commission such additional information,
documents and reports with respect to compliance by the Owner
Trustee with the conditions and covenants of this Indenture as
may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in
TIA Section 313(c)) such
50
summaries of any information, documents and reports required
to be filed by the Owner Trustee pursuant to clauses (i) and
(ii) of this Section 7.3(a) and by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Owner Trustee otherwise determines, the
fiscal year of the Owner Trustee shall end on December 31 of
each year.
Section 7.4. REPORTS BY INDENTURE TRUSTEE. If required by TIA Section
313(a), within 60 days after each August 1, beginning with August 1, 200[_], the
Indenture Trustee shall mail to each Noteholder as required by TIA Section
313(c) a brief report dated as of such date that complies with TIA Section
313(a). The Indenture Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each securities
exchange, if any, on which the Notes are listed. The Owner Trustee shall notify
the Indenture Trustee if and when the Notes are listed on any securities
exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.1. COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V herein.
Section 8.2. ACCOUNTS; DISTRIBUTIONS.
(a) On or prior to the Closing Date, the Indenture Trustee
shall establish and maintain or cause to be established and maintained, in the
name of the Indenture Trustee for the benefit of the Noteholders and the
Transferor, the Collection Account as provided in Article V of the Sale and
Servicing Agreement into which amounts shall be deposited in accordance with the
terms of the Sale and Servicing Agreement.
51
(b) The Indenture Trustee shall deposit any amounts
representing payments on and any collections in respect of the Mortgage Loans
received by it, if any, and any other amounts required by the terms of the
Transaction Documents to be deposited, immediately following receipt thereof.
Amounts on deposit in the Collection Account may be invested in Permitted
Investments pursuant to Section 3.02(d) of the Sale and Servicing Agreement.
(c) On each Payment Date and the Redemption Date, to the
extent funds are available in the Collection Account, the Indenture Trustee
shall make the distributions and payments in the amounts and in the priority set
forth in Section 5.01 of the Sale and Servicing Agreement (except as otherwise
provided in Section 5.4(b) herein).
(d) On each Payment Date and the Redemption Date, to the
extent of the interest of the Indenture Trustee in the Collection Account (as
described in Section 5.01 of the Sale and Servicing Agreement), the Indenture
Trustee hereby authorizes the Owner Trustee or the Paying Agent, as applicable,
to make the distributions from the Collection Account as required pursuant to
Section 5.01 of the Sale and Servicing Agreement.
Section 8.3. [Reserved].
Section 8.4. SERVICER'S MONTHLY STATEMENTS.
On each Payment Date, the Indenture Trustee shall deliver the Indenture
Trustee's statement to Noteholders with respect to such Payment Date to DTC and
the Rating Agencies. Such information shall also be made available at the
Indenture Trustee's website currently located at http\\www.[__________].
Section 8.5. [Reserved].
Section 8.6. OPINION OF COUNSEL. The Indenture Trustee shall receive at
least seven days notice when requested by the Owner Trustee to take any action
pursuant to Section 2.9(a) herein, accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
will not materially and adversely impair the security for the Notes or the
rights of the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to express
an opinion as to the fair market value of a Trust Estate. Counsel rendering any
such opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
52
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes but with
prior notice to the Rating Agencies, the Owner Trustee and the Indenture
Trustee, when authorized by an Owner Trustee Order, at any time and from time to
time, may enter into one or more indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as in force at the date of
the execution thereof), in form satisfactory to the Indenture Trustee, for any
of the following purposes:
(i) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better
to assure, convey and confirm unto the Indenture Trustee any
property subject or required to be subjected to the lien of
this Indenture, or to subject to the lien of this Indenture
additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Owner
Trustee, and the assumption by any such successor of the
covenants of the Owner Trustee herein and in the Notes
contained;
(iii) to add to the covenants of the Owner Trustee, for
the benefit of the Noteholders, or to surrender any right or
power herein conferred upon the Owner Trustee;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any
supplemental indenture or to make any other provisions with
respect to matters or questions arising under this Indenture
or in any supplemental indenture; provided, that such action
shall not adversely affect the interests of the Noteholders;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to
the Notes and to add to or change any of the provisions of
this Indenture as shall be necessary to facilitate the
53
administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI herein; or
(vii) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to effect
the qualification of this Indenture under the TIA or under any
similar federal statute hereafter enacted and to add to this
Indenture such other provisions as may be expressly required
by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Owner Trustee and the Indenture Trustee, when
authorized by an Owner Trustee Order, may, also without the consent of any of
the Noteholders but with prior confirmation from the Rating Agencies, enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Noteholders
under this Indenture; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel or satisfaction of the Rating Agency
Condition, adversely affect in any material respect the interests of any
Noteholder or cause the Owner Trustee to be subject to entity level tax.
