EXHIBIT 4.3
HOME EQUITY LOAN TRUST [ ]-[ ],
Issuer,
and
________________________,
Indenture Trustee
________________________
INDENTURE
________________________
Dated as of ___________________
HOME EQUITY LOAN-BACKED TERM NOTES
HOME EQUITY LOAN-BACKED VARIABLE PAY REVOLVING NOTES
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS*
Trust Indenture
Act Section Indenture Section
____________________________________________________________________________________________
310(a)(1)...............................................................................6.11
(a)(2)..................................................................................6.11
(a)(3)..................................................................................6.10
(a)(4)........................................................................Not Applicable
(a)(5)..................................................................................6.11
(b)...............................................................................6.08, 6.11
(c)...........................................................................Not Applicable
311(a)..................................................................................6.12
(b).....................................................................................6.12
(c)...........................................................................Not Applicable
312(a).........................................................................7.01, 7.02(a)
(b)..................................................................................7.02(b)
(c)..................................................................................7.02(c)
313(a)..................................................................................7.04
(b).....................................................................................7.04
(c).......................................................................7.03(a)(iii), 7.04
(d).....................................................................................7.04
314(a).........................................................................3.10, 7.03(a)
(b).....................................................................................3.07
(c)(1).....................................................................8.05(c), 10.01(a)
(c)(2).....................................................................8.05(c), 10.01(a)
(c)(3).......................................................................Not Applicable
(d)(1).....................................................................8.05(c), 10.01(b)
(d)(2).....................................................................8.05(c), 10.01(b)
(d)(3).....................................................................8.05(c), 10.01(b)
(e).................................................................................10.01(a)
315(a)...............................................................................6.01(b)
(b).....................................................................................6.05
(c)..................................................................................6.01(a)
(d)..................................................................................6.01(c)
(d)(1)...............................................................................6.01(c)
(d)(2)...............................................................................6.01(c)
(d)(3)...............................................................................6.01(c)
(e).....................................................................................5.13
316(a)(1)(A)............................................................................5.11
316(a)(1)(B)............................................................................5.12
316(a)(2).....................................................................Not Applicable
316(b)..................................................................................5.07
317(a)(1)...............................................................................5.04
317(a)(2)............................................................................5.03(d)
317(b)...............................................................................3.03(a)
318(a).................................................................................10.07
_________________
*This reconciliation and tie shall not, for any purpose, be deemed to be part of the within indenture.
This Indenture, dated as of __________________, is between Home Equity Loan Trust [ ]-[ ], a
Delaware statutory trust, as issuer (the "Issuer"), and __________________, as indenture trustee (the "Indenture
Trustee").
WITNESSETH:
Each party hereto agrees as follows for the benefit of the other party and for the equal and ratable
benefit of the Noteholders of the Issuer's Series [ ]-[ ] Home Equity Loan-Backed Term Notes and Home Equity
Loan-Backed Variable Pay Revolving Notes (together, the "Notes").
GRANTING CLAUSE:
The Issuer hereby Grants to the Indenture Trustee on the Closing Date, as trustee for the benefit of the
Noteholders and the Enhancer, all of the Issuer's right, title and interest in and to all accounts, chattel
paper, general intangibles, contract rights, payment intangibles, certificates of deposit, deposit accounts,
instruments, documents, letters of credit, money, advices of credit, investment property, goods and other
property consisting of, arising under or related to whether now existing or hereafter created in any of the
following: (a) the Initial Mortgage Loans and any Subsequent Mortgage Loans (together with the Cut-Off Date
Principal Balances and any Additional Balances arising thereafter to and including the date immediately preceding
the commencement of the Rapid Amortization Period), and all monies due or to become due thereunder; (b) the
Custodial Account, Note Payment Account, Pre-Funding Account, Capitalized Interest Account, Funding Account and
Reserve Sub-Account, and all funds on deposit or credited thereto from time to time; (c) the Policy and all
hazard insurance policies; and (d) all present and future claims, demands, causes and choses in action in respect
of any or all of the foregoing and all payments on or under, and all proceeds of every kind and nature whatsoever
in respect of, any or all of the foregoing and all payments on or under, and all proceeds of every kind and
nature whatsoever in the conversion thereof, voluntary or involuntary, into cash or other liquid property, all
cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks, deposit accounts, rights to
payment of any and every kind, and other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of any of the foregoing
(collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any
other amounts owing in respect of, the Notes, equally and ratably without prejudice, priority or distinction, and
to secure compliance with the provisions of this Indenture, all as provided in this Indenture.
The foregoing Grant shall inure to the benefit of the Enhancer in respect of draws made on the Policy
and amounts owing from time to time pursuant to the Insurance Agreement (regardless of whether such amounts
relate to the Notes or the Certificates), and such Grant shall continue in full force and effect for the benefit
of the Enhancer until all such amounts owing to it have been repaid in full.
The Indenture Trustee, as trustee on behalf of the Noteholders, acknowledges such Xxxxx, accepts the
trust under this Indenture in accordance with the provisions hereof and agrees to perform its duties as Indenture
Trustee as required herein.
ARTICLE I
Definitions
Section 1.01 Definitions. For all purposes of this Indenture, except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the
meanings assigned to such terms in the Definitions attached hereto as Appendix A, which is incorporated by
reference herein. All other capitalized terms used herein shall have the meanings specified herein.
Section 1.02 Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a
provision of the Trust Indenture Act (the "TIA"), such provision is incorporated by reference in and made a part
of this Indenture. The following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other obligor on the indenture
securities.
All other TIA terms used in this Indenture that are defined by XXX, defined by TIA reference to
another statute or defined by Commission rule have the meaning assigned to them by such definitions.
Section 1.03 Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with
generally accepted accounting principles as in effect from time to time;
(c) "or" includes "and/or";
(d) "including" means "including without limitation";
(e) words in the singular include the plural and words in the plural include the singular;
(f) the term "proceeds" has the meaning ascribed thereto in the UCC; and
(g) any agreement, instrument or statute defined or referred to herein or in any instrument or
certificate delivered in connection herewith means such agreement, instrument or statute as from time to time
amended, modified or supplemented and includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
Original Issuance of Notes
Section 2.01 Form. The Term Notes and the Variable Pay Revolving Notes, in each case together with the
Indenture Trustee's certificate of authentication, shall be in substantially the forms set forth in Exhibits A-1
and A-2, respectively, with such appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or other marks of identification and
such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers
executing the Notes, as evidenced by their execution thereof. Any portion of the text of any Note may be set
forth on the reverse thereof, with an appropriate reference thereto on the face of such Note.
The Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of
these methods, all as determined by the Authorized Officers executing such Notes, as evidenced by their execution
of such Notes.
The terms of the Notes set forth in Exhibits A-1 and A-2 are part of the terms of this Indenture.
Any additional Variable Pay Revolving Notes issued by the Issuer (in accordance with the instruction of
the Depositor) after the Closing Date pursuant to Section 2.03 shall be issued in accordance with the provisions
of this Indenture and shall be in substantially the form of Exhibit A-2 and shall have the same Note Rate (which
may be adjusted as described in Section 2.03), Final Payment Date and priority for payment as the Variable Pay
Revolving Notes issued on the Closing Date.
Section 2.02 Execution, Authentication and Delivery. The Notes shall be executed on behalf of the
Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers
of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of
such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and deliver Term Notes for original issue
in an aggregate initial principal amount of the Initial Aggregate Term Note Balance and Variable Pay Revolving
Notes for original issue in an aggregate initial principal amount of the Initial Class A-1 Variable Pay Revolving
Note Balance. The Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-1 Variable Pay Revolving Notes,
Class A-2 Variable Pay Revolving Notes and Class A-3 Variable Pay Revolving Notes, shall have an initial
principal amount equal to the Initial Class A-1 Note Balance, Initial Class A-2 Note Balance, Initial Class A-3
Note Balance, Initial Class A-1 Variable Pay Revolving Note Balance, Initial Class A-2 Variable Pay Revolving
Note Balance and Initial Class A-3 Variable Pay Revolving Note Balance, respectively.
Each Note shall be dated the date of its authentication. The Term Notes shall be issuable as registered
Book-Entry Notes in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof and the
Variable Pay Revolving Notes shall be issued as Definitive Notes in minimum denominations of $250,000 and
integral multiples of $1,000 in excess thereof except that respect to the Class A-2 Variable Pay Revolving Notes
and the Class A-3 Variable Pay Revolving Notes, one Definitive Note will be issued in Initial Class A-2 Variable
Pay Revolving Note Balance and Initial Class A-3 Variable Pay Revolving Note Balance, respectively . Each Class
of Variable Pay Revolving Notes issued pursuant to Section 2.03 shall be issued with an initial Note Balance
equal to the outstanding Note Balance of the related Class of Term Notes as of the related Targeted Final Payment
Date, plus, in the case of a substitute Variable Pay Revolving Note issued in connection with an Advance by an
existing Holder, the remaining Note Balance of the Variable Pay Revolving Note being so substituted.
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 2.03 Advance or Additional Variable Pay Revolving Notes. Not later than sixty (60)
days prior to a Targeted Final Payment Date, the Indenture Trustee, on behalf of the Issuer, will request an
Advance (in substantially the form attached hereto as Exhibit C) from the Holder(s) of the related Class of
Variable Pay Revolving Notes in an aggregate amount equal to the outstanding Note Balance of the related Class of
Term Notes, to be paid on the Business Day prior to such Targeted Final Payment Date. Within thirty (30) days
thereafter, each Holder of that Class of Variable Pay Revolving Notes shall notify the Indenture Trustee in
writing (as set forth in Exhibit C) whether it will make such Advance, subject to the continued satisfaction of
the conditions precedent specified in the Note Purchase Agreement.
If the Holder of such Class of Variable Pay Revolving Notes indicates that it will make an
Advance, the Issuer shall issue and, upon receipt of an Issuer Order, the Indenture Trustee shall authenticate, a
substitute Variable Pay Revolving Note for such Holder in a principal amount equal to the remaining Note Balance
of such Holder's existing Variable Pay Revolving Note plus the amount of the Advance to be made by such Holder.
The Indenture Trustee shall register such substitute Variable Pay Revolving Note to such Holder on or prior to
the date such Advance is to be made in exchange for the Advance and the existing Variable Pay Revolving Note of
such Holder.
If the Holders of such Class of Variable Pay Revolving Notes indicate to the Indenture Trustee
that they will not make an Advance in an aggregate amount equal to the outstanding Note Balance of the related
Class of Term Notes, the Indenture Trustee will notify the Depositor by close of business on the next Business
Day. If insufficient Advances will be made, the Depositor may direct the Issuer to issue additional Variable Pay
Revolving Notes in an aggregate amount equal to the related outstanding Class of Term Notes or such
insufficiency, if less. Upon receipt of such direction and the related Advance, the Issuer shall issue and, upon
receipt of an Issuer Order, the Indenture Trustee shall authenticate, such additional Variable Pay Revolving
Notes in accordance with Sections 2.01 and 2.02 and Article IV. If such additional Variable Pay Revolving Notes
are issued, the Indenture Trustee shall register such Variable Pay Revolving Notes in accordance with Article IV
of this Indenture and deliver such Variable Pay Revolving Notes in accordance with the instructions of the
Depositor. In addition, in connection with the issuance of the additional Variable Pay Revolving Notes, at the
direction of, and pursuant to the procedures provided by, the Depositor, the Indenture Trustee shall contact the
broker-dealers identified by the Depositor in order to solicit bids for the aggregate principal amount of
Variable Pay Revolving Notes for which the Indenture Trustee has received notice that Advances will not be made.
Within a reasonable time after receipt of the bids, the Indenture Trustee, in consultation with the Depositor,
shall determine the lowest margin over LIBOR at which Variable Pay Revolving Notes in an aggregate amount equal
to the amount of requested Advances which the Indenture Trustee has received notice will not be made, can be
sold, and such margin shall become the new margin in effect for all the Variable Pay Revolving Notes, as of the
related Targeted Final Payment Date; provided that such margin shall in no event exceed ____%; and provided
further that, if any Holder of a Variable Pay Revolving Note agrees to make an Advance on the related Targeted
Final Payment Date, such margin shall not be lower than the margin on the Variable Pay Revolving Notes
immediately prior to such Targeted Final Payment Date. In addition, if there exists an unreimbursed Draw on the
Policy, or a Servicing Default has occurred and is continuing, the margin on the Variable Pay Revolving Notes may
not be increased without the consent of the Enhancer. All further actions of the Indenture Trustee necessary to
effect the issuance and sale of such additional Variable Pay Revolving Notes shall be at the direction of the
Depositor and in conformity with this Indenture.
Notwithstanding the foregoing, if an Early Amortization Event has occurred, an Insolvency Event with
respect to the Enhancer has occurred and is continuing or a Default has occurred and is continuing, the Indenture
Trustee will not request an Advance and the Issuer will not issue any additional Variable Pay Revolving Notes.
ARTICLE III
Covenants
Section 3.01 Collection of Payments with Respect to the Mortgage Loans. The Indenture Trustee
shall establish and maintain with itself the Note Payment Account in which the Indenture Trustee shall, subject
to the terms of this paragraph, deposit, on the same day as it is received from the Servicer, each remittance
received by the Indenture Trustee with respect to the Mortgage Loans. The Indenture Trustee shall make all
payments of principal of and interest on the Notes, subject to Section 3.03 as provided in Section 3.05 herein
from monies on deposit in the Note Payment Account.
Section 3.02 Maintenance of Office or Agency. The Issuer will maintain in the City of Novato,
California, an office or agency where, subject to satisfaction of conditions set forth herein, Notes may be
surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the Issuer shall fail to maintain any
such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at [_____________], and the Issuer hereby appoints the Indenture
Trustee as its agent to receive all such surrenders, notices and demands.
Section 3.03 Money for Payments to Be Held in Trust; Paying Agent. As provided in Section 3.01, all
payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the
Note Payment Account pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture Trustee or
by the Paying Agent, and no amounts so withdrawn from the Note Payment Account for payments of Notes shall be
paid over to the Issuer except as provided in this Section 3.03. The Issuer hereby appoints the Indenture
Trustee to act as initial Paying Agent hereunder. The Issuer will cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall
agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section 3.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of amounts due with respect to the Notes in
trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein provided;
(b) give the Indenture Trustee and the Enhancer written notice of any default by the
Issuer of which it has actual knowledge in the making of any payment required to be made with respect to the
Notes;
(c) at any time during the continuance of any such default, upon the written request of
the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;
(d) immediately resign as Paying Agent and forthwith pay to the Indenture Trustee all sums
held by it in trust for the payment of Notes, if at any time it ceases to meet the standards required to be met
by a Paying Agent at the time of its appointment;
(e) comply with all requirements of the Code with respect to the withholding from any
payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith; and
(f) deliver to the Indenture Trustee a copy of the statement to Noteholders prepared with
respect to each Payment Date by the Servicer pursuant to Section 4.01 of the Servicing Agreement.
The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, by Issuer Request direct any Paying Agent to pay to the Indenture Trustee all
sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as
those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the
Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or
any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for
one year after such amount has become due and payable shall be discharged from such trust and be paid to the
Issuer on Issuer Request; and the Noteholder of such Note shall thereafter, as an unsecured general creditor,
look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and
all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon
cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuer cause to be published once, in an Authorized
Newspaper, notice that such money remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer. The Indenture Trustee may also adopt and employ, at the expense and direction of the
Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing
notice of such repayment to Noteholders the Notes which have been called but have not been surrendered for
redemption or whose right to or interest in monies due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Noteholder).
Section 3.04 Existence. The Issuer will keep in full effect its existence, rights and franchises as a
statutory trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is
or becomes, organized under the laws of any other state or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction)
and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Mortgage Loans
and each other instrument or agreement included in the Trust Estate.
Section 3.05 Priority of Distributions; Defaulted Interest.
(a) In accordance with Section 3.03(a) of the Servicing Agreement, the priority of distributions on each
Payment Date from Principal Collections and Interest Collections with respect to the Mortgage Loans, any optional
advance of delinquent principal or interest on the Mortgage Loans made by the Servicer in respect of the related
Collection Period, any Policy Draw Amount deposited into the Note Payment Account (to be applied solely with
respect to the payment of amounts described in clauses (i) and (vi) under this Section 3.05(a)), and any amounts
transferred to the Note Payment Account or Funding Account from the Pre-Funding Account, Capitalized Interest
Account, Funding Account or Reserve Sub-Account pursuant to Sections 3.16, 3.17, 3.18 and 3.19 of the Servicing
Agreement, is as follows:
(i) from Interest Collections, any Capitalized Interest Requirement pursuant to
Section 3.19(b) of the Servicing Agreement and any Policy Draw Amount with respect to the Notes
deposited into the Note Payment Account on such Payment Date pursuant to Section 3.28(a)(ii), to the
Note Payment Account, for payment by the Paying Agent to the Noteholders of each Class of Term Notes and
Variable Pay Revolving Notes, pari passu, interest for the related Interest Period at the related Note
Rate on the related Note Balance immediately prior to such Payment Date, excluding any Relief Act
Shortfalls allocated thereto pursuant to Section 3.05(f), plus any such amount remaining unpaid from
prior Payment Dates;
(ii) from Net Principal Collections, to the extent not paid pursuant to clause (i)
above, to the Note Payment Account, for payment by the Paying Agent to the Noteholders of each Class of
Term Notes and Variable Pay Revolving Notes, pari passu, interest for the related Interest Period at the
related Note Rate on the related Note Balance immediately prior to such Payment Date, excluding any
Relief Act Shortfalls allocated thereto pursuant to Section 3.05(f), plus any such amount remaining
unpaid from prior Payment Dates;
(iii) during the Revolving Period, to the Funding Account, Principal Collections to
the extent not previously applied to purchase Additional Balances or Subsequent Mortgage Loans;
(iv) from Interest Collections, to the Enhancer, the amount of the premium for the
Policy and any unpaid premium for the Policy from prior Payment Dates, with interest thereon as provided
in the Insurance Agreement;
(v) at the request of the holders of the Certificates, from Excess Spread, to the
Distribution Account, for distribution to the holders of the Certificates, an amount equal to the
Additional Balance Increase Amount;
(vi) during the Revolving Period and the Amortization Periods, to the Note Payment
Account, the Principal Distribution Amount for payment by the Paying Agent to the Noteholders for each
Class of Variable Pay Revolving Notes, pro rata, based on their respective Note Balances, including any
Policy Draw Amount with respect to the Notes deposited into the Note Payment Account on such Payment
Date pursuant to Section 3.28(a)(iii); provided that any Liquidation Loss Amounts for any Payment Date
during the Revolving Period shall be deposited in the Funding Account; provided further, that any
amounts transferred from the Pre-Funding Account pursuant to Section 3.18(b) of the Servicing Agreement
after the aggregate Note Balance of the Variable Pay Revolving Notes has been reduced to zero shall be
deposited into the Funding Account;
(vii) to the Enhancer, to reimburse it for prior draws made on the Policy, with
interest thereon as provided in the Insurance Agreement;
(viii) from any remaining Excess Spread during the Revolving Period, first, to the
Note Payment Account for payment to each Class of Variable Pay Revolving Notes, pro rata, based on their
respective Note Balances, until the Note Balance thereof has been reduced to zero and then as a deposit
to the Funding Account, the amount necessary to be applied on that Payment Date so that the
Overcollateralization Amount, after giving effect to the application of funds pursuant to clause (vi)
above, is not less than the Overcollateralization Target Amount;
(ix) from any remaining Excess Spread during the Amortization Periods, to the Note
Payment Account, the amount necessary to be applied on such Payment Date for payment by the Paying Agent
to the Noteholders of the Variable Pay Revolving Notes, which amount will be paid to each Class of the
Variable Pay Revolving Notes, pro rata, based on their respective Note Balances, so that the
Overcollateralization Amount, after giving effect to the application of funds pursuant to clause (vi)
above, is not less than the Overcollateralization Target Amount;
(x) from any remaining Excess Spread during the Amortization Periods, to the Note
Payment Account, any Liquidation Loss Amounts not otherwise covered by payments pursuant to clauses
(vi), (viii) or (ix) above on such Payment Date or prior Payment Dates, for payment by the Paying Agent
to the Noteholders of each Class of Variable Pay Revolving Notes, pro rata, based on their respective
Note Balances;
(xi) to the Enhancer, any amounts owed to the Enhancer pursuant to the Insurance
Agreement other than amounts specified in clauses (iv) or (vii) above;
(xii) to the Note Payment Account from the remaining Excess Spread, for payment by
the Paying Agent to the Noteholders, any Interest Shortfalls on the Notes for such Payment Date and for
any Payment Date not previously paid, pro rata, in accordance with Interest Shortfalls previously
allocated thereto and remaining unpaid;
(xiii) during the Amortization Periods, to the Indenture Trustee, any amounts owing
to the Indenture Trustee pursuant to Section 6.07 to the extent remaining unpaid;
(xiv) to the Reserve Sub-Account, the amount (if any) required pursuant to
Section 3.05(c); and
(xv) any remaining amount, to the Distribution Account, for distribution to the
holders of the Certificates by the Certificate Paying Agent in accordance with the Trust Agreement;
provided, that on the Final Payment Date, the amount that is required to be paid pursuant to clause (vi) above
shall be equal to the Note Balance immediately prior to such Payment Date and shall include any amount on deposit
in the Note Payment Account on such Payment Date in accordance with Section 3.28(a)(iii).
For purposes of the foregoing, the Note Balance of each Class of Notes on each Payment Date during the
Amortization Periods for such Class of Notes will be reduced (any such reduction, an "Unpaid Principal Amount")
by the pro rata portion allocable to such Notes of all Liquidation Loss Amounts for such Payment Date, but only
to the extent that such Liquidation Loss Amounts are not otherwise covered by payments made pursuant to clauses
(vi), (viii), (ix) or (x) above, or by a draw on the Policy, and the Overcollateralization Amount is zero.
(b) Notwithstanding the allocation of payments described in Section 3.05(a), unless an Early Amortization
Event has occurred, all Collections on the Mortgage Loans payable as principal distributions on the Variable Pay
Revolving Notes during the Amortization Periods will be so paid until the aggregate Note Balance of the Variable
Pay Revolving Notes has been reduced to zero and thereafter, will be deposited into the Reserve Sub-Account. On
the first Payment Date following the next Targeted Final Payment Date, amounts in the Reserve Sub-Account will be
deposited into the Note Payment Account and applied as principal payments, pro rata, on the Variable Pay
Revolving Notes based on their respective Note Balances.
Notwithstanding the allocation of payments described in Section 3.05(a), if an Early
Amortization Event has occurred, all amounts in the Reserve Sub-Account and all Collections on the Mortgage Loans
payable as principal distributions on the Variable Pay Revolving Notes pursuant to Section 3.05(a) will be paid
on each Payment Date to the Holders of the Variable Pay Revolving Notes and the Term Notes, pro rata, based on
their respective Note Balances.
(c) Within sixty (60) Business Days of each Targeted Final Payment Date, the Indenture Trustee, on behalf of
the Issuer, will request an Advance (under the circumstances and in the manner set forth in Section 2.03 hereof)
from the Holder of the related Class of Variable Pay Revolving Notes, the proceeds of which shall be applied by
the Indenture Trustee to make principal payments in an amount equal to the outstanding Note Balance on the
related Class of Term Notes on such Targeted Final Payment Date or, if received within 10 days following such
Targeted Final Payment Date (but not later than 1:00 p.m. New York time on the 10th day or, if such 10th day is
not a Business Day, the immediately preceding Business Day), not later than the 10th day following the related
Targeted Final Payment Date or, if such 10th day is not a Business Day, the immediately preceding Business Day.
