INDENTURE
between
FIRSTPLUS FUNDING TRUST
as Issuer
and
FIRST BANK NATIONAL ASSOCIATION
as Indenture Trustee
Dated as of June 1, 1997
FIRSTPLUS FUNDING TRUST
Asset-Backed Notes
Series 1997A
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE 2
Section 1.1 Definitions 2
Section 1.2 Rules of Construction 5
ARTICLE II THE NOTES 6
Section 2.1 Form 6
Section 2.2 Execution, Authentication, Delivery and Dating 6
Section 2.3 Registration; Registration of Transfer and Exchange 7
Section 2.4 Mutilated, Destroyed, Lost or Stolen Notes 8
Section 2.5 Persons Deemed Owner 9
Section 2.6 Payment of Principal and Interest; Defaulted Interest 9
Section 2.7 Cancellation 10
Section 2.8 Authentication of Notes 11
Section 2.9 Release of Collateral 14
Section 2.10 Definitive Notes 15
Section 2.11 Tax Treatment 16
ARTICLE III COVENANTS 17
Section 3.1 Payment of Principal and Interest 17
Section 3.2 Maintenance of Office or Agency 17
Section 3.3 Money for Payments To Be Held in Trust 17
Section 3.4 Existence 19
Section 3.5 Protection of Collateral 19
Section 3.6 Annual Opinions as to Collateral 20
Section 3.7 Performance of Obligations; Servicing of Home Loans 20
Section 3.8 Negative Covenants 21
Section 3.9 Annual Statement as to Compliance 22
Section 3.10 [RESERVED] 23
Section 3.11 Servicer's Obligations 23
Section 3.12 [RESERVED] 23
Section 3.13 Further Instruments and Acts 23
ARTICLE IV SATISFACTION AND DISCHARGE 23
Section 4.1 Satisfaction and Discharge of Indenture 23
Section 4.2 Application of Trust Money 24
Section 4.3 Repayment of Moneys Held by Paying Agent 24
ARTICLE V REMEDIES 24
Section 5.1 Events of Default 24
Section 5.2 Acceleration of Maturity; Rescission and
Annulment 26
Section 5.3 Collection of Indebtedness and
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TABLE OF CONTENTS
(Continued)
Page
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Suits for Enforcement by Indenture Trustee 26
Section 5.4 Remedies; Priorities 28
Section 5.5 Optional Preservation of the Collateral 29
Section 5.6 Limitation of Suits 30
Section 5.7 Unconditional Rights of Noteholders To
Receive Principal and Interest 30
Section 5.8 Restoration of Rights and Remedies 30
Section 5.9 Rights and Remedies Cumulative 31
Section 5.10 Delay or Omission Not a Waiver 31
Section 5.11 Control by Noteholders 31
Section 5.12 Waiver of Past Defaults 32
Section 5.13 Undertaking for Costs 32
Section 5.14 Waiver of Stay or Extension Laws 32
Section 5.15 Action on Notes 33
Section 5.16 Performance and Enforcement of Certain Obligations 33
ARTICLE VI THE INDENTURE TRUSTEE 34
Section 6.1 Duties of Indenture Trustee 34
Section 6.2 Rights of Indenture Trustee 35
Section 6.3 Individual Rights of Indenture Trustee 35
Section 6.4 Indenture Trustee's Disclaimer 36
Section 6.5 Notice of Defaults 36
Section 6.6 Reports by Indenture Trustee to Holders 36
Section 6.7 Compensation and Indemnity 36
Section 6.8 Replacement of Indenture Trustee 37
Section 6.9 Successor Indenture Trustee by Merger 38
Section 6.10 Appointment of Co-Indenture Trustee or
Separate Indenture Trustee 38
Section 6.11 Eligibility; Disqualification 39
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS 40
Section 7.1 Issuer To Furnish Indenture Trustee Names
and Addresses of Noteholders 40
Section 7.2 Preservation of Information; Communications
to Noteholders 40
Section 7.3 Indenture Trustee Certificate 40
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES 40
Section 8.1 Collection of Money 40
Section 8.2 Payments 41
Section 8.3 [RESERVED] 42
Section 8.4 Servicer's Remittance Reports 42
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TABLE OF CONTENTS
(Continued)
Page
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Section 8.5 Release of Collateral 42
ARTICLE IX SUPPLEMENTAL INDENTURES 42
Section 9.1 Supplemental Indentures Without Consent
of Noteholders 42
Section 9.2 Supplemental Indentures with Consent of Noteholders 44
Section 9.3 Execution of Supplemental Indentures 45
Section 9.4 Effect of Supplemental Indenture 45
Section 9.5 [RESERVED] 45
Section 9.6 Reference in Notes to Supplemental Indentures 45
Section 9.7 [RESERVED] 45
ARTICLE X RETIREMENT OF NOTES 46
Section 10.1 Retirement 46
Section 10.2 Form of Retirement Notice 47
Section 10.3 Notes Payable on Redemption Date 47
ARTICLE XI MISCELLANEOUS 47
Section 11.1 Compliance Certificates and Opinions, etc. 47
Section 11.2 Form of Documents Delivered to Indenture Trustee 48
Section 11.3 Acts of Noteholders 49
Section 11.4 Notices, etc., to Indenture Trustee, Issuer,
Rating Agencies, Note Insurer and Arranger 49
Section 11.5 Notices to Noteholders; Waiver 50
Section 11.6 Effect of Headings and Table of Contents 51
Section 11.7 Successors and Assigns 51
Section 11.8 Separability 51
Section 11.9 Benefits of Indenture 51
Section 11.10 Legal Holidays 51
Section 11.11 GOVERNING LAW 51
Section 11.12 Counterparts 51
Section 11.13 Recording of Indenture 51
Section 11.14 Issuer Obligation 52
Section 11.15 No Petition 52
Section 11.16 Inspection 52
Section 11.17 Grant of Noteholder Rights to Note Insurer 52
Section 11.18 Third Party Beneficiary 53
Section 11.19 Suspension and Termination of Note Insurer's Rights 53
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EXHIBITS
--------
EXHIBIT A Form of Note
EXHIBIT B-1 Form of Transferor Representation Letter (without QIB
representation)
EXHIBIT B-2 Form of Transferee Representation Letter (with QIB
representation)
EXHIBIT B-3 Form of Transferee Representation Letter (for Transferees that
are not QIBs)
-iv-
INDENTURE dated as of June 1, 1997, between FIRSTPLUS FUNDING
TRUST, a Delaware business trust (the "Issuer"), and FIRST BANK NATIONAL
ASSOCIATION, a national banking association, as trustee and not in its
individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the holders of the Issuer's Asset-Backed
Notes (the "Notes"):
GRANTING CLAUSE
Subject to the terms of this Indenture, the Issuer hereby Grants to the
Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit
of the Noteholders and the Note Insurer, all of the Issuer's right, title and
interest in and to: (i) the Trust Estate; (ii) all right, title and interest
of the Issuer in the Sale and Servicing Agreement (including the Issuer's
right to cause the Seller to repurchase Home Loans from the Issuer 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; and (iv) all funds on
deposit from time to time in the Trust Accounts (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 Noteholders and
the Note Insurer, acknowledges such Grant, accepts the trusts hereunder and
agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of the Noteholders and the Note Insurer
may be adequately and effectively protected. The Indenture Trustee agrees
and acknowledges that the Indenture Trustee's Home Loan Files will be held by
the Custodian for the benefit of the Indenture Trustee in Dallas, Texas. The
Indenture Trustee further agrees and acknowledges that each other item of
Collateral that is physically delivered to the Indenture Trustee will be held
by the Indenture Trustee in New York, New York.
Subject to the conditions set forth in this Indenture and the Note Purchase
Agreement, on each Advance Date and pursuant to a Subsequent Transfer
Agreement, the Issuer shall grant to the Indenture Trustee all of the right,
title and interest of the Issuer in and to each Subsequent Home Loan
(including all interest and principal thereon received after the related
Cut-Off Date) identified
INDENTURE (IBJ Warehouse) - Page 1
on the schedule attached to the related Subsequent Transfer Agreement and all
items in the related Indenture Trustee's Home Loan File.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 DEFINITIONS. Except as otherwise specified herein or as
the context may otherwise require, (i) capitalized terms used but not
otherwise defined herein have the respective meanings set forth in the Sale
and Servicing Agreement for all purposes of this Indenture and (ii) the
following terms have the respective meanings set forth below for all purposes
of this Indenture.
ACT: As specified in Section 11.3(a).
AUTHORIZED OFFICER: With respect to the Issuer, any officer of the
Issuer who is authorized to act for the Issuer in matters relating to the
Issuer and who is identified on the list of Authorized Officers delivered by
the Issuer to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
COLLATERAL: As specified in the Granting Clause of this Indenture.
CORPORATE TRUST OFFICE: 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 000 X. Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000; Attention: Corporate Trust
Department, or at such other address as the Indenture Trustee may designate
from time to time by notice to the Noteholders, the Note Insurer and the
Issuer, or the principal corporate trust office of any successor Indenture
Trustee at the address designated by such successor Indenture Trustee by
notice to the Noteholders, the Note Insurer and the Issuer.
DECLARATION OF TRUST: The Declaration of Trust of the Issuer, dated as
of June 12, 1997, as amended from time to time as provided therein.
DEFAULT: Any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.
DEPOSITORY INSTITUTION: Any depository institution or trust company,
including the Indenture Trustee, that (i) is incorporated under the laws of
the United States of America or any State thereof, (ii) is subject to
supervision and examination by federal or state banking authorities and (iii)
has outstanding unsecured commercial paper or other short-term unsecured debt
obligations that are rated A-1 by Standard & Poor's and P-1 by Moody's (or
comparable ratings if Standard & Poor's and Moody's are not the Rating
Agencies).
EVENT OF DEFAULT: As specified in Section 5.1.
INDENTURE (IBJ Warehouse) - Page 2
EXECUTIVE OFFICER: 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.
GRANT: Mortgage, pledge, bargain, sell, 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 or of any
other agreement or instrument shall include all rights, powers and options
(but none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give
receipt for principal and interest payments in respect of the Collateral and
all other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights
and options, to bring Proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party
is or may be entitled to do or receive thereunder or with respect thereto.
INDENTURE TRUSTEE: First Bank National Association, a national banking
association, as Indenture Trustee under this Indenture acting on behalf of
the Noteholders and the Note Insurer, or any successor indenture trustee
under this Indenture.