Section 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Owner Trustee and the Indenture Trustee, when authorized by an Owner Trustee
Order, also may, with prior consent of the Rating Agencies, and with the consent
of the Majority Noteholder, by Act of such Majority Noteholder delivered to the
Owner Trustee and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Note affected thereby:
(a) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof, the interest
rate thereon or the amount required to be paid on the Notes following the
exercise of the option set forth in Section 8.01 of the Sale and Servicing
Agreement, change the provisions of this Indenture relating to the application
of collections on, or the proceeds of the sale of, the Trust Estate to payment
of principal of or interest on the Notes, or change any place of payment where,
or the coin or currency in which, any Note or the interest thereon is payable,
or impair the right to institute suit for the enforcement of the provisions of
this Indenture requiring the application of funds available therefor, as
provided in Article V herein, to the payment of any such amount due on the Notes
on
54
or after the respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(b) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(d) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Indenture Trustee to direct the Owner Trustee to
sell or liquidate the Trust Estate pursuant to Section 5.4 herein;
(e) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional provisions
of this Indenture or the Transaction Documents cannot be modified or waived
without the consent of the Holder of each Outstanding Note affected thereby;
(f) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation of any
of the individual components of such calculation); or
(g) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the Trust
Estate or, except as otherwise permitted or contemplated herein, terminate the
lien of this Indenture on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the lien of this Indenture
provided further, that such action shall not, as evidenced by an Opinion of
Counsel, cause the Owner Trustee to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
In connection with requesting the consent of the Noteholders pursuant
to this Section 9.2, the Indenture Trustee shall mail to the Holders of the
Notes to which such amendment or supplemental indenture relates a notice setting
forth in general terms the substance of such supplemental indenture at the Owner
Trustee's expense. It shall not be necessary for any Act of
55
Noteholders under this Section 9.2 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
Section 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2 herein, shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture and all conditions
precedent to the execution of such supplemental indenture have been met. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
Section 9.4. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Indenture Trustee, the Owner Trustee and the Holders of the Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.5. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
Section 9.6. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Owner Trustee or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Owner Trustee, to any such
supplemental indenture may be prepared and executed by the Owner Trustee and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding
Notes.
56
ARTICLE X
REDEMPTION OF NOTES
Section 10.1. EARLY TERMINATION.
The Servicer may effect an early termination of the Trust pursuant to
Section 8.01 of the Sale and Servicing Agreement on or after any Payment Date on
which the Note Principal Amount of the Notes declines to 15% or less of the
Initial Note Principal Amount of the Notes and the purchase price for the
Mortgage Loans has been paid, pursuant to the provisions of Section 8.01(b) of
the Sale and Servicing Agreement (such date, the "Redemption Date"). If the
Servicer does not terminate the Trust in accordance with Section 8.01(b) of the
Sale and Servicing Agreement within three months of the first Payment Date upon
which such termination may be effected, then the Indenture Trustee shall conduct
an auction process for the Mortgage Loans as provided in Section 8.01(c) of the
Sale and Servicing Agreement.
The Indenture Trustee shall furnish notice of any redemption of the
Notes that occurs as a result of any of the foregoing in accordance with Section
8.01 of the Sale and Servicing Agreement.
Section 10.2. MANDATORY REDEMPTION.
(a) If the full amount of principal and interest then due on
the Notes is not paid by the Payment Date in [__________], the Indenture Trustee
shall begin a process for soliciting bids in connection with an auction of the
Mortgage Loans. The Indenture Trustee shall provide the Servicer written notice
of such auction at least ten (10) Business Days prior to the date bids must be
received in such auction (the "Mandatory Auction Date"). The auction shall be
conducted as follows:
(i) If more than one bid is received, the Indenture
Trustee shall solicit and resolicit new bids from all
participating bidders until only one bid remains or the
remaining bidders decline to resubmit bids. The Indenture
Trustee shall accept the highest of such remaining bids if it
is equal to or in excess of the Mandatory Redemption Price. If
the highest of such remaining bids is less than the Mandatory
Redemption Price, then the Indenture Trustee shall neither
accept such bid nor consummate such sale unless Holders of
66-2/3% of the Outstanding Amount of the Notes consent.
(ii) If the first auction conducted by the Indenture
Trustee does not produce any bid at least equal to the
Mandatory Redemption Price, then the Indenture Trustee shall,
beginning on the Payment Date occurring approximately
57
three months after the Mandatory Auction Date for the failed
auction, commence another auction in accordance with the
requirements of this subsection (c). If such second auction
does not produce any bid at least equal to the Mandatory
Redemption Price, then the Indenture Trustee shall, beginning
on the Payment Date occurring approximately three months after
the Mandatory Auction Date for the failed second auction,
commence another auction in accordance with the requirements
of this subsection (a), and shall continue to conduct similar
auctions approximately every three months thereafter until the
earliest of (i) delivery by the Servicer of notice of exercise
of its repurchase option pursuant to Section 8.01(b) of the
Sale and Servicing Agreement, (ii) receipt by the Indenture
Trustee of a bid meeting the conditions specified in the
preceding paragraph, or (iii) the Payment Date on which the
Principal Balance of all the Mortgage Loans is reduced to
zero.
(b) If the Indenture Trustee receives a bid meeting the
conditions specified in this Section 10.2, the Servicer and the Owner Trustee
shall promptly arrange for the sale of the Mortgage Loans to the winning bidder,
the Indenture Trustee shall execute such agreements and termination statements
as may be reasonably required or appropriate to release its lien with respect to
the Mortgage Loans and Mortgage Files upon payment to it of the bid purchase
price and satisfaction of any other terms and conditions of the auction sale.
The Indenture Trustee shall cooperate with the Servicer and the Owner Trustee in
their sale of the Mortgage Loans, shall deliver to the winning bidder the
related Mortgage Files in the Indenture Trustee's possession (if any), and shall
take such other actions as the winning bidder may reasonably request to effect
the transfer of the Mortgage Loans.
(c) Notice of any termination, specifying the Payment Date
(which shall be a date that would otherwise be a Payment Date) upon which the
Noteholders may surrender their Notes to the Indenture Trustee for payment of
the final distribution and cancellation (the "Redemption Date"), shall be given
promptly by the Indenture Trustee (upon receipt of written directions from the
Servicer, if the Servicer is exercising its right to repurchase of the Mortgage
Loans, given not later than the first day of the month preceding the month of
such final distribution) by letter to the Noteholders mailed not earlier than
the 15th day and not later than the 25th day of the month next preceding the
month of such final distribution specifying (i) the Payment Date upon which
final distribution of the Notes will be made upon presentation and surrender of
Notes at the office or agency of the Indenture Trustee therein designated, (ii)
the amount of any such final distribution and (iii) that the Record Date
otherwise applicable to such Payment Date is not applicable, distributions being
made only upon presentation and surrender of the Notes at the office or agency
of the Indenture Trustee therein specified. On the Redemption Date specified
pursuant to this subsection (e), the Indenture Trustee shall distribute the
proceeds of the sale of the Mortgage Loans in accordance with the priorities
listed in Section 5.4(b) of this Indenture.