If no Advance is received, the Issuer shall, at the direction of the Depositor, issue additional Variable Pay
Revolving Notes. Neither the Advance, nor proceeds from the sale of additional Variable Pay Revolving Notes
issued with respect to a Targeted Final Payment Date, will exceed or be less than the amount necessary to pay the
outstanding Note Balance on the related Class of Term Notes on such Targeted Final Payment Date. Advances may be
made and additional Variable Pay Revolving Notes may be issued only in connection with a Targeted Final Payment
Date and in accordance with this Indenture and the Trust Agreement. If no Advance is received, and the Trust
fails to issue additional Variable Pay Revolving Notes on a Targeted Final Payment Date, an amount equal to 10
days interest on the related Class of Term Notes shall be deposited into the Reserve Sub-Account pursuant to
Section 3.05(a)(xv) from amounts otherwise payable to Certificateholders. Upon the issuance and sale by the
Trust of additional Variable Pay Revolving Notes within 10 days after the related Targeted Final Payment Date,
the amount of interest deposited into the Reserve Sub-Account pursuant to Section 3.05(a)(xv) shall be paid to
the Holders of the related Class of Term Notes, together with the Note Balance of such Class, in an amount equal
to the interest accrued on such Class of Term Notes through the date of payment.
(d) On each Payment Date, the Paying Agent shall apply, from amounts on deposit in the Note Payment Account,
and in accordance with the Servicing Certificate, the amounts set forth above in the order of priority set forth
in Section 3.05(a).
Amounts paid to Noteholders shall be paid in respect of the Notes in accordance with the
applicable percentage as set forth in Section 3.05(e). Interest on the Notes will be computed on the basis of
the actual number of days in each Interest Period and a 360-day year. Any installment of interest or principal
payable on any Note that is punctually paid or duly provided for by the Issuer on the applicable Payment Date
shall be paid to the Noteholder of record thereof on the immediately preceding Record Date by wire transfer to an
account specified in writing by such Noteholder reasonably satisfactory to the Indenture Trustee, or by check or
money order mailed to such Noteholder at such Noteholder's address appearing in the Note Register, the amount
required to be distributed to such Noteholder on such Payment Date pursuant to such Noteholder's Notes; provided,
that the Indenture Trustee shall not pay to any such Noteholder any amounts required to be withheld from a
payment to such Noteholder by the Code.
(e) Principal of each Note shall be due and payable in full on the Final Payment Date as provided in the
applicable form of Note set forth in Exhibits A-1 and A-2. All principal payments on the Term Notes and Variable
Pay Revolving Notes of each Class shall be made in accordance with the priorities set forth in Sections 3.05(a),
3.05(b) and 3.05(c) to the Noteholders entitled thereto in accordance with the related Percentage Interests
represented thereby. Upon written notice to the Indenture Trustee by the Issuer, the Indenture Trustee shall
notify the Person in the name of which a Note is registered at the close of business on the Record Date preceding
the applicable Targeted Final Payment Date, the Final Payment Date or other final Payment Date, as applicable.
Such notice shall be mailed no later than five Business Days prior to the Final Payment Date or such other final
Payment Date and, unless such Note is then a Book-Entry Note, shall specify that payment of the principal amount
and any interest due with respect to such Note at the Final Payment Date or such other final Payment Date will be
payable only upon presentation and surrender of such Note, and shall specify the place where such Note may be
presented and surrendered for such final payment.
On each Payment Date, the Overcollateralization Amount available to cover any Liquidation
Loss Amounts on such Payment Date shall be deemed to be reduced by an amount equal to such Liquidation Loss
Amounts (except to the extent that such Liquidation Loss Amounts were covered on such Payment Date by a payment
in respect of Liquidation Loss Amounts).
(f) With respect to any Payment Date, interest payments on the Notes will be reduced by any Relief Act
Shortfalls for the related Collection Period on a pro rata basis in accordance with the amount of interest
payable on the Notes on such Payment Date, absent such reduction.
Section 3.06 Protection of Trust Estate.
(a) The Issuer shall from time to time execute and deliver all such supplements and
amendments hereto and all such financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the priority thereof)
of this Indenture or carry out more effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant made or to be
made by this Indenture;
(iii) cause the Trust to enforce any of the Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and the rights of the Indenture
Trustee and the Noteholders in such Trust Estate against the claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture Trustee shall not remove
any portion of the Trust Estate that consists of money or is evidenced by an instrument, certificate or other
writing from the jurisdiction in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant to Section 3.07 (or from the jurisdiction in which it was held as described in the Opinion of Counsel
delivered at the Closing Date pursuant to Section 3.07, if no Opinion of Counsel has yet been delivered pursuant
to Section 3.07) unless the Indenture Trustee shall have first received an Opinion of Counsel to the effect that
the lien and security interest created by this Indenture with respect to such property will continue to be
maintained after giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to execute any
financing statement, continuation statement or other instrument required to be executed pursuant to this
Section 3.06.
Section 3.07 Opinions as to Trust Estate.
On the Closing Date, the Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel at the expense of the Issuer stating that, upon delivery of the Loan Agreements relating to the
Initial Mortgage Loans to the Indenture Trustee or the Custodian in the State of [ ], the Indenture Trustee
will have a perfected, first priority security interest in such Mortgage Loans.
On or before December 31st in each calendar year, beginning in [ ], the Issuer shall furnish to the
Indenture Trustee an Opinion of Counsel at the expense of the Issuer either stating that, in the opinion of such
counsel, no further action is necessary to maintain a perfected, first priority security interest in the Mortgage
Loans until December 31 in the following calendar year or, if any such action is required to maintain such
security interest in the Mortgage Loans, 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 security interest in the Mortgage Loans until December 31 in the
following calendar year.
Section 3.08 Performance of Obligations; Servicing Agreement.
(a) The Issuer shall punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust
Estate.
(b) The Issuer may contract with other Persons to assist it in performing its duties under
this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an
Officer's Certificate of the Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer shall not take any action or permit any action to be taken by others that
would release any Person from any of such Person's covenants or obligations under any of the documents relating
to the Mortgage Loans or under any instrument included in the Trust Estate, or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of,
any of the documents relating to the Mortgage Loans or any such instrument, except such actions as the Servicer
is expressly permitted to take in the Servicing Agreement.
(d) The Issuer may retain an administrator and may enter into contracts with other Persons
for the performance of the Issuer's obligations hereunder, and performance of such obligations by such Persons
shall be deemed to be performance of such obligations by the Issuer.
Section 3.09 Negative Covenants. So long as any Notes are Outstanding, the Issuer shall not:
(a) except as expressly permitted by this Indenture, sell, transfer, exchange or otherwise
dispose of the Trust Estate, unless directed to do so by the Indenture Trustee pursuant to Section 5.04 hereof;
(b) claim any credit on, or make any deduction from the principal or interest payable in
respect of, the Notes (other than amounts properly withheld from such payments under the Code) or assert any
claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any
part of the Trust Estate;
(c) (i) permit the validity or effectiveness of this Indenture to be impaired, or permit
the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as
may be expressly permitted hereby, (ii) permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon
or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof or (iii) permit
the lien of this Indenture not to constitute a valid first priority security interest in the Trust Estate; or
(d) impair or cause to be impaired the Issuer's interest in the Mortgage Loans, the
Purchase Agreement or in any other Basic Document, if any such action would materially and adversely affect the
interests of the Noteholders.
Section 3.10 Annual Statement as to Compliance. The Issuer shall deliver to the Indenture Trustee,
within 120 days after the end of each fiscal year of the Issuer (commencing with the fiscal year ending on [
]), an Officer's Certificate stating, as to the Authorized Officer signing such Officer's Certificate, that:
(a) a review of the activities of the Issuer during such year and of its performance under
this Indenture and the Trust Agreement has been made under such Authorized Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based on such review, the Issuer
has complied with all conditions and covenants under this Indenture and the provisions of the Trust Agreement
throughout such year, or, if there has been a default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the nature and status thereof.
Section 3.11 Recordation of Assignments. The Issuer shall enforce the obligation, if any, of the
Sellers under the Purchase Agreement to submit or cause to be submitted for recordation all Assignments of
Mortgages within 60 days of receipt of recording information by the Servicer.
Section 3.12 Representations and Warranties Concerning the Mortgage Loans. The Indenture Trustee, as
pledgee of the Mortgage Loans, shall have the benefit of (i) the representations and warranties made by _________
in Section 3.1(a) and Section 3.1(b) of the Purchase Agreement and (ii) the benefit of the representations and
warranties made by _________ in Section 3.1(d) of the Purchase Agreement, in each case, concerning the Mortgage
Loans and the right to enforce the remedies against _________ or __________ provided in Section 3.1(e) of the
Purchase Agreement, as applicable, to the same extent as though such representations and warranties were made
directly to the Indenture Trustee.
Section 3.13 Assignee of Record of the Mortgage Loans. As pledgee of the Mortgage Loans, the Indenture
Trustee shall hold title to the Mortgage Loans by being named as payee in the endorsements or assignments of the
Loan Agreements and assignee in the Assignments of Mortgage to be delivered under Section 2.1 of the Purchase
Agreement. Except as expressly provided in the Purchase Agreement or in the Servicing Agreement with respect to
any specific Mortgage Loan, the Indenture Trustee shall not execute any endorsement or assignment or otherwise
release or transfer such title to any of the Mortgage Loans until such time as the remaining Trust Estate may be
released pursuant to Section 8.05(b). The Indenture Trustee's holding of such title shall in all respects be
subject to its fiduciary obligations to the Noteholders hereunder.
Section 3.14 Servicer as Agent and Bailee of the Indenture Trustee. Solely for purposes of perfection
under Section 9-313 or 9-314 of the UCC or other similar applicable law, rule or regulation of the state in which
such property is held by the Servicer, the Issuer and the Indenture Trustee hereby acknowledge that the Servicer
is acting as agent and bailee of the Indenture Trustee in holding amounts on deposit in the Custodial Account
pursuant to Section 3.02 of the Servicing Agreement that are allocable to the Mortgage Loans, as well as the
agent and bailee of the Indenture Trustee in holding any Related Documents released to the Servicer pursuant to
Section 3.06(c) of the Servicing Agreement, and any other items constituting a part of the Trust Estate which
from time to time come into the possession of the Servicer. It is intended that, by the Servicer's acceptance of
such agency pursuant to Section 3.02 of the Servicing Agreement, the Indenture Trustee, as a pledgee of the
Mortgage Loans, will be deemed to have possession of such Related Documents, such monies and such other items for
purposes of Section 9-313 or 9-314 of the UCC of the state in which such property is held by the Servicer.
Section 3.15 Investment Company Act. The Issuer shall not become an "investment company" or under the
"control" of an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended
(or any successor or amendatory statute), and the rules and regulations thereunder (taking into account not only
the general definition of the term "investment company" but also any available exceptions to such general
definition); provided, however, that the Issuer shall be in compliance with this Section 3.15 if it shall have
obtained an order exempting it from regulation as an "investment company" so long as it is in compliance with the
conditions imposed in such order.
Section 3.16 Issuer May Consolidate, etc.
(a) The Issuer shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the laws of the United States of
America or any state or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in form reasonably satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and to
the Certificate Paying Agent, on behalf of the Certificateholders and the performance or observance of
every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed,
all as provided herein;
(ii) immediately after giving effect to such transaction, no Event of Default shall
have occurred and be continuing;
(iii) the Enhancer shall have consented thereto and each Rating Agency shall have
notified the Issuer that such transaction will not cause a Rating Event, without taking into account the
Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered
copies thereof to the Indenture Trustee and the Enhancer) to the effect that such transaction will not
have any material adverse tax consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation or merger and such
supplemental indenture comply with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any filing required by the Exchange
Act).
(b) The Issuer shall not convey or transfer any of its properties or assets, including
those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the properties and assets
of the Issuer the conveyance or transfer of which is hereby restricted shall (A) be a United States
citizen or a Person organized and existing under the laws of the United States of America or any state,
(B) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of
and interest on all Notes and the performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as provided herein, (C) expressly
agrees by means of such supplemental indenture that all right, title and interest so conveyed or
transferred shall be subject and subordinate to the rights of Noteholders of the Notes, (D) unless
otherwise provided in such supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense arising under or related to this
Indenture and the Notes and (E) expressly agrees by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make all filings with the Commission
(and any other appropriate Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing;
(iii) the Enhancer shall have consented thereto, and each Rating Agency shall have
notified the Issuer that such transaction will not cause a Rating Event, if determined without regard to
the Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered
copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material
adverse tax consequence to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such
supplemental indenture comply with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any filing required by the Exchange
Act).
Section 3.17 Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with Section 3.16(a), the
Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect
as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to
Section 3.16(b), the Issuer shall be released from every covenant and agreement of this Indenture to be observed
or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of written notice
to the Indenture Trustee of such conveyance or transfer.
Section 3.18 No Other Business. The Issuer shall not engage in any business other than financing,
purchasing, owning and selling and managing the Mortgage Loans and the issuance of the Notes and Certificates in
the manner contemplated by this Indenture and the Basic Documents and all activities incidental thereto.
Section 3.19 No Borrowing. The Issuer shall not issue, incur, assume, guarantee or otherwise become
liable, directly or indirectly, for any indebtedness except for the Notes.
Section 3.20 Guarantees, Loans, Advances and Other Liabilities. Except as contemplated by this Indenture
or the other Basic Documents, the Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire
(or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or
make any capital contribution to, any other Person.
Section 3.21 Capital Expenditures. The Issuer shall not make any expenditure (by long-term or operating
lease or otherwise) for capital assets (either realty or personalty).
Section 3.22 Owner Trustee Not Liable for Certificates or Related Documents. The recitals contained
herein shall be taken as the statements of the Issuer, and the Owner Trustee and the Indenture Trustee assume no
responsibility for the correctness of the recitals contained herein. The Owner Trustee and the Indenture Trustee
make no representations as to the validity or sufficiency of this Indenture or any other Basic Document, of the
Certificates (other than the signatures of the Owner Trustee or the Indenture Trustee on the Certificates) or the
Notes, or of any Related Documents. The Owner Trustee and the Indenture Trustee shall at no time have any
responsibility or liability with respect to the sufficiency of the Trust Estate or its ability to generate the
payments to be distributed to Certificateholders under the Trust Agreement or the Noteholders under this
Indenture, including, the compliance by the Depositor or the Sellers with any warranty or representation made
under any Basic Document or in any related document or the accuracy of any such warranty or representation, or
any action of the Certificate Paying Agent, the Certificate Registrar or any other person taken in the name of
the Owner Trustee or the Indenture Trustee.
Section 3.23 Restricted Payments. The Issuer shall not, directly or indirectly, (i) pay any dividend or
make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, (x)
distributions to the Owner Trustee and the Certificateholders as contemplated by, and to the extent funds are
available for such purpose under, the Trust Agreement and (y) payments to the Servicer pursuant to the terms of
the Servicing Agreement. The Issuer will not, directly or indirectly, make payments to or distributions from the
Custodial Account except in accordance with this Indenture and the other Basic Documents.
Section 3.24 Notice of Events of Default. The Issuer shall give the Indenture Trustee, the Enhancer and
the Rating Agencies prompt written notice of each Event of Default hereunder and under the Trust Agreement.
Section 3.25 Further Instruments and Acts. Upon request of the Indenture Trustee, the Issuer shall
execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purposes of this Indenture.
Section 3.26 Statements to Noteholders. On each Payment Date, each of the Indenture Trustee and the
Certificate Registrar shall make available to the Depositor, the Owner Trustee, each Rating Agency, each
Noteholder and each Certificateholder, with a copy to the Enhancer, the Servicing Certificate provided to the
Indenture Trustee by the Servicer relating to such Payment Date and delivered pursuant to Section 4.01 of the
Servicing Agreement.
The Indenture Trustee will make the Servicing Certificate (and, at its option, any additional files
containing the same information in an alternative format) available each month to Securityholders and the
Enhancer, and other parties to this Indenture via the Indenture Trustee's internet website. The Indenture
Trustee's internet website shall initially be located at "xxx.xxxxxxx.xxx." Assistance in using the website can
be obtained by calling the Indenture Trustee's customer service desk at (000) 000-0000. Parties that are unable
to use the above distribution options are entitled to have a paper copy mailed to them via first class mail by
calling the customer service desk and indicating such. The Indenture Trustee shall have the right to change the
way the statement to Securityholders are distributed in order to make such distribution more convenient or more
accessible to the above parties and the Indenture Trustee shall provide timely and adequate notification to all
above parties regarding any such changes. The Indenture Trustee may require registration and acceptance of a
disclaimer in connection with providing access to its website.
Section 3.27 Determination of Note Rate. On the second LIBOR Business Day immediately preceding (i) the
Closing Date in the case of the first Interest Period and (ii) the first day of each succeeding Interest Period,
the Indenture Trustee shall determine LIBOR and the applicable Note Rate for such Interest Period and shall
inform the Issuer, the Servicer and the Depositor by means of the Indenture Trustee's online service.
Section 3.28 Payments under the Policy.
(a) (i) If the Servicing Certificate specifies a Policy Draw Amount for any Payment Date, the
Indenture Trustee shall make a draw on the Policy in an amount specified in the Servicing Certificate for such
Payment Date or, if no amount is specified, the Indenture Trustee shall make a draw on the Policy in the amount
by which the amount on deposit in the Note Payment Account is less than interest due on the Notes on such Payment
Date.
(ii) The Indenture Trustee shall deposit or cause to be deposited such Policy Draw Amount into
the Note Payment Account on such Payment Date to the extent such amount relates to clause (a) of the definition
of "Deficiency Amount" or clause (b) of the definition of "Insured Amount".
(iii) To the extent such amount relates to clause (b) of the definition of "Deficiency
Amount", the Indenture Trustee shall (i) during the Revolving Period, deposit such amount into the Funding Account
as Principal Collections and (ii) during the Amortization Periods, deposit such amount into the Note Payment
Account.
(b) The Indenture Trustee shall submit, if a Policy Draw Amount is specified in any statement
to Securityholders prepared pursuant to Section 4.01 of the Servicing Agreement, the Notice (in the form attached
as Exhibit A to the Policy) to the Enhancer no later than 12:00 noon, New York City time, on the second (2nd)
Business Day prior to the applicable Payment Date.
Section 3.29 Replacement/Additional Enhancement. The Issuer (or the Servicer on its behalf) may, at its
expense, in accordance with and upon satisfaction of the conditions set forth herein, but shall not be required
to, obtain a surety bond, letter of credit, guaranty or reserve account as a Permitted Investment for amounts on
deposit in the Capitalized Interest Account, or may arrange for any other form of additional credit enhancement;
provided, that after prior notice thereto, no Rating Agency shall have informed the Issuer that a Rating Event
would occur as a result thereof (without taking the Policy into account); and provided further, that the issuer
of any such instrument or facility and the timing and mechanism for drawing on such additional enhancement shall
be acceptable to the Indenture Trustee and the Enhancer. It shall be a condition to procurement of any such
additional credit enhancement that there be delivered to the Indenture Trustee and the Enhancer (a) an Opinion of
Counsel, acceptable in form to the Indenture Trustee and the Enhancer, from counsel to the provider of such
additional credit enhancement with respect to the enforceability thereof and such other matters as the Indenture
Trustee or the Enhancer may require and (b) an Opinion of Counsel to the effect that the procurement of such
additional enhancement would not (i) adversely affect in any material respect the tax status of the Notes or the
Certificates or (ii) cause the Issuer to be taxable as an association (or a publicly traded partnership) for
federal income tax purposes or to be classified as a taxable mortgage pool within the meaning of Section 7701(i)
of the Code.
Section 3.30 Additional Representations of Issuer.
The Issuer hereby represents and warrants to the Indenture Trustee that as of the Closing Date:
(a) This Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in
the Loan Agreements in favor of the Indenture Trustee, which security interest is prior to all
other Liens (except as expressly permitted otherwise in this Indenture), and is enforceable as such
as against creditors of and purchasers from the Issuer.
(b) The Loan Agreements constitute "instruments" within the meaning of the applicable UCC.
(c) The Issuer owns and has good and marketable title to the Loan Agreements free and clear of any Lien of
any Person.
(d) The original executed copy of each Loan Agreement (except for any Loan Agreement with respect to which a
Lost Note Affidavit has been delivered to the Custodian) has been delivered to the Custodian.
(e) The Issuer has received a written acknowledgment from the Custodian that the Custodian is acting solely
as agent of the Indenture Trustee for the benefit of the Noteholders.
(f) Other than the security interest granted to the Indenture Trustee pursuant to this Indenture, the
Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any
of the Loan Agreements. The Issuer has not authorized the filing of and is not aware of any
financing statements against the Issuer that include a description of collateral covering the Loan
Agreements other than any financing statement relating to the security interest granted to the
Indenture Trustee hereunder or any security interest that has been terminated. The Issuer is not
aware of any judgment or tax lien filings against the Issuer.
(g) None of the Loan Agreements has any marks or notations indicating that they have been pledged, assigned
or otherwise conveyed to any Person other than the Indenture Trustee, except for (i) any
endorsements that are part of a complete chain of endorsements from the originator of the Loan
Agreement to the Indenture Trustee, and (ii) any marks or notations pertaining to Liens that have
been terminated or released.
(h) None of the provisions of this Section 3.30 shall be waived without the prior written confirmation from
Standard & Poor's that such waiver shall not result in a reduction or withdrawal of the
then-current rating of the Notes.
ARTICLE IV
The Notes; Satisfaction And Discharge Of Indenture
Section 4.01 The Notes; Variable Pay Revolving Notes
(a) The Term Notes shall be registered in the name of a nominee designated by the Depository.
Beneficial Owners will hold interests in the Term Notes through the book-entry facilities of the Depository in
minimum initial Term Note Balances of $25,000 and integral multiples of $1,000 in excess thereof.
The Indenture Trustee may for all purposes (including the making of payments due on the Notes) deal with
the Depository as the authorized representative of the Beneficial Owners with respect to the Term Notes for the
purposes of exercising the rights of Noteholders of Term Notes hereunder. Except as provided in the next
succeeding paragraph of this Section 4.01, the rights of Beneficial Owners with respect to the Term Notes shall
be limited to those established by law and agreements between such Beneficial Owners and the Depository and
Depository Participants. Except as provided in Section 4.08, Beneficial Owners shall not be entitled to
definitive certificates for the Term Notes as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Noteholder of the Term Notes shall not be deemed inconsistent if they are
made with respect to different Beneficial Owners. The Indenture Trustee may establish a reasonable record date
in connection with solicitations of consents from or voting by Noteholders and give notice to the Depository of
such record date. Without the consent of the Issuer and the Indenture Trustee, no Term Note may be transferred
by the Depository except to a successor Depository that agrees to hold such Note for the account of the
Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as Depository, the Indenture Trustee, at
the request of the Servicer and with the approval of the Issuer may appoint a successor Depository. If no
successor Depository has been appointed within 30 days of the effective date of the Depository's resignation or
removal, each Beneficial Owner shall be entitled to certificates representing the Notes it beneficially owns in
the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer by the Owner Trustee, not in its
individual capacity but solely as Owner Trustee and upon Issuer Order, authenticated by the Note Registrar and
delivered by the Indenture Trustee to or upon the order of the Issuer.
(b) The Variable Pay Revolving Notes issued on the Closing Date shall be issued in definitive
form and shall bear the designation "Class A-1 VPRN-1," "Class A-2 VPRN-1" and "Class A-3 VPRN-1," as
applicable, and each new Class of Variable Pay Revolving Notes will be issued in definitive form and shall bear
sequential numerical designations in the order of their issuance.
Section 4.02 Registration of and Limitations on Transfer and Exchange of Notes; Appointment of
Certificate Registrar. The Issuer shall cause to be kept at the Indenture Trustee's [_____________] a Note
Register in which, subject to such reasonable regulations as it may prescribe, the Note Registrar shall provide
for the registration of Notes and of transfers and exchanges of Notes as herein provided. The Issuer hereby
appoints the Indenture Trustee as the initial Note Registrar.
Subject to the restrictions and limitations set forth below, upon surrender for registration of transfer
of any Note at the [_____________], the Issuer shall execute, and the Note Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more new Notes in authorized initial
Note Balances evidencing the same aggregate Percentage Interests.