INDEPENDENT: When used with respect to any specified Person, that the
Person (a) is in fact independent of the Issuer, any other obligor on the
Notes, the Seller, and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect
financial interest in the Issuer, any such other obligor, the Seller, or any
Affiliate of any of the foregoing Persons, and (c) is not connected with the
Issuer, any such other obligor, the Seller, or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director, or person performing similar functions.
ISSUER: FIRSTPLUS FUNDING TRUST until a successor replaces it and,
thereafter, means any successor obligor on the Notes.
ISSUER ORDER and ISSUER REQUEST: A written order or request signed in
the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
NOTE REGISTER and NOTE REGISTRAR: The respective meanings specified in
Section 2.3.
OFFICER'S CERTIFICATE: A certificate signed by any Authorized Officer
of the Issuer, under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.1, and delivered to the
Indenture Trustee.
OPINION OF COUNSEL: One or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be employees of or
counsel to the Issuer and who shall be satisfactory to the Indenture Trustee
and, so long as a Note Insurer Default has not occurred and is continuing,
the Note Insurer, and which opinion or opinions (i) shall be addressed to the
Indenture
INDENTURE (IBJ Warehouse) - Page 3
Trustee, as Indenture Trustee, and, so long as a Note Insurer Default has not
occurred and is continuing, the Note Insurer, (ii) shall comply with any
applicable requirements of Section 11.1, and (iii) shall be in form and
substance satisfactory to the Indenture Trustee and, so long as a Note
Insurer Default has not occurred and is continuing, the Note Insurer.
OUTSTANDING: 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 related
Noteholders (provided, however, that if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision for such notice has been made,
satisfactory to the Indenture Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that
any such Notes are held by a bona fide purchaser;
provided, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand,
authorization, direction, notice, consent, or waiver hereunder or
under any Basic Document, Notes owned by the Issuer, any other
obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent, or waiver, only Notes that
the Indenture Trustee knows to be so owned shall be so disregarded;
Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Issuer, any other obligor upon
the Notes, the Seller or any Affiliate of any of the foregoing
Persons.
OUTSTANDING AMOUNT: The aggregate of the Note Principal Balances of all
Notes Outstanding at the date of determination.
PAYING AGENT: The Indenture Trustee or any other Person that meets the
eligibility standards for the Indenture Trustee specified in Section 6.11 and
is authorized by the Issuer to make payments from the Note Payment Account
and the Note Principal Prepayment Account, including payment of principal of
or interest on the Notes on behalf of the Issuer.
INDENTURE (IBJ Warehouse) - Page 4
PERSON: Any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization, or government or any agency or
political subdivision thereof.
PREDECESSOR NOTE: With respect to any particular Note, every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.4 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
PROCEEDING: Any suit in equity, action at law or other judicial or
administrative proceeding.
REDEMPTION DATE: In the case of a redemption of the Notes pursuant to
Section 10.1 or a payment to Noteholders pursuant to Section 10.3, the
Payment Date specified by the Note Insurer pursuant to Section 10.2.
REDEMPTION PRICE: In the case of a redemption of the Notes pursuant to
Section 10.1, an amount equal to the unpaid principal amount of the Notes
redeemed plus accrued and unpaid interest thereon to but excluding the
Redemption Date.
SALE AND SERVICING AGREEMENT: The Sale and Servicing Agreement dated as
of June 1, 1997, between the Issuer, FIRSTPLUS FINANCIAL, INC., as Seller
and Servicer, and the Indenture Trustee, as Indenture Trustee.
SECURITIES ACT: The Securities Act of 1933, as amended.
SELLER: FIRSTPLUS FINANCIAL, INC., in its capacity as seller under the
Sale and Servicing Agreement, and any successor in interest.
SERVICER: FIRSTPLUS FINANCIAL, INC. in its capacity as servicer under
the Sale and Servicing Agreement, and any successor Servicer thereunder.
UCC: 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 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;
INDENTURE (IBJ Warehouse) - Page 5
(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 "FIRSTPLUS
FUNDING TRUST Asset-Backed Notes, Series 1997A". The Notes, together with
the Indenture Trustee's certificate of authentication, shall be in
substantially the form set forth in EXHIBIT A, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as
may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution thereof. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods, all as determined by the
officers executing such Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in EXHIBIT A are part of the terms of this Indenture.
Section 2.2 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Notes
shall be executed on behalf of the Issuer by an Authorized Officer of the
Issuer. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
INDENTURE (IBJ Warehouse) - Page 6
Subject to the satisfaction of the conditions set forth in Section 2.8,
the Indenture Trustee shall authenticate and deliver the Notes for original
issue with an Aggregate Maximum Principal Balance of $500,000,000. The
aggregate Note Principal Balance Outstanding at any time may not exceed the
Aggregate Maximum Note Principal Balance.
In the event of an advance of Additional Principal Balances by the
Noteholders as provided in Section 2.02 of the Sale and Servicing Agreement,
each Noteholder shall, and is hereby authorized to, record on the schedule
attached to its Note the date and amount of any Additional Principal Balance
advanced by it, and each repayment thereof; provided that failure to make any
such recordation on such schedule or any error in such schedule shall not
adversely affect any Noteholder's rights with respect to its Note Principal
Balance and its right to receive interest payments in respect of the Note
Principal Balance held by such Noteholder.
The Notes that are authenticated and delivered by the Indenture Trustee
to or upon the order of the Issuer on the Closing Date shall be dated the
Closing Date. 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
related denomination of the Maximum Note Principal Balance.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 2.3 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The
Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee initially shall be the "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon
any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties
of Note Registrar. The Note Registrar shall make the Note Register available
for inspection by any Noteholder and the Note Insurer upon reasonable notice
from such Noteholder.
If a Person other than the Indenture Trustee is appointed by the Issuer
as Note Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Noteholders and the
principal amounts and number of such Notes.
Subject to Section 2.12, upon surrender for registration of transfer of
any Note at the office or agency of the Issuer to be maintained as provided
in Section 3.2, the Issuer shall execute, the
INDENTURE (IBJ Warehouse) - Page 7
Indenture Trustee shall authenticate, and the Noteholder shall be entitled to
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 Maximum Note Principal Amount.
At the option of the Noteholder, 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 Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall be entitled to
obtain from the Indenture Trustee, the Notes which the Noteholder making the
exchange is entitled to receive.
Any 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 Securities Exchange Act of 1934, as amended.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
No service charge shall be made to a Noteholder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes, other
than exchanges pursuant to Section 2.4 or Section 9.6 not involving any
transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to such
Note.
Section 2.4 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, the Issuer shall execute, and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note of
a like principal amount; provided, however, that if any such destroyed, lost
or stolen Note, but not a mutilated Note, shall have become or within
INDENTURE (IBJ Warehouse) - Page 8
seven days shall be due and payable, or shall have been called for
redemption, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable or upon the Redemption
Date without surrender thereof. If, after the delivery of such replacement
Note or payment of a destroyed, lost or stolen Note pursuant to the proviso
to the preceding sentence, a bona fide purchaser of the original Note in lieu
of which such replacement Note was issued presents for payment such original
Note, the Issuer and the Indenture Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section, the Issuer
may require the payment by the Holder of such Note, other than the Note
Insurer, of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Indenture Trustee) connected
therewith.
Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.5 PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Note Insurer, the
Indenture Trustee and any agent of the Issuer, the Note Insurer or the
Indenture Trustee may treat the Person in whose name any Note is registered
(as of the day of determination) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any, on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and none
of the Issuer, the Note Insurer, the Indenture Trustee or any agent of the
Issuer, the Note Insurer or the Indenture Trustee shall be affected by notice
to the contrary.
Section 2.6 PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
(a) The Notes shall accrue interest as provided in the Sale and
Servicing Agreement, and such interest shall be payable on each Payment Date
as specified therein, subject to Section 3.1. Any installment of interest or
principal payable on any Note shall be paid on the applicable Payment Date to
the Person in whose name such Note (or one or more Predecessor Notes) is
registered in the Note Register as of the close of business on the related
Record Date by wire transfer in immediately available funds to the account
specified in writing by the related Noteholder, except for the final
installment of principal payable with respect to such Note on a Payment Date
following a
INDENTURE (IBJ Warehouse) - Page 9
Conversion Date or on the Final Scheduled Payment Date for such Notes and
except for the Redemption Price for any Note called for redemption pursuant
to Section 10.1, which shall be payable as provided below.
(b) The principal of each Note shall be payable in installments on each
Payment Date as provided in the Sale and Servicing Agreement.
Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable, if not previously paid, on the earlier of (i)
the Final Scheduled Payment Date or (ii) the date on which an Event of
Default shall have occurred and be continuing, if the Indenture Trustee or
the Majority Noteholders have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2. All principal payments on the
Notes shall be made pro rata to the Noteholders entitled thereto. If a
Conversion Date has occurred, 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 Issuer expects that the final
installment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final
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. A copy of such form of notice shall be sent to the Note Insurer
by the Indenture Trustee. No such notice shall be sent to the Noteholders or
the Note Insurer unless a Conversion Date has occurred. Notices in
connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.2.
(c) Any reduction in the principal amount of any Notes (or any one or
more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of such Note and of any Note issued
upon the registration of transfer of such Note or in exchange thereof or in
lieu thereof, whether or not noted thereon. Any increase in the principal
amount of any Note (or any one or more Predecessor Notes) effected by
payments to the Issuer of Additional Note Principal Balances shall be binding
upon the Issuer and shall inure to the benefit of all future holders of such
Note and of any Note issued upon the registration of transfer thereof or in
exchange thereof or in lieu thereof, whether or not noted thereon.
Section 2.7 CANCELLATION.
(a) All Notes surrendered for payment, registration of transfer,
exchange or redemption shall, if surrendered to any Person other than the
Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly canceled by the Indenture Trustee. The Issuer shall deliver to the
Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner
whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange
for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Notes may be held or disposed of
by the Indenture Trustee in accordance with its standard retention or
disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be destroyed or returned to it; provided, that such
Issuer Order is timely and the Notes have not been previously disposed of by
the Indenture Trustee.
INDENTURE (IBJ Warehouse) - Page 10
(b) On any date, prior to a Conversion Date, on which (i) the Aggregate
Note Principal Balance has been reduced to zero, (ii) the Notes have been
purchased by the Issuer or its assignee, if such assignee is an Affiliate of
the Issuer pursuant to Section 12.01(a) of the Sale and Servicing Agreement,
or (iii) the entire Trust Estate has been sold pursuant to Section 12.02 of
the Sale and Servicing Agreement and the proceeds of such sale plus any
amounts on deposit in the Trust Accounts have been applied in accordance with
Section 12.03(a) of the Sale and Servicing Agreement, the Issuer shall have
the right to request the Noteholders to surrender the Notes to the Indenture
Trustee, and the Indenture Trustee shall cancel such Notes upon receipt of an
Issuer Order requesting such cancellation.