58
(d) Upon presentation and surrender of the Notes, to the
extent of funds available therefor, the Indenture Trustee shall cause to be
distributed to the Holders of the Notes on the Payment Date for such final
distribution, in proportion to the Percentage Interests of their respective
Notes and to the extent that funds are available for such purpose, an amount
equal to the amount required to be distributed to Noteholders pursuant to
Section 5.4(b) for such Payment Date.
(e) In the event that all of the Noteholders shall not
surrender their Notes for final payment and cancellation on or before such final
Payment Date, the Indenture Trustee shall promptly following such date cause all
funds in the Collection Account not distributed in final payment to Noteholders,
to be withdrawn therefrom and credited to the remaining Noteholders by
depositing such funds in a separate escrow account for the benefit of such
Noteholders, and the Servicer (if the Servicer has exercised its right to
purchase the Mortgage Loans) or the Indenture Trustee (in any other case) shall
give a second written notice to the remaining Noteholders to surrender their
Notes for cancellation and receive the final payment with respect thereto. If
within nine months after the second notice all the Notes shall not have been
surrendered for cancellation, the Ownership Interest will be entitled to all
remaining unclaimed funds and other assets which remain subject hereto, and the
Indenture Trustee upon transfer of such funds shall be discharged of any
responsibility for such funds and the Noteholders shall look to the holder of
the Ownership Interest for payment.
ARTICLE XI
MISCELLANEOUS
Section 11.1. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Owner Trustee made
to the Indenture Trustee to take any action under any provision of this
Indenture, the Owner Trustee shall furnish to the Indenture Trustee (i) an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with,
(ii) an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with and (iii) (if required by
the TIA) an Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section 11.1, except that, in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
59
(1) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other
property or securities with the Indenture Trustee that is to be made the basis
for the release of any property or securities subject to the lien of this
Indenture (except in the case of the release of Mortgage Loans in accordance
with the Sale and Servicing Agreement), the Owner Trustee shall, in addition to
any obligation imposed in Section 11.1(a) herein or elsewhere in this Indenture,
furnish to the Indenture Trustee an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair value (within
90 days of such deposit) to the Owner Trustee of the Collateral or other
property or securities to be so deposited.
(ii) Whenever the Owner Trustee 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 Owner Trustee shall also
deliver to the Indenture Trustee an Independent Certificate as
to the same matters, if the fair value to the Owner Trustee of
the Collateral, other property or securities to be so
deposited and of all other such Collateral, other property or
securities made the basis of any such withdrawal or release
since the commencement of the then-current fiscal year of the
Owner Trustee, as set forth in the certificates delivered
pursuant to clause (i) above and this clause (ii), is 10% or
more of the aggregate Note Principal Amount of the Notes, but
such a certificate need not be furnished with respect to any
securities so deposited, if the fair value thereof to the
Owner Trustee as set forth in the related Officer's
Certificate is less than either (A) $25,000 or (B) one percent
of the aggregate Note Principal Amount of the Notes.
60
(iii) Whenever any property or securities are to be
released from the lien of this Indenture, the Owner Trustee
shall also furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days
of such release) of the property or securities proposed to be
released and stating that in the opinion of such person the
proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
(iv) Whenever the Owner Trustee 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 Owner Trustee 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 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 Principal Amount of the
Notes, but such certificate need not be furnished in the case
of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the then
aggregate Note Principal Amount of the Notes.
Section 11.2. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Owner
Trustee may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Servicer, the Transferor or the Owner Trustee,
stating that the information with respect to such factual matters is in the
possession of the Servicer, the Transferor or the Owner Trustee, 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.
61
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 Owner
Trustee shall deliver any document as a condition of the granting of such
application, or as evidence of the Owner Trustee'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 Owner Trustee to have such
application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained
in any such document as provided in Article VI hereof.
Section 11.3. ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in 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 Owner Trustee. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1 hereof)
conclusive in favor of the Indenture Trustee and the Owner Trustee, if made in
the manner provided in this Section 11.3.
(b) The fact and date of the execution by any person of any
such instrument or writing may be proved in any manner that the Indenture
Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Owner Trustee in reliance thereon, whether or not
notation of such action is made upon such Note.
62
Section 11.4. NOTICES. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or Act of Noteholders is to be
made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Owner
Trustee shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at its Corporate
Trust Office, or
(b) the Owner Trustee 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 Owner Trustee addressed to: Compass
Receivables Asset Funding Trust 200[_]-[_], in care of the Owner Trustee and its
Corporate Trust Office, Attention: [__________], with copies to [__________],
Attention: [__________] and to the Servicer addressed to: 00 Xxxxx 00xx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx 00000, or at any other address previously furnished in
writing to the Indenture Trustee by the Owner Trustee. The Owner Trustee shall
promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee.
Notices required to be given to the Rating Agencies by the 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 Xxxxx'x, at
the following address: 00 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000; (ii) in the case of
S&P, at the following address: 00 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 and (iii) in
the case of Fitch, at the following address: Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx,
XX 00000; or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
Section 11.5. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
63
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder.