No transfer, sale, pledge or other disposition of a Variable Pay Revolving Note shall be made unless
such transfer, sale, pledge or other disposition is exempt from the registration requirements of the Securities
Act, and any applicable state securities laws or is made in accordance with said Act and laws. In the event of
any such transfer, the Indenture Trustee or the Issuer shall require the transferee to either (i) execute an
investment letter in substantially the form attached hereto as Exhibit B (or in such form and substance
reasonably satisfactory to the Indenture Trustee and the Issuer) which investment letters shall not be an expense
of the Owner Trustee, the Indenture Trustee, the Servicer, the Depositor or the Issuer and which investment
letter states that, among other things, such transferee (a) is a "qualified institutional buyer" as defined under
Rule 144A, acting for its own account or the accounts of other "qualified institutional buyers" as defined under
Rule 144A, and (b) is aware that the proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act, provided by Rule 144A or (ii) deliver to the Indenture Trustee and the
Issuer (a) an investment letter executed by the transferee in substantially the form of Exhibit D, (b) a
representation letter executed by the transferor in substantially the form of Exhibit E and (c) an opinion of
counsel to the effect that such transfer is not required to be registered under the Securities Act and the facts
surrounding the transfer do not create a security that is required to be registered under the Securities Act, in
each case, acceptable to and in form and substance reasonably satisfactory to the Issuer and the Indenture
Trustee, which opinion and letters shall not be an expense of the Owner Trustee, the Indenture Trustee, the
Servicer, the Depositor or the Issuer. The Noteholder of a Variable Pay Revolving Note desiring to effect such
transfer shall, and does hereby agree to, indemnify the Indenture Trustee, the Enhancer and the Issuer against
any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and
state laws. In addition, no transfer of any Variable Pay Revolving Note or any interest therein shall be made to
any employee benefit plan or certain other retirement plans and arrangements, including individual retirement
accounts and annuities, Xxxxx plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested, that are subject to ERISA or
Section 4975 of the Code (collectively, a "Plan"), any Person acting, directly or indirectly, on behalf of any
such Plan or any Person acquiring such Variable Pay Revolving Note with "plan assets" of a Plan within the
meaning of the Department of Labor Regulations Section 2510.3-101 ("Plan Assets") unless the Indenture Trustee
and the Servicer are provided with an Opinion of Counsel that establishes to the satisfaction of the Indenture
Trustee and the Servicer that the purchase of such Variable Pay Revolving Note is permissible under applicable
law, will not constitute or result in any prohibited transaction under ERISA or Section 4975 of the Code and will
not subject the Indenture Trustee or the Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those undertaken in this Indenture, which
Opinion of Counsel shall not be an expense of the Indenture Trustee or the Servicer. In lieu of such Opinion of
Counsel, any Person acquiring such Variable Pay Revolving Note shall provide a certification in the form of
Exhibit G to the Trust Agreement, which the Indenture Trustee and the Servicer may rely upon without further
inquiry or investigation. Neither an Opinion of Counsel nor a certification will be required in connection with
the initial transfer of any such Variable Pay Revolving Note by the Owner Trust to the Depositor or any transfer
from the Depositor to an Affiliate of the Depositor (in which case, the Depositor or any such Affiliate shall be
deemed to have represented that the Depositor or such Affiliate, as applicable, is not a Plan or a Person
investing Plan Assets of any Plan) and the Indenture Trustee shall be entitled to conclusively rely upon a
representation (which shall be a written representation) from the Depositor of the status of such transferee as
an Affiliate of the Depositor.
Until the earlier of (i) 10 days after the Targeted Final Payment Date for the related Class of Term
Notes or (ii) the occurrence of an Early Amortization Event, no Variable Pay Revolving Note issued after the
Closing Date, either at issuance or upon sale transfer, pledge or other disposition, will be registered in the
name of any Holder unless such Holder shall have established, to the satisfaction of the Indenture Trustee and
the Depositor, that such Holder is either an Initial Purchaser, any Affiliate thereof or a broker-dealer
acquiring a Variable Pay Revolving Note for resale or has the Required Ratings (or its obligations are guaranteed
by an entity that has the Required Ratings) or such Holder shall have been approved by Noteholders representing
51% of the aggregate Note Balance of each Class of Term Notes and the Enhancer (provided that no Enhancer Default
or Insolvency Event with respect to the Enhancer has occurred and is continuing), which approval of the Enhancer
shall not be unreasonably withheld; provided, that if the Enhancer shall not have notified the Depositor or the
Indenture Trustee within five (5) days of receiving notice of a proposed transferee, that the Enhancer does not
approve such Holder, such approval shall be deemed to have been made.
Subject to the foregoing, at the option of the Noteholders, Notes may be exchanged for other Notes of
like tenor, in each case in authorized initial Note Balances evidencing the same aggregate Percentage Interests,
upon surrender of the Notes to be exchanged at the [_____________] of the Note Registrar. Whenever any Notes are
so surrendered for exchange, the Issuer shall execute and the Note Registrar shall authenticate and deliver the
Notes which the Noteholder making the exchange is entitled to receive. Each Note presented or surrendered for
registration of transfer or exchange shall (if so required by the Note Registrar) be duly endorsed by, or be
accompanied by a written instrument of transfer in form reasonably satisfactory to the Note Registrar duly
executed by, the Noteholder thereof or his attorney duly authorized in writing with such signature guaranteed by
a commercial bank or trust company located or having a correspondent located in The City of New York. Notes
delivered upon any such transfer or exchange will evidence the same obligations, and will be entitled to the same
rights and privileges, as the Notes surrendered.
No service charge shall be imposed for any registration of transfer or exchange of Notes, but the Note
Registrar shall require payment of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall be cancelled by the Note Registrar
and delivered to the Indenture Trustee for subsequent destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate Registrar to keep at its
[______________] a Certificate Register pursuant to Section 3.09 of the Trust Agreement in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges thereof pursuant to Section 3.05 of the Trust Agreement. The
Indenture Trustee hereby accepts such appointment.
Each purchaser of a Note, by its acceptance of the Note, shall be deemed to have represented that the
acquisition of such Note by the purchaser does not constitute or give rise to a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, for which no statutory, regulatory or administrative exemption
is available.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated Note is surrendered to
the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be
required by it to hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the
Issuer, the Note Registrar or the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8 405 of the UCC are met, the Issuer shall execute, and upon its
request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same class; provided, however, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven days shall be due and
payable, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable without surrender thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of the
original Note in lieu of which such replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the
Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be
entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the Issuer may require the payment by
the Noteholder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee)
connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in replacement of any mutilated, destroyed,
lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not
the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued
hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04 Persons Deemed Owners. Prior to due presentment for registration of transfer of any Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and none of the Issuer, the Indenture Trustee or any agent of the Issuer or
the Indenture Trustee shall be affected by notice to the contrary.
Section 4.05 Cancellation. All Notes surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Issuer
may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided
in this Section 4.05, except as expressly permitted by this Indenture. All cancelled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at
the time unless the Issuer shall direct by an Issuer Request that they be destroyed or returned to it; provided,
however, that such Issuer Request is timely and the Notes have not been previously disposed of by the Indenture
Trustee.
Section 4.06 Book-Entry Notes. Each Class of Term Notes, upon original issuance, shall be issued in the
form of typewritten Notes representing the Book-Entry Notes, to be delivered to The Depository Trust Company, the
initial Depository, by, or on behalf of, the Issuer. Such Term Notes shall initially be registered on the Note
Register in the name of Cede & Co., the nominee of the initial Depository, and no Beneficial Owner shall receive
a Definitive Note representing such Beneficial Owner's interest in such Note, except as provided in
Section 4.08. Unless and until definitive, fully registered Term Notes (such Term Notes, together with the
Variable Pay Revolving Notes, the "Definitive Notes") have been issued to Beneficial Owners pursuant to Section
4.08:
(a) the provisions of this Section 4.06 shall be in full force and effect;
(b) the Note Registrar and the Indenture Trustee shall be entitled to deal with the Depository
for all purposes of this Indenture (including the payment of principal of and interest on the Notes and the
giving of instructions or directions hereunder) as the sole holder of the Term Notes, and shall have no
obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 4.06 conflict with any other provisions
of this Indenture, the provisions of this Section 4.06 shall control;
(d) the rights of Beneficial Owners shall be exercised only through the Depository and shall be
limited to those established by law and agreements between such Owners of Term Notes and the Depository or the
Depository Participants. Unless and until Definitive Notes are issued pursuant to Section 4.08, the initial
Depository will make book-entry transfers among the Depository Participants and receive and transmit payments of
principal of and interest on the Notes to such Depository Participants; and
(e) whenever this Indenture requires or permits actions to be taken based upon instructions or
directions of Noteholders of Term Notes evidencing a specified percentage of the Note Balances of the Term Notes,
the Depository shall be deemed to represent such percentage only to the extent that it has received instructions
to such effect from Beneficial Owners or Depository Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Term Notes and has delivered such instructions to the
Indenture Trustee.
Section 4.07 Notices to Depository. Whenever a notice or other communication to the Noteholders of the
Term Notes is required under this Indenture, unless and until Definitive Term Notes shall have been issued to
Beneficial Owners pursuant to Section 4.08, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders of the Term Notes to the Depository, and shall have no obligation to
the Beneficial Owners.
Section 4.08 Definitive Notes. Each Variable Pay Revolving Note shall be issued as a Definitive Note.
If (i) the Indenture Trustee determines that the Depository is no longer willing or able to properly discharge
its responsibilities with respect to the Term Notes and the Indenture Trustee is unable to locate a qualified
successor, (ii) the Depositor, with the prior consent of the Beneficial Owners, notifies the Indenture Trustee
and the Depository that it has elected to terminate the book-entry system through the Depository, or (iii) after
the occurrence of an Event of Default, Beneficial Owners of Term Notes representing beneficial interests
aggregating at least a majority of the aggregate Term Note Balance of the Term Notes advise the Depository in
writing that the continuation of a book-entry system through the Depository is no longer in the best interests of
the Beneficial Owners, then the Depository shall notify all Beneficial Owners and the Indenture Trustee of the
occurrence of any such event and of the availability of Definitive Notes to Beneficial Owners requesting the
same. Upon surrender to the Indenture Trustee of the typewritten Term Notes representing the Book-Entry Notes by
the Depository (or Percentage Interest of the Book-Entry Notes being transferred pursuant to clause (iii) above),
accompanied by registration instructions, the Issuer shall execute and the Indenture Trustee shall authenticate
the Definitive Notes in accordance with the instructions of the Depository. None of the Issuer, the Note
Registrar or the Indenture Trustee shall be liable for any delay in delivery of such instructions, and each may
conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Indenture Trustee shall recognize the Noteholders of the Definitive Notes as Noteholders.
Section 4.09 Tax Treatment. The Issuer has entered into this Indenture, and the Notes will be issued,
with the intention that, for federal, state and local income, single business and franchise tax purposes, the
Notes will be treated as indebtedness for purposes of such taxes. The Issuer, by entering into this Indenture,
and each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its acceptance of an interest in
the applicable Book-Entry Note), agree to treat the Notes for federal, state and local income, single business
and franchise tax purposes as indebtedness for purposes of such taxes.
Section 4.10 Satisfaction and Discharge of Indenture. This Indenture shall cease to be of further
effect with respect to the Notes except as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of
principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09, 3.16, 3.18 and 3.19, (v) the
rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture
Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.11) and (vi) the rights
of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes,
when:
(A) either:
(1) all Notes theretofore authenticated and delivered (other than (i) Notes
that have been destroyed, lost or stolen and that have been replaced or paid as
provided in Section 4.03 and (ii) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Issuer and thereafter repaid
to the Issuer or discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation:
a) have become due and payable;
b) will become due and payable at the Final Payment Date within one
year; or
c) have been declared immediately due and payable pursuant to
Section 5.02.
and the Issuer has irrevocably deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes and Certificates then Outstanding
not theretofore delivered to the Indenture Trustee for cancellation when due on the Final Payment Date,
as evidenced to the Indenture Trustee by an accountant's letter or an Officer's Certificate of the
Issuer;
(B) the Issuer has paid or caused to be paid all other sums payable hereunder and
under the Insurance Agreement by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee and the Enhancer an
Officer's Certificate and an Opinion of Counsel, each meeting the applicable requirements of
Section 10.01 and each stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied with and, if the Opinion of
Counsel relates to a deposit made in connection with Section 4.10(A)(2)b. above, such opinion
shall further be to the effect that such deposit will not have any material adverse tax
consequences to the Issuer, any Noteholders or any Certificateholders.
Section 4.11 Application of Trust Money. All monies deposited with the Indenture Trustee pursuant to
Section 4.10 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment, either directly or through any Paying Agent or Certificate Paying Agent, as the
Indenture Trustee may determine, to the Securityholders of Securities, of all sums due and to become due thereon
for principal and interest; but such monies need not be segregated from other funds except to the extent required
herein or required by law.
Section 4.12 Subrogation and Cooperation. The Issuer and the Indenture Trustee acknowledge that (i) to
the extent the Enhancer makes payments under the Policy on account of principal of or interest on the Notes, the
Enhancer will be fully subrogated to the rights the Noteholders to receive such principal and interest, and
(ii) the Enhancer shall be paid such principal and interest only from the sources and in the manner provided
herein and in the Insurance Agreement for the payment of such principal and interest.
The Indenture Trustee shall cooperate in all respects with any reasonable request by the Enhancer for
action to preserve or enforce the Enhancer's rights or interest under this Indenture or the Insurance Agreement,
consistent with this Indenture and without limiting the rights of the Noteholders as otherwise set forth in the
Indenture, including upon the occurrence and continuance of a default under the Insurance Agreement, a request
(which request shall be in writing) to take any one or more of the following actions:
(i) institute Proceedings for the collection of all amounts then payable on the
Notes or under this Indenture in respect to the Notes and all amounts payable under the Insurance
Agreement and to enforce any judgment obtained and collect from the Issuer monies adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or interest therein, at
one or more public or private Sales (as defined in Section 5.15 hereof) called and conducted in any
manner permitted by law;
(iii) file or record all assignments that have not previously been recorded;
(iv) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the UCC and take any other
appropriate action to protect and enforce the rights and remedies of the Enhancer hereunder.
Following the payment in full of the Notes, the Enhancer shall continue to have all rights and
privileges provided to it under this Section and in all other provisions of this Indenture, until all amounts
owing to the Enhancer have been paid in full.
Section 4.13 Repayment of Monies Held by Paying Agent. In connection with the satisfaction and
discharge of this Indenture with respect to the Notes, all monies then held by any Paying Agent (other than the
Indenture Trustee) under the provisions of this Indenture with respect to such Notes shall, upon demand of the
Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.05; and thereupon, such
Paying Agent shall be released from all further liability with respect to such monies.
Section 4.14 Temporary Notes. Pending the preparation of any Definitive Notes, the Issuer may execute
and upon its written direction, the Indenture Trustee may authenticate and make available for delivery, temporary
Notes that are printed, lithographed, typewritten, photocopied or otherwise produced, in any denomination,
substantially of the tenor of the Definitive Notes in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers executing such Notes may determine, as
evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to be prepared without
unreasonable delay. After the preparation of the Definitive Notes, the temporary Notes shall be exchangeable for
Definitive Notes upon surrender of the temporary Notes at the office or agency of the Indenture Trustee, without
charge to the Noteholder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and make available for delivery, in exchange therefor,
Definitive Notes of authorized denominations and of like tenor and aggregate principal amount. Until so
exchanged, such temporary Notes shall in all respects be entitled to the same benefits under this Indenture as
Definitive Notes.
ARTICLE V
Default And Remedies
Section 5.01 Events of Default. The Issuer shall deliver to the Indenture Trustee and the Enhancer,
within five days after learning of the occurrence of any event that with the giving of notice and the lapse of
time would become an Event of Default under clause (c) of the definition of "Event of Default" written notice in
the form of an Officer's Certificate of its status and what action the Issuer is taking or proposes to take with
respect thereto.
Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an Event of Default shall occur and
be continuing, then and in every such case the Indenture Trustee, acting at the direction of the Enhancer or the
Noteholders of Notes representing not less than a majority of the aggregate Note Balance of the Notes, with the
written consent of the Enhancer (so long as no Enhancer Default exists), may declare the Notes to be immediately
due and payable by a notice in writing to the Issuer (and to the Indenture Trustee if given by Noteholders); and
upon any such declaration, the unpaid principal amount of the Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity with respect to an Event of Default has
been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee
as hereinafter provided in this Article V, the Enhancer or the Noteholders of Notes representing a majority of
the aggregate Note Balance of the Notes, with the written consent of the Enhancer, by written notice to the
Issuer and the Indenture Trustee, may in writing waive the related Event of Default and rescind and annul such
declaration and its consequences if:
(a) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:
(i) all payments of principal of and interest on the Notes and all other amounts
that would then be due hereunder or upon the Notes if the Event of Default giving rise to such
acceleration had not occurred;
(ii) all sums paid or advanced by the Indenture Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents
and counsel; and
(iii) all Events of Default, other than the nonpayment of the principal of the Notes
that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12;
provided that no such waiver shall be effective following an Early Amortization Event if the requisite consents
of the Noteholders and the Enhancer have been obtained with respect to a sale or other liquidation of the Trust
Estate pursuant to Section 5.04(a).
No such rescission shall affect any subsequent default or impair any right consequent thereto.
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a) The Issuer covenants that if default in the payment of (i) any interest on any Note when
the same becomes due and payable, and such default continues for a period of five days, or (ii) the principal of
or any installment of the principal of any Note when the same becomes due and payable, the Issuer shall, upon
demand of the Indenture Trustee, pay to it, for the benefit of the Noteholders, the entire amount then due and
payable on the Notes for principal and interest, with interest on the overdue principal, and in addition thereto
such further amount as shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Indenture
Trustee, in its own name and as trustee of an express trust, subject to the provisions of Section 10.17 hereof,
may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to
judgment or final decree, and may enforce the same against the Issuer or other obligor on the Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor on the Notes, wherever situated,
the monies adjudged or decreed to be payable.
(c) If an Event of Default shall occur and be continuing, the Indenture Trustee, subject to the
provisions of Section 10.17 hereof, may, as more particularly provided in Section 5.04, in its discretion proceed
to protect and enforce its rights and the rights of the Noteholders by such appropriate Proceedings as the
Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this
Indenture or by law.
(d) If there shall be pending, relative to the Issuer or any other obligor on the Notes or any
Person having or claiming an ownership interest in the Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or if a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or if
there shall be any other comparable judicial Proceedings relative to the Issuer or other any other obligor on the
Notes, or relative to the creditors or property of the Issuer or such other obligor, then the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise, and irrespective of whether the Indenture Trustee shall have made any demand pursuant
to the provisions of this Section, shall be entitled and empowered, by intervention in such Proceedings or
otherwise:
(i) to file and prove a claim or claims for the entire amount of principal and
interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except
as a result of negligence, willful misconduct or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on behalf of the
Noteholders in any election of a trustee, a standby trustee or Person performing similar functions in
any such Proceedings;
(iii) to collect and receive any monies or other property payable or deliverable on
any such claims and to distribute all amounts received with respect to the claims of the Noteholders and
of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Indenture Trustee or the Noteholders allowed in any
judicial proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby
authorized by each of such Noteholders to make payments to the Indenture Trustee, and, in the event the Indenture
Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence, willful misconduct or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or
consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Noteholder thereof or to authorize the
Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid,
to vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or under any of the
Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production
thereof in any trial or other Proceedings relative thereto, and any such action or proceedings instituted by the
Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment,
subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of
the Term Notes and the Variable Pay Revolving Notes, as applicable.
(g) In any Proceedings to which the Indenture Trustee shall be a party (including any
Proceedings involving the interpretation of any provision of this Indenture), the Indenture Trustee shall be held
to represent all Noteholders, and it shall not be necessary to make any Noteholder a party to any such
Proceedings.
Section 5.04 Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing, then the Indenture Trustee,
subject to the provisions of Section 10.17 hereof, with the written consent of the Enhancer may, or, at the
written direction of the Enhancer, shall, do one or more of the following, in each case subject to Section 5.05:
(i) institute Proceedings in its own name and as trustee of an express trust for
the collection of all amounts then payable on the Notes or under this Indenture with respect thereto,
whether by declaration or otherwise, and all amounts payable under the Insurance Agreement, enforce any
judgment obtained, and collect from the Issuer and any other obligor on the Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take any other
appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the
Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or interest therein, at
one or more public or private sales called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise liquidate the Trust Estate following an
Event of Default, unless (A) the Indenture Trustee obtains the consent of the Enhancer, which consent will not be
unreasonably withheld, and the Noteholders of 100% of the aggregate Note Balance of the Notes, (B) the proceeds
of such sale or liquidation distributable to Noteholders are sufficient to discharge in full all amounts then due
and unpaid upon the Notes for principal and interest and to reimburse the Enhancer for any amounts drawn under
the Policy and any other amounts due the Enhancer under the Insurance Agreement or (C) the Indenture Trustee
determines that the Mortgage Loans will not continue to provide sufficient funds for the payment of principal of
and interest on the Notes as they would have become due if the Notes had not been declared due and payable, and
the Indenture Trustee obtains the consent of the Enhancer, which consent will not be unreasonably withheld, and
the Noteholders of 66 2/3% of the aggregate Note Balance of the Notes. In determining such sufficiency or
insufficiency with respect to clause (B) and (C) above, the Indenture Trustee may, but need not, obtain and rely,
and shall be protected in relying in good faith, upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of
the Trust Estate for such purpose. Notwithstanding the foregoing, provided that a Servicing Default shall not
have occurred, any Sale (as defined in Section 5.15 hereof) of the Trust Estate shall be made subject to the
continued servicing of the Mortgage Loans by the Servicer as provided in the Servicing Agreement. Notwithstanding
any sale of the Mortgage Loans pursuant to this Section 5.04(a), the Indenture Trustee shall, for so long as any
principal or accrued interest on the Notes remains unpaid, continue to act as Indenture Trustee hereunder and to
draw amounts payable under the Policy in accordance with its terms.
(b) If the Indenture Trustee collects any money or property pursuant to this Article V, it
shall pay out such money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to the Noteholders for amounts due and unpaid on the related Notes for interest,
including accrued and unpaid interest on the Notes for any prior Payment Date, ratably, without
preference or priority of any kind, according to the amounts due and payable on such Notes for
interest from amounts available in the Trust Estate for such Noteholders, but excluding any
Interest Shortfalls;
THIRD: to the Noteholders for amounts due and unpaid on the related Notes for principal,
ratably, without preference or priority of any kind, according to the amounts due and payable
on such Notes for principal, from amounts available in the Trust Estate for such Noteholders,
until the respective Note Balances of such Notes have been reduced to zero;
FOURTH: to the payment of all amounts due and owing the Enhancer under the Insurance Agreement;
FIFTH: to the Noteholders for amounts due and unpaid on the related Notes for Interest
Shortfalls, if any, including any unpaid Interest Shortfalls on the Notes for any prior Payment
Date, ratably, without preference or priority of any kind, according to such amounts due and
payable from amounts available in the Trust Estate for such Noteholders;
SIXTH: to the Certificate Paying Agent for amounts due under Article VIII of the Trust
Agreement; and
SEVENTH: to the payment of the remainder, if any, to the Issuer or any other person legally
entitled thereto.
The Indenture Trustee may fix a record date and payment date for any payment to Noteholders pursuant to
this Section 5.04. At least 15 days before such record date, the Indenture Trustee shall mail to each Noteholder
a notice that states the record date, the payment date and the amount to be paid.
Section 5.05 Optional Preservation of the Trust Estate. If the Notes have been declared due and payable
under Section 5.02 following an Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not (but shall at the written direction of the
Enhancer), elect to take and maintain possession of the Trust Estate; provided that no such waiver shall be
effective following an Early Amortization Event if the requisite consents of the Noteholders and the Enhancer
have been obtained with respect to a sale or other liquidation of the Trust Estate pursuant to Section 5.04(a).