Section 2.8 AUTHENTICATION OF NOTES.
(a) The Notes shall be authenticated by the Indenture Trustee, upon
receipt by the Indenture Trustee of the following:
(i) An Issuer Order authorizing the execution and authentication
of such Notes by the Issuer.
(ii) All of the items of Collateral shall have been delivered to
the Indenture Trustee or its designee.
(iii) Except to the extent provided in subsection (b) below, Opinions
of Counsel addressed to the Indenture Trustee and the Note
Insurer to the effect that:
(A) the Issuer has been duly formed and is validly existing
as a business trust under the laws of the State of Delaware, and has
power, authority and legal right to execute and deliver this
Indenture, the Insurance Agreement and the Sale and Servicing
Agreement;
(B) the issuance of the Notes has been duly and
validly authorized by the Issuer;
(C) the Notes, when executed and authenticated in
accordance with the provisions of this Indenture and delivered
against payment therefor, will be the legal, valid and binding
obligations of the Issuer pursuant to the terms of this Indenture
and will be entitled to the benefits of this Indenture, and will be
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent or
preferential conveyance and other similar laws of general
application affecting the rights of creditors generally and to
general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(D) all instruments furnished to the Indenture Trustee as
conditions precedent to the authentication of the Notes by the
Indenture Trustee pursuant to the
INDENTURE - (IBJ Warehouse) - Page 11
Indenture conform to the requirements of this Indenture and
constitute all the documents required to be delivered hereunder for
the Indenture Trustee to authenticate the Notes;
(E) all conditions precedent provided for in this
Indenture relating to the authentication of the Notes have been
complied with;
(F) assuming due authorization, execution and delivery
thereof by the Indenture Trustee, this Indenture has been duly
executed and delivered by Issuer and constitutes the legal, valid
and binding obligation of the Issuer, enforceable against the
Issuer in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent or
preferential conveyance and other similar laws of general
application affecting the rights of creditors generally and to
general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(G) Neither the Issuer nor the Seller is or will, as a
result of the sale of the Notes as contemplated in the Note
Purchase Agreement, become an "investment company" or under the
"control" of an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended, which would be
required to register under such act.
(H) The Notes will be treated as indebtedness for
federal income tax purposes and not as an ownership interest in the
assets of the Issuer or as an equity interest in the Issuer or in a
separate association taxable as a corporation.
(I) As long as the Issuer has only a single owner, the
Issuer will be disregarded as an entity separate from such owner
for federal income tax purposes.
(J) Upon creation of the Trust Estate under the
Indenture and delivery of the Notes by the Indenture Trustee for
value in accordance with the instructions of the Issuer and, in the
case of Subsequent Home Loans, upon the Grant for value thereof by
the Issuer to the Indenture Trustee pursuant to the applicable
Subsequent Transfer Agreement, the Indenture will be effective to
create in favor of the Indenture Trustee a security interest under
the Uniform Commercial Code as currently in effect in the State of
New York (the "New York UCC") in all right, title and interest of
the Issuer in those portions of the Trust Estate in which a
security interest may be created pursuant to Article 9 of the New
York UCC; and
(K) The security interest referred to in paragraph (J)
above in the items of the Trust Estate described below will be
perfected as described below:
(1) The delivery by the Issuer to the Custodian, on
behalf of the Indenture Trustee, in the State of Texas of the
Debt Instruments pursuant to
INDENTURE - (IBJ Warehouse) - Page 12
the Indenture will perfect such security interest in favor of
the Indenture Trustee under the Texas UCC in all right, title
and interest of the Issuer in such Debt Instruments and,
assuming the Indenture Trustee acquires its interest in such
Debt Instruments without knowledge that the same are subject
to a security interest (other than the security interest
created by the Indenture), the Indenture Trustee will acquire
such security interest in such Debt Instruments free and clear
of any prior lien of a kind which may be perfected under
Article 9 of the Texas UCC. The Debt Instruments constitute
"instruments" under Article 9 of the New York UCC and Article
9 of the Texas UCC.
(2) The security interest in the portion of the
Trust Estate constituting "proceeds" (as defined in Section
9.306(a) of the Texas UCC) from the Debt Instruments will be
perfected as and to the extent provided in Section 9.306 of
the Texas UCC and, assuming that none of such proceeds
represent proceeds (as defined in the Texas UCC) of collateral
in which another party has a prior perfected security
interest, the Indenture Trustee will acquire such security
interest in such proceeds free and clear of any prior lien of
a kind which may be perfected under Article 9 of the Texas UCC.
(3) The filing of the UCC-1 Financing Statement with
respect to the other assets comprising the Trust Estate which
constitute "general intangibles" under Article 9 of the New
York UCC and Article 9 of the Texas UCC (as used in this
Section, the "Filing Collateral") with the Secretary of the
State of the State of Texas will perfect such security
interest in favor of the Indenture Trustee under the Texas UCC
in all right, title and interest of the Issuer in the Filing
Collateral in which a security interest may be perfected under
Article 9 of the Texas UCC and, assuming that the Filing
Collateral does not represent proceeds (as defined in the
Texas UCC) of collateral in which another secured party has a
prior perfected security interest, the Indenture Trustee will
acquire such security interest in the Filing Collateral free
and clear of any prior lien of a kind which may be perfected
under Article 9 of the Texas UCC.
(4) The security interest in the portion of the
Trust Estate constituting "proceeds" (as defined in Section
9.306(1) of the Texas UCC) from the Filing Collateral will be
perfected as and to the extent provided in Section 9.306 of
the Texas UCC and, assuming that none of such proceeds
represents proceeds (as defined in the Texas UCC) of
collateral in which another party has a prior perfected
security interest, the Indenture Trustee will acquire such
security interest in such proceeds free and clear of any prior
lien of a kind which may be perfected under Article 9 of the
Texas UCC.
INDENTURE - (IBJ Warehouse) - Page 13
(iv) An Officer's Certificate of the Issuer complying with
the requirements of Section 11.1 and stating that:
(A) the Issuer is not in Default under this
Indenture and the issuance of the Notes applied for will not
result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to
which the Issuer is a party or by which it is bound, or any
order of any court or administrative agency entered in any
proceeding to which the Issuer is a party or by which it may
be bound or to which it may be subject;
(B) the Issuer is the owner of all of the Home
Loans, has not assigned any interest or participation in the
Home Loans (or, if any such interest or participation has been
assigned, it has been released) and has the right to Grant all
of the Home Loans to the Indenture Trustee;
(C) the Issuer has Granted to the Indenture Trustee
all of its right, title, and interest in the Collateral, and
has delivered or caused the same to be delivered to the
Indenture Trustee;
(D) attached thereto are true and correct copies of
letters signed by Moody's and Standard & Poor's confirming
that the Notes have been rated "Aaa" and "AAA" by Moody's and
Standard & Poor's, respectively; and
(E) all conditions precedent provided for in this
Indenture relating to the authentication and delivery of the
Notes have been complied with.
(b) The Opinions of Counsel to be delivered pursuant to subsection
(a)(iii) above may differ from the Opinions of Counsel described in such
subsection so long as the Opinions of Counsel so delivered are acceptable
to each Rating Agency, the Note Insurer, and the Indenture Trustee, which
shall be conclusively evidenced by the delivery on the Closing Date of
each such Rating Agency's rating letter, by delivery on the Closing Date
of the related Note Insurance Policy, and by the Indenture Trustee's
authentication and delivery of the Notes, respectively; and in such case
such acceptable opinions of counsel shall be deemed to be the Opinions of
Counsel required to be received by the Indenture Trustee in connection
with the authentication of the Notes by the Indenture Trustee.
Section 2.9 RELEASE OF COLLATERAL.
(a) Subject to the provisions of this Section 2.9, Section 11.1 hereof,
and the terms of the Basic Documents, the Indenture Trustee shall release
property from the lien of this Indenture only upon receipt of an Issuer
Request accompanied by an Officer's Certificate.
INDENTURE - (IBJ Warehouse) - Page 14
(b) The Issuer or the Servicer, on behalf of the Issuer, shall be
entitled to obtain a release from the lien of this Indenture for any Home
Loan and the related Mortgaged Property at any time (i) after a payment by
the Seller or the Servicer pursuant to Section 3.05 of the Sale and Servicing
Agreement or by the Issuer pursuant to Section 2.9(c) of this Indenture of
the Purchase Price of the Home Loan, (ii) after a Qualified Substitute Home
Loan is substituted for such Home Loan and payment of the Substitution
Adjustment, if any, (iii) after liquidation of the Home Loan in accordance
with Section 4.02 of the Sale and Servicing Agreement and the deposit of all
Insurance Proceeds and Liquidation Proceeds received with respect thereto in
the Collection Account, (iv) upon the payment in full of the Home Loan or the
sale or other disposition of the related Mortgaged Property), or (v) as
contemplated by Section 11.02(b) of the Sale and Servicing Agreement. Any
such release other than as contemplated by Section 11.02(b) of the Sale and
Servicing Agreement or pursuant to clause (iv) of the preceding sentence
shall be subject to the condition that the Issuer shall have delivered to the
Indenture Trustee and the Note Insurer an Issuer Request (A) identifying the
Home Loan and the related Mortgaged Property to be released, (B) requesting
the release thereof, (C) setting forth the amount deposited in the Collection
Account with respect thereto, (D) certifying that the amount deposited in the
Collection Account (x) equals the Purchase Price of the applicable Home Loan,
in the case of a release pursuant to clause (i) above, (y) equals the
Substitution Adjustment related to the Qualified Substitute Home Loan and the
Deleted Home Loan released pursuant to clause (ii) above, or (z) equals the
entire amount of Insurance Proceeds and Liquidation Proceeds received with
respect to such Home Loan and the related Mortgaged Property in the case of a
release pursuant to clause (iii) above. Any such release as contemplated by
Section 11.02(b) of the Sale and Servicing Agreement shall be subject to the
Issuer's compliance with the provisions of such Section. Any such release
pursuant to clause (iv) of the second preceding sentence shall be subject to
the Servicer's compliance with the provisions of Section 7.02 of the Sale and
Servicing Agreement.