Section 11.6. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 11.7. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 11.8. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Owner Trustee shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
Section 11.9. SEPARABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.10. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
Section 11.11. 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
64
Business Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after any
such nominal date.
Section 11.12. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.13. COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.14. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Owner Trustee and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
Section 11.15. TRUST OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Owner Trustee, 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 Owner Trustee 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 Owner Trustee, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties or
obligations of the Owner Trustee hereunder, the Owner Trustee shall be subject
to, and entitled to the benefits of, the terms and provisions of Articles VI,
VII and VIII of the Trust Agreement.
Section 11.16. NO PETITION. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Transferor (and any
wholly-owned subsidiary thereof), the Seller, the
65
Servicer or the Owner Trustee, or join in any institution against the Transferor
(and any wholly-owned subsidiary thereof), the Seller, the Servicer or the Owner
Trustee of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Notes, this Indenture or any of the Transaction Documents.
Section 11.17. INSPECTION. The Owner Trustee agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee, during
the Owner Trustee's normal business hours, to examine all the books of account,
records, reports and other papers of the Owner Trustee, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Owner Trustee's affairs, finances and
accounts with the Owner Trustee's officers, employees, and Independent certified
public accountants, all at such reasonable times and as often as may be
reasonably requested. The Indenture Trustee shall and shall cause its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
Section 11.18. INCONSISTENCIES WITH THE SALE AND SERVICING AGREEMENT.
In the event certain provisions of this Agreement conflict with the provisions
of the Sale and Servicing Agreement, the parties hereto agree that the
provisions of the Sale and Servicing Agreement shall be controlling.
Section 11.19. THIRD-PARTY BENEFICIARIES. This Indenture will inure to
the benefit of and be binding upon the parties hereto, the Noteholders, the Note
Owners and their respective successors and permitted assigns. Except as
otherwise provided in this Indenture, no other person will have any right or
obligation hereunder.
Section 11.20. LIMITED RECOURSE.
(a) Notwithstanding anything in this Agreement to the
contrary, the Notes constitute limited recourse obligations and are limited in
recourse to the assets of the Trust. The Indenture Trustee, by entering into
this Agreement, and each Noteholder, by accepting a Note, agree that recourse
for the Notes is limited to the assets of the Trust and, if the assets of the
Trust shall prove to be insufficient to pay amounts due under the Notes, the
Noteholders shall have no claim against the assets of the Seller other than
those which have been conveyed to the Trust.
(b) If, notwithstanding paragraph (a) above, the Noteholders
are deemed to have any interest in any asset of the Seller other than the
Seller's interest in the assets of the Trust, including any interest in assets
of the Seller, or any assets sold by the Seller to another
66
trustee pursuant to a separate pooling and servicing agreement, sale and
servicing agreement or similar agreement, pledged to secure debt obligations of
the Seller other than the Notes, the Indenture Trustee, by entering into this
Agreement, and each Noteholder, by accepting a Note, agree that any such
interest is subordinate to the claims of the holders of any such debt
obligations, and the Indenture Trustee and Noteholders shall have no rights in
such assets until such debt obligations are indefeasibly paid in full. The
agreement of the Indenture Trustee and the Noteholders pursuant to this Section
11.20 is intended to constitute a subordination agreement for the purposes of
Section 510(a) of title 11 of the United States Code, 11 U.S.C. xx.xx. 101 ET
SEQ. (the "BANKRUPTCY CODE").
Section 11.21. [RESERVED].
Section 11.22. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Indenture is executed and delivered
by the Owner Trustee, not individually or personally but solely as Owner Trustee
of the Trust under the Trust Agreement, in the exercise of the powers and
authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Owner Trustee is made
and intended not as personal representations, undertakings and agreements by the
Owner Trustee but is made and intended for the purpose of binding only the Owner
Trustee, (c) nothing herein contained shall be construed as creating any
liability on the Owner Trustee individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if
any, being expressly waived by the parties to this Indenture and by any person
claiming by, through or under them and (d) under no circumstances shall the
Owner Trustee be personally liable for the payment of any indebtedness or
expenses of the Owner Trustee or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaking by the
Owner Trustee under this Indenture or any related documents.
67
IN WITNESS WHEREOF, the Owner Trustee and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers,
thereunto duly authorized and duly attested, all as of the day and year first
above written.
COMPASS RECEIVABLES ASSET FUNDING TRUST 200[_]-[_]
By: [__________], not in its individual
capacity but solely as Owner Trustee
By:
---------------------------------------
Name:
Title:
[__________], as Indenture Trustee
By:
----------------------------------------------
Name:
Title:
STATE OF
COUNTY OF
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared _______________, known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
[__________], not in its individual capacity, but solely as Owner Trustee on
behalf of COMPASS RECEIVABLES ASSET FUNDING TRUST 200[_]-[_], a New York common
law trust, and that such person executed the same as the act of said common law
trust for the purpose and consideration therein expressed, and in the capacities
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ___day of _________,
200[_].
-----------------------------------------------------
Notary Public in and for the State of
---------------
(Seal)
My commission expires:
STATE OF
COUNTY OF
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ____________________, known to
me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of [__________], a
[__________], and that such person executed the same as the act of said
corporation for the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this __day of _________,
200[_].
Notary Public in and for the State of
--------------
(Seal)
My commission expires:
--------------------------------
SCHEDULE 1
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
The Owner Trustee hereby represents, warrants, and covenants to the
Indenture Trustee as to itself, the Seller and the Originator as follows on the
Closing Date and on each Payment Date thereafter:
GENERAL
1. This Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in the Collateral in favor of the Indenture
Trustee, each of which security interest is prior to all other Liens, and is
enforceable as such as against creditors of and purchasers from the Owner
Trustee.