It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the
payment of principal of and interest on the Notes and other obligations of the Issuer including payment to the
Enhancer, and the Indenture Trustee shall take such desire into account when determining whether or not to take
and maintain possession of the Trust Estate. In determining whether to take and maintain possession of the Trust
Estate, the Indenture Trustee may, but need not, obtain and rely, and shall be protected in relying in good
faith, upon an opinion of an Independent investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.
Section 5.06 Limitation of Suits. No Noteholder shall have any right to institute any Proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for
any other remedy hereunder, unless and subject to the provisions of Section 10.17 hereof:
(a) such Noteholder shall have previously given written notice to the Indenture Trustee of a
continuing Event of Default;
(b) the Noteholders of not less than 25% of the aggregate Note Balance of the Notes shall have
made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in
its own name as Indenture Trustee hereunder;
(c) such Noteholder or Noteholders shall have offered the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred by it in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute such Proceedings; and
(e) no direction inconsistent with such written request shall have been given to the Indenture
Trustee during such 60-day period by the Noteholders of a majority of the aggregate Note Balance of the Notes or
by the Enhancer.
It is understood and intended that no Noteholder shall have any right in any manner whatever by virtue
of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any
other Noteholders or to obtain or to seek to obtain priority or preference over any other Noteholders or to
enforce any right under this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from
two or more groups of Noteholders, each representing less than a majority of the aggregate Note Balance of the
Notes, the Indenture Trustee shall act at the direction of the group of Noteholders with the greater Note
Balance. In the event that the Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Noteholders representing the same Note Balance, then the Indenture Trustee
in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of
this Indenture.
Section 5.07 Unconditional Rights of Noteholders to Receive Principal and Interest. Subject to the
provisions of this Indenture, the Noteholder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without the consent of such Noteholder.
Section 5.08 Restoration of Rights and Remedies. If the Indenture Trustee or any Noteholder has
instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and the Noteholders shall, subject to
any determination in such Proceeding, be restored severally and respectively to their former positions hereunder,
and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no
such Proceeding had been instituted.
Section 5.09 Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to
the Indenture Trustee, the Enhancer or the Noteholders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law, in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10 Delay or Omission Not a Waiver. No delay or omission of the Indenture Trustee, the
Enhancer or any Noteholder to exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right
and remedy given by this Article V or by law to the Indenture Trustee or to the Noteholders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the
case may be.
Section 5.11 Control by Enhancer or Noteholders. The Enhancer (so long as no Enhancer Default exists)
or the Noteholders of a majority of the aggregate Note Balance of Notes with the consent of the Enhancer, shall
have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee,
provided that:
(a) such direction shall not be in conflict with any rule of law or with this Indenture;
(b) subject to the express terms of Section 5.04, any direction to the Indenture Trustee to
sell or liquidate the Trust Estate shall be by the Enhancer (so long as no Enhancer Default exists) or by the
Noteholders of Notes representing not less than 100% of the aggregate Note Balance of the Notes with the consent
of the Enhancer;
(c) if the conditions set forth in Section 5.05 shall have been satisfied and the Indenture
Trustee elects to retain the Trust Estate pursuant to such Section, then any direction to the Indenture Trustee
by Noteholders of Notes representing less than 100% of the aggregate Note Balance of the Notes to sell or
liquidate the Trust Estate shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that
is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to Section 6.01, the Indenture
Trustee need not take any action that it determines (in its sole discretion) might involve it in liability or
might materially adversely affect the rights of any Noteholders not consenting to such action, unless the Trustee
has received satisfactory indemnity from the Enhancer or a Noteholder.
Section 5.12 Waiver of Past Defaults. Prior to the declaration of the acceleration of the maturity of
the Notes as provided in Section 5.02, the Enhancer (so long as no Enhancer Default exists) or the Noteholders
of not less than a majority of the aggregate Note Balance of the Notes, with the consent of the Enhancer, may
waive any past Event of Default and its consequences, except an Event of Default (a) with respect to payment of
principal of or interest on any of the Notes or (b) in respect of a covenant or provision hereof that cannot be
modified or amended without the consent of the Noteholder of each Note. In the case of any such waiver, the
Issuer, the Indenture Trustee and the Noteholders shall be restored to their respective former positions and
rights hereunder; but no such waiver shall extend to any subsequent or other Event of Default or impair any right
consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be deemed to have been cured and not
to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereto.
Section 5.13 Undertaking for Costs. All parties to this Indenture agree, and each Noteholder by such
Noteholder's acceptance of the related Note shall be deemed to have agreed, that any court may in its discretion
require, in any Proceeding for the enforcement of any right or remedy under this Indenture, or in any Proceeding
against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by
any party litigant in such Proceeding of an undertaking to pay the costs of such Proceeding, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant
in such Proceeding, having due regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 5.13 shall not apply to (a) any Proceeding instituted by the
Indenture Trustee, (b) any Proceeding instituted by any Noteholder, or group of Noteholders, in each case holding
in the aggregate more than 10% of the aggregate Note Balance of the Notes or (c) any Proceeding instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective
due dates expressed in such Note and in this Indenture.
Section 5.14 Waiver of Stay or Extension Laws. The Issuer covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit
or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not hinder,
delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
Section 5.15 Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a "Sale") of any portion of the Trust
Estate pursuant to Section 5.04 is expressly subject to the provisions of Section 5.05 and this Section 5.15.
The power to effect any such Sale shall not be exhausted by any one or more Sales as to any portion of the Trust
Estate remaining unsold, but shall continue unimpaired until the entire Trust Estate shall have been sold or all
amounts payable on the Notes and under this Indenture and under the Insurance Agreement shall have been paid.
The Indenture Trustee may from time to time postpone any public Sale by public announcement made at the time and
place of such Sale. The Indenture Trustee hereby expressly waives its right to any amount fixed by law as
compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust Estate, or any portion
thereof, unless:
(i) the Noteholders of all Notes and the Enhancer direct the Indenture Trustee to
make such Sale in accordance with the provisions of Section 5.04,
(ii) the proceeds of such Sale would be not less than the entire amount that would
be payable to the Noteholders under the Notes, the Certificateholders under the Certificates and the
Enhancer in respect of amounts drawn under the Policy and any other amounts due the Enhancer under the
Insurance Agreement, in full payment thereof in accordance with Section 5.02, on the Payment Date next
succeeding the date of such Sale, or
(iii) the Indenture Trustee determines, in its sole discretion, that the conditions
for retention of the Trust Estate set forth in Section 5.05 cannot be satisfied (in making any such
determination, the Indenture Trustee may rely and shall be protected in relying in good faith upon an
opinion of an Independent investment banking firm obtained and delivered as provided in Section 5.05),
and the Enhancer consents to such Sale (which consent shall not be unreasonably withheld), and the
Noteholders of Notes representing at least 66 2/3% of the aggregate Note Balance of the Notes consent to
such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private Sale shall not be
deemed a Sale or other disposition thereof for purposes of this Section 5.15(b).
(c) Unless the Noteholders and the Enhancer shall have otherwise consented or directed the
Indenture Trustee, at any public Sale of all or any portion of the Trust Estate at which a minimum bid equal to
or greater than the amount described in paragraph (ii) of Section 5.15(b) has not been established by the
Indenture Trustee and no Person bids an amount equal to or greater than such amount, then the Indenture Trustee
shall bid an amount at least $1.00 more than the highest other bid, which bid shall be subject to the provisions
of Section 5.15(d)(ii) herein.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(i) any Noteholder may bid for and, with the consent of the Enhancer, purchase the
property offered for sale, and upon compliance with the terms of sale may hold, retain and possess and
dispose of such property, without further accountability, and may, in paying the purchase money
therefor, deliver any Notes or claims for interest thereon in lieu of cash up to the amount which shall,
upon distribution of the net proceeds of such sale, be payable thereon, and such Notes, in case the
amounts so payable thereon shall be less than the amount due thereon, shall be returned to the
Noteholders thereof after being appropriately stamped to show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the property offered for Sale in
connection with any Sale thereof and, subject to any requirements of, and to the extent permitted by,
applicable law in connection therewith, may purchase all or any portion of the Trust Estate in a private
sale. In lieu of paying cash therefor, the Indenture Trustee may make settlement for the purchase price
by crediting the gross Sale price against the sum of (A) the amount that would be distributable to the
Noteholders and the Certificateholders and amounts owing to the Enhancer as a result of such Sale in
accordance with Section 5.04(b) on the Payment Date next succeeding the date of such Sale and (B) the
expenses of the Sale and of any Proceedings in connection therewith that are reimbursable to it, without
being required to produce the Notes in order to complete any such Sale or in order for the net Sale
price to be credited against such Notes, and any property so acquired by the Indenture Trustee shall be
held and dealt with by it in accordance with the provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Trust Estate in connection with a Sale
thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey its interest in any portion of the Trust Estate in
connection with a Sale thereof, and to take all action necessary to effect such Sale; and
(v) no purchaser or transferee at such a Sale shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions precedent or see to the
application of any monies.
Section 5.16 Action on Notes. The Indenture Trustee's right to seek and recover judgment on the Notes
or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee
against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or
upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied
in accordance with Section 5.04(b).
Section 5.17 Performance and Enforcement of Certain Obligations.
(a) Promptly following a written request from the Enhancer or the Indenture Trustee (with the
written consent of the Enhancer), the Issuer, in its capacity as owner of the Mortgage Loans, shall, with the
written consent of the Enhancer, take all such lawful action as the Indenture Trustee may request to cause the
Issuer to compel or secure the performance and observance by the Sellers and the Servicer, as applicable, of each
of their obligations to the Issuer under or in connection with the Purchase Agreement and the Servicing
Agreement, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer
under or in connection with the Purchase Agreement and the Servicing Agreement to the extent and in the manner
directed by the Indenture Trustee, as pledgee of the Mortgage Loans, including the transmission of notices of
default on the part of the Sellers or the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Sellers or the Servicer of each of their
obligations under the Purchase Agreement and the Servicing Agreement.
(b) If an Event of Default shall have occurred and be continuing, the Indenture Trustee, as
pledgee of the Mortgage Loans, subject to the rights of the Enhancer under the Servicing Agreement, may, and at
the direction (which direction shall be in writing or by telephone (confirmed in writing promptly thereafter)) of
the Noteholders of 66 2/3% of the aggregate Note Balance of the Notes, shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Sellers or the Servicer under or in connection with the
Purchase Agreement and the Servicing Agreement, including the right or power to take any action to compel or
secure performance or observance by the Sellers or the Servicer, as the case may be, of each of their obligations
to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under
the Purchase Agreement and the Servicing Agreement, as the case may be, and any right of the Issuer to take such
action shall not be suspended. In connection therewith, as determined by the Indenture Trustee, the Issuer shall
take all actions necessary to effect the transfer of the Mortgage Loans to the Indenture Trustee.
ARTICLE VI
The Indenture Trustee
Section 6.01 Duties of Indenture Trustee.
(a) If an Event of Default shall have occurred and be continuing, the Indenture Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their
exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or obligations shall be read
into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates, reports or opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, that the Indenture Trustee shall examine the
certificates, reports and opinions to determine whether or not they conform to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of Section 6.01(a);
(ii) the Indenture Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.11 or
any direction from the Enhancer that the Enhancer is entitled to give under any of the Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on any money received by it except
as the Indenture Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated from other funds except
to the extent required by law or the terms of this Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to expend or risk its
own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Indenture Trustee shall be subject to the provisions of this Section and to the
provisions of TIA.
(h) With respect to each Payment Date, on the Business Day following the related Determination
Date, the Indenture Trustee shall forward or cause to be forwarded by mail, or other mutually agreed-upon method,
to the Enhancer and the Servicer, a statement setting forth, to the extent applicable, (i) during the Pre-Funding
Period, the Pre-Funded Amount as of such Payment Date and any transfers of funds in connection therewith, and
(ii) during the Revolving Period, the amount of Principal Collections to be deposited into the Funding Account
(including the Reserve Sub-Account) in respect of such Payment Date, and the amount on deposit in the Funding
Account (including the Reserve Sub-Account) as of such Payment Date, after giving effect to any amounts so
deposited therein.
(i) The Indenture Trustee hereby accepts appointment as Certificate Paying Agent under the
Trust Agreement and agrees to be bound by the provisions of the Trust Agreement relating to the Certificate
Paying Agent. The Indenture Trustee hereby agrees to be bound by the provisions of Article IX of the Trust
Agreement.
(j) The Indenture Trustee shall not be required to take notice or be deemed to have notice or
knowledge of any Event of Default (except for an Event of Default specified in clause (a) of the definition
thereof) unless a Responsible Officer of the Indenture Trustee shall have received written notice or have actual
knowledge thereof. In the absence of receipt of such notice or such knowledge, the Indenture Trustee may
conclusively assume that there is no default or Event of Default.
(k) The Indenture Trustee shall have no duty to see to any recording or filing of any financing
statement or continuation statement evidencing a security interest or to see to the maintenance of any such
recording or filing or to any rerecording or refiling of any thereof.
Section 6.02 Rights of Indenture Trustee.
(a) The Indenture Trustee may rely and shall be protected in acting or refraining from acting
in good faith upon any resolution, Officer's Certificate, opinion of counsel, certificate of auditors, or any
other certificate, statement, instrument, report, notice, consent or other document believed by it to be genuine
and to have been signed or presented by the proper person. The Indenture Trustee need not investigate any fact
or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may require an Officer's
Certificate or an Opinion of Counsel. The Indenture Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on any such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, and the
Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers; provided, however, that the Indenture
Trustee's conduct does not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or opinion of counsel with
respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and
in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall not be personally liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture, unless it shall be proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts.
(g) Prior to the occurrence of an Event of Default hereunder, and after the curing or waiver of
all Events of Default that may have occurred, the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the
Enhancer or the Noteholders representing a majority of the aggregate Note Balance; provided, however, that if the
payment within a reasonable time to the Indenture Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the Indenture Trustee, not assured to
the Indenture Trustee by the security afforded to it by the terms of this Indenture, the Indenture Trustee may
require indemnity satisfactory to the Indenture Trustee against such cost, expense or liability as a condition to
taking any such action.
(h) The Indenture Trustee shall be under no obligation to exercise any of the trusts or powers
vested in it by this Indenture or to institute, conduct or defend any litigation hereunder or in relation hereto
at the request, order or direction of any of the Enhancer or the Noteholders, pursuant to the provisions of this
Indenture, unless the Enhancer or the Noteholders shall have offered to the Indenture Trustee reasonable security
or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Indenture Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured or waived), to exercise such of the rights and powers vested in it by this
Indenture, and to use the same degree of care and skill in their exercise as a prudent investor would exercise or
use under the circumstances in the conduct of such investor's own affairs.
Section 6.03 Individual Rights of Indenture Trustee. The Indenture Trustee in its individual or any
other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Indenture Trustee must comply with Sections 6.11
and 6.12.
Section 6.04 Indenture Trustee's Disclaimer. The Indenture Trustee shall not be (i) responsible for and
makes no representation as to the validity or adequacy of this Indenture or the Notes, (ii) accountable for the
Issuer's use of the proceeds from the Notes or (iii) responsible for any statement of the Issuer in this
Indenture or in any document issued in connection with the sale of the Notes or in the Notes, other than the
Indenture Trustee's certificate of authentication thereon.
Section 6.05 Notice of Event of Default. If an Event of Default shall occur and be continuing, and if
such Event of Default is known to a Responsible Officer of the Indenture Trustee, then the Indenture Trustee
shall give prompt notice thereof to the Enhancer. The Indenture Trustee shall mail to each Noteholder notice of
such Event of Default within 90 days after it occurs. Except in the case of an Event of Default with respect to
the payment of principal of or interest on any Note, the Indenture Trustee may withhold such notice if and so
long as a committee of its Responsible Officers in good faith determines that withholding such notice is in the
interests of the Noteholders.
Section 6.06 Reports by Indenture Trustee to Noteholders. The Indenture Trustee shall deliver to each
Noteholder such information as may be required to enable such Noteholder to prepare its federal and state income
tax returns. In addition, upon Issuer Request, the Indenture Trustee shall promptly furnish such information
reasonably requested by the Issuer that is reasonably available to the Indenture Trustee to enable the Issuer to
perform its federal and state income tax reporting obligations.
Section 6.07 Compensation and Indemnity. The Indenture Trustee shall be compensated and indemnified by
the Servicer in accordance with Section 6.06 of the Servicing Agreement. All amounts owing the Indenture Trustee
hereunder in excess of such amount, as well as any amount owed to the Indenture Trustee in accordance with
Section 6.06 of the Servicing Agreement, to the extent the Servicer has failed to pay such amount, shall be paid
solely as provided in Section 3.05 hereof (subject to the priorities set forth therein). The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs
of collection, in addition to the compensation for its services. Such expenses shall include the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee's agents, counsel, accountants and
experts. The Issuer shall indemnify the Indenture Trustee against any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify the Issuer promptly of any claim for
which it may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer shall not relieve the
Issuer of its obligations hereunder. The Issuer shall defend any such claim, and the Indenture Trustee may have
separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer is not obligated to
reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee
through the Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to this Section 6.07 shall survive
the discharge of this Indenture. When the Indenture Trustee incurs expenses after the occurrence of an Event of
Default specified in clause (c) or (d) of the definition thereof with respect to the Issuer, such expenses are
intended to constitute expenses of administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.
Section 6.08 Replacement of Indenture Trustee. No resignation or removal of the Indenture Trustee and
no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may resign at any time by so
notifying the Issuer and the Enhancer. The Enhancer or the Noteholders of a majority of the aggregate Note
Balance of the Notes may remove the Indenture Trustee by so notifying the Indenture Trustee and the Enhancer (if
given by such Noteholders) and may appoint a successor Indenture Trustee. Unless a Servicer Default has occurred
and is continuing, the appointment of any successor Indenture Trustee shall be subject to the prior written
approval of the Servicer. The Issuer shall remove the Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture Trustee or its property; or
(d) the Indenture Trustee otherwise becomes incapable of fulfilling its duties under the Basic
Documents.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of the Indenture
Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture
Trustee), the Issuer shall promptly appoint a successor Indenture Trustee with the consent of the Enhancer, which
consent shall not be unreasonably withheld. In addition, the Indenture Trustee shall resign to avoid being
directly or indirectly controlled by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring
Indenture Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the
Indenture Trustee under this Indenture. The successor Indenture Trustee shall mail a notice of its succession to
the Noteholders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture
Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture
Trustee resigns or is removed, then the retiring Indenture Trustee, the Issuer or the Noteholders of a majority
of aggregate Note Balance of the Notes may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any court of
competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture
Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer's
obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.
Section 6.09 Successor Indenture Trustee by Xxxxxx. If the Indenture Trustee consolidates with, merges
or converts into, or transfers all or substantially all its corporate trust business or assets to, another
corporation or banking association, then the resulting, surviving or transferee corporation without any further
act shall be the successor Indenture Trustee; provided, that such corporation or banking association shall be
otherwise qualified and eligible under Section 6.11. The Indenture Trustee shall provide the Rating Agencies
with written notice of any such transaction occurring after the Closing Date.
If at the time of any such succession by merger, conversion or consolidation, any of the Notes shall
have been authenticated but not delivered, then any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated. If at such
time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate
such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture
Trustee; and in all such cases, such certificates shall have the full force that it is anywhere in the Notes or
in this Indenture provided that the certificate of the Indenture Trustee shall have.
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of
meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at such time be
located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or
more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part
of the Issuer, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust Estate, or any part thereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable. No
co trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11, and no notice to Noteholders of the appointment of any co trustee or separate trustee
shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed
and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the
Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee
and such separate trustee or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding of title to the Trust
Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to this 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, either jointly with the Indenture
Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically
including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its
agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful
act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11 Eligibility; Disqualification. The Indenture Trustee shall at all times satisfy the
requirements of TIA § 310(a). The Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition and it or its parent shall have
a long-term debt rating of "A" or better by Xxxxx'x. The Indenture Trustee shall comply with TIA § 310(b),
including the optional provision permitted by the second sentence of TIA § 310(b)(9); provided, however, that
there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are
met.
Section 6.12 Preferential Collection of Claims Against Issuer. The Indenture Trustee shall comply with
TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). An Indenture Trustee that has resigned
or been removed shall be subject to TIA § 311(a) to the extent indicated.
Section 6.13 Representations and Warranties. The Indenture Trustee hereby represents and warrants that:
(a) The Indenture Trustee is duly organized, validly existing and in good standing as a
national banking association with power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is currently conducted.
(b) The Indenture Trustee has the power and authority to execute and deliver this Indenture and
to carry out its terms; and the execution, delivery and performance of this Indenture have been duly authorized
by the Indenture Trustee by all necessary corporate action.
(c) The consummation of the transactions contemplated by this Indenture and the fulfillment of
the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the articles of organization or bylaws of the
Indenture Trustee or any agreement or other instrument to which the Indenture Trustee is a party or by which it
is bound.
(d) To the Indenture Trustee's best knowledge, there are no Proceedings or investigations
pending or threatened before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Indenture Trustee or its properties (A) asserting the invalidity of
this Indenture, (B) seeking to prevent the consummation of any of the transactions contemplated by this Indenture
or (C) seeking any determination or ruling that might materially and adversely affect the performance by the
Indenture Trustee of its obligations under, or the validity or enforceability of, this Indenture.
(e) The Indenture Trustee does not have notice of any adverse claim (as such terms are used in
Section 8-302 of the UCC in effect in the State of Delaware) with respect to the Mortgage Loans.
Section 6.14 Directions to Indenture Trustee. The Indenture Trustee is hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the assets of the Trust in trust for
the Noteholders and the Enhancer;
(b) to authenticate and deliver the Notes substantially in the form prescribed by Exhibit A in
accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the terms of this Indenture.
Section 6.15 Indenture Trustee May Own Securities. The Indenture Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not
Indenture Trustee.
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders. The Issuer shall
furnish or cause to be furnished to the Indenture Trustee (a) not more than five days after each Record Date, a
list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Noteholders
as of such Record Date, and (b) at such other times as the Indenture Trustee and the Enhancer may request in
writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of
a date not more than 10 days prior to the time such list is furnished; provided, however, that for so long as the
Indenture Trustee is the Note Registrar, no such list need be furnished.
Section 7.02 Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of the Noteholders contained in the most recent list furnished to the Indenture Trustee
as provided in Section 7.01 and the names and addresses of the Noteholders received by the Indenture Trustee in
its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA § 312(b) with other Noteholders with respect to
their rights under this Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the protection of
TIA § 312(c).
Section 7.03 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer is required
to file the same with the Commission, copies of the annual reports and the information, documents and
other reports (or copies of such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) that the Issuer may be required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such additional information, documents
and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture
as may be required from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit by
mail to all Noteholders described in TIA § 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and
by rules and regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on
December 31 of each year.
Section 7.04 Reports by Indenture Trustee. If required by TIA § 313(a), within 60 days after each
January 1, beginning with [ ], the Indenture Trustee shall make available to each Noteholder as required by
TIA § 313(c) and to the Enhancer a brief report dated as of such date that complies with TIA § 313(a). The
Indenture Trustee also shall comply with TIA § 313(b).
A copy of each report at the time of its distribution to Noteholders shall be filed by the Indenture
Trustee with the Commission, if required, and each stock exchange, if any, on which the Term Notes are listed.
The Issuer shall notify the Indenture Trustee if and when the Term Notes are listed on any stock exchange.
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01 Collection of Money. Except as otherwise expressly provided herein, the Indenture Trustee
may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance
of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture
Trustee pursuant to this Indenture. The Indenture Trustee shall apply all such money received by it as provided
in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making
of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Indenture
Trustee may take such action as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right
to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in
Article V.
Section 8.02 Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause the Indenture Trustee to establish
and maintain, in the name of the Indenture Trustee, for the benefit of the Noteholders, the Certificate Paying
Agent, on behalf of the Certificateholders, and the Enhancer, the Note Payment Account as provided in
Section 3.01 of this Indenture and the Reserve Sub-Account.