(c) The Issuer shall have the option, exercisable in its sole
discretion at any time, to obtain the release of the lien of the Indenture or
to substitute one or more Qualified Substitute Home Loans for any Home Loan
provided that (x) any release of the lien of the Indenture or substitution
pursuant to this Section 2.09(c) is conducted in the same manner as a
repurchase or substitution of a Defective Home Loan by the Seller pursuant to
Section 3.05 of the Sale and Servicing Agreement and (y) after giving effect
to such release of the lien of the Indenture or substitution, the Home Loan
Pool will satisfy the underwriting criteria set forth in Section 3.03(ii) of
the Sale and Servicing Agreement and the Issuer shall have delivered an
Officer's Certificate to such effect to the Indenture Trustee, the Note
Insurer and the Noteholders. The foregoing clause (y) shall not apply to a
prepayment of 100% of the Notes in accordance with Section 11.02(d) of the
Sale and Servicing Agreement.
(d) The Indenture Trustee shall, if requested by the Servicer,
temporarily release or cause the Custodian to temporarily release to the
Servicer the Indenture Trustee's Home Loan File pursuant to the provisions of
Section 7.02 of the Sale and Servicing Agreement upon compliance by the
Servicer of the provisions thereof provided that the Indenture Trustee's Home
Loan File shall have been stamped to signify the Issuer's pledge to the
Indenture Trustee under the Indenture.
INDENTURE - (IBJ Warehouse) - Page 15
Section 2.10 DEFINITIVE NOTES. The Notes, upon original issuance, will
be issued in the form of typewritten Notes in the name of the initial
Noteholders, executed by the Issuer and authenticated by the Indenture
Trustee.
Section 2.11 TAX TREATMENT. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for
federal, State and local income, single business and franchise tax purposes,
the Notes will qualify as indebtedness of the Issuer secured by the
Collateral. The Issuer, by entering into this Indenture, and each
Noteholder, by its acceptance of a Note, agree to treat the Notes for
federal, state and local income, single business and franchise tax purposes
as indebtedness of the Issuer.
Section 2.12 RESTRICTIONS ON TRANSFER.
(a) The Notes have not been registered or qualified under the
Securities Act or the securities laws of any state. No Note may be
transferred unless such Note is resold (i) pursuant to a valid registration
statement under the Securities Act and any applicable state securities or
"Blue Sky" laws, (ii) pursuant to Rule 144A under the Securities Act or (iii)
pursuant to another exemption available under the Securities Act and, in each
case, in compliance with any applicable state securities or "Blue Sky" laws.
(b) Prior to a transfer of a Note pursuant to Rule 144A under the
Securities Act, the Indenture Trustee shall require a transferor's
representation letter AND a transferee's letter in the forms attached hereto
as EXHIBIT B-1 and EXHIBIT B-2, respectively. Prior to a transfer of a Note
pursuant to another exemption available under the Securities Act, the
Indenture Trustee shall require a transferee's representation letter in the
form attached hereto as EXHIBIT B-3, or such other representations (or an
acceptable opinion of counsel obtained at no expense to the Issuer) as may be
approved by the Issuer.
(c) The Indenture Trustee shall have no liability to the Trust Estate,
any Noteholder, or any other Person arising from a transfer of any Note in
reliance upon a certification or representations, or an opinion described in
this Section 2.12. Neither the Issuer nor the Indenture Trustee is obligated
to register or qualify the Notes under the Securities Act or any other
securities law.
(d) Promptly after receipt, the Indenture Trustee shall furnish to a
requesting Holder, or any prospective owner designated by such Holder, the
information required to be delivered to Holders and prospective owners of
Notes in connection with resales of the Notes to permit compliance with Rule
144A of the Securities Act in connection with such resales. Such information
with respect to the Notes shall be provided to the Indenture Trustee as
provided in the related Sale and Servicing Agreement.
INDENTURE - (IBJ Warehouse) - Page 16
ARTICLE III
COVENANTS
Section 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer will duly
and punctually pay (or will cause to be duly and punctually paid) the
principal of and interest, if any, on the Notes in accordance with the terms
of the Notes and this Indenture. Without limiting the foregoing (i) unless
the Notes have been declared due and payable pursuant to Section 5.2 hereof
and moneys collected by the Indenture Trustee are being applied in accordance
with Section 5.4(b) hereof, subject to and in accordance with Section 8.2(c),
the Issuer will cause all amounts on deposit in the Note Payment Account on a
Payment Date deposited therein to be paid to the Noteholders pursuant to the
Sale and Servicing Agreement and this Indenture and (ii) the Issuer will
cause all amounts deposited in the Note Principal Prepayment Account pursuant
to Section 11.02(b) of the Sale and Servicing Agreement to be paid to the
Noteholders in accordance therewith, and the Indenture Trustee agrees to make
such distributions in accordance therewith. Amounts properly withheld under
the Code by any Person from a payment to any Noteholder of interest and/or
principal shall be considered as having been paid by the Issuer to such
Noteholder for all purposes of this Indenture.
The Notes shall be non-recourse obligations of the Issuer and shall be
limited in right of payment to amounts available from the Collateral and any
amounts received by the Indenture Trustee under the Guaranty Policy in
respect of the Notes, as provided in this Indenture. The Issuer shall not
otherwise be liable for payments on the Notes, and none of the owners,
agents, officers, directors, employees, or successors or assigns of the
Issuer shall be personally liable for any amounts payable, or performance
due, under the Notes or this Indenture. If any other provision of this
Indenture shall be deemed to conflict with the provisions of this Section
3.1, the provisions of this Section 3.1 shall control.
Section 3.2 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes and to serve as
Paying Agent with respect to the Certificates. The Issuer will give prompt
written notice to the Indenture Trustee of the location, and of any change in
the location, of any such office or agency. If at any time the Issuer shall
fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
Section 3.3 MONEY FOR PAYMENTS TO BE HELD IN TRUST. All payments of
amounts due and payable with respect to the Notes that are to be made
pursuant to Section 8.2(c) shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, and no amounts withdrawn from the
Collection Account and deposited in the Note Payment Account for payment on
the Notes shall be paid over to the Issuer except as provided in Section
8.02(c).
INDENTURE - (IBJ Warehouse) - Page 17
Any Paying Agent shall be appointed by Issuer Order with written notice
thereof to the Indenture Trustee and the Note Insurer. Any Paying Agent
appointed by the Issuer shall be a Person who would be eligible to be
Indenture Trustee hereunder as provided in Section 6.11. The Issuer shall
not appoint any Paying Agent (other than the Indenture Trustee) which is not,
at the time of such appointment, a Depository Institution.
The Issuer will cause each Paying Agent (unless the Indenture Trustee is
the 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, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and pay such sums
to such Persons as herein provided;
(ii) give the Indenture Trustee and the Note Insurer notice of any
default by the Issuer (or any other obligor upon the Notes) of
which it has actual knowledge in the making of any payment
required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such
Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment
of Notes if at any time it ceases to meet the standards
required to be met by a Paying Agent at the time of its
appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect
to any applicable reporting requirements in connection
therewith; provided, however, that with respect to withholding
and reporting requirements applicable to original issue
discount (if any) on the Notes, the Issuer shall have first
provided the calculations pertaining thereto to the Indenture
Trustee.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
INDENTURE - (IBJ Warehouse) - Page 18
Subject to applicable laws with respect to escheat of funds or abandoned
property, any money held by the Indenture Trustee or any Paying Agent in
trust for the payment of any amount due with respect to any Note and
remaining unclaimed for two years after such amount has become due and
payable shall be discharged from such trust and be paid to the Issuer on
Issuer Request; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look only to the Issuer for payment thereof (but only to
the extent of the amounts so paid to the Issuer), and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Indenture Trustee or such Paying
Agent, before being required to make any such repayment, shall at the expense
and direction of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in the City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not
be less than 30 days from the date of such publication, any unclaimed balance
of such money then remaining will be repaid to the Issuer. The Indenture
Trustee shall also adopt and employ, at the expense and direction of the
Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been surrendered for redemption or
whose right to or interest in moneys due and payable but not claimed is
determinable from the records of the Indenture Trustee or of any Paying
Agent, at the last address of record for each such Holder).
Section 3.4 EXISTENCE.
(a) Subject to Section 3.4(b), the Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States
of America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes and the Collateral.
(b) Upon any consolidation or merger of or other succession to the
Issuer, the Person succeeding to the Issuer may exercise every right and
power of the Issuer under this Indenture with the same effect as if such
Person had been named as the Issuer herein.
Section 3.5 PROTECTION OF COLLATERAL. The Issuer will from time to
time and upon the direction of the Majority Noteholders execute and deliver
all such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(i) provide further assurance with respect to the Grant of all or
any portion of the Collateral;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more
effectively the purposes hereof;
INDENTURE - (IBJ Warehouse) - Page 19
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any rights with respect to the Collateral; or
(v) preserve and defend title to the Collateral and the rights of
the Indenture Trustee, the Noteholders and the Note Insurer in
such Collateral against the claims of all persons and parties.
The Issuer hereby designates the Servicer, its agent and
attorney-in-fact to execute any financing statement, continuation statement
or other instrument required to be executed pursuant to this Section 3.5.
Section 3.6 ANNUAL OPINIONS AS TO COLLATERAL.
On or before February 15 in each calendar year, beginning in 1998, the
Issuer shall furnish to the Indenture Trustee, the Note Insurer and the
Arranger 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 February 15th of the following
calendar year.
Section 3.7 PERFORMANCE OF OBLIGATIONS; SERVICING OF HOME LOANS.
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any
instrument or agreement included in the Collateral or that would result in
the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or agreement,
except as expressly provided in this Indenture, the Sale and Servicing
Agreement or such other instrument or agreement.
(b) The Issuer may contract with or otherwise obtain the assistance of
other Persons (including, without limitation, the Servicer to assist it in
performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee and the Note Insurer
in an Officer's Certificate of the Issuer shall be deemed to be action taken
by the Issuer.
INDENTURE - (IBJ Warehouse) - Page 20
Initially, the Issuer has contracted with the Servicer to assist the Issuer
in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Collateral, including but not
limited to (i) filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by the terms of this Indenture and
the Sale and Servicing Agreement and (ii) recording or causing to be recorded
all Mortgages, Assignments of Mortgage, all intervening assignments of Mortgage
and all assumption and modification agreements to the extent such documents are
required to be recorded by the terms of the Sale and Servicing Agreement, in
each case in accordance with and within the time periods provided for in this
Indenture and/or the Sale and Servicing Agreement, as applicable.
(d) If the Servicer is terminated or resigns in accordance with the Sale
and Servicing Agreement, a successor Servicer shall be appointed as provided in
Section 10.02 of the Sale and Servicing Agreement.