2. The Mortgage Loans constitute "general intangibles" or "instruments"
within the meaning of the applicable UCC.
3. The Collection Account and all subaccounts thereof constitute either
a deposit account or a securities account.
4. To the extent that payments and collections received or made with
respect to the Mortgage Loans constitute securities entitlements, such payments
and collections have been and will have been credited to the Collection Account.
The securities intermediary for the Collection Account has agreed to treat all
assets credited to the Collection Account as "financial assets" within the
meaning of the applicable UCC.
CREATION
5. The Owner Trustee owns and has good and marketable title to the
Collateral free and clear of any Lien, claim or encumbrance of any Person,
excepting only liens for taxes, assessments or similar governmental charges or
levies incurred in the ordinary course of business that are not yet due and
payable or as to which any applicable grace period shall not have expired, or
that are being contested in good faith by proper proceedings and for which
adequate reserves have been established, but only so long as foreclosure with
respect to such a lien is not imminent and the use and value of the property to
which the Lien attaches is not impaired during the pendency of such proceeding.
6. The Seller has received all consents and approvals to the sale of
the Mortgage Loans to the Owner Trustee required by the terms of the Mortgage
Loans that constitute instruments.
7. To the extent the Collection Account or subaccounts thereof
constitute securities entitlements, certificated securities or uncertificated
securities, the Owner Trustee has received all consents and approvals required
to transfer to the Indenture Trustee its interest and rights in the Collection
Account hereunder.
PERFECTION
8. The Owner Trustee has caused or will have caused, within ten days
after the effective date of this Agreement, the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the pledge of the
Collateral from the Owner Trustee to the Indenture Trustee and the security
interest in the Collateral granted to the Indenture Trustee under this
Agreement.
9. With respect to the Collection Account and all subaccounts that
constitute deposit accounts, either:
(i) the Owner Trustee has delivered to the Indenture Trustee a
fully-executed agreement pursuant to which the bank maintaining the deposit
accounts has agreed to comply with all instructions originated by the Indenture
Trustee directing disposition of the funds in the Collection Account without
further consent by the Owner Trustee; or
(ii) the Owner Trustee has taken all steps necessary to cause the
Indenture Trustee to become the account holder of the Collection Account.
10. With respect to the Collection Account or subaccounts thereof that
constitute securities accounts or securities entitlements, either:
(i) the Owner Trustee has caused or will have caused, within ten days
after the effective date of this Agreement, the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the security interest in
the Collection Account granted by the Owner Trustee to the Indenture Trustee; or
(ii) the Owner Trustee has delivered to the Indenture Trustee a
fully-executed agreement pursuant to which the securities intermediary has
agreed to comply with all instructions originated by the Indenture Trustee
relating to the Collection Account without further consent by the Seller; or
(iii) the Owner Trustee has taken all steps necessary to cause the
securities intermediary to identify in its records the Indenture Trustee as the
person having a security entitlement against the securities intermediary in the
Collection Account.
2
PRIORITY
11. Other than the transfer of the Transferred Assets to the Trust
under the Transfer Agreement, the transfer of the Mortgage Loans to the Seller
under the Mortgage Loan Purchase Agreement, the transfer of the Mortgage Loans
to the Trust pursuant to the Sale and Servicing Agreement and the security
interest granted to the Indenture Trustee pursuant to the this Agreement, none
of the Owner Trustee, the Seller or the Originator have pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Mortgage Loans.
None of the Owner Trustee, the Seller or the Originator have authorized the
filing of, or are aware of any financing statements against the Owner Trustee,
the Seller or the Originator that include a description of collateral covering
the Mortgage Loans other than any financing statement relating to the security
interest granted to the Indenture Trustee hereunder or that has been terminated.
12. The Owner Trustee is not aware of any judgement, ERISA or tax lien
filings against the Owner Trustee, the Seller or the Originator.
13. The Originator has in its possession all original copies of the
Mortgage Notes that constitute or evidence the Mortgage Loans. To the Owner
Trustee's knowledge, none of the instruments that constitute or evidence the
Mortgage Loans has any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the Owner
Trustee. All financing statements filed or to be filed against the Owner
Trustee, the Seller and the Originator in favor of the Indenture Trustee in
connection herewith describing the Mortgage Loans contain a statement to the
following effect: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the Indenture
Trustee."
14. Neither the Collection Account nor any subaccount thereof is in the
name of any person other than the Owner Trustee or the Indenture Trustee as
trustee under the Indenture or in the name of its nominee. The Owner Trustee has
not consented for the securities intermediary of the Collection Account to
comply with entitlement orders of any person other than the Indenture Trustee.
15. SURVIVAL OF PERFECTION REPRESENTATIONS. Notwithstanding any other
provision of this Agreement or any other transaction document, the Perfection
Representations contained in this Schedule shall be continuing, and remain in
full force and effect (notwithstanding any replacement of the Servicer or
termination of the Servicer's rights to act as such) until such time as all
obligations under this Agreement have been finally and fully paid and performed.
16. NO WAIVER. The parties to this Agreement (i) shall not, without
obtaining a confirmation of the then-current rating of the Notes, waive any of
the Perfection Representations,
3
and (ii) shall provide the Rating Agencies with prompt written notice of any
breach of the Perfection Representations, and shall not, without obtaining a
confirmation of the then-current rating of the Notes (as determined after any
adjustment or withdrawal of the ratings following notice of such breach) waive a
breach of any of the Perfection Representations.