(b) All monies deposited from time to time in the Note Payment Account pursuant to the
Servicing Agreement and all deposits therein pursuant to this Indenture are for the benefit of the Noteholders
and the Certificate Paying Agent, on behalf of the Certificateholders, and all investments made with such monies,
including all income or other gain from such investments, are for the benefit of the Servicer as provided in
Section 5.01 of the Servicing Agreement.
On each Payment Date, the Indenture Trustee shall distribute all amounts on deposit in the Note Payment
Account to the Noteholders in respect of the Notes and, in its capacity as Certificate Paying Agent, to the
Certificateholders from the Distribution Account in the order of priority set forth in Section 3.05 (except as
otherwise provided in Section 5.04(b)) and in accordance with the Servicing Certificate.
All monies deposited from time to time in the Reserve Sub-Account pursuant to this Indenture are for the
benefit of the Noteholders and the Enhancer, and all investments made with such monies, including all income or
other gain from such investments, are for the benefit of the Noteholders.
The Indenture Trustee shall invest any funds in the Note Payment Account and the Reserve Sub-Account in
Permitted Investments selected in writing by the Servicer maturing no later than the Business Day preceding the
next succeeding Payment Date (except that any investment in the institution with which the Note Payment Account
is maintained may mature on such Payment Date) and shall not be sold or disposed of prior to the maturity. In
addition, such Permitted Investments shall not be purchased at a price in excess of par. The Indenture Trustee
shall have no liability whatsoever for investment losses on Permitted Investments, if such investments are made
in accordance with the provisions of this Indenture and the Indenture Trustee is not the obligor under the
Permitted Investment.
Section 8.03 Officer's Certificate. The Indenture Trustee shall receive at least seven days' notice
when requested by the Issuer to take any action pursuant to Section 8.05(a), accompanied by copies of any
instruments to be executed, and the Indenture Trustee shall also require, as a condition to such action, an
Officer's Certificate, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and concluding that all conditions precedent
to the taking of such action have been complied with.
Section 8.04 Termination Upon Distribution to Noteholders. This Indenture and the respective
obligations and responsibilities of the Issuer and the Indenture Trustee created hereby shall terminate upon the
distribution to the Noteholders, the Certificate Paying Agent on behalf of the Certificateholders and the
Indenture Trustee of all amounts required to be distributed pursuant to Article III; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21 years from the death of the survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of St. James's,
living on the date hereof.
Section 8.05 Release of Trust Estate.
(a) Subject to the payment of its fees, expenses and indemnification, the Indenture Trustee
may, and when required by the provisions of this Indenture or the 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. No Person
relying upon an instrument executed by the Indenture Trustee as provided in Article VIII hereunder shall be bound
to ascertain the Indenture Trustee's authority, inquire into the satisfaction of any conditions precedent, or see
to the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes Outstanding, (ii) all
sums due the Indenture Trustee pursuant to this Indenture have been paid and (iii) all sums due the Enhancer have
been paid, release any remaining portion of the Trust Estate that secured the Notes from the lien of this
Indenture.
(c) The Indenture Trustee shall release property from the lien of this Indenture pursuant to
this Section 8.05 only upon receipt of an Issuer Request accompanied by an Officers' Certificate and a letter
from the Enhancer stating that the Enhancer has no objection to such request from the Issuer.
(d) The Indenture Trustee shall, at the request of the Issuer or the Depositor, surrender the
Policy to the Enhancer for cancellation, upon final payment of principal of and interest on the Notes.
Section 8.06 Surrender of Notes Upon Final Payment. By acceptance of any Note, the Noteholder thereof
agrees to surrender such Note to the Indenture Trustee promptly, prior to such Noteholder's receipt of the final
payment thereon.
ARTICLE IX
Supplemental Indentures
Section 9.01 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Noteholders of any Notes, but with prior notice to the Rating
Agencies and the prior written consent of the Enhancer (which consent shall not be unreasonably withheld and so
long as no Enhancer Default exists), the Issuer and the Indenture Trustee, when authorized by an Issuer Request,
at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time subject to
the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any
property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of
this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable provisions
hereof, of another Person to the Issuer, and the assumption by any such successor of the covenants of
the Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of the Noteholders or
the Enhancer, or to surrender any right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee;
(v) to cure any ambiguity, to correct any error or to correct or supplement any
provision herein or in any supplemental indenture that may be inconsistent with any other provision
herein or in any supplemental indenture;
(vi) to make any other provisions with respect to matters or questions arising
under this Indenture or in any supplemental indenture; provided, that such action shall not materially
and adversely affect the interests of the Noteholders or the Enhancer (as evidenced by an Opinion of
Counsel);
(vii) to evidence and provide for the acceptance of the appointment hereunder by a
successor trustee with respect to the Notes and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than
one trustee, pursuant to the requirements of Article VI; or
(viii) to modify, eliminate or add to the provisions of this Indenture to such extent
as shall be necessary to effect the qualification of this Indenture under TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly
required by TIA;
provided, however, that no such supplemental indenture shall be entered into unless the Indenture Trustee shall
have received an Opinion of Counsel to the effect that the execution of such supplemental indenture will not give
rise to any material adverse tax consequence to the Noteholders.
The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture
and to make any further appropriate agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer Request, may, without
the consent of any Noteholder but with prior notice to the Rating Agencies and the Enhancer, enter into an
indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the
Noteholders under this Indenture; provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, (i) adversely affect in any material respect the interests of any Noteholder or the Enhancer or
(ii) cause the Issuer to be subject to an entity level tax.
Section 9.02 Supplemental Indentures With Consent of Noteholders. The Issuer and the Indenture Trustee,
when authorized by an Issuer Request, may, with prior notice to the Rating Agencies and with the consent of the
Enhancer and the Noteholders of not less than a majority of the Note Balances of each Class of Notes affected
thereby, by Act (as defined in Section 10.03 hereof) of such Noteholders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying
in any manner the rights of the Noteholders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Noteholder of each Note affected thereby:
(a) change the date of payment of any installment of principal of or interest on any Note, or
reduce the principal amount thereof or the Note Rate thereon, change the provisions of this Indenture relating to
the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of or
interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any
such amount due on the Notes on or after the respective due dates thereof;
(b) reduce the percentage of the Note Balances of any Class of Notes, the consent of the
Noteholders of which is required for any such supplemental indenture, or the consent of the Noteholders of which
is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder
and their consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of the term "Outstanding"
or modify or alter the exception in the definition of the term "Noteholder";
(d) reduce the percentage of the aggregate Note Balance of the Notes required to direct the
Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04;
(e) modify any provision of this Section 9.02 except to increase any percentage specified
herein or to provide that certain additional provisions of this Indenture or the other Basic Documents cannot be
modified or waived without the consent of the Noteholder of each Note affected thereby;
(f) modify any of the provisions of this Indenture in such manner as to affect the calculation
of the amount of any payment of interest or principal due on any Note on any Payment Date (including the
calculation of any of the individual components of such calculation); or
(g) permit the creation of any lien ranking prior to or on a parity with the lien of this
Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject hereto or deprive the Noteholder of any
Note of the security provided by the lien of this Indenture; and provided further, that such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine whether or not any Notes would be affected by any
supplemental indenture and any such determination shall be conclusive upon the Noteholders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture Trustee shall not be liable for
any such determination made in good faith.
It shall not be necessary for any Act (as defined in Section 10.03 hereof) of Noteholders under this
Section 9.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if
such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture
pursuant to this Section 9.02, the Indenture Trustee shall mail to the Noteholders of the Notes to which such
amendment or supplemental indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental indenture.
Section 9.03 Execution of Supplemental Indentures. In executing, or permitting the additional trusts
created by, any supplemental indenture permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to receive and, subject to Sections 6.01 and
6.02, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
Section 9.04 Effect of Supplemental Indenture. Upon the execution of any supplemental indenture
pursuant to the provisions hereof, this Indenture shall be and shall be deemed to be modified and amended in
accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer
and the Noteholders shall thereafter be determined, exercised and enforced hereunder subject in all respects to
such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be
and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 9.05 Conformity with Trust Indenture Act. Every amendment of this Indenture and every
supplemental indenture executed pursuant to this Article IX shall conform to the requirements of TIA as in effect
at the time of such amendment or supplement so long as this Indenture shall then be qualified under TIA.
Section 9.06 Reference in Notes to Supplemental Indentures. Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture
Trustee, shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Indenture Trustee shall so determine, new Notes so modified as to
conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be
prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.
ARTICLE X
Miscellaneous
Section 10.01 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee and to the Enhancer
(i) an Officer's Certificate stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in
this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has read or has
caused to be read such covenant or condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such signatory has
made such examination or investigation as is necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has been complied with;
(iv) a statement as to whether, in the opinion of each such signatory, such
condition or covenant has been complied with; and
(v) if the signer of such certificate or opinion is required to be Independent,
the statement required by the definition of the term "Independent."
(b) (i) Prior to the deposit of any Collateral or other property or securities with the
Indenture Trustee that is to be made the basis for the release of any property or securities subject to the lien
of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 10.01(a) or elsewhere in
this Indenture, furnish to the Indenture Trustee an Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days of such deposit) to the Issuer of the
Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof as to the matters described
in clause (i) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate
as to the same matters, if the fair value to the Issuer of the securities to be so deposited and of all
other such securities made the basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause
(i) above and this clause (ii), is 10% or more of the aggregate Note Balance of the Notes, but such a
certificate need not be furnished with respect to any securities so deposited, if the fair value thereof
to the Issuer as set forth in the related Officer's Certificate is less than $25,000 or less than one
percent of the aggregate Note Balance of the Notes.
(iii) Whenever any property or securities are to be released from the lien of this
Indenture, the Issuer shall furnish to the Indenture Trustee an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under this Indenture in contravention of the
provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof as to the matters described
in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate
as to the same matters if the fair value of the property or securities and of all other property, other
than property as contemplated by clause (v) below or securities released from the lien of this Indenture
since the commencement of the then-current calendar year, as set forth in the certificates required by
clause (iii) above and this clause (iv), equals 10% or more of the aggregate Note Balance of the Notes,
but such certificate need not be furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer's Certificate is less than $25,000 or less than
one percent of the aggregate Note Balance of the Notes.
(v) Notwithstanding the foregoing, this Section 10.01(b) shall not apply to (A)
collection upon, sales or other dispositions of the Mortgage Loans as and to the extent permitted or
required by the Basic Documents or (B) the making of cash payments out of the Note Payment Account as
and to the extent permitted or required by the Basic Documents, so long as the Issuer shall deliver to
the Indenture Trustee every six months, commencing [ ], an Officer's Certificate of the Issuer
stating that all the dispositions of Collateral described in clauses (A) or (B) above that occurred
during the preceding six calendar months (or such longer period, in the case of the first such Officer's
Certificate) were permitted or required by the Basic Documents and that the proceeds thereof were
applied in accordance with the Basic Documents.
Section 10.02 Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only
one such Person, or that they be so certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any such certificate of an Authorized
Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of any Seller or the Issuer, stating that the
information with respect to such factual matters is in the possession of any Seller or the Issuer, unless such
counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
Whenever in this Indenture, in connection with any application or certificate or report to the Indenture
Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it is intended that the truth and
accuracy, at the time of the granting of such application or at the effective date of such certificate or report
(as the case may be), of the facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate
or report. The foregoing shall not, however, be construed to affect the Indenture Trustee's right to rely upon
the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.
Section 10.03 Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in
writing; and except as herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to
the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any such instrument or writing may be
proved in any manner that the Indenture Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by
the Noteholder of any Note shall bind the Noteholder of every Note issued upon the registration thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such
Note.
Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Enhancer and Rating Agencies. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture shall be in writing and if such request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders is to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or with the Indenture Trustee at its
[______________] with a copy to __________________. The Indenture Trustee shall promptly transmit any notice
received by it from the Noteholders to the Issuer,
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every
purpose hereunder if in writing and mailed first-class, postage prepaid to the Issuer addressed to: Home Equity
Loan Trust [ ]-[ ], in care of the Owner Trustee, or at any other address previously furnished in writing to
the Indenture Trustee by the Issuer. The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee, or
(c) the Enhancer by the Issuer, the Indenture Trustee or by any Noteholders shall be sufficient
for every purpose hereunder to in writing and mailed, first-class postage pre-paid, or personally delivered or
telecopied to: Ambac Assurance Corporation, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Consumer Asset-Backed Securities Group (Home Equity Loan Trust [ ]-[ ]), telecopier number (000) 000-0000.
The Enhancer shall promptly transmit any notice received by it from the Issuer, the Indenture Trustee or the
Noteholders to the Issuer or Indenture Trustee, as the case may be.
Notices required to be given to the Rating Agencies by the Issuer, the Indenture Trustee or the Owner
Trustee shall be in writing, personally delivered or mailed by certified mail, return receipt requested, to
(i) in the case of Moody's, at the following address: Xxxxx'x Investors Service, Inc., ABS Monitoring Department,
00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ii) in the case of Standard & Poor's, at the following address:
Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0003, Attention: Asset Backed Surveillance
Department; or, as to each of the foregoing Persons, at such other address as shall be designated by written
notice to the other foregoing Persons.
Section 10.05 Notices to Noteholders; Waiver. Where this Indenture provides for notice to Noteholders of
any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and
mailed, first-class, postage prepaid to each Noteholder affected by such event, at such Person's address as it
appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Noteholders is given by mail, neither the failure to
mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency
of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided
shall conclusively be presumed to have been duly given regardless of whether such notice is in fact actually
received.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by any
Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent
of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or
similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required
to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not
affect any other rights or obligations created hereunder, and shall not under any circumstance constitute an
Event of Default.
Section 10.06 Alternate Payment and Notice Provisions. Notwithstanding any provision of this Indenture
or any of the Notes to the contrary, the Issuer may enter into any agreement with any Noteholder providing for a
method of payment, or notice by the Indenture Trustee to such Noteholder, that is different from the methods
provided for in this Indenture for such payments or notices. The Issuer shall furnish to the Indenture Trustee a
copy of each such agreement and the Indenture Trustee shall cause payments to be made and notices to be given in
accordance with such agreements.
Section 10.07 Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts
with another provision hereof that is required to be included in this Indenture by any of the provisions of TIA,
such required provision shall control.
The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the provisions
automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
Section 10.08 Effect of Headings. The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
Section 10.09 Successors and Assigns. All covenants and agreements in this Indenture and the Notes by
the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture
Trustee in this Indenture shall bind its successors, co-trustees and agents.
Section 10.10 Severability. In case any provision in this Indenture or in the Notes shall be held
invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
Section 10.11 Benefits of Indenture. Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors hereunder, and the Noteholders, the
Enhancer, and any other party secured hereunder, and any other Person with an ownership interest in any part of
the Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture. The Enhancer
shall be a third party beneficiary of this Indenture.
Section 10.12 Legal Holidays. In any case where the date on which any payment is due shall not be a
Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made
on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on
the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.
Section 10.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.14 Counterparts. This Indenture may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and
the same instrument.
Section 10.15 Recording of Indenture. If this Indenture is subject to recording in any appropriate
public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an
Opinion of Counsel (which counsel shall be reasonably acceptable to the Indenture Trustee) to the effect that
such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or
for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.
Section 10.16 Issuer Obligation. No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or
the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and
the Owner Trustee have no such obligations in their respective individual capacities), and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
Section 10.17 No Petition. The Indenture Trustee, by entering into this Indenture, and each Noteholder,
by its acceptance of a Note, hereby covenant and agree that they will not at any time institute against the
Depositor or the Issuer, or join in any institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, this
Indenture or any of the other Basic Documents.
Section 10.18 Inspection. The Issuer agrees that, on reasonable prior notice, it shall permit any
representative of the Indenture Trustee, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such
books to be audited by Independent certified public accountants, and to discuss the Issuer's affairs, finances
and accounts with the Issuer's officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture Trustee shall and shall cause its
representatives to hold in confidence all such information except to the extent disclosure may be required by law
(and all reasonable applications for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused their names to be signed hereto by
their respective officers thereunto duly authorized, all as of the day and year first above written.
HOME EQUITY LOAN TRUST [ ]-[ ], as Issuer
By: _________________, not in its individual capacity but
solely as Owner Trustee
By: ______________________________________________
Name:
Title:
__________________, as Indenture Trustee
By:__________________________________________________
Name:
Title:
__________________
hereby accepts the appointment as Paying
Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section
4.02 hereof.
By: ________________________________
Name:
Title:
Signatures and Seals
STATE OF _______________ )
) ss.:
COUNTY OF _____________ )
On this ___ day of [ ], before me personally appeared ____________, to me known, who being by me
duly sworn, did depose and say, that he/she resides at _____________, that he/she is the ____________ of
_______________, the Owner Trustee, one of the corporations described in and which executed the above instrument;
that he/she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation; and that he/she signed his/her
name thereto by like order.
__________________________________
Notary Public
Acknowledgements
STATE OF ___________________ )
) ss.:
COUNTY OF _________________ )
On this ___ day of [ ], before me personally appeared __________, to me known, who being by me duly
sworn, did depose and say, that he/she resides at _____________; that he/she is the ___________ of
__________________, as Indenture Trustee, one of the corporations described in and which executed the above
instrument; that he/she knows the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of said corporation; and that he/she
signed his/her name thereto by like order.
__________________________________
Notary Public
NOTORIAL SEAL
TABLE OF CONTENTS
Page
ARTICLE I Definitions............................................................................................2
Section 1.01 Definitions.........................................................................................2
Section 1.02 Incorporation by Reference of Trust Indenture Act...................................................2
Section 1.03 Rules of Construction...............................................................................2
ARTICLE II Original Issuance of Notes............................................................................3
Section 2.01 Form ...........................................................................................3
Section 2.02 Execution, Authentication and Delivery..............................................................3
Section 2.03 Advance or Additional Variable Pay Revolving Notes..................................................4
ARTICLE III Covenants............................................................................................5
Section 3.01 Collection of Payments with Respect to the Mortgage Loans...........................................5
Section 3.02 Maintenance of Office or Agency.....................................................................6
Section 3.03 Money for Payments to Be Held in Trust; Paying Agent................................................6
Section 3.04 Existence...........................................................................................7
Section 3.05 Priority of Distributions; Defaulted Interest.......................................................8
Section 3.06 Protection of Trust Estate.........................................................................12
Section 3.07 Opinions as to Trust Estate........................................................................12
Section 3.08 Performance of Obligations; Servicing Agreement....................................................13
Section 3.09 Negative Covenants.................................................................................13
Section 3.10 Annual Statement as to Compliance..................................................................14
Section 3.11 Recordation of Assignments.........................................................................14
Section 3.12 Representations and Warranties Concerning the Mortgage Loans.......................................14
Section 3.13 Assignee of Record of the Mortgage Loans...........................................................15
Section 3.14 Servicer as Agent and Bailee of the Indenture Trustee..............................................15
Section 3.15 Investment Company Act.............................................................................15
Section 3.16 Issuer May Consolidate, etc........................................................................15
Section 3.17 Successor or Transferee............................................................................17
Section 3.18 No Other Business..................................................................................17
Section 3.19 No Borrowing.......................................................................................17
Section 3.20 Guarantees, Loans, Advances and Other Liabilities..................................................17
Section 3.21 Capital Expenditures...............................................................................18
Section 3.22 Owner Trustee Not Liable for Certificates or Related Documents.....................................18
Section 3.23 Restricted Payments................................................................................18
Section 3.24 Notice of Events of Default........................................................................18
Section 3.25 Further Instruments and Acts.......................................................................18
Section 3.26 Statements to Noteholders..........................................................................18
Section 3.27 Determination of Note Rate.........................................................................19
Section 3.28 Payments under the Policy..........................................................................19
Section 3.29 Replacement/Additional Enhancement.................................................................19
Section 3.30 Additional Representations of Issuer...............................................................20
ARTICLE IV The Notes; Satisfaction And Discharge Of Indenture...................................................21
Section 4.01 The Notes; Variable Pay Revolving Notes............................................................21
Section 4.02 Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate Registrar...............................................................22
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes.........................................................24
Section 4.04 Persons Deemed Owners..............................................................................25
Section 4.05 Cancellation.......................................................................................25
Section 4.06 Book-Entry Notes...................................................................................26
Section 4.07 Notices to Depository..............................................................................26
Section 4.08 Definitive Notes...................................................................................26
Section 4.09 Tax Treatment......................................................................................27
Section 4.10 Satisfaction and Discharge of Indenture............................................................27
Section 4.11 Application of Trust Money.........................................................................28
Section 4.12 Subrogation and Cooperation........................................................................28
Section 4.13 Repayment of Monies Held by Paying Agent...........................................................29
Section 4.14 Temporary Notes....................................................................................29
ARTICLE V Default And Remedies..................................................................................30
Section 5.01 Events of Default..................................................................................30
Section 5.02 Acceleration of Maturity; Rescission and Annulment.................................................30
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..........................31
Section 5.04 Remedies; Priorities...............................................................................33
Section 5.05 Optional Preservation of the Trust Estate..........................................................35
Section 5.06 Limitation of Suits................................................................................35
Section 5.07 Unconditional Rights of Noteholders to Receive Principal and Interest..............................36
Section 5.08 Restoration of Rights and Remedies.................................................................36
Section 5.09 Rights and Remedies Cumulative.....................................................................36
Section 5.10 Delay or Omission Not a Waiver.....................................................................36
Section 5.11 Control by Enhancer or Noteholders.................................................................36
Section 5.12 Waiver of Past Defaults............................................................................37
Section 5.13 Undertaking for Costs..............................................................................37
Section 5.14 Waiver of Stay or Extension Laws...................................................................38
Section 5.15 Sale of Trust Estate...............................................................................38
Section 5.16 Action on Notes....................................................................................40
Section 5.17 Performance and Enforcement of Certain Obligations.................................................40
ARTICLE VI The Indenture Trustee................................................................................41
Section 6.01 Duties of Indenture Trustee........................................................................41
Section 6.02 Rights of Indenture Trustee........................................................................42
Section 6.03 Individual Rights of Indenture Trustee.............................................................44
Section 6.04 Indenture Trustee's Disclaimer.....................................................................44
Section 6.05 Notice of Event of Default.........................................................................44
Section 6.06 Reports by Indenture Trustee to Noteholders........................................................44
Section 6.07 Compensation and Indemnity.........................................................................44
Section 6.08 Replacement of Indenture Trustee...................................................................45
Section 6.09 Successor Indenture Trustee by Merger..............................................................46
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee..................................46
Section 6.11 Eligibility; Disqualification......................................................................47
Section 6.12 Preferential Collection of Claims Against Issuer...................................................48
Section 6.13 Representations and Warranties.....................................................................48
Section 6.14 Directions to Indenture Trustee....................................................................48
Section 6.15 Indenture Trustee May Own Securities...............................................................49
ARTICLE VII Noteholders' Lists and Reports......................................................................49
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders.............................49
Section 7.02 Preservation of Information; Communications to Noteholders.........................................49
Section 7.03 Reports by Issuer..................................................................................49
Section 7.04 Reports by Indenture Trustee.......................................................................50
ARTICLE VIII Accounts, Disbursements and Releases...............................................................50
Section 8.01 Collection of Money................................................................................50
Section 8.02 Trust Accounts.....................................................................................50
Section 8.03 Officer's Certificate..............................................................................51
Section 8.04 Termination Upon Distribution to Noteholders.......................................................51
Section 8.05 Release of Trust Estate............................................................................52
Section 8.06 Surrender of Notes Upon Final Payment..............................................................52
ARTICLE IX Supplemental Indentures..............................................................................52
Section 9.01 Supplemental Indentures Without Consent of Noteholders.............................................52
Section 9.02 Supplemental Indentures With Consent of Noteholders................................................54
Section 9.03 Execution of Supplemental Indentures...............................................................55
Section 9.04 Effect of Supplemental Indenture...................................................................55
Section 9.05 Conformity with Trust Indenture Act................................................................55
Section 9.06 Reference in Notes to Supplemental Indentures......................................................55
ARTICLE X Miscellaneous.........................................................................................56
Section 10.01 Compliance Certificates and Opinions, etc.........................................................56
Section 10.02 Form of Documents Delivered to Indenture Trustee..................................................58
Section 10.03 Acts of Noteholders...............................................................................58
Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Enhancer and Rating Agencies.........................59
Section 10.05 Notices to Noteholders; Waiver....................................................................60
Section 10.06 Alternate Payment and Notice Provisions...........................................................60
Section 10.07 Conflict with Trust Indenture Act.................................................................60
Section 10.08 Effect of Headings................................................................................60
Section 10.09 Successors and Assigns............................................................................61
Section 10.10 Severability......................................................................................61
Section 10.11 Benefits of Indenture.............................................................................61
Section 10.12 Legal Holidays....................................................................................61
Section 10.13 GOVERNING LAW.....................................................................................61
Section 10.14 Counterparts......................................................................................61
Section 10.15 Recording of Indenture............................................................................61
Section 10.16 Issuer Obligation.................................................................................61
Section 10.17 No Petition.......................................................................................62
Section 10.18 Inspection........................................................................................62
EXHIBITS
Exhibit A-1 - Form of Term Notes
Exhibit A-2 - Form of Variable Pay Revolving Notes
Exhibit B - Form of 144A Investment Representation
Exhibit C - Form of Advance Request
Exhibit D - Form of Investor Representation Letter
Exhibit E - Form of Transferor Letter
Appendix A - Definitions
APPENDIX A
DEFINITIONS
Addition Notice: With respect to the transfer of Subsequent Mortgage Loans to the Issuer by a Seller
pursuant to Section 2.2 of the Purchase Agreement (in substantially the form set forth in Exhibit 3 to such
agreement), a notice given by the respective Seller to the Rating Agencies, the Indenture Trustee, the Enhancer
and the Owner Trustee, which shall be given not later than seven Business Days prior to the related Subsequent
Transfer Date, of (i) the Seller's designation of Subsequent Mortgage Loans to be sold to the Issuer and (ii) the
aggregate principal balance as of the Subsequent Cut-Off Date of such Subsequent Mortgage Loans.