(e) Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees that it will not, without the prior
written consent of the Majority Noteholders (i) amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
(except to the extent otherwise provided in the Sale and Servicing Agreement)
or (ii) waive timely performance or observance by the Servicer or the Seller
under the Sale and Servicing Agreement. If any such amendment, modification,
supplement or waiver shall be so consented to by the Majority Noteholders, the
Issuer agrees, promptly following a request by the Indenture Trustee, to
execute and deliver, in its own name and at its own expense, such agreements,
instruments, consents and other documents as the Indenture Trustee may deem
necessary or appropriate in the circumstances.
Section 3.8 NEGATIVE COVENANTS. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture or the Sale
and Servicing Agreement, sell, transfer, exchange or otherwise
dispose of any of the properties or assets of the Issuer,
including those included in the Collateral, unless directed to
do so by the Indenture Trustee or the Majority Noteholders;
(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 Collateral;
INDENTURE (IBJ Wharehouse) -- Page 21
(iii) engage in any business or activity other than as permitted by
the Declaration of Trust or other than in connection with, or
relating to, the issuance of Notes pursuant to this Indenture,
or amend the Declaration of Trust as in effect on the Closing
Date other than in accordance with Section 7.1 thereof,
(iv) issue debt obligations under any other indenture;
(v) incur or assume any indebtedness or guaranty any indebtedness
of any Person, except for such indebtedness as may be incurred
by the Issuer in connection with the issuance of the Notes
pursuant to this Indenture;
(vi) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person;
(vii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged,
or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture
except as may be expressly permitted hereby, (B) permit any
lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden
the Collateral or any part thereof or any interest therein or
the proceeds thereof (other than tax liens, mechanics' liens
and other liens that arise by operation of law, in each case
on any of the Mortgaged Properties and arising solely as a
result of an action or omission of the related Obligor) or (C)
permit the lien of this Indenture not to constitute a valid
first priority (other than with respect to any such tax,
mechanics' or other lien) security interest in the Collateral;
(viii) take any action or fail to take any action which may cause the
Issuer to be taxable as a taxable mortgage pool pursuant to
Section 7701(i) of the Code and the corresponding regulations.
Section 3.9 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Indenture Trustee, the Note Insurer and the Arranger, within 120 days
after the end of each fiscal year of the Issuer (commencing with the fiscal
year 1997), an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and
of its performance under this Indenture has been made under
such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and
covenants under this
INDENTURE (IBJ Wharehouse) -- Page 22
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 [RESERVED].
Section 3.11 SERVICER'S OBLIGATIONS. The Issuer shall cause the Servicer
to comply with the Servicer's obligations under Sections 5.01, 6.01, 7.07 and
Article IX of the Sale and Servicing Agreement.
Section 3.12 [RESERVED].
Section 3.13 FURTHER INSTRUMENTS AND ACTS. Upon request of the Indenture
Trustee or the Note Insurer, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1 SATISFACTION AND DISCHARGE OF INDENTURE. When either (I) the
Sale and Servicing Agreement has been terminated pursuant to Section 11.01(a)
thereof or (II) all of the following have occurred:
(a) all Notes theretofore authenticated and delivered (other than (i)
Notes that have been destroyed, lost or stolen and that have been replaced or
paid as provided in Section 2.4 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.3) have been delivered to the Indenture Trustee for
cancellation; or
(b) the Issuer has paid or caused to be paid all amounts payable (i) to
the Note Insurer under this Indenture, the Sale and Servicing Agreement, and
the Insurance Agreement, (ii) to the Indenture Trustee under this Indenture and
the Sale and Servicing Agreement, and (iii) to the Servicer under the Sale and
Servicing Agreement; and
(c) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate 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;
then, upon Issuer Request, this Indenture and the lien, rights, and
interests created hereby, 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
INDENTURE (IBJ Wharehouse) -- Page 23
(including the rights of the Indenture Trustee under Section 6.7 and the
obligations of the Indenture Trustee under Section 4.2) and (vi) the rights
of Noteholders as beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee payable to all or any of them), and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute and deliver proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, and shall pay, or
assign or transfer and deliver, to or at the direction of the Issuer, all
Collateral held by it as part of the Trust Estate after satisfaction of the
conditions specified in clauses (b) and (c) above.
Section 4.2 APPLICATION OF TRUST MONEY. All moneys deposited with the
Indenture Trustee pursuant to Sections 3.3 and 4.1 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment, either directly or through any Paying Agent, as
the Indenture Trustee may determine, to the Holders of the particular Notes for
the payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
Section 4.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
moneys then held by any Paying Agent other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.3 and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
ARTICLE V
REMEDIES
Section 5.1 EVENTS OF DEFAULT. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any Interest Payment Amount when the same
becomes due and payable; or
(b) default in the payment of any Principal Payment Amount when the same
becomes due and payable; or
(c) failure by the Issuer duly to observe and perform, in any material
respect, any covenant, obligation or agreement of the Issuer made in this
Indenture (other than a covenant, obligation or agreement, a default in the
observance or performance of which is elsewhere in this Section specifically
dealt with), which failure continues unremedied for a period of 30 days after
there shall have been given, by registered or certified mail, to the Issuer by
the Indenture Trustee or
INDENTURE (IBJ Wharehouse) -- Page 24
to the Issuer and the Indenture Trustee by the Holders of Outstanding Notes
representing at least 25% of the Outstanding Amount, 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) any representation or warranty of the Issuer made in this Indenture,
the Insurance Agreement, the Sale and Servicing Agreement or in any certificate
or other writing delivered pursuant hereto or in connection herewith proving to
have been incorrect in any material respect as of the time when the same shall
have been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured, for a
period of 30 days after there shall have been given, by registered or certified
mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the Holders of Outstanding Notes representing at least 25% of the
Outstanding Amount, 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
(e) the entry by a court or supervisory authority having jurisdiction of
(A) a decree or order for relief in respect of the Issuer or any substantial
part of the Collateral in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization, or other
similar law or (B) appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator, or other similar official of the Issuer or any
substantial part of the Collateral, or ordering the winding up or liquidation
of the Issuer's affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
60 consecutive days; or
(f) the commencement by the Issuer of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization,
or other similar law or of any other case or proceeding to be adjudicated
bankrupt or insolvent or the consent by the Issuer to the entry of a decree or
order for relief in respect of itself or any substantial part of the Collateral
in an involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization, or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Issuer or any substantial part of the Collateral, or the filing by the Issuer
of a petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, or the consent by the Issuer to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator, or similar official of
the Issuer or of any substantial part of the Collateral, or the making by the
Issuer of an assignment for the benefit of creditors, or the Issuer's failure
to pay its debts generally as they become due, or the taking of corporate
action by the Issuer in furtherance of any such action; or
(g) the Issuer shall admit in writing its inability to pay its debts as
they become due, file a petition to take advantage of any applicable insolvency
or reorganization statute, make an assignment for the benefit of its creditors,
or voluntarily suspend payment of its obligations.
The Issuer shall deliver to the Indenture Trustee and the Note Insurer,
within five days after the occurrence thereof, written notice in the form of an
Officer's Certificate of any event which with
INDENTURE (IBJ Wharehouse) -- Page 25
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 Issuer is taking or
proposes to take with respect thereto.
Section 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee, at the direction or upon the prior written consent of
the Majority Noteholders may declare all the Notes to be immediately due and
payable, by a notice in writing to the Issuer (and to the Indenture Trustee if
given by Noteholders), and upon any such declaration the unpaid principal
amount of such Notes, together with accrued and unpaid interest thereon through
the date of acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided,
the Majority Noteholders, by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences if (a) the
Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay
(i) 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 (ii) all sums
paid or advanced by the Indenture Trustee hereunder, if any, and the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
its agents and counsel and (b) all Events of Default, other than the nonpayment
of the principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) The Issuer covenants that if (i) default is made in the payment of
any interest on any Note when the same becomes due and payable, and such
default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note
when the same becomes due and payable, the Issuer will, upon demand of the
Indenture Trustee and at the direction of the Majority Noteholders, pay to the
Indenture Trustee, for the benefit of the Holders of the Notes and the Note
Insurer, the whole amount then due and payable on such Notes for principal and
interest, with interest upon the overdue principal and, to the extent payment
at such rate of interest shall be legally enforceable, upon overdue
installments of interest at the rate borne by the Notes and in addition thereto
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances, if any, of the Indenture Trustee and the Note Insurer and their
respective agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, shall at the written direction of the Majority Noteholders 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
INDENTURE (IBJ Wharehouse) -- Page 26
the Issuer or other obligor upon such Notes and collect in the manner provided
by law out of the property of the Issuer or other obligor upon such Notes,
wherever situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee shall, at the written direction of the Majority Noteholders, as more
particularly provided in Section 5.4, proceed to protect and enforce its rights
and the rights of the Note Insurer and the Noteholders, by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant
or agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right
vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest
in the Collateral, Proceedings under Title 11 of the United States Code or any
other applicable federal or State bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee
shall have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, upon the direction of the Majority Noteholders, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and the Note Insurer, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Indenture Trustee
and each predecessor Indenture Trustee (except as a result of negligence
or bad faith), the Note Insurer and the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders, the Note Insurer and the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee, the Note Insurer
INDENTURE (IBJ Wharehouse) -- Page 27
or the Holders of Notes allowed in any judicial proceedings relative to
the Issuer, its creditors and its property; and any trustee, receiver,
liquidator, custodian or other similar official in any such Proceeding
is hereby authorized by each of such Noteholders and the Note Insurer to
make payments to the Indenture Trustee and, in the event that the
Indenture Trustee shall consent to the making of payments directly to
such Noteholders and the Note Insurer, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor Indenture Trustee and their
respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances, if any, made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder or the Note Insurer any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof or the Note Insurer or to authorize the Indenture Trustee to vote in
respect of the claim of any Noteholder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes and the Note Insurer.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
Section 5.4 REMEDIES; PRIORITIES.
If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall, at the written direction of the Majority Noteholders,
do one or more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
or under this Indenture with respect thereto, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer and
any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Collateral;
INDENTURE (IBJ Wharehouse) -- Page 28
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee, the Note Insurer or the Noteholders;
(iv) prior to a Conversion Date, sell the Collateral or any portion
thereof or rights or interest therein pursuant to Section 12.02 of the
Sale and Servicing Agreement; or
(v) on any date on or after a Conversion Date, sell the Collateral
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 Collateral
following an Event of Default, unless (A) the Holders of 100% of the
Outstanding Amount of the Notes consent thereto, (B) the proceeds of
such sale or liquidation distributable to the Noteholders are sufficient
to discharge in full all amounts then due and unpaid upon such Notes for
principal and interest or (C) the Indenture Trustee determines that the
Collateral will not continue to provide sufficient funds for the payment
of principal of and interest on the Notes as they would have become due
if the Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of Holders of 66-2/3% of the Outstanding
Amount of the Notes. In determining such sufficiency or insufficiency
with respect to clause (B) and (C), the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility
of such proposed action and as to the sufficiency of the Collateral for
such purpose.