17. SERVICER TO MAINTAIN PERFECTION AND PRIORITY. The Owner Trustee
shall cause the Servicer, in order to evidence the interests of the Seller, the
Owner Trustee and the Indenture Trustee under the Sale and Servicing Agreement,
to take such action, or execute and deliver such instruments (other than
effecting a Filing (as defined below), unless such Filing is effected in
accordance with this paragraph) as may be necessary or advisable (including,
without limitation, such actions as are requested by the Indenture Trustee) to
maintain and perfect, as a first priority interest, the Indenture Trustee's
security interest in the Mortgage Loans. The Owner Trustee shall cause the
Servicer to, from time to time and within the time limits established by law,
prepare and present to the Indenture Trustee for the Indenture Trustee to
authorize (based in reliance on the Opinion of Counsel hereinafter provided for)
the Master Service to file, all financing statements, amendments, continuations,
initial financing statements in lieu of a continuation statement, terminations,
partial terminations, releases or partial releases, or any other filings
necessary or advisable to continue, maintain and perfect the Indenture Trustee's
security interest in the Mortgage Loans as a first-priority interest (each a
"Filing"). The Owner Trustee shall cause the Servicer to present each such
Filing to the Indenture Trustee together with (x) an Opinion of Counsel to the
effect that such Filing is (i) consistent with grant of the security interest to
the Trust pursuant to Section 2.01 of the Sale and Servicing Agreement and the
grant of the security interest to the Indenture Trustee pursuant to this
Indenture, (ii) satisfies all requirements and conditions to such Filing in this
Agreement and (iii) satisfies the requirements for a Filing of such type under
the Uniform Commercial Code in the applicable jurisdiction (or if the Uniform
Commercial Code does not apply, the applicable statute governing the perfection
of security interests), and (y) a form of authorization for the Indenture
Trustee's signature. Upon receipt of such Opinion of Counsel and form of
authorization, the Indenture Trustee shall promptly authorize in writing the
Servicer to, and the Owner Trustee shall cause the Servicer to, effect such
Filing under the Uniform Commercial Code without the signature of the Seller or
the Owner Trustee or the Indenture Trustee where allowed by applicable law.
Notwithstanding anything else in the transaction documents to the contrary, the
Servicer shall not have any authority to effect a Filing without obtaining
written authorization from the Indenture Trustee.
4
SCHEDULE A
MORTGAGE LOAN SCHEDULE
EXHIBIT A
FORM OF CLASS A NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE OWNER TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
No. CUSIP NO.
Aggregate Class Note Principal Amount: Denomination of this Class A
Note:
$ $
COMPASS RECEIVABLES ASSET FUNDING TRUST 200[_]-[_]
MORTGAGE LOAN ASSET BACKED NOTES,
SERIES 200[_]-[_], CLASS A
COMPASS RECEIVABLES ASSET FUNDING TRUST 200[_]-[_], a common law trust
organized and existing under the laws of the State of New York (herein referred
to as the "Trust"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of $____________ payable on each Payment
Date in an amount equal to the result obtained by multiplying (i) a fraction the
numerator of which is the initial principal amount of this Class A Note and the
denominator of which is the aggregate principal amount of all Class A Notes by
(ii) the aggregate amount, if any, payable from the Collection Account in
respect of principal on the Class A Note pursuant to Section 5.01 of the Sale
and Servicing Agreement dated as of [__________] (the "Sale and Servicing
Agreement"), among the Owner Trustee, Compass Asset Acceptance Company, L.L.C.,
as Seller (the "Seller"), Compass Bank, as Servicer ("Compass Bank"), and
[__________], a [__________], as Indenture Trustee (the
A-1
"Indenture Trustee"); provided, however, that the entire unpaid principal amount
of this Note shall be due and payable on the earliest to occur of (i) the
Payment Date occurring in [__________] (the "Final Maturity Date"), (ii) the
Redemption Date or (iii) the date on which an Event of Default under the
Indenture dated as of [__________], between the Owner Trustee and the Indenture
Trustee shall have occurred and be continuing, if the Indenture Trustee or the
Holders of Notes representing not less than a 66 2/3% of the Outstanding Amount
of the Notes have declared the Notes to be immediately due and payable in the
manner provided in Section 5.2 of the Indenture. Capitalized terms used but not
defined herein are defined in Article I of the Indenture, which also contains
rules as to construction that shall be applicable herein.
The Owner Trustee will pay interest on this Note at the rate per annum
described in the Sale and Servicing Agreement with respect to the Class A Note
on the principal amount of this Note outstanding on the preceding Payment Date
(after giving effect to all payments of principal made on the preceding Payment
Date) on each Payment Date until the principal of this Note is paid or made
available for payment in full. Interest on this Note will accrue for each
Payment Date during the period from and including the preceding Payment Date to
the day immediately preceding such Payment Date (or, in the case of the first
Payment Date, the period from and including the Closing Date to the day
immediately preceding the First Payment Date) (each, an "Accrual Period").
Interest will be computed on the basis of the actual number of days in each
Accrual Period and a 360-day year. Such principal of and interest on this Note
shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Owner
Trustee with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-2
IN WITNESS WHEREOF, the Owner Trustee has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date: _________________, 200[_]
COMPASS RECEIVABLES ASSET FUNDING TRUST 200[_]-[_]
By: [__________], not in its individual capacity but
solely as Owner Trustee under the Trust Agreement
By:
---------------------------------------------------
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: _________________, 200[_]
[__________], not in its individual capacity but
solely as Indenture Trustee,
By:
---------------------------------------------------
Authorized Signatory
A-3
(REVERSE OF NOTE)
This Note is one of a duly authorized issue of Notes of the Trust,
designated as its Mortgage Loan Asset Backed Notes, Series 200[_]-[_] Class A,
all issued under the Indenture, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Owner Trustee, the Indenture Trustee
and the Holders of the Notes. The Class A Notes are subject to all terms of the
Indenture.