Additional Balance: With respect to any Mortgage Loan, any future Draw made by the related Mortgagor
pursuant to the related Loan Agreement after the Cut-Off Date or Subsequent Cut-Off Date, together with all money
due or to become due in respect of such Draw; provided, however, that any Draw during the Rapid Amortization
Period shall be an Excluded Amount, shall not be acquired by the Trust and shall not be an Additional Balance.
Additional Balance Increase Amount: Shall mean (a) the excess, if any, of (i) the aggregate principal
amount of Additional Balances conveyed to the Trust Estate, over (ii) Principal Collections and Excess Spread
applied to purchase those Additional Balances from the Funding Account and/or the Custodial Account minus (b)
amounts paid on previous Payment Dates to the holders of the Certificates as an Additional Balance Increase
Amount.
Advance: An advance of funds made by a Holder of Variable Pay Revolving Notes in connection with the
related Targeted Final Payment Date.
Affiliate: With respect to any Person, any other Person controlling, controlled by or under common
control with such Person. For purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or
otherwise and "controlling" and "controlled" shall have meanings correlative to the foregoing.
Amortization Periods: Collectively, the Managed Amortization Period and the Rapid Amortization Period.
Appraised Value: With respect to any Mortgaged Property, either (x) the value as generally set forth in
an appraisal of such Mortgaged Property used to establish compliance with the underwriting criteria then in
effect in connection with the later of the application for the Mortgage Loan secured by such Mortgaged Property
or any subsequent increase or decrease in the related Credit Limit, or to reduce or eliminate the amount of any
primary mortgage insurance, or (y) if the sales price of such Mortgaged Property is considered in accordance with
the underwriting criteria applicable to the related Mortgage Loan, the lesser of (i) the appraised value referred
to in (x) above and (ii) the sales price of such Mortgaged Property.
Assignment of Mortgage: With respect to any Mortgage, an assignment, notice of transfer or equivalent
instrument, in recordable form, sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to reflect the conveyance of such Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments covering Mortgages secured by
Mortgaged Properties located in the same jurisdiction.
Authorized Newspaper: A newspaper of general circulation in the Borough of Manhattan, The City of New
York, printed in the English language and customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
Authorized Officer: With respect to the Issuer, any officer of the Owner Trustee who is authorized to
act for the Owner Trustee in matters relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Base Specified Overcollateralization Amount: Shall mean [ ]% of the Initial Aggregate Note Balance.
Basic Documents: The Trust Agreement, the Indenture, the Purchase Agreement, the Insurance Agreement,
the Policy, the Servicing Agreement, the Custodial Agreement, any Subsequent Transfer Agreement and the other
documents and certificates delivered in connection with any of the above.
Beneficial Owner: With respect to any Note, the Person who is the beneficial owner of such Note as
reflected on the books of the Depository or on the books of a Person maintaining an account with such Depository
(directly as a Depository Participant or indirectly through a Depository Participant, in accordance with the
rules of such Depository).
Billing Cycle: With respect to any Mortgage Loan and Due Date, the calendar month preceding such Due
Date.
Book-Entry Notes: Beneficial interests in the Notes, ownership and transfers of which shall be made
through book entries by the Depository as described in Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions
in the States of New York, Delaware or any State in which the Corporate Trust Office are required or authorized
by law to be closed.
Capitalized Interest Account: The account established and maintained pursuant to Section 3.19 of the
Servicing Agreement.
Capitalized Interest Requirement: With respect to each Payment Date during the Pre-Funding Period and
on the Payment Date immediately after the end of the Pre-Funding Period, the excess, if any of (i) the sum of (A)
the amount of interest that would accrue at the Net WAC Rate for the related Interest Period on the amount on
deposit in the Pre-Funding Account as of the close of business on the preceding Payment Date (or as of the
Closing Date, in the case of the first Payment Date) and (B) the amount of any fees paid to the Enhancer for the
Policy, over (ii) the amount of reinvestment earnings since the preceding Payment Date (or the Closing Date, in
the case of the first Payment Date) in the Pre-Funding Account.
Certificate Balance: The excess, if any, of the Principal Balance of the Mortgage Loans over the
aggregate outstanding principal balance of the Notes.
Certificate Distribution Amount: For any Payment Date, the amount, if any, distributable on the
Certificates for such Payment Date pursuant to Section 3.05(a)(xv) of the Indenture.
Certificate of Trust: The Certificate of Trust filed for the Trust pursuant to Section 3810(a) of the
Statutory Trust Statute.
Certificate Paying Agent: The Certificate Paying Agent appointed pursuant to Section 3.10 of the Trust
Agreement. Initially the Indenture Trustee has been appointed as the Certificate Paying Agent.
Certificate Percentage Interest: With respect to any Payment Date and any Certificate, the Percentage
Interest for such Certificate.
Certificate Register: The register maintained by the Certificate Registrar in which the Certificate
Registrar shall provide for the registration of Certificates and of transfers and exchanges of Certificates.
Certificate Registrar: The Certificate Registrar appointed pursuant to Section 3.05 of the Trust
Agreement. Initially the Indenture Trustee has been appointed as the Certificate Registrar.
Certificateholder: The Person in whose name a Certificate is registered in the Certificate Register
except that, any Certificate registered in the name of the Issuer, the Owner Trustee or the Indenture Trustee or
any Affiliate of the Owner Trustee or the Indenture Trustee shall be deemed not to be outstanding and the
registered holder will not be considered a Certificateholder for purposes of giving any request, demand,
authorization, direction, notice, consent or waiver under the Indenture or the Trust Agreement; provided that, in
determining whether the Indenture Trustee or the Owner Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Certificates that the Indenture
Trustee or the Owner Trustee knows to be so owned shall be so disregarded. Owners of Certificates that have been
pledged in good faith may be regarded as Certificateholders if the pledgee establishes to the satisfaction of the
Indenture Trustee or the Owner Trustee, as the case may be, the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Issuer, any other obligor upon the Certificates or any Affiliate of
the Owner Trustee or the Indenture Trustee.
Certificates: The Certificates issued pursuant to the Trust Agreement.
Class: With respect to any Note, all Notes that bear the same class designation, (i.e., the Class A-1
Notes as a group, the Class A-2 Notes as a group, the Class A-3 Notes as a group, the Class A-1 Variable Pay
Revolving Notes as a group, the Class A-2 Variable Pay Revolving Notes as a group or the Class A-3 Variable Pay
Revolving Notes as a group).
Class A-1 Notes: The Class A-1 Home Equity Loan-Backed Term Notes, Series [ ]-[ ], in
substantially the form set forth in Exhibit A-1 to the Indenture.
Class A-1 Variable Pay Revolving Notes: The Class A-1 Home Equity Loan-Backed Variable Pay Revolving
Notes, Series [ ]-[ ], in substantially the form set forth in Exhibit A-2 to the Indenture, which will
relate to, and provide for the option to make an Advance in connection with the Targeted Final Payment Date of,
the Class A-1 Notes.
Class A-2 Notes: The Class A-2 Home Equity Loan-Backed Term Notes, Series [ ]-[ ], in
substantially the form set forth in Exhibit A-1 to the Indenture.
Class A-2 Variable Pay Revolving Notes: The Class A-2 Home Equity Loan-Backed Variable Pay Revolving
Notes, Series [ ]-[ ], in substantially the form set forth in Exhibit A-2 to the Indenture, which will
relate to, and provide for the option to make an Advance in connection with the Targeted Final Payment Date of,
the Class A-2 Notes.
Class A-3 Notes: The Class A-3 Home Equity Loan-Backed Term Notes, Series [ ]-[ ], in
substantially the form set forth in Exhibit A-1 to the Indenture.
Class A-3 Variable Pay Revolving Notes: The Class A-3 Home Equity Loan-Backed Variable Pay Revolving
Notes, Series [ ]-[ ], in substantially the form set forth in Exhibit A-2 to the Indenture, which will
relate to, and provide for the option to make an Advance in connection with the Targeted Final Payment Date of,
the Class A-3 Notes.
Closing Date: _________________.
Code: The Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder.
Collateral: The meaning specified in the Granting Clause of the Indenture.
Collection Period: With respect to any Mortgage Loan and Payment Date, the calendar month preceding any
such Payment Date.
Collections: With respect to any Collection Period, all Interest Collections and Principal Collections
during such Collection Period.
Combined Loan-to-Value Ratio or CLTV: With respect to each Mortgage Loan, the ratio, expressed as a
percentage, of the sum of (i) the Credit Limit and (ii) any outstanding principal balance, at origination of such
Mortgage Loan, of all other mortgage loans, if any, secured by senior or subordinate liens on the related
Mortgaged Property, to the Appraised Value, or, when not available, the Stated Value.
Commission: The Securities and Exchange Commission.
Corporate Trust Office: With respect to the Indenture Trustee, Certificate Registrar, Certificate
Paying Agent and Paying Agent, the principal corporate trust office of the Indenture Trustee and Note Registrar
at which at any particular time its corporate trust business shall be administered, which office at the date of
the execution of this instrument is located at (i) for Note and Certificate transfer purposes:
___________________ and (ii) for all other purposes, such office shall be located at ______________________. With
respect to the Owner Trustee, the principal corporate trust office of the Owner Trustee at which at any
particular time its corporate trust business shall be administered, which office at the date of the execution of
this Trust Agreement is located at ____________________.
Credit Limit: With respect to any Mortgage Loan, the maximum Principal Balance permitted under the
terms of the related Loan Agreement.
Custodial Account: The account or accounts created and maintained by the Servicer pursuant to
Section 3.02(b) of the Servicing Agreement, in which the Servicer shall deposit or cause to be deposited certain
amounts in respect of the Mortgage Loans.
Custodial Agreement: The Custodial Agreement, dated the Closing Date, among the Custodian, the
Indenture Trustee, the Issuer and the Servicer relating to the custody of the Mortgage Loans and the Related
Documents.
Custodian: [ ] and its successors and assigns, as applicable pursuant to the Custodial Agreement, or
any other successor custodian of the Mortgage Files appointed by the Indenture Trustee and reasonably acceptable
to the Enhancer and the Servicer.
Cut-Off Date: ________________.
Cut-Off Date Principal Balance: With respect to any Initial Mortgage Loan or Subsequent Mortgage Loan,
the unpaid principal balance thereof as of the close of business on the last day of the Billing Cycle immediately
prior to the Cut-Off Date or Subsequent Cut-Off Date, as the case may be.
Default: Any occurrence which is or with notice or the lapse of time or both would become an Event of
Default.
Deficiency Amount: With respect to any Payment Date and the Notes, an amount equal to the sum of (a)
the amount by which the aggregate amount of accrued interest on the Notes (excluding any Relief Act Shortfalls
for such Payment Date) at the respective Note Rates on such Payment Date exceeds the amount on deposit in the
Note Payment Account available for interest distributions on the Notes on such Payment Date and (b)(i) with
respect to any Payment Date that is not the Final Payment Date, any Liquidation Loss Amount with respect to the
Mortgage Loans for such Payment Date, to the extent not distributed as part of the Principal Distribution Amount
to the Holders of the Notes on such Payment Date or deposited into the Funding Account as part of the Principal
Distribution Amount for such Payment Date or applied to reduce the Overcollateralization Amount on such Payment
Date or (ii) on the Final Payment Date, the aggregate outstanding principal balance of the Notes to the extent
otherwise not paid on such date.
Definitive Notes: Any definitive, fully registered Note, as described in Section 4.06 of the Indenture.
Deleted Loan: A Mortgage Loan replaced or to be replaced with an Eligible Substitute Loan.
Depositor: GreenPoint Mortgage Securities LLC, a Delaware limited liability company, or its successor
in interest.
Depository: The Depository Trust Company or a successor appointed by the Indenture Trustee with the
approval of the Issuer. Any successor to the Depository shall be an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act and the regulations of the Commission thereunder.
Depository Participant: A Person for whom, from time to time, the Depository effects book-entry
transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Payment Date, the [ ] day of the month in which such Payment
Date occurs or if such day is not a Business Day, the next succeeding Business Day.
Distribution Account: The account or accounts created and maintained by the Certificate Paying Agent
pursuant to Section 3.10(c) of the Trust Agreement. The Certificate Paying Agent will make all distributions on
the Certificates from money on deposit in the Distribution Account.
Draw: With respect to any Mortgage Loan, a borrowing by the related Mortgagor under the related Loan
Agreement.
Draw Period: With respect to each Mortgage Loan, the period consisting of either the first five, ten or
fifteen years after the date of origination of such Mortgage Loan, during which the related Mortgagor is
permitted to make Draws.
Due Date: With respect to each Mortgage Loan, the date on which monthly payments on such Mortgage Loan
are due.
Early Amortization Event: The occurrence of any one of the following events: (i) the Term Notes are
downgraded below "[__]" by [__________] or "[__] by [_______] and, within [60] days of the downgrade, the ratings
have not been restored to the original ratings; (ii) within [10] days after a Targeted Final Payment Date, the
Trust fails to receive an Advance and fails to issue and sell additional Variable Pay Revolving Notes; (iii) an
Event of Default under the Indenture or an Enhancer Default has occurred; or (iv) if, beginning in [ ] (a) for
three consecutive months, the average amount in the Funding Account which has not been used during a month to
purchase Additional Balances or Subsequent Mortgage Loans is greater than [__]% of such amount plus the amount
which had been used during that month to purchase Additional Balances and Subsequent Mortgage Loans, or (b) for
six consecutive months, the average amount in the Funding Account which has not been used during a month to
purchase Additional Balances or Subsequent Mortgage Loans is greater than [__]% of such amount plus the amount
which had been used during that month to purchase Additional Balances and Subsequent Mortgage Loans; provided,
however, that amounts on deposit in the Funding Account during the month of a Targeted Final Payment Date that
will be distributed to the holders of the Variable Pay Revolving Notes on the Payment Date in the month following
such Targeted Final Payment Date will be disregarded with respect to the calculation described in this clause
(iv).
Eligible Account: An account that is any of the following: (i) maintained with a depository
institution the short-term debt obligations of which have been rated by each Rating Agency in its highest rating
category available, or (ii) an account or accounts in a depository institution in which such accounts are fully
insured to the limits established by the FDIC, provided that any deposits not so insured shall, to the extent
acceptable to each Rating Agency, as evidenced in writing, be maintained such that (as evidenced by an Opinion of
Counsel delivered to the Indenture Trustee and each Rating Agency) the Indenture Trustee have a claim with
respect to the funds in such account or a perfected first security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to claims of any other depositors or
creditors of the depository institution with which such account is maintained, or (iii) an account or accounts
maintained with a depository institution or trust company, as long as its short-term debt obligations are rated
[__] by [_______], and [__] by [__________] (or the equivalent) or better by each Rating Agency, and its long
term debt obligations are rated [__] by [_________] and [__] by [________] (or the equivalent) or better by each
Rating Agency, or (iv) a segregated trust account or accounts maintained in the corporate trust division of a
depository institution or trust company, acting in its fiduciary capacity, or (v) an account or accounts of a
depository institution acceptable to each Rating Agency (as evidenced in writing by each Rating Agency that use
of any such account will not cause a Rating Event (if determined without regard to the Policy).
Eligible Substitute Loan: A Mortgage Loan substituted by either Seller for a Deleted Loan, which must,
on the date of such substitution, as confirmed in an Officers' Certificate delivered to the Indenture Trustee,
(i) have an outstanding principal balance, after deduction of the principal portion of the monthly payment due in
the month of substitution (or in the case of a substitution of more than one Mortgage Loan for a Deleted Mortgage
Loan, an aggregate outstanding principal balance, after such deduction), not in excess of the outstanding
principal balance of the Deleted Loan (the amount of any shortfall to be deposited by the Seller in the Custodial
Account in the month of substitution) and a Credit Limit not in excess of $________; (ii) comply with each
representation and warranty made by [ ] and set forth in Section 3.1(b) of the Purchase Agreement, other than
clauses (viii), (xiii), (xxiv), (xxv)(B), (xxvi) and (xxvii) thereof, and comply with each of the representations
and warranties made by _______ set forth in Section 3.1(d)(II) of the Purchase Agreement, as of the date of
substitution; (iii) have a Loan Rate, Net Loan Rate and Gross Margin no lower than and not more than 1% per annum
higher than the Loan Rate, Net Loan Rate and Gross Margin, respectively, of the Deleted Loan as of the date of
substitution; (iv) have a CLTV at the time of substitution no higher than that of the Deleted Loan at the time of
substitution; (v) have a remaining term to stated maturity not greater than (and not more than one year less
than) that of the Deleted Loan; and (vi) not be 30 days or more delinquent.
Enhancer: [________________], or any successor thereto.
Enhancer Default: Any failure by the Enhancer to make a payment required under the Policy in accordance
with its terms.
Enhancer Optional Deposit: Amounts deposited by or on behalf of the Enhancer in the Note Payment
Account, other than Insured Amounts, to be applied to the Notes.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: With respect to the Indenture, any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) a default in the payment of the principal of, any installment of the principal of or interest on any
Note when the same becomes due and payable, and such default shall continue for a period of five days;
(b) there occurs a default in the observance or performance in any material respect of any covenant or
agreement of the Issuer made in the Indenture, or any representation or warranty of the Issuer made in the
Indenture or in any certificate 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 that has a material adverse
effect on the Noteholders or the Enhancer, and such default shall continue or not be cured, or the circumstance
or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of [__] 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 Enhancer or the Noteholders
of at least [__]% of the aggregate Note Balance of the Notes, a written notice specifying such default or
incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of
default hereunder;
(c) there occurs the filing of a decree or order for relief by a court having jurisdiction in the premises
in respect of the Issuer or any substantial part of the Trust Estate in an involuntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Trust Estate, or ordering the winding-up or liquidation of the Issuer's affairs, and such
decree or order shall remain unstayed and in effect for a period of [__] consecutive days;
(d) there occurs the commencement by the Issuer of a voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry
of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the appointment
or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Issuer or for any substantial part of the assets of the Trust Estate, or the making by the Issuer of any
general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of any action by the Issuer in furtherance of any of the foregoing; or
(e) the occurrence of an Early Amortization Event.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
Excess Spread: With respect to any Payment Date and without taking into account any Insured Amount, if
any, paid by the Enhancer under the Policy for such Payment Date, the excess, if any, of (i) Interest Collections
for the related Collection Period over (ii) the sum of (x) the sum of (A) the premium allocable to such Payment
Date and (B) any unpaid premium for the Policy, with interest thereon as provided in the Insurance Agreement and
(y) the aggregate amount distributed to the Noteholders as interest on such Payment Date pursuant to
Section 3.05(a)(i) of the Indenture.
Excess Spread Test: As to any Payment Date, a test that will be satisfied if the product of (x) (i) the
amount of Excess Spread (reduced by the aggregate Liquidation Loss Amounts with respect to such Payment Date) on
such Payment Date divided by (ii) the Pool Balance as of the beginning of the related Collection Period and (y)
12, expressed as a percentage, is greater than or equal to [__]%.
Excluded Amount: For any Payment Date during the Rapid Amortization Period, all Draws made to an
obligor under any Mortgage Loan during the Rapid Amortization Period which shall not be transferred to the Trust
Estate, and the portion of the Principal Collections and Interest Collections for each Collection Period
allocated to such Excluded Amount based on a pro rata allocation between the related Excluded Amount and the
Principal Balance of such Mortgage Loan in proportion to the respective amounts outstanding as of the end of the
calendar month preceding such Collection Period.
Expenses: The meaning specified in Section 7.02 of the Trust Agreement.
Xxxxxx Xxx: Xxxxxx Xxx, formerly the Federal National Mortgage Association, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
Final Payment Date: The Payment Date in _______________.
Fiscal Year: The fiscal year of the Trust, which shall end on December 31 of each year.
Foreclosure Profit: With respect to a Liquidated Mortgage Loan, the amount, if any, by which (i) the
aggregate of Liquidation Proceeds net of Liquidation Expenses exceeds (ii) the Principal Balance of such
Liquidated Mortgage Loan (plus accrued and unpaid interest thereon at the applicable Loan Rate from the date
interest was last paid through the date of receipt of the final Liquidation Proceeds) immediately prior to the
final recovery of the related Liquidation Proceeds.
Freddie Mac: Freddie Mac, formerly the Federal Home Loan Mortgage Corporation, or any successor thereto.
Funding Account: The account established and maintained pursuant to Section 3.16 of the Servicing
Agreement.
Funding Event: Shall mean that, during the Managed Amortization Period, the aggregate Note Balance of
the Variable Pay Revolving Notes has been reduced to zero and the Overcollateralization Amount is at least equal
to the Overcollateralization Target Amount.
GAAP: Generally accepted accounting principles.
Xxxxx: 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 the Indenture. A Grant of the Collateral or of any other agreement or instrument shall include all rights,
powers and options (but none of the obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect
of such collateral or other agreement or instrument and all other moneys payable thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally to do and receive anything that
the granting party is or may be entitled to do or receive thereunder or with respect thereto.
Gross Margin: With respect to any Mortgage Loan, the percentage set forth as the "Margin" for such
Mortgage Loan on the Mortgage Loan Schedule.
Indemnified Party: The meaning specified in Section 7.02 of the Trust Agreement.
Indenture: The indenture dated as of the Closing Date between the Issuer and the Indenture Trustee.
Indenture Trustee: _________, a national banking association, and its successors and assigns or any
successor indenture trustee appointed pursuant to the terms of the Indenture.