If the Indenture Trustee collects any money or property pursuant to this
Article V, it shall pay out the money or property in the order set forth in
Article 12.03 of the Sale and Servicing Agreement.
The Indenture Trustee may fix a record date and payment date for any
payment to be made to the Noteholders pursuant to this Section. At least 15
days before such record date, the Indenture Trustee shall mail to each
Noteholder, the Note Insurer and the Issuer a notice that states the record
date, the payment date and the amount to be paid.
Section 5.5 OPTIONAL PRESERVATION OF THE COLLATERAL. If the Notes have
been declared to be due and payable under Section 5.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain possession
of the Collateral. It is the desire of the parties hereto and the Noteholders
that there be at all times sufficient funds for the payment of principal of and
interest on the Notes, and the Indenture Trustee shall take such desire into
account when determining whether or not to maintain possession of the
Collateral. 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.
INDENTURE (IBJ Wharehouse) -- Page 29
Section 5.6 LIMITATION OF SUITS. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder for so long as a Note Insurer Default has not occurred or is
not continuing and if a Note Insurer Default has occurred and is continuing,
unless:
(a) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) the Holders of Outstanding Notes representing at least 25% of the
Outstanding Amount 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 Noteholders.
It is understood and intended that no one or more Holders of Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Outstanding Amount of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.7 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the Final Scheduled Payment Date thereof expressed in such Note or in
this Indenture (or, in the case of redemption, on or after the Redemption Date)
and to institute suit for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder.
Section 5.8 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee, the Note Insurer or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to
the Indenture Trustee, the Note Insurer or to such Noteholder, then and in
every such
INDENTURE (IBJ Wharehouse) -- Page 30
case the Issuer, the Indenture Trustee, the Note Insurer and the Noteholders
shall, subject to any determination in such Proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all
rights and remedies of the Indenture Trustee and the Noteholders shall
continue as though no such Proceeding had been instituted.
Section 5.9 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Note Insurer or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or omission of the
Indenture Trustee, the Note Insurer or any Holder of any Note to exercise any
right or remedy accruing upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this
Article V or by law to the Indenture Trustee, the Note Insurer or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee, the Note Insurer or by the Noteholders, as
the case may be, subject, in each case, however, to the right of the Note
Insurer to control any such right and remedy, except as provided in
Section 11.19.
Section 5.11 CONTROL BY NOTEHOLDERS. The Majority Noteholders shall have
the right to direct the time, method and place of conducting any Proceeding for
any remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided
that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture;
(b) subject to the express terms of Section 5.4, any direction to the
Indenture Trustee to sell or liquidate the Collateral shall be by Holders of
Outstanding Notes representing not less than 100% of the Outstanding Amount if
the proceeds of such sale would be less than the sum of all amounts due the
Indenture Trustee hereunder and the Aggregate Note Principal Balance and
interest due or to become due thereon on the Payment Date next succeeding such
sale, together with any amounts owing to the Note Insurer under the Guaranty
Policy and the Insurance Agreement;
(c) if the conditions set forth in Section 5.5 have been satisfied and
the Indenture Trustee elects to retain the Collateral pursuant to such Section,
then any direction to the Indenture Trustee by Holders of Outstanding Notes
representing less than 100% of the Outstanding Amount to sell or liquidate the
Collateral 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.
INDENTURE (IBJ WAREHOUSE) -- Page 31
Notwithstanding the rights of the Note Insurer and the Noteholders set
forth in this Section, subject to Section 6.1, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to
such action.
Notwithstanding anything to the contrary in this Article V, the
Noteholders may not direct the Indenture Trustee to take any of the actions set
forth in Section 5.4(a) without the consent of the Note Insurer, if at the time
of such action any Guaranty Insurance Premium, any Note Insurer Reimbursement
Amount or any other amount is due and owing to the Note Insurer pursuant to the
Guaranty Policy or the Insurance Agreement.
Section 5.12 WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.2, the
Majority Noteholders 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 Note Insurer or the
Holder of each Note, as applicable. In the case of any such waiver, the
Issuer, the Indenture Trustee, the Note Insurer and the Holders of the Notes
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other Default or impair
any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
Section 5.13 UNDERTAKING FOR COSTS. All parties to this Indenture agree,
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it
as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee or the Note Insurer, (b) any suit instituted by any
Noteholder, or group of Noteholders, in each case holding Outstanding Notes
representing in the aggregate more than 10% of the Outstanding Amount or (c)
any suit instituted by any Noteholder for the enforcement of the payment of
principal of or interest on any Note on or after the respective due dates
expressed in such Note and in this Indenture (or, in the case of redemption, on
or after the Redemption Date).
Section 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any
INDENTURE (IBJ WAREHOUSE) -- Page 32
time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 5.15 ACTION ON NOTES. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Collateral or
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.4(b).
Section 5.16 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee to do so and
at the Servicer's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and
observance by the Seller and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale and
Servicing Agreement to the extent and in the manner directed by the Indenture
Trustee, including the transmission of notices of default on the part of the
Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and
Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and at the direction (which direction shall be in writing) of the
Holders of Outstanding Notes representing at least 66-2/3% of the Outstanding
Amount shall, exercise all rights, remedies, powers, privileges and claims of
the Issuer against the Seller or the Servicer under or in connection with the
Sale and Servicing Agreement, including the right or power to take any action
to compel or secure performance or observance by the Seller or the Servicer, as
the case may be, of each of their obligations to the Issuer thereunder and to
give any consent, request, notice, direction, approval, extension, or waiver
under the Sale and Servicing Agreement, and any right of the Issuer to take
such action shall be suspended.
INDENTURE (IBJ WAREHOUSE) -- Page 33
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.1 DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Indenture
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee shall not be liable for the action or inaction
of the Custodian, but the Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to PARAGRAPHS (a), (b), (c), (e) AND (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
INDENTURE (IBJ WAREHOUSE) -- Page 34
(f) Money held in trust by the Indenture Trustee shall be segregated
from other funds except to the extent permitted by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it; PROVIDED, HOWEVER, that the Indenture Trustee shall
not refuse or fail to perform any of its duties hereunder solely as a result of
nonpayment of its normal fees and expenses and further provided that nothing in
this Section 6.1(g) shall be construed to limit the exercise by the Indenture
Trustee of any right or remedy permitted under this Indenture or otherwise in
the event of the Issuer's failure to pay the Indenture Trustee's fees and
expenses pursuant to Section 6.7. In determining that such repayment or
indemnity is not reasonably assured to it, the Indenture Trustee must consider
not only the likelihood of repayment or indemnity by or on behalf of the Issuer
but also the likelihood of repayment or indemnity from amounts payable to it
from the Collateral pursuant to Section 6.7.
Section 6.2 RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may conclusively rely on any document believed
by it to be genuine and to have been signed or presented by the proper person.
The Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or an Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee.
(d) The Indenture Trustee shall not be liable for 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 with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
Section 6.3 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual capacity or in any capacity other than as Indenture
Trustee may, and in its capacity as Indenture Trustee may not, become the owner
or pledgee of Notes and may otherwise deal with the Issuer or
INDENTURE (IBJ WAREHOUSE) -- Page 35
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 Section 6.11.
Section 6.4 INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, shall not be accountable for the
Issuer's use of the proceeds from the Notes, or responsible for any statement
of the Issuer in the Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Indenture Trustee's
certificate of authentication.
Section 6.5 NOTICE OF DEFAULTS. If a Default occurs and is continuing
and if it is known to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall mail to the Note Insurer and each Noteholder notice of
the Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant to
the mandatory redemption provisions of such Note), the Indenture Trustee may
withhold the notice 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.
Section 6.6 REPORTS BY INDENTURE TRUSTEE TO HOLDERS. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and State income tax returns.
Section 6.7 COMPENSATION AND INDEMNITY. As compensation for its services
hereunder, the Indenture Trustee shall be entitled to receive, on each Payment
Date, the Indenture Trustee's Fee pursuant to Section 7.03 of the Sale and
Servicing Agreement (which compensation shall not be limited by any law on
compensation of a trustee of an express trust) and shall be entitled to
reimbursement from the Servicer for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances, if any, of the Indenture
Trustee's agents, counsel, accountants and experts. The Issuer agrees to cause
the Servicer to indemnify the Indenture Trustee, its directors, officers,
employees and agents against any and all loss, liability or expense (including
attorneys' fees) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder and under the Sale and
Servicing Agreement. The Indenture Trustee shall notify the Issuer and the
Servicer promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer and the Servicer shall not relieve
the Issuer of its obligations hereunder. The Issuer shall or shall cause the
Servicer to defend any such claim, and the Indenture Trustee may have separate
counsel and the Issuer shall or shall cause the Servicer to pay the fees and
expenses of such counsel. Neither the Issuer nor the Servicer need reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee that is attributable to the Indenture Trustee's own willful
misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the
INDENTURE (IBJ WAREHOUSE) -- Page 36
occurrence of a Default specified in Section 5.1(e) or (f) with respect to
the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other
applicable federal or State bankruptcy, insolvency or similar law.
Section 6.8 REPLACEMENT OF INDENTURE TRUSTEE. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section. The Indenture Trustee may resign
at any time by so notifying the Issuer and the Note Insurer. The Majority
Noteholders may remove the Indenture Trustee by so notifying the Indenture
Trustee and may appoint a successor Indenture Trustee. The Issuer shall remove
the Indenture Trustee upon the prior written consent of the Note Insurer if:
(a) the Indenture Trustee fails to comply with Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(d) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason, other than by reason of a
removal by the Majority Noteholders as provided above, (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee acceptable to the
Note Insurer and that satisfies the eligibility requirements of Section 6.11.
The retiring or removed Indenture Trustee agrees to cooperate with the
Servicer and any successor Indenture Trustee in effecting the termination of
the retiring or removed Indenture Trustee's responsibilities and rights
hereunder and shall promptly provide such successor Indenture Trustee all
documents and records reasonably requested by it to enable it to assume the
Indenture Trustee's functions hereunder. Any successor Indenture Trustee shall
have all the rights, powers and duties of the Indenture Trustee under this
Indenture.