The Class A Notes are and will be secured by the collateral pledged as
security therefor as provided in the Indenture.
Principal of the Class A Notes will be payable on each Payment Date in
an amount described on the face hereof. "Payment Date" means the [__] day of
each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing in [__________].
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Payment Date and the
Redemption Date. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default under the Indenture shall have occurred and be continuing and the
Indenture Trustee, at the direction or upon the prior written consent of the
Holders of the Notes representing not less than 66 2/3% of the Outstanding
Amount of the Notes, shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture. All principal
payments on the Class A Notes shall be made pro rata to the Holders of the Class
A Notes entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the related installment of principal, if any, to the extent not in
full payment of this Note, shall be made by wire transfer of immediately
available funds to, or by check or money order mailed to, the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, or upon
written request by a Noteholder delivered to the Indenture Trustee at least five
Business Days prior to such Record Date, by wire transfer (but only if such
Noteholder is the Depository or such Noteholder owns of record one or more Notes
having principal denominations aggregating at least $[5,000,000]) or by such
other means of payment as the Noteholder and the Indenture Trustee shall agree.
Such checks or money orders shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in
A-4
the Indenture, for payment in full of the then remaining unpaid principal amount
of this Note on a Payment Date, then the Indenture Trustee, in the name of and
on behalf of the Trust, will notify the Person who was the Registered Holder
hereof as of the Record Date preceding such Payment Date by notice mailed or
transmitted by facsimile prior to such Payment Date, and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in New York, New
York.
As provided in the Sale and Servicing Agreement, the Class A Notes may
be redeemed in whole, but not in part, at the option of the Servicer, on any
Payment Date on and after the date on which the Note Principal Amount is less
than or equal to 15% of the Note Principal Amount on the Closing Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Owner Trustee pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and thereupon one or more new Notes of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the Owner Trustee may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Trust, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Trust or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Trust, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such Person may have expressly
agreed and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law,
A-5
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that such
Noteholder or Note Owner will not at any time institute against the Transferor
(and any wholly-owned subsidiary thereof), the Seller, the Servicer or the Owner
Trustee, or join in any institution against the Transferor (and any wholly-owned
subsidiary thereof), the Seller, the Servicer or the Owner Trustee of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Transaction
Documents.
Each Person that acquires a Note shall be required to represent, or in
the case of a Book-Entry Note, will be deemed to represent by its acceptance of
the Note, that (i) it is not, and is not acquiring the Note on behalf of or with
"plan assets" (as determined under Department of Labor Regulation ss.2510.3-101
or otherwise) of a Plan, or (ii) its acquisition and holding of the Note are
eligible for relief under Prohibited Transaction Class Exemption ("PTCE") 00-00,
XXXX 00-0, XXXX 95-60, PTCE 96-23 or a similar exemption.
The Owner Trustee has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Trust secured by the Trust Estate. Each Noteholder, by acceptance of a Note
(and each Note Owner by acceptance of a beneficial interest in a Note), agrees
to treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Trust.
Prior to the due presentment for registration of transfer of this Note,
the Owner Trustee, the Indenture Trustee and any agent of the Owner Trustee or
the Indenture Trustee may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Owner Trustee, the Indenture Trustee or
any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Holders of the Notes under the Indenture at any time
by the Owner Trustee with the consent of the Holders of Notes representing 51%
of the Outstanding Amount of all Notes at the time Outstanding. The Indenture
also contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Owner Trustee with certain provisions
of the Indenture and certain past defaults under the Indenture and their
consequences. Any such
A-6
consent or waiver by the Holder of this Note (or any one or more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Trust" as used in this Note includes any successor to the
Trust under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Owner Trustee,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Transaction Documents, none of the Owner Trustee in its
individual capacity, any owner of a beneficial interest in the Trust, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Transaction
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Trust for any
and all liabilities, obligations and undertakings contained in the Indenture or
in this Note.
A-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
--------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints , attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
---------------------
*/
-------------------------------------
Signature Guaranteed:
*/
-------------------------------------
-----------------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
A-8
EXHIBIT B
FORM OF CLASS M NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE OWNER TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
No. CUSIP NO.
Aggregate Class Note Principal Amount: Denomination of this Class
Note:
$ $
COMPASS RECEIVABLES ASSET FUNDING TRUST 200[_]-[_]
MORTGAGE LOAN ASSET BACKED NOTES,
SERIES 200[_]-[_], CLASS M
COMPASS RECEIVABLES ASSET FUNDING TRUST 200[_]-[_], a commong law trust
organized and existing under the laws of the State of New York (herein referred
to as the "Trust"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of $____________ payable on each Payment
Date in an amount equal to the result obtained by multiplying (i) a fraction the
numerator of which is the initial principal amount of this Class M Note and the
denominator of which is the aggregate principal amount of all Class M Notes by
(ii) the aggregate amount, if any, payable from the Collection Account in
respect of principal on the Class M Note pursuant to Section 5.01 of the Sale
and Servicing Agreement dated as of [__________] (the "Sale and Servicing
Agreement"), among the Owner Trustee, Compass Asset Acceptance Company, L.L.C.,
as Seller (the "Seller"), Compass Bank, as Servicer ("Compass Bank"), and
[__________], a [__________], as Indenture Trustee (the "
B-1
Indenture Trustee"); provided, however, that the entire unpaid principal amount
of this Note shall be due and payable on the earliest to occur of (i) the
Payment Date occurring in [__________] (the "Final Maturity Date"), (ii) the
Redemption Date or (iii) the date on which an Event of Default under the
Indenture dated as of [__________], between the Owner Trustee and the Indenture
Trustee shall have occurred and be continuing, if the Indenture Trustee or the
Holders of Notes representing not less than 66 2/3% of the Outstanding Amount of
the Notes have declared the Notes to be immediately due and payable in the
manner provided in Section 5.2 of the Indenture. Capitalized terms used but not
defined herein are defined in Article I of the Indenture, which also contains
rules as to construction that shall be applicable herein.