Independent: When used with respect to any specified Person, such Person (i) is in fact independent of
the Issuer, any other obligor on the Notes, the Sellers, the Depositor and any Affiliate of any of the foregoing
Persons, (ii) does not have any direct financial interest or any material indirect financial interest in the
Issuer, any such other obligor, the Sellers, the Depositor or any Affiliate of any of the foregoing Persons and
(iii) is not connected with the Issuer, any such other obligor, the Sellers, the Depositor or any Affiliate of
any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to the Indenture Trustee under the
circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an Issuer Order and approved by the
Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer
has read the definition of "Independent" in this Indenture and that the signer is Independent within the meaning
thereof.
Index: With respect to any Mortgage Loan, the prime rate from time to time for the adjustment of the
Loan Rate set forth as such on the related Loan Agreement.
Initial Aggregate Note Balance: $[ ].
Initial Aggregate Term Note Balance: $[ ].
Initial Certificate Balance: $[ ].
Initial Class A-1 Note Balance: $[ ].
Initial Class A-1 Variable Pay Revolving Note Balance: $[ ].
Initial Class A-2 Note Balance: $[ ].
Initial Class A-2 Variable Pay Revolving Note Balance: $[ ].
Initial Class A-3 Note Balance: $[ ].
Initial Class A-3 Variable Pay Revolving Note Balance: $[ ].
Initial Mortgage Loans: The adjustable rate home equity revolving lines of credit initially transferred
by the Depositor to the Issuer on the Closing Date, which are listed on the Mortgage Loan Schedule on such date.
Initial Pool Balance: The sum of (a) the aggregate Principal Balances of the Initial Mortgage Loans as
of the Cut-off Date and (b) the Original Pre-Funded Amount.
Initial Purchaser: _______________, as the initial purchaser of the Variable Pay Revolving Notes.
Insolvency Event: With respect to a specified Person, (a) the filing of a decree or order for relief by
a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such
Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay its debts as such debts become due or the admission by
such Person in writing (as to which the Indenture Trustee shall have notice) of its inability to pay its debts
generally, or the adoption by the Board of Directors or managing member of such Person of a resolution which
authorizes action by such Person in furtherance of any of the foregoing.
Insurance Agreement: The Insurance and Indemnity Agreement dated as of the Closing Date, among the
Servicer, the Sellers, the Depositor, the Issuer, the Indenture Trustee and the Enhancer, including any
amendments and supplements thereto.
Insurance Proceeds: Proceeds paid by any insurer (other than the Enhancer) pursuant to any insurance
policy covering a Mortgage Loan which are required to be remitted to the Servicer, or amounts required to be paid
by the Servicer pursuant to the next to last sentence of Section 3.04 of the Servicing Agreement, net of any
component thereof (i) covering any expenses incurred by or on behalf of the Servicer in connection with obtaining
such proceeds, (ii) that is applied to the restoration or repair of the related Mortgaged Property, (iii)
released to the related Mortgagor in accordance with the Servicer's normal servicing procedures or (iv) required
to be paid to any holder of a mortgage senior to such Mortgage Loan.
Insured Amount: As defined in the Policy.
Interest Collections: With respect to any Payment Date, the sum of all payments by or on behalf of
Mortgagors and any other amounts constituting interest (including without limitation such portion of Insurance
Proceeds, Net Liquidation Proceeds and Repurchase Prices as is allocable to interest on the applicable Mortgage
Loan) as is paid by the Sellers or the Servicer (including any optional servicing advance) or is collected and
applied by the Servicer under the Mortgage Loans during the related Collection Period, exclusive of the pro rata
portion thereof attributable to any Excluded Amounts, and reduced by the Servicing Fee for the related Collection
Period and by any fees (including annual fees) or late charges or similar administrative fees paid by Mortgagors
during the related Collection Period. The terms of the related Loan Agreement shall determine the portion of
each payment in respect of such Mortgage Loan that constitutes principal or interest.
Interest Coverage Amount: The amount to be paid from proceeds from the sale of the Notes for deposit
into the Capitalized Interest Account pursuant to Section 3.19 of the Servicing Agreement on the Closing Date,
which amount initially shall be $[ ], and thereafter, shall be the amount computed in accordance with Section
3.19 of the Servicing Agreement.
Interest Period: With respect to the Notes and any Payment Date (other than the first Payment Date), the
period beginning on the preceding Payment Date and ending on the day preceding such Payment Date, and in the case
of the first Payment Date, the period beginning on the Closing Date and ending on the day preceding the first
Payment Date.
Interest Rate Adjustment Date: With respect to each Mortgage Loan, the date or dates on which the Loan
Rate is adjusted in accordance with the related Loan Agreement.
Interest Shortfall: (I) With respect to the Class A-1 Notes and the Class A-2 Notes and any Payment
Date, the sum of:
(A) an amount of interest on such Class of Notes calculated at a rate equal to the excess of (i) the
lesser of (a) LIBOR plus the related margin and (b) ___% over (ii) the Net WAC Rate, plus
(B) interest on such amount calculated at a rate equal to the related Note Rate; and
(II) With respect to the Class A-3 Notes and the Variable Pay Revolving Notes and any Payment Date, the
sum of:
(A) an amount of interest on such Class of Notes calculated at a rate equal to the excess of (i) LIBOR
plus the related margin over (ii) the Net WAC Rate, plus
(B) interest on such amount calculated at a rate equal to the related Note Rate.
Interest Shortfalls will not be included as interest payments on the Notes for such Payment Date and
such amount will accrue interest at the related Note Rate (as adjusted from time to time) and will be paid on
future Payment Dates only to the extent funds are available therefor as set forth in Section 3.05(a) of the
Indenture.
Issuer or Trust: The Home Equity Loan Trust [ ]-[ ], a Delaware statutory trust, or its successor
in interest.
Issuer Order or 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.
LIBOR: As to any Interest Period, (a) for any Interest Period other than the first Interest Period, the
rate for United States dollar deposits for one month that appears on the Telerate Screen Page 3750 as of 11:00
a.m., London, England time, on the second LIBOR Business Day prior to the first day of that Interest Period or
(b) with respect to the first Interest Period, the rate for United States dollar deposits for one month that
appears on the Telerate Screen Page 3750 as of 11:00 a.m., London, England time, two LIBOR Business Days prior to
the Closing Date. If such rate does not appear on such page (or other page as may replace that page on that
service, or if such service is no longer offered, such other service for displaying LIBOR or comparable rates as
may be reasonably selected by the Indenture Trustee after consultation with the Servicer and the Enhancer), the
rate will be the Reference Bank Rate. If no Reference Bank Rate is available, LIBOR will be LIBOR applicable to
the preceding Payment Date.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking
institutions in the city of London, England are required or authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation, assignment, participation,
deposit arrangement, encumbrance, lien (statutory or other), preference, priority right or interest or other
security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation,
any conditional sale or other title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing statement under the UCC (other than any
such financing statement filed for informational purposes only) or comparable law of any jurisdiction to evidence
any of the foregoing; provided, however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.
Liquidated Mortgage Loan: With respect to any Payment Date, any Mortgage Loan in respect of which the
Servicer has determined, in accordance with the servicing procedures specified in the Servicing Agreement, as of
the end of the related Collection Period that substantially all Liquidation Proceeds which it reasonably expects
to recover, if any, with respect to the disposition of the related REO Property have been recovered.
Liquidation Expenses: All out-of-pocket expenses (exclusive of overhead) incurred by or on behalf of
the Servicer in connection with the liquidation of any Mortgage Loan and not recovered under any insurance
policy, including legal fees and expenses, any unreimbursed amount expended (including, without limitation,
amounts advanced to correct defaults on any mortgage loan which is senior to such Mortgage Loan and amounts
advanced to keep current or pay off a mortgage loan that is senior to such Mortgage Loan) respecting such
Mortgage Loan and any related and unreimbursed expenditures for real estate property taxes or for property
restoration, preservation or insurance against casualty loss or damage.
Liquidation Loss Amount: With respect to any Payment Date and any Mortgage Loan that became a
Liquidated Mortgage Loan during the related Collection Period, the unrecovered portion of the Principal Balance
of such Mortgage Loan and any unpaid accrued interest thereon at the end of such Collection Period, after giving
effect to the Net Liquidation Proceeds applied in reduction of such Principal Balance.
Liquidation Proceeds: Proceeds (including Insurance Proceeds but not including amounts drawn under the
Policy) if any received in connection with the liquidation of any Mortgage Loan or related REO Property, whether
through trustee's sale, foreclosure sale or otherwise.
Loan Agreement: With respect to each Mortgage Loan, the credit line agreement, pursuant to which the
related Xxxxxxxxx agrees to pay the indebtedness evidenced thereby and secured by the related Mortgage as
modified or amended.
Loan Rate: With respect to any Mortgage Loan and any day, the per annum rate of interest applicable
under the related Loan Agreement.
Lost Note Affidavit: With respect to any Mortgage Loan as to which the original Loan Agreement has been
permanently lost or destroyed and has not been replaced, an affidavit from the related Seller certifying that the
original Loan Agreement has been lost, misplaced or destroyed (together with a copy of the related Loan
Agreement, if available).
Managed Amortization Period: The period beginning on the first day following the end of the related
Revolving Period and ending on the earlier of (i) the Payment Date occurring in March 2010 and (ii) the
occurrence of a Rapid Amortization Event.
Maximum Loan Rate: With respect to each Mortgage Loan, the maximum loan rate thereon specified in the
related Loan Agreement.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the
laws of the State of Delaware, or any successor thereto.
MERS® System: The system of recording transfers of Mortgages electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with MERS on the MERS® System.
Minimum Monthly Payment: With respect to any Mortgage Loan and any month, the minimum amount required
to be paid by the related Mortgagor in such month.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely
as nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination thereof.
Moody's: Xxxxx'x Investors Service, Inc., or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a first or second lien on an estate
in fee simple interest in real property securing a Mortgage Loan.
Mortgage File: With respect to each Mortgage Loan:
(i) the original Loan Agreement endorsed or assigned without recourse in blank (which endorsement shall
contain either an original signature or a facsimile signature of an authorized officer of [ ]) or, with respect
to any Mortgage Loan as to which the original Loan Agreement has been permanently lost or destroyed and has not
been replaced, a Lost Note Affidavit;
(ii) the original Mortgage, noting the presence of the MIN of the Mortgage Loan, if the Mortgage is
registered on the MERS® System, and language indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan
is a MOM Loan, with evidence of recording thereon, or, if the original Mortgage has not yet been returned from
the public recording office, a copy of the original Mortgage certified by [ ] that such Mortgage has been sent
for recording, or a county certified copy of such Mortgage in the event the recording office keeps the original
or if the original is lost;
(iii) unless the Mortgage Loan is registered on the MERS® System, original assignments (which may be included
in one or more blanket assignments if permitted by applicable law) of the Mortgage in recordable form from [ ]
to "_________, as Indenture Trustee under that certain Indenture dated as of [ ], for Home Equity Loan Trust
[ ]-[ ], Home Equity Loan-Backed Term Notes" c/o the Servicer at an address specified by the Servicer;
(iv) originals of any intervening assignments of the Mortgage from the originator to [ ] (or to MERS, if
the Mortgage Loan is registered on the MERS® System, and which notes the presence of a MIN), with evidence of
recording thereon, or, if the original of any such intervening assignment has not yet been returned from the
public recording office, a copy of such original intervening assignment certified by [ ] that such original
intervening assignment has been sent for recording; and
(v) a true and correct copy of each assumption, modification, consolidation or substitution agreement, if
any, relating to such Mortgage Loan; and
(vi) any documents required to be added to such documents pursuant to the Purchase Agreement, the Trust
Agreement or the Servicing Agreement.
It is understood that the Mortgage File (other than item (i) above) may be retained in microfilm,
microfiche, optical storage or magnetic media in lieu of hard copy; provided, that with respect to any Mortgage
Loan not registered on the MERS® System, the original assignment of Mortgage described in clause (iii) above
shall be retained in the Mortgage File.
Mortgage Loan Schedule: The initial schedule of Initial Mortgage Loans as of the Cut-Off Date set forth
in Exhibit A of the Servicing Agreement, and as of each Subsequent Cut-Off Date, any Subsequent Mortgage Loans,
which schedule sets forth as to each Mortgage Loan (i) the Cut-Off Date Principal Balance, (ii) the Credit Limit
and Gross Margin, (iii) the Maximum Loan Rate, if any, (iv) the loan number and (v) the lien position of the
related Mortgage.
Mortgage Loans: At any time, all Initial Mortgage Loans and Subsequent Mortgage Loans, including
Additional Balances, if any, that have been sold to the Issuer pursuant to, in the case of Initial Mortgage
Loans, the Trust Agreement, or, in the case of Subsequent Mortgage Loans, a Subsequent Transfer Agreement,
together with all monies due or become due thereunder or the Related Documents, and that remain subject to the
terms thereof.
Mortgaged Property: The underlying property, including real property and improvements thereon, securing
a Mortgage Loan.
Mortgagor: The obligor or obligors under a Loan Agreement.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan, Liquidation Proceeds net of
Liquidation Expenses minus the pro rata portion of such amount that is attributable to any Excluded Amount (but
not including the portion, if any, of such amount that exceeds the Principal Balance of, plus accrued and unpaid
interest on, such Mortgage Loan at the end of the Collection Period immediately preceding the Collection Period
in which such Mortgage Loan became a Liquidated Mortgage Loan) and including any Recovery Amounts.
Net Loan Rate: With respect to any Payment Date and any Mortgage Loan, the Loan Rate of that Mortgage
Loan applicable to the Due Date in the related Collection Period, net of the Servicing Fee Rate and, beginning on
the thirteenth Payment Date and thereafter, [__]% ([__] basis points), adjusted to an effective rate reflecting
the methods by which interest is calculated on the related Classes of Notes during such Interest Period.
Net Principal Collections: With respect to any Payment Date, the excess, if any, of Principal
Collections for such Payment Date over the aggregate amount of Additional Balances created during the related
Collection Period, conveyed to the Issuer.
Net WAC Rate: With respect to any Payment Date, (i) a per annum rate equal to the weighted average of
the Net Loan Rates of the Mortgage Loans as of the first day of the month preceding the month in which such
Payment Date occurs, and weighted on the basis of the respective Principal Balances of such Mortgage Loans as of
the first day of the related Collection Period, minus (ii) the premium rate on the Policy multiplied by a
fraction, the numerator of which is the sum of the Note Balances for each Class of Notes and the denominator of
which is the Pool Balance.
Net Worth: As of any date of determination, the net worth of [ ] and its consolidated subsidiaries,
as determined in accordance with GAAP.
Note Balance: With respect to any Payment Date and any Class of Notes, the Initial Note Balance of such
Class reduced by all payments of principal on such Class prior to such Payment Date and increased, in the case of
any Class of Variable Pay Revolving Notes, by each Advance paid by the holder of such Class of Variable Pay
Revolving Notes or, in the case of any additional Variable Pay Revolving Notes, by each Advance made by one or
more of the "Purchasers" under and as defined in the Note Purchase Agreement.
Note Owner or Owner: The Beneficial Owner of a Note.
Note Payment Account: The account established by the Indenture Trustee pursuant to Sections 3.01
and 8.02 of the Indenture and Section 5.01 of the Servicing Agreement. Amounts deposited in the Note Payment
Account will be distributed by the Indenture Trustee in accordance with Section 3.05 of the Indenture.
Note Purchase Agreement: The note purchase agreement dated as of the Closing Date, among the Issuer, the
Depositor, _____________, ______________, for itself and as representative of _____________________________ or
any similar agreement entered into by the Depositor and any other Holder of a Variable Pay Revolving Note.
Note Rate: As to the Notes, the following rates:
Class A-1 Notes: a floating rate equal to the least of (i) LIBOR plus [ ]% per annum (or, for
any Interest Period commencing after the first Payment Date on which the aggregate Note Balance of the
Notes is less than [__]% of the Note Balance as of the Closing Date, LIBOR plus [__]% per annum), (ii)
the related Net WAC Rate and (iii) [____]% per annum;
Class A-2 Notes: a floating rate equal to the least of (i) LIBOR plus [ ]% per annum (or, for
any Interest Period commencing after the first Payment Date on which the aggregate Note Balance is less
than [__]% of the Note Balance of the Notes as of the Closing Date, LIBOR plus [___]% per annum), (ii)
the related Net WAC Rate and (iii) [____]% per annum.
Class A-3 Notes: a floating rate equal to the lesser of (i) LIBOR plus [ ]% per annum (or,
for any Interest Period commencing after the first Payment Date on which the aggregate Note Balance is
less than [__]% of the Note Balance of the Notes as of the Closing Date, LIBOR plus [__]% per annum),
and (ii) the related Net WAC Rate.
Variable Pay Revolving Notes: a floating rate equal to the lesser of (i) LIBOR plus [ ]% per
annum (or, for any Interest Period commencing after the first Payment Date on which the aggregate Note
Balance is less than 10% of the Note Balance of the Notes as of the Closing Date, LIBOR plus [___]% per
annum), and (ii) the related Net WAC Rate.
The margin on the Variable Pay Revolving Notes may be adjusted in accordance with Section 2.03
of the Indenture. The margin for the Class A-1 Notes and the Class A-2 Notes will increase to [ ]%
per annum, for each Interest Period beginning after the date on which a Early Amortization Event has
occurred.
Note Register: The register maintained by the Note Registrar in which the Note Registrar shall provide
for the registration of Notes and of transfers and exchanges of Notes.
Note Registrar: The Indenture Trustee, in its capacity as Note Registrar.
Noteholder or Holder: The Person in whose name a Note is registered in the Note Register, except that,
any Note registered in the name of the Depositor, the Issuer or the Indenture Trustee or any Affiliate of any of
them shall be deemed not to be outstanding and the registered holder will not be considered a Noteholder for
purposes of giving any request, demand, authorization, direction, notice, consent or waiver under the Indenture
or the Trust Agreement; provided, that in determining whether the Indenture Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that the Indenture
Trustee or the Owner Trustee knows to be so owned shall be so disregarded. Owners of Notes that have been
pledged in good faith may be regarded as Noteholders if the pledgee thereof establishes to the satisfaction of
the Indenture Trustee or the Owner Trustee such pledgee's right so to act with respect to such Notes and that
such pledgee is not the Issuer, any other obligor on the Notes or any Affiliate of any of the foregoing Persons.
Notes: The Variable Pay Revolving Notes and the Term Notes.
Officer's Certificate: With respect to the Servicer, a certificate signed by the President, Managing
Director, a Director, a Vice President or an Assistant Vice President, of the Servicer and delivered to the
Indenture Trustee. With respect to the Issuer, a certificate signed by any Authorized Officer of the Issuer,
under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01
of the Indenture, and delivered to the Indenture Trustee. Unless otherwise specified, any reference in the
Indenture to an Officer's Certificate shall be to an Officer's Certificate of any Authorized Officer of the
Issuer.
Opinion of Counsel: A written opinion of counsel of a law firm reasonably acceptable to the recipient
thereof. Any Opinion of Counsel for the Servicer may be provided by in-house counsel for the Servicer if
reasonably acceptable.
Original Pre-Funded Amount: The amount deposited from the proceeds of the sale of the Securities into
the Pre-Funding Account on the Closing Date, which amount is $[ ].
Outstanding: With respect to the Notes, as of the date of determination, all Notes theretofore
executed, authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to the Indenture
Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes have been executed,
authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Indenture Trustee
is presented that any such Notes are held by a holder in due course;
provided, however, that for purposes of effectuating the Enhancer's right of subrogation as set forth in
Section 4.12 of the Indenture only, all Notes that have been paid with funds provided under the Policy shall be
deemed to be Outstanding until the Enhancer has been reimbursed with respect thereto.
Overcollateralization Amount: With respect to any Payment Date, the amount (but not less than zero), if
any, by which (a) the aggregate outstanding Principal Balance of the Mortgage Loans as of the close of business
on the last day of the related Collection Period, plus amounts on deposit in the Pre-Funding Account and the
Funding Account (excluding any investment earnings thereon) exceeds (b) the aggregate Note Balance of the Notes.
Overcollateralization Target Amount: Shall mean, with respect to each Payment Date (I) prior to the
Stepdown Date, an amount equal to the sum of (i) the Base Specified Overcollateralization Amount and (ii) 100% of
the aggregate Principal Balance of Mortgage Loans that are [___] days or more contractually delinquent, as of the
last day of the related Collection Period or (II) on or after the Stepdown Date, an amount equal to the greater
of (i) the sum of (a) [___]% of the Pool Balance as of the last day of the related Collection Period and (b) 100%
of the aggregate Principal Balance of Mortgage Loans that are [___] days or more contractually delinquent, as of
the last day of the related Collection Period, and (ii) the sum of (a) [__]% of the Initial Aggregate Note
Balance and (b) 100% of the aggregate Principal Balance of Mortgage Loans that are [___] days or more
contractually delinquent, as of the last day of the related Collection Period; provided, however, if the Excess
Spread Test is not satisfied, the Overcollateralization Target Amount shall be no less than the
Overcollateralization Target Amount as of the previous Payment Date. The Overcollateralization Target Amount may
be reduced from time to time with the consent of the Enhancer and written notice from each Rating Agency that the
rating will not be reduced or withdrawn as a result of the change in the Overcollateralization Target Amount
(without taking the Policy into account).
Owner Trust: Home Equity Loan Trust [ ]-[ ], created by the Certificate of Trust pursuant to the
Trust Agreement.
Owner Trustee: _________, not in its individual capacity but solely as owner trustee, and its
successors and assigns or any successor Owner Trustee appointed pursuant to the terms of the Trust Agreement.
Ownership Interest: As to any Certificate, any ownership or security interest in such Certificate,
including any interest in such Certificate as the Certificateholder thereof and any other interest therein,
whether direct or indirect, legal or beneficial, as owner or as pledgee.
Paying Agent: Any paying agent or co-paying agent appointed pursuant to Section 3.03 of the Indenture,
which initially shall be the Indenture Trustee.
Payment Date: The [ ] day of each month, or if such day is not a Business Day, then the next Business
Day.
Percentage Interest: With respect to any Note and Payment Date, the percentage obtained by dividing the
Note Balance of such Note by the aggregate Note Balance of all Notes prior to such Payment Date. With respect to
any Certificate and any Payment Date, the Percentage Interest stated on the face of such Certificate.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the United States or any agency or
instrumentality thereof when such obligations are backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i) above maturing not more than one
month from the date of acquisition thereof; provided, that the unsecured short-term debt obligations of the party
agreeing to repurchase such obligations are at the time rated by each Rating Agency in its highest short-term
rating category available;
(iii) federal funds, certificates of deposit, demand deposits, time deposits and bankers' acceptances
(which shall each have an original maturity of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or a remaining maturity of more than 30 days)
denominated in United States dollars of any U.S. depository institution or trust company incorporated under the
laws of the United States or any state thereof or of any domestic branch of a foreign depository institution or
trust company; provided, that the short-term debt obligations of such depository institution or trust company
(or, if the only Rating Agency is [_________], in the case of the principal depository institution in a
depository institution holding company, debt obligations of the depository institution holding company) at the
date of acquisition thereof have been rated by each Rating Agency in its highest short-term rating category
available; and provided further, that if the only Rating Agency is [___________] and if the depository or trust
company is a principal subsidiary of a bank holding company and the debt obligations of such subsidiary are not
separately rated, the applicable rating shall be that of the bank holding company; and provided further, that if
the only Rating Agency is [___________] and the original maturity of such short-term debt obligations of a
domestic branch of a foreign depository institution or trust company shall exceed 30 days, the short-term rating
of such institution shall be [____];
(iv) commercial paper (having original maturities of not more than 365 days) of any corporation
incorporated under the laws of the United States or any state thereof which on the date of acquisition has been
rated by each Rating Agency in its highest short-term rating category available; provided, that such commercial
paper shall have a remaining maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund (including without limitation, any such fund
for which the Indenture Trustee or an Affiliate of the Indenture Trustee acts as an advisor or a manager) rated
by each Rating Agency in one of its two highest long-term rating categories available (if so rated by such Rating
Agency); and
(vi) other obligations or securities that are acceptable to each Rating Agency as a Permitted
Investment hereunder and will not cause a Rating Event, and which are acceptable to the Enhancer, as evidenced in
writing;
provided, however, that no instrument shall be a Permitted Investment if it represents, either (1) the right to
receive only interest payments with respect to the underlying debt instrument or (2) the right to receive both
principal and interest payments derived from obligations underlying such instrument and the principal and
interest payments with respect to such instrument provide a yield to maturity greater than [___]% of the yield to
maturity at par of such underlying obligations. References herein to the highest long-term rating category
available debt shall mean [__] in the case of [__________] and [___] in the case of [_________], and references
herein to the highest short-term rating category available shall mean [__] in the case of [_________] and [__] in
the case of [_______].