The retiring or removed Indenture Trustee shall grant to the successor
Indenture Trustee the Collateral, including, without limitation, all of the
Indenture Trustee's Home Loan Files, the related documents and statements held
by it hereunder, and the Seller, the Servicer, the Issuer and the retiring or
removed Indenture Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Indenture Trustee all such rights,
powers, duties and obligations.
The successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring or removed Indenture Trustee, the Note Insurer, the
Servicer, the Seller and the Issuer. The successor Indenture Trustee shall
mail a notice of its succession to Noteholders. The retiring
INDENTURE (IBJ WAREHOUSE) -- Page 37
Indenture Trustee shall promptly transfer all property held by it as Indenture
Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of at least a majority of the Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's obligations under Section 6.7 shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.9 SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
the Note Insurer and the Rating Agencies prior written notice of any such
transaction.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture and 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 Collateral 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 Estate, and to vest in such
Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Collateral, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Indenture Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 6.11
INDENTURE (IBJ WAREHOUSE) -- Page 38
and no notice to Noteholders of the appointment of any co-trustee or separate
trustee shall be required under Section 6.8 hereof; provided that the
Indenture Trustee shall deliver notice of any such co-trustee or separate
trustee to the Note Insurer.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Collateral 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 Indenture 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 Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11 ELIGIBILITY; DISQUALIFICATION. There shall at all times be
a trustee hereunder (i) which shall be a corporation or association organized
and doing business under the laws of the United States of America or of any
State, authorized under such laws to exercise corporate trust
INDENTURE (IBJ WAREHOUSE) -- Page 39
powers, having a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published report of condition, subject to supervision
or examination by federal or state authority and having an office within the
United States of America, and (ii) which shall have (or whose parent shall have)
a long-term unsecured debt rating of "A-" or better by Standard & Poor's and
"A3" or better by Moody's, or shall otherwise be acceptable to each Rating
Agency. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If
at any time the Indenture Trustee shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect specified in this Article.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.1 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date, (b) at such other
times as the Indenture Trustee may request in writing, within 30 days after
receipt by the Issuer of any such request, a list of similar form and content
as of a date not more than 10 days prior to the time such list is furnished;
provided, however, that so long as the Indenture Trustee is the Note Registrar,
no such list shall be required to be furnished.
Section 7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.
The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.1
and the names and addresses of Holders of Notes received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy
any list furnished to it as provided in such Section 7.1 upon receipt of a new
list so furnished.
Section 7.3 INDENTURE TRUSTEE CERTIFICATE. The Indenture Trustee shall
prepare and distribute an Indenture Trustee Certificate in accordance with the
Sale and Servicing Agreement.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.1 COLLECTION OF MONEY.
(a) GENERAL. Except as otherwise expressly provided herein, the
Indenture Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or
INDENTURE (IBJ WAREHOUSE) -- Page 40
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 Collateral, the Indenture Trustee
may, and upon written request of the Note Insurer shall, take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action
shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided
in Article V.
(b) CLAIMS UNDER GUARANTY POLICY. The Notes will be insured by the
Guaranty Policy pursuant to the terms set forth therein, notwithstanding any
provisions to the contrary contained in this Indenture or the Sale and
Servicing Agreement. All amounts received under the Guaranty Policy shall be
used solely for the payment to Noteholders of principal and interest on the
Notes.
Section 8.2 PAYMENTS.
(a) On each Payment Date and Redemption Date, to the extent funds are
available in the Note Payment Account, the Indenture Trustee shall make the
following payments pursuant to the Servicer's Monthly Remittance Report from
the amounts on deposit in the Note Payment Account in the following order of
priority:
(i) (A) to the Servicer, an amount equal to the Servicing
Compensation (net of (1) any amounts retained prior to deposit
into the Collection Account pursuant to Section 5.01(b)(1) of
the Sale and Servicing Agreement, (2) any amount representing
income or gain from investments credited to the Collection
Account and paid to the Servicer pursuant to Section
5.01(b)(2) of the Sale and Servicing Agreement and (3) the
Indenture Trustee Fee with respect to such Payment Date) and
all unpaid Servicing Compensation from prior Due Periods, and
(B) to the Note Insurer, an amount equal to the Guaranty
Insurance Premium and all unpaid Guaranty Insurance Premiums
from prior Due Periods;
(ii) to the Holders of the Notes, the Interest Payment Amount with
respect to such Payment Date; provided, that if there are not
sufficient funds in the Note Payment Account to pay the entire
amount of accrued and unpaid interest then due on the Notes,
the amount in the Note Payment Account shall be applied to the
payment of such interest on the Notes PRO RATA on the basis of
the total such interest due on the Notes;
(iii) to the Holders of the Notes, the Principal Payment Amount
until the Outstanding Amount of the Notes is reduced to zero;
(iv) to the Note Insurer, the Note Insurer Reimbursement Amount;
INDENTURE (IBJ Warehouse) -- Page 41
(v) to the Servicer, the Servicing Advance Reimbursement Amount
with respect to such Payment Date;
(vi) to the Noteholders, that portion of the Facility Fee, if any,
due and unpaid on such Payment Date;
(vii) to the Issuer Special Purpose Account, the amounts remaining
after payments as described above, free of the lien of the
Indenture.
(b) The Indenture Trustee shall make claims under the Guaranty Policy
pursuant to Section 5.02 of the Sale and Servicing Agreement and in accordance
with the Guaranty Policy. The Indenture Trustee shall deposit any Guaranteed
Payment received from the Note Insurer in the Note Payment Account. For claims
under the Guaranty Policy for a Deficiency Amount, on the related Payment Date,
the Indenture Trustee shall pay such amount based upon the portion of the
related Interest Payment Amount and the portion of the related Principal
Payment Amount payable on the related Notes to the Holders of such Notes in
accordance with the terms of the Sale and Servicing Agreement. For claims
under the Guaranty Policy for a Preference Amount, the Indenture Trustee shall
distribute such amount in accordance with the terms of the Guaranty Policy.
All amounts received under the Guaranty Policy shall be used solely for the
payment to Noteholders of principal and interest on the related Notes.
Section 8.3 [RESERVED].
Section 8.4 SERVICER'S REMITTANCE REPORTS. On each Payment Date, the
Indenture Trustee shall deliver the Servicer's Remittance Report with respect
to such Payment Date to the Seller, the Noteholders, the Note Insurer and the
Rating Agencies.
Section 8.5 RELEASE OF COLLATERAL. Subject to the payment of its fees
and expenses pursuant to Section 6.7, the Indenture Trustee may, and when
required by the provisions of this Indenture or the Sale and Servicing
Agreement shall, execute instruments to release property from the lien of this
Indenture, or convey the Indenture Trustee's interest in the same, in a manner
and under circumstances that are not inconsistent with the provisions of this
Indenture and the Sale and Servicing Agreement. No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article VIII
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes but with prior notice
to the Rating Agencies and with the prior written consent of the Note Insurer,
the Issuer and the Indenture Trustee,
INDENTURE (IBJ Warehouse) -- Page 42
when authorized by an Issuer Order, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture that may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided, that such action
shall not adversely affect the interests of the Holders of the Notes; or
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, with the prior written consent
of the Note Insurer, when authorized by an Issuer Order, may, also without the
consent of any Noteholder but with prior consent of each Rating Agency, 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 (i) an Opinion of Counsel or (ii) written confirmation
from each Rating Agency that such action will not result in a reduction or
withdrawal of its respective then-current rating of the Notes.
INDENTURE (IBJ Warehouse) -- Page 43
Section 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior consent of the Rating Agencies and the Majority Noteholders, 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 Redemption Price with respect thereto, change the provisions of
this Indenture relating to the application of collections on, or the proceeds
of the sale of, the Collateral to payment of principal of or interest on the
Notes, or change any place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable, or impair the right to institute
suit for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to the
payment of any such amount due on the Notes on or after the respective due
dates thereof (or, in the case of redemption, on or after the Redemption Date);
(b) reduce the percentage of the Outstanding Amount of the Notes, the
consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of
the term "Outstanding";
(d) reduce the percentage of the Outstanding Amount of the Notes required
to direct the Indenture Trustee to direct the Issuer to sell or liquidate the
Collateral pursuant to Section 5.4;
(e) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional provisions of
this Indenture or the Basic Documents cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby;
(f) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the amount of any payment of interest or principal
due on any Note on any Payment Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the
Holders of Notes to the benefit of any provisions for the mandatory redemption
of the Notes contained herein; or
(g) permit the creation of any lien ranking prior to or on a parity with
the lien of this Indenture with respect to any part of the Collateral 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.
INDENTURE (IBJ Warehouse) -- Page 44
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
In connection with requesting the consent of the Noteholders pursuant to
this Section, the Indenture Trustee shall mail to the Holders of the Notes to
which such amendment or supplemental indenture relates a notice setting forth
in general terms the substance of such supplemental indenture. It shall not be
necessary for any Act of Noteholders under this Section to approve the
particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties, liabilities or immunities
under this Indenture or otherwise.
Section 9.4 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations
of rights, obligations, duties, liabilities and immunities under this Indenture
of the Indenture Trustee, the Issuer and the Holders of the Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.5 [RESERVED]
Section 9.6 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
Section 9.7 [RESERVED]
INDENTURE (IBJ Warehouse) -- Page 45
ARTICLE X
RETIREMENT OF NOTES
Section 10.1 RETIREMENT.
(a) On any date on or after a Conversion Date, the Issuer may, at its
option, effect an early retirement of the Notes on or after any Payment Date on
which the Aggregate Note Principal Balance declines to 15% or less of the Pool
Principal Balance of the Home Loans pledged to the Trust Estate as of the
Conversion Date. The Issuer shall effect such early retirement by directing
the Indenture Trustee to arrange for the sale of all of the Home Loans to a
person that is not an Affiliate of the Issuer, the Seller, or the Servicer at a
price not less than the Redemption Price plus an amount equal to any unpaid
Servicing Compensation, Guaranty Insurance Premium, Facility Fee and Note
Insurer Reimbursement Amounts. In connection with any such early retirement,
to the extent that sufficient proceeds are not available from the sale of the
Home Loans, the Issuer shall be required to pay the outstanding fees and
expenses, if any, of the Indenture Trustee, the Note Insurer, and the Servicer.
(b) Subject to Section 11.17, on any date on or after a Conversion Date
and on or after which (i) 17.5% or more (based on Net Loan Losses) of the Home
Loans have become Defaulted Home Loans on a cumulative basis and (ii) the
Overcollateralization Amount has been reduced to zero or an amount less than
zero, then the Note Insurer may, at its option, effect an early retirement of
the Notes and termination of this Agreement.