The Owner Trustee will pay interest on this Note at the rate per annum
described in the Sale and Servicing Agreement with respect to the Class M Note
on the principal amount of this Note outstanding on the preceding Payment Date
(after giving effect to all payments of principal made on the preceding Payment
Date) on each Payment Date until the principal of this Note is paid or made
available for payment in full. Interest on this Note will accrue for each
Payment Date during the period from and including the preceding Payment Date to
the day immediately preceding such Payment Date (or, in the case of the first
Payment Date, the period from and including the Closing Date to the day
immediately preceding the First Payment Date) (each, an "Accrual Period").
Interest will be computed on the basis of the actual number of days in each
Accrual Period and a 360-day year. Such principal of and interest on this Note
shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Owner
Trustee with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
B-2
IN WITNESS WHEREOF, the Owner Trustee has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date: , 200[_]
-----------------
COMPASS RECEIVABLES ASSET FUNDING TRUST 200[_]-[_]
By: [__________], not in its individual capacity but
solely as Owner Trustee under the Trust Agreement
By:
-------------------------------------------------
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: , 200[_]
-----------------
[__________], not in its individual capacity but
solely as Indenture Trustee,
By:
------------------------------------------------
Authorized Signatory
B-3
(REVERSE OF NOTE)
This Note is one of a duly authorized issue of Notes of the Trust,
designated as its Mortgage Loan Asset Backed Notes, Series 200[_]-[_] Class M,
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 Owner Trustee, the Indenture Trustee
and the Holders of the Notes. The Class M Notes are subject to all terms of the
Indenture.
The Class M Notes are and will be secured by the collateral pledged as
security therefor as provided in the Indenture.
Principal of the Class M Notes will be payable on each Payment Date in
an amount described on the face hereof. "Payment Date" means the [__] day of
each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing in [__________].
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Payment Date and the
Redemption Date. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default under the Indenture shall have occurred and be continuing and the
Indenture Trustee, at the direction or upon the prior written consent of the
Holders of the Notes representing not less than 66 2/3% of the Outstanding
Amount of the Notes, shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture. All principal
payments on the Class M Notes shall be made pro rata to the Holders of the Class
M Notes entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the related installment of principal, if any, to the extent not in
full payment of this Note, shall be made by wire transfer of immediately
available funds to, or by check or money order mailed to, the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date or upon
written request by a Noteholder delivered to the Indenture Trustee at least five
Business Days prior to such Record Date, by wire transfer (but only if such
Noteholder is the Depository or such Noteholder owns of record one or more Notes
having principal denominations aggregating at least $[5,000,000]) or by such
other means of payment as the Noteholder and the Indenture Trustee shall agree.
Such checks or money orders shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or
B-4
not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Payment Date, then the Indenture Trustee, in the name of and on
behalf of the Trust, will notify the Person who was the Registered Holder hereof
as of the Record Date preceding such Payment Date by notice mailed or
transmitted by facsimile prior to such Payment Date, and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in New York, New
York.
As provided in the Sale and Servicing Agreement, the Class M Notes may
be redeemed in whole, but not in part, at the option of the Servicer, on any
Payment Date on and after the date on which the Note Principal Amount is less
than or equal to 15% of the Note Principal Amount on the Closing Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Owner Trustee pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and thereupon one or more new Notes of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the Owner Trustee may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Owner Trustee or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Trust or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Trust, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law,
B-5
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that such
Noteholder or Note Owner will not at any time institute against the Transferor
(and any wholly-owned subsidiary thereof), the Seller, the Servicer or the Owner
Trustee, or join in any institution against the Seller, the Servicer or the
Owner Trustee of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the Transaction Documents.
Each Person that acquires a Note shall be required to represent, or in
the case of a Book-Entry Note, will be deemed to represent by its acceptance of
the Note, that (i) it is not, and is not acquiring the Note on behalf of or with
"plan assets" (as determined under Department of Labor Regulation ss.2510.3-101
or otherwise) of a Plan, or (ii) its acquisition and holding of the Note are
eligible for relief under Prohibited Transaction Class Exemption ("PTCE") 00-00,
XXXX 00-0, XXXX 95-60, PTCE 96-23 or a similar exemption.
The Owner Trustee has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Trust secured by the Trust Estate. Each Noteholder, by acceptance of a Note
(and each Note Owner by acceptance of a beneficial interest in a Note), agrees
to treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Trust.
Prior to the due presentment for registration of transfer of this Note,
the Owner Trustee, the Indenture Trustee and any agent of the Owner Trustee or
the Indenture Trustee may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Owner Trustee, 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
Owner Trustee and the rights of the Holders of the Notes under the Indenture at
any time by the Owner Trustee with the consent of the Holders of Notes
representing 51% of the Outstanding Amount of all Notes at the time Outstanding.
The Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Owner Trustee
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such
B-6
consent or waiver by the Holder of this Note (or any one or more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Trust" as used in this Note includes any successor to the
Trust under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Owner Trustee,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Transaction Documents, none of the Owner Trustee in its
individual capacity, any owner of a beneficial interest in the Trust, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Transaction
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Trust for any
and all liabilities, obligations and undertakings contained in the Indenture or
in this Note.
B-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
--------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints , attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
---------------------
*/
------------------------------------------------
Signature Guaranteed:
*/
------------------------------------------------
----------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
B-8