Any such early retirement of the Notes by the Note Insurer shall be
accomplished by the Note Insurer (i) sending notice to the Indenture Trustee of
all information described in Section 10.2 and (ii) depositing or causing to be
deposited into the Collection Account by 10:00 A.M. New York City time on the
third Business Day prior to the Redemption Date the amount of the Redemption
Price plus an amount equal to any unpaid Servicing Compensation, Guaranty
Insurance Premium, Facility Fee and Note Insurer Reimbursement Amounts. On the
same day that such amounts are deposited into the Collection Account, such
amounts and any amounts then on deposit in the Collection Account (other than
any amounts not required to have been deposited therein pursuant to
Section 5.01(b)(1) of the Sale and Servicing Agreement) shall be transferred to
the Note Payment Account for payment to the Noteholders on the Redemption Date;
and any amounts received with respect to the Home Loans and Foreclosure
Properties subsequent to such transfer shall belong to the Note Insurer. For
purposes of calculating the Required Payment Amount for the Redemption Date,
amounts transferred to the Note Payment Account pursuant to the immediately
preceding sentence on the Determination Date immediately preceding such final
Payment Date shall in all cases be deemed to have been received during the
related Due Period, and such transfer shall be made pursuant to Section 5.01(c)
of the Sale and Servicing Agreement.
(c) The Servicer or the Issuer shall furnish each Rating Agency, the Note
Insurer and the Arranger notice of any such early retirement in accordance with
Section 10.2.
INDENTURE (IBJ Warehouse) -- Page 46
Section 10.2 FORM OF RETIREMENT NOTICE. Notice of early retirement under
Section 10.1 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted not later than 10 days
prior to the applicable Redemption Date to each Noteholder, as of the close of
business on the Record Date preceding the applicable Redemption Date, at such
Noteholder's address or facsimile number appearing in the Note Register.
All notices of early retirement shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment of
the Redemption Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.2).
Notice of early retirement of the Notes shall be given by the Indenture
Trustee in the name of the [ISSUER] and at the expense of the [SERVICER].
Failure to give notice of early retirement, or any defect therein, to any
Noteholder shall not impair or affect the validity of the early retirement of
any other Note.
Section 10.3 NOTES PAYABLE ON REDEMPTION DATE; PROVISION FOR PAYMENT OF
INDENTURE TRUSTEE AND NOTE INSURER. The Notes or portions thereof to be
redeemed shall, following notice of early retirement as required by Section
10.2 (in the case of redemption pursuant to Section 10.1), on the Redemption
Date become due and payable at the Redemption Price and (unless the Issuer or
the Note Insurer, as applicable, shall default in the payment of the Redemption
Price) no interest shall accrue on the Redemption Price for any period after
the date to which accrued interest is calculated for purposes of calculating
the Redemption Price.
ARTICLE XI
MISCELLANEOUS
Section 11.1 COMPLIANCE CERTIFICATES AND OPINIONS, ETC. Upon any
application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and (ii) an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that, in the case of any such application or request as
to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
INDENTURE (IBJ Warehouse) -- Page 47
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
Section 11.2 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such Officer's
Certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Servicer, the Seller, or the Issuer stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, or the Issuer unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of
the facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such
INDENTURE (IBJ Warehouse) -- Page 48
application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion
contained in any such document as provided in Article VI.
Section 11.3 ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.1) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided
in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes (or any one or more
Predecessor Notes) shall bind the Holder of every Note issued upon the
registration thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Indenture Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.
Section 11.4 NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER, RATING
AGENCIES, NOTE INSURER AND ARRANGER. Any request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders or other documents
provided or permitted by this Indenture shall be in writing and if such
request, demand, authorization, direction, notice, consent, waiver or act of
Noteholders is to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed first-class,
postage prepaid to the Issuer addressed to: FIRSTPLUS FUNDING TRUST, 0000
Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000, Attention: Xxx X. Xxxxxx, or at any other
address previously furnished in writing to the Indenture Trustee by the Issuer.
INDENTURE (IBJ Warehouse) -- Page 49
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer or the
Indenture Trustee shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, to (i) in the case of Moody's, at the
following address: Xxxxx'x Investors Service, Inc., Residential Mortgage
Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (ii) in
the case of Standard & Poor's, at the following address: Standard & Poor's
Ratings Group, 00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention of
Asset Backed Surveillance Department; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
Notices required to be given to the Note Insurer or the Arranger by the
Issuer or the Indenture Trustee shall be in writing, personally delivered or
mailed by certified mail, return receipt requested, to (i) in the case of the
Note Insurer, at the following address:MBIA Insurance Corporation, 000 Xxxx
Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention:Insured Portfolio Management -
Structured Finance (IPM-SF) and (ii) in the case of the Arranger, at the
following address:The Industrial Bank of Japan, Limited, New York Branch, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:Xxxxxx Xxxxxxxx, or at such
other address as shall be designated by written notice to the other parties.
Section 11.5 NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be
a sufficient giving of such notice.
INDENTURE (IBJ Warehouse) -- Page 50
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event
of Default.
Section 11.6 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 11.7 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
Section 11.8 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 11.9 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 Collateral, any benefit or any legal or equitable right, remedy or claim
under this Indenture, except that the Note Insurer is an express third party
beneficiary to this Indenture as provided in Section 11.18.
Section 11.10 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 11.11 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 11.12 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 11.13 RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which Opinion of Counsel shall be reasonably acceptable to the Indenture
Trustee) to the effect that such recording is necessary either for the
protection of the
INDENTURE (IBJ WAREHOUSE) - Page 51
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 11.14 ISSUER OBLIGATION. Each Noteholder by its acceptance of a
Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer 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 in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent,
officer, director, employee or agent of the Indenture Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer or the Indenture
Trustee or of any successor or assign of the Indenture Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee has no such obligations in its
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.
Section 11.15 NO PETITION. Until the date that is one year and one day
after the last day on which any Note is Outstanding, the Indenture Trustee, by
entering into this Indenture, and each Noteholder, by its acceptance of a Note,
hereby covenant and agree that they will not at any time institute against the
Seller, the Servicer or the Issuer, or join in any institution against the
Seller, the Servicer or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Basic
Documents.
Section 11.16 INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or the Note
Insurer, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
Section 11.17 GRANT OF NOTEHOLDER RIGHTS TO NOTE INSURER. In
consideration for the guarantee of the Notes by the Note Insurer pursuant to
the Guaranty Policy, the Noteholders hereby grant to the Note Insurer the right
to act as the holder of 100% of the outstanding Notes for the purpose of
exercising the rights of the Holders of the Notes hereunder without the consent
of any Noteholders, including the voting rights of such Holders, but excluding
(i) the rights of the Majority Noteholders to exercise remedies following an
Event of Default pursuant to Section 5.4, but only during the period following
a Conversion Event and prior to a Conversion Date, (ii) those rights requiring
the
INDENTURE (IBJ WAREHOUSE) - Page 52
consent of each affected Noteholder as provided in paragraphs (a) through (g)
of Section 9.2 and (iii) any rights of such Holders to distributions under
Section 8.2; provided that the preceding grant of rights to the Note Insurer
by the Noteholders shall be subject to Section 11.19.
Section 11.18 THIRD PARTY BENEFICIARY. The parties hereto acknowledge
that the Note Insurer is an express third party beneficiary hereof entitled to
enforce any rights reserved to it hereunder as if it were actually a party
hereto.
Section 11.19 SUSPENSION AND TERMINATION OF NOTE INSURER'S RIGHTS.
(a) During the continuation of a Note Insurer Default, the grant of
rights to the Note Insurer pursuant to Section 11.17 shall be of no force or
effect, and any other rights granted or reserved to the Note Insurer hereunder
shall vest instead in the Majority Noteholders; provided that the Note Insurer
shall be entitled to any distributions in reimbursement of the Note Insurer
Reimbursement Amount, and the Note Insurer shall retain those rights under
Section 9.2 hereof to consent to any supplement to this Indenture.
(b) At such time as either (i) the Aggregate Note Principal Balance has
been reduced to zero and all accrued interest has been paid on the Notes or
(ii) the Guaranty Policy has been terminated and in either case of (i) or (ii)
the Note Insurer has been reimbursed for all Guaranteed Payments and any other
amounts owed under the Guaranty Policy and the Insurance Agreement (and the
Note Insurer no longer has any obligation under the Guaranty Policy, except for
breach thereof by the Note Insurer), then the grant of rights to the Note
Insurer pursuant to Section 11.17 shall be of no further force or effect and
any other rights and benefits granted or reserved to the Note Insurer hereunder
(including the rights to direct certain actions and receive certain notices)
shall terminate and the Noteholders shall be entitled to the exercise of such
rights and to receive such benefits of the Note Insurer following such
termination to the extent that such rights and benefits are applicable to the
Noteholders.
INDENTURE (IBJ WAREHOUSE) - Page 53
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto
duly authorized and duly attested, all as of the day and year first above
written.
FIRSTPLUS FUNDING TRUST
By: /s/ XXX X. XXXXXX
-----------------------------------
Xxx X. Xxxxxx
Vice President
FIRST BANK NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ XXXXX XXXXXXXXXXXXXX
-----------------------------------
Xxxxx Xxxxxxxxxxxxxx
Vice President
INDENTURE (IBJ WAREHOUSE) - SIGNATURE PAGE
STATE OF TEXAS
-----------------
COUNTY OF DALLAS
----------------
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared Xxx X. Xxxxxx, 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
FIRSTPLUS FUNDING TRUST, a Delaware business trust, and that such person
executed the same as the act of said entity for the purpose and consideration
therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 12th day of June, 1997.
/s/ XXXXX X. XXXXXX
-------------------------------------------
Notary Public in and for the State of Texas
(Seal)
My commission expires:
----------------------
XXXXX X. XXXXXX
NOTARY PUBLIC, STATE OF TEXAS
COMMISSION EXPIRES: 09-26-2000
STATE OF TEXAS
-----------------
COUNTY OF DALLAS
----------------
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared Xxxxx Xxxxxxxxxxxxxx, 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 FIRST BANK
NATIONAL ASSOCIATION, a national banking association, and that such person
executed the same as the act of said corporation for the purpose and
consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 12th day of June, 1997.
/s/ XXXXX X. XXXXXX
-------------------------------------------
Notary Public in and for the State of Texas
(Seal)
My commission expires:
----------------------
XXXXX X. XXXXXX
NOTARY PUBLIC, STATE OF TEXAS
COMMISSION EXPIRES: 09-26-2000
SCHEDULE A
(To be Provided at the Closing and Amended as Provided in the Sale and
Servicing Agreement)
EXHIBIT A
Form of Note