Person: Any legal individual, corporation, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or government or any agency or political
subdivision thereof.
Plan: Any employee benefit plan or certain other retirement plans and arrangements, including
individual retirement accounts and annuities, Xxxxx plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or arrangements are invested, that are subject
to ERISA or Section 4975 of the Code, as described in Section 3.05 of the Trust Agreement.
Plan Assets: The meaning specified in Section 2510.3-101 of the Department of Labor Regulations and as
described in Section 3.05 of the Trust Agreement.
Policy: The [ ] Insurance Policy No. [ ], dated as of the Closing Date, issued by the Enhancer.
Policy Draw Amount: With respect to any Payment Date, the Insured Amount.
Pool Balance: With respect to any date, the aggregate Principal Balance of all Mortgage Loans as of
such date plus, during the Pre-Funding Period, the Pre-Funded Amount.
Predecessor Note: With respect to any Note, every previous Note evidencing all or a portion of the same
debt as that evidenced by such Note; and, for the purpose of this definition, any Note authenticated and
delivered under Section 4.03 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Note shall be
deemed to evidence the same debt as such mutilated, lost, destroyed or stolen Note.
Pre-Funded Amount: With respect to any date of determination during the Pre-Funding Period, the amount
on deposit in the Pre-Funding Account.
Pre-Funding Account: The account established and maintained pursuant to Section 3.18 of the Servicing
Agreement.
Pre-Funding Period: The period commencing on the Closing Date until the earliest of (i) the date on
which the amount on deposit in the Pre-Funding Account is less than $[ ], (ii) [ ] or (iii) the occurrence of
a Servicing Default.
Principal Balance: With respect to any Mortgage Loan, other than a Liquidated Mortgage Loan, and as of
any day, the related Cut-Off Date Principal Balance, plus (i) any Additional Balances in respect of such Mortgage
Loan conveyed to the Trust, minus (ii) all collections credited as principal in respect of any such Mortgage Loan
in accordance with the related Loan Agreement (except any such collections that are allocable to any Excluded
Amount) and applied in reduction of the Principal Balance thereof. For purposes of this definition, a Liquidated
Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal Balance of the related Mortgage
Loan immediately prior to the final recovery of substantially all related Liquidation Proceeds and a Principal
Balance of zero thereafter.
Principal Collections: With respect to any Payment Date, the aggregate of the following amounts:
(i) the total amount of payments made by or on behalf of the related Mortgagor, received and
applied as payments of principal on such Mortgage Loan during the related Collection Period, as reported by the
Servicer or the related Subservicer;
(ii) any Liquidation Proceeds allocable as a recovery of principal received in connection with such
Mortgage Loan during the related Collection Period and any Recovery Amounts;
(iii) if such Mortgage Loan was repurchased by a Seller pursuant to the Purchase Agreement during the
related Collection Period, 100% of the Principal Balance thereof as of the date of such purchase and if any
Eligible Substitute Loan is substituted for a Deleted Loan, the Substitution Adjustment Amount;
(iv) any other amounts received as payments on or proceeds of such Mortgage Loan during the
Collection Period, to the extent applied in reduction of the Principal Balance thereof; and
(v) on the Payment Date immediately following the end of the Pre-Funding Period, any amount
transferred from the Pre-Funding Account to the Note Payment Account in accordance with Section 3.18 of the
Servicing Agreement;
provided, that Principal Collections shall be reduced by any amounts withdrawn from the Custodial Account
pursuant to clauses (c), (g), (h), (j) and (k) of Section 3.03 of the Servicing Agreement, and shall not include
any portion of such amounts attributable to any Excluded Amount in respect of any Mortgage Loan that are
allocable to principal of such Mortgage Loan and not otherwise excluded from the amounts specified in (i) through
(iv) above.
Principal Distribution Amount: For any Payment Date (i) during the Revolving Period, the amount, if
any, transferred from the Pre-Funding Account to the Note Payment Account pursuant to Section 3.18(b) of the
Servicing Agreement, and the amount, if any, transferred from the Funding Account to the Note Payment Amount
pursuant to Section 3.16(c)(ii) of the Servicing Agreement, (ii) during the Managed Amortization Period, Net
Principal Collections for the Mortgage Loans, (iii) during the Rapid Amortization Period, Principal Collections
for the Mortgage Loans, (iv) after an Early Amortization Event, any amount in the Reserve Sub-Account, and (v) on
any Payment Date, from the Excess Spread, to the extent available or, to the extent not available, from a draw on
the Policy (but only to the extent the Overcollateralization Amount is zero), an amount equal to the aggregate of
the Liquidation Loss Amounts, if any, for such Payment Date.
Proceeding: Any suit in equity, action at law or other judicial or administrative proceeding.
Program Guide: The Home Equity Servicing Guidelines, as in effect from time to time.
Purchase Agreement: The mortgage loan purchase agreement dated as of the Closing Date, among the
Sellers, the Purchaser, the Issuer and the Indenture Trustee.
Purchase Price: The amounts specified in Section 2.3(a) of the Purchase Agreement.
Purchaser: GreenPoint Mortgage Securities LLC, as purchaser under the Purchase Agreement.
Rapid Amortization Event: Any one of the following events:
(a) the failure on the part of a Seller (i) to make any payment or deposit required to be made under the
Purchase Agreement within five Business Days after the date such payment or deposit is required to be made; or
(ii) to observe or perform in any material respect any other covenants or agreements of the Seller set forth in
the Purchase Agreement, which failure continues unremedied for a period of 60 days after written notice and such
failure materially and adversely affects the interests of the Securityholders or the Enhancer; provided, however,
that a Rapid Amortization Event shall not be deemed to have occurred if such Seller has repurchased or caused to
be repurchased or substituted for the affected Mortgage Loan during such period (or within an additional 60 days
with the consent of the Indenture Trustee and the Enhancer) in accordance with the provisions of the Indenture;
(b) if any representation or warranty made by a Seller in the Purchase Agreement proves to have been
incorrect in any material respect when made and which continues to be incorrect in any material respect for a
period of 45 days with respect to any representation or warranty of the Seller made in Section 3.1(a) or
3.1(d)(I), as applicable, of the Purchase Agreement or 90 days with respect to any representation or warranty
made in Section 3.1(b) or 3.1(d)(II), as applicable, of the Purchase Agreement after written notice and as a
result of which the interests of the Securityholders or the Enhancer are materially and adversely affected;
provided, however, that a Rapid Amortization Event shall not be deemed to have occurred if the Seller has
repurchased or caused to be repurchased or substituted for the affected Mortgage Loan during such period (or
within an additional 60 days with the consent of the Indenture Trustee and the Enhancer) in accordance with the
provisions of the Indenture;
(c) the entry against a Seller of a decree or order by a court or agency or supervisory authority having
jurisdiction under Title 11 of the United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or if a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Servicer or
its property, and the continuance of any such decree or order unstayed and in effect for a period of 60
consecutive days;
(d) either Seller shall voluntarily submit to Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law relating to the Seller or the
Issuer or of or relating to all or substantially all of its property; or the Seller or the Issuer shall admit in
writing its inability to pay its debts generally 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;
(e) the Issuer shall become subject to regulation by the Commission as an investment company within the
meaning of the Investment Company Act of 1940, as amended;
(f) a Servicing Default shall occur and be unremedied under the Servicing Agreement and a qualified
successor Servicer shall not have been appointed;
(g) the occurrence of a draw on the Policy and the failure by the Servicer to reimburse the Enhancer for any
amount owed to the Enhancer pursuant to the Insurance Agreement on account of the draw, which failure continues
unremedied for a period of 90 days after written notice to the Servicer;
(h) the Issuer (or a portion thereof) is determined to be a taxable mortgage pool or an association (or a
publicly-traded partnership) taxable as a corporation or a taxable mortgage pool for federal income tax purposes;
(i) an event of default under the Insurance Agreement; or
(j) an Enhancer Default has occurred and is continuing and the Enhancer cannot be replaced without
additional expense.
In the case of any event described in (a), (b), (f), (g), (i) or (j), a Rapid Amortization Event shall be
deemed to have occurred only if, after any applicable grace period described in such clauses, any of the
Indenture Trustee, the Enhancer or, with the consent of the Enhancer (so long as no Enhancer Default exists),
Securityholders evidencing not less than 51% of the aggregate Securities Balance, by written notice to the
Sellers, the Servicer, the Depositor and the Owner Trustee (and to the Indenture Trustee, if given by the
Enhancer or the Securityholders), declare that a Rapid Amortization Event has occurred as of the date of such
notice. In the case of any event described in clauses (c), (d), (e) or (h), a Rapid Amortization Event shall be
deemed to have occurred without any notice or other action on the part of the Indenture Trustee, the
Securityholders or the Enhancer immediately upon the occurrence of such event; provided, that any Rapid
Amortization Event may be waived and deemed of no effect with the written consent of the Enhancer and each Rating
Agency, subject to the satisfaction of any conditions to such waiver.
Rapid Amortization Period: The period beginning on the earlier of (i) the first day following the end of
the Managed Amortization Period and (ii) the occurrence of a Rapid Amortization Event, and ending upon the
termination of the Issuer.
Rating Agency: Each of [__________] and [_____________] or, if any such organization or a successor
thereto is no longer in existence, such nationally recognized statistical rating organization, or other
comparable Person, designated by the Depositor, notice of which designation shall be given to the Indenture
Trustee. References herein to the highest short term unsecured rating category of a Rating Agency shall mean
[__] or better in the case of [__________] and [__] or better in the case of [_________]; and in the case of any
other Rating Agency, shall mean such equivalent ratings. References herein to the highest long-term rating
category of a Rating Agency shall mean "________" in the case of [___________] and "___" in the case of
[_________]; and in the case of any other Rating Agency, shall mean such equivalent rating.
Rating Event: The qualification, reduction or withdrawal by a Rating Agency of its then-current rating
of the Notes.
Record Date: With respect to the Notes and any Payment Date, unless Notes are no longer held in
book-entry form, the close of business on the Business Day immediately preceding such Payment Date and if the
Notes are no longer held in book-entry form, the last Business Day of the calendar month preceding the month of
such Payment Date.
Recovery Amount: Amounts collected on a Mortgage Loan after the Mortgage Loan becomes a Liquidated
Mortgage Loan, net of any Servicing Fee, Recovery Fee and any reimbursement for advances and expenses of the
Servicer.
Recovery Fee: A customary fee calculated based on additional recovery amounts charged for the
collection of such additional recovery amounts on any Mortgage Loan after the date that such Mortgage Loan became
a Liquidated Mortgage Loan.
Reference Bank Rate: With respect to any Interest Period, as follows: the arithmetic mean (rounded
upwards, if necessary, to the nearest one sixteenth of one percent) of the offered rates for United States dollar
deposits for one month which are offered by the Reference Banks as of 11:00 a.m., London, England time, on the
second LIBOR Business Day prior to the first day of such Interest Period to prime banks in the London interbank
market in amounts approximately equal to the sum of the outstanding Note Balance of the Notes; provided, that at
least two Reference Banks provide such rate. If fewer than two such rates are provided, the Reference Bank Rate
will be the arithmetic mean of the rates quoted by one or more major banks in New York City, selected by the
Indenture Trustee after consultation with the Servicer and the Enhancer, as of 11:00 a.m., New York time, on such
date for loans in U.S. Dollars to leading European banks for a period of one month in amounts approximately equal
to the aggregate Note Balance of the Notes. If no quotations can be obtained, the Reference Bank Rate will be the
Reference Bank Rate applicable to the preceding Interest Period.
Reference Banks: Shall mean three major banks in the London interbank market selected by the Indenture
Trustee after consultation with the Servicer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and
interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time to time.
Related Documents: With respect to each Mortgage Loan, the documents contained in the Mortgage File.
Relief Act Shortfalls: With respect to any Payment Date, for any Mortgage Loan as to which there has
been a reduction in the amount of interest collectible thereon for the related Collection Period as a result of
the application of the Servicemembers Civil Relief Act, formerly known as the Soldiers' and Sailors' Civil Relief
Act of 1940, as amended, or any similar state legislation or regulations, the shortfall, if any, equal to (i) one
month's interest on the Principal Balance of such Mortgage Loan at the applicable Loan Rate, over (ii) the
interest collectible on such Mortgage Loan during such Collection Period.
Repurchase Event: With respect to any Mortgage Loan, either (i) a discovery that, as of the Closing
Date with respect to an Initial Mortgage Loan or the related Subsequent Transfer Date with respect to any
Subsequent Mortgage Loan, the related Mortgage was not a valid lien on the related Mortgaged Property subject
only to (A) the lien of any prior mortgage indicated on the Mortgage Loan Schedule, (B) the lien of real property
taxes and assessments not yet due and payable, (C) covenants, conditions, and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such Mortgage and such other
permissible title exceptions as are customarily accepted for similar loans and (D) other matters to which like
properties are commonly subject that do not materially adversely affect the value, use, enjoyment or
marketability of the related Mortgaged Property or (ii) with respect to any Mortgage Loan as to which either
Seller delivers an affidavit certifying that the original Loan Agreement has been lost or destroyed, a subsequent
default on such Mortgage Loan if the enforcement thereof or of the related Mortgage is materially and adversely
affected by the absence of such original Loan Agreement.
Repurchase Price: With respect to any Mortgage Loan required to be repurchased on any date pursuant to
the Purchase Agreement or purchased by the Servicer pursuant to the Servicing Agreement, an amount equal to the
sum of (i) 100% of the Principal Balance thereof (without reduction for any amounts charged off), (ii) unpaid
accrued interest at the Loan Rate (or with respect to the last day of the month in the month of repurchase, the
Loan Rate will be the Loan Rate in effect as of the second to last day in such month) on the outstanding
Principal Balance thereof from the Due Date to which interest was last paid by the related Mortgagor to the first
day of the month following the month of purchase and (iii) in connection with any Mortgage Loan required to be
repurchased pursuant to Sections 2.1 or 3.1 of the Purchase Agreement, any costs and damages incurred by the
Trust Fund with respect to such Mortgage Loan in connection with a breach of Section 3.1(b)(x) of the Purchase
Agreement. No portion of any Repurchase Price shall be included in any Excluded Amount for any Payment Date
during the Rapid Amortization Period.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance policy which is required to
be maintained from time to time under the Servicing Agreement or the related Subservicing Agreement in respect of
such Mortgage Loan.
Required Ratings: Shall mean, at any time with respect to any Person, that either (a) the short-term
unsecured debt of such Person is rated at least two of the following ratings: "___" or better by [__________] and
"___" by [_________] or (b) the long-term unsecured debt of such Person is rated at least two of the following
ratings: "[__]" by [_________] and "[__]" by [________].
Reserve Sub-Account: A sub-account within the Funding Account established and maintained pursuant to
Section 3.17 of the Servicing Agreement.
Responsible Officer: With respect to the Indenture Trustee, any officer of the Indenture Trustee with
direct responsibility for the administration of the Trust Agreement and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
Revolving Period: The period beginning on the Closing Date and ending on the earlier of (i) the Payment
Date occurring in [ ], (ii) the occurrence of an event described in clause (iv) of the definition of Early
Amortization Event and (iii) the occurrence of a Rapid Amortization Event.
Rolling Six-Month Annualized Liquidation Loss Amounts: With respect to any Determination Date, the
product (expressed as a percentage) of (i) the aggregate Liquidation Loss Amounts as of the end of each of the
six Collection Periods (reduced by the aggregate Subsequent Net Recovery Amounts for such Collection Periods)
immediately preceding such Determination Date divided by the Initial Pool Balance and (ii) two (2).
Secretary of State: The Secretary of State of the State of Delaware.
Securities Act: The Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
Securities Balance: The Note Balance or Certificate Balance, as the context may require.
Securitization Transaction: Any transaction involving a sale or other transfer of mortgage loans
directly or indirectly to an issuing in connection with an issuance of publicly offered or privately placed,
rated or unrated mortgage-backed securities.
Security: Any Certificate or a Note, as the context may require.
Securityholder: Any Noteholder or Certificateholder.
Seller or Sellers: [ ] and [ ], and their respective successors and assigns.
Servicer: [ ], and its successors and assigns.
Servicer Advances: Any advances the Servicer may make with respect to the Mortgage Loans, whether or
not required, in respect of principal, interest, taxes, insurance or otherwise.
Servicing Agreement: The servicing agreement dated as of the Closing Date among the Servicer, the
Issuer and the Indenture Trustee.
Servicing Certificate: A certificate completed and executed by a Servicing Officer on behalf of the
Servicer in accordance with Section 4.01 of the Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Servicing Default: Any one of the following events:
(i) any failure by the Servicer to deposit in the Custodial Account, the Funding Account, the Reserve
Sub-Account, the Note Payment Account or the Distribution Account any deposit required to be made under the terms
of the Servicing Agreement that continues unremedied for a period of five Business Days after the date upon which
written notice of such failure shall have been given to the Servicer by the Issuer or the Indenture Trustee, or
to the Servicer, the Issuer and the Indenture Trustee by the Enhancer;
(ii) any failure on the part of the Servicer duly to observe or perform in any material respect any other
covenants or agreements of the Servicer set forth in the Securities or in the Servicing Agreement, which failure,
in each case, materially and adversely affects the interests of the Securityholders or the Enhancer, and which
failure continues unremedied for a period of 45 days after the date on which written notice of such failure,
requiring the same to be remedied, and stating that such notice is a "Notice of Default" under the Servicing
Agreement, shall have been given to the Servicer by the Issuer or the Indenture Trustee, or to the Servicer, the
Issuer and the Indenture Trustee by the Enhancer;
(iii) the entry against the Servicer of a decree or order by a court or agency or supervisory authority having
jurisdiction under Title 11 of the United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or if a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Servicer or
its property, and the continuance of any such decree or order unstayed and in effect for a period of 60
consecutive days;
(iv) the Servicer shall voluntarily submit to Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law relating to the Servicer or of or
relating to all or substantially all of its property; or the Servicer shall admit in writing its inability to pay
its debts generally 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;
(v) a Rapid Amortization Event occurs on account of the circumstances specified in clause (g) of the
definition of Rapid Amortization Event, which event continues beyond the 90 day grace period set forth in such
clause (g);
(vi) the Servicer's Tangible Net Worth at any time is less than $[_______] and [ ] fails to own, directly
or indirectly, at least [__]% of the common stock of the Servicer; or
(vii) the Rolling Six-Month Annualized Liquidation Loss Amount with respect to the Mortgage Loans exceeds
[__]%.
Servicing Fee: With respect to any Mortgage Loan and any Collection Period, the product of (i) the
Servicing Fee Rate divided by 12 and (ii) the related Principal Balance as of the first day of such Collection
Period.
Servicing Fee Rate: [ ]% per annum.
Servicing Officer: Any officer of the Servicer involved in, or responsible for, the administration and
servicing of the Mortgage Loans whose name and specimen signature appear on a list of servicing officers
furnished to the Indenture Trustee (with a copy to the Enhancer) by the Servicer, as such list may be amended
from time to time.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. or
its successor in interest.
Stated Value: With respect to any Mortgage Loan, the stated value of the related Mortgaged Property
determined in accordance with the Program Guide and given by the related Mortgagor in his or her application.
Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code §§3801 et seq., as
the same may be amended from time to time.
Stepdown Date: The later of (i) the Payment Date in April 2008 and (ii) the Payment Date on which the
Pool Balance plus amounts on deposit in the Funding Account (after applying payments received in the related
Collection Period) as of such Payment Date is less than 50% of the Initial Pool Balance.
Subsequent Cut-Off Date: With respect to any Subsequent Mortgage Loan, the date specified in the
related Subsequent Transfer Agreement.
Subsequent Cut-Off Date Principal Balance: With respect to any Subsequent Mortgage Loan, the Principal
Balance thereof as of the close of business on the last day of the Collection Period immediately prior to the
related Subsequent Cut-Off Date.
Subsequent Mortgage Loan: An adjustable rate home equity revolving line of credit sold by a Seller to
the Issuer pursuant to Section 2.2 of the Purchase Agreement, such Mortgage Loan being identified on the Mortgage
Loan Schedule attached to the related Subsequent Transfer Agreement, as set forth in such Subsequent Transfer
Agreement.
Subsequent Net Recovery Amounts: Recovery Amounts collected on a Mortgage Loan after the Mortgage Loan
becomes a Liquidated Mortgage Loan, net of any Recovery Fee.
Subsequent Transfer Agreement: Each Subsequent Transfer Agreement dated as of a Subsequent Transfer
Date executed by the respective Seller and the Issuer substantially in the form of Exhibit 2 to the Purchase
Agreement, by which the related Subsequent Mortgage Loans are sold to the Issuer.
Subsequent Transfer Date: With respect to each Subsequent Transfer Agreement, the date on which the
related Subsequent Mortgage Loans are sold to the Issuer.
Subservicer: Each Person that enters into a Subservicing Agreement as a subservicer of Mortgage Loans.
Subservicing Agreement: The written contract between the Servicer and any Subservicer relating to
servicing and administration of certain Mortgage Loans as provided in Section 3.01(b) of the Servicing Agreement.
Substitution Adjustment Amount: With respect to any Eligible Substitute Loan and any Deleted Loan, the
amount, if any, as determined by the Servicer, by which the aggregate principal balance of all such Eligible
Substitute Loans as of the date of substitution is less than the aggregate Principal Balance of all such Deleted
Loans (after application of the principal portion of the Monthly Payments due in the month of substitution that
are to be distributed to the Securityholders in the month of substitution).
Tangible Net Worth: Net Worth, less the sum of the following (without duplication): (a) any other
assets of [ ] and its consolidated subsidiaries that would be treated as intangibles under GAAP including,
without limitation, any write-up of assets (other than adjustments to market value to the extent required under
GAAP with respect to excess servicing, residual interests in offerings of asset-backed securities and
asset-backed securities that are interest-only securities), good-will, research and development costs,
trade-marks, trade names, copyrights, patents and unamortized debt discount and expenses and (b) loans or other
extensions of credit to officers of [ ] or its consolidated subsidiaries other than mortgage loans made to such
Persons in the ordinary course of business.
Targeted Final Payment Date: Shall mean (i) for the [Class A-1 Notes, the Payment Date occurring in [
], (ii) for the Class A-2 Notes, the Payment Date occurring in [ ] and for the Class A-3 Notes], the Payment
Date occurring in [ ].
Tax Matters Partner: _____, as the Servicer, for so long as the Servicer holds all or any portion of
the Certificates; if any other Person holds 100% of the Certificates, such Person; and otherwise as provided in
the Code.
Telerate Screen Page 3750: The display page so designated on the Telerate Capital Markets Report (or
such other page as may replace page 3750 on such service for the purpose of displaying London interbank offered
rates of major banks, or, if such service is no longer offered, such other service for displaying London
interbank offered rates or comparable rates as may be selected by the Indenture Trustee after consultation with
the Servicer.
Term Notes: The Class [A-1 Notes, the Class A-2 Notes and the Class A-3 Notes].
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation or other form of assignment of
any Ownership Interest in a Certificate.
Transfer Date: The Payment Date on which the Servicer, upon receipt of written notice and direction from
the Issuer, shall cause the retransfer of Mortgage Loans from the Trust Estate to the Issuer, pursuant to
Section 3.15(c) of the Servicing Agreement.
Transfer Notice Date: The fifth Business Day prior to the Transfer Date for which the Servicer shall
give the Indenture Trustee, the Rating Agencies and the Enhancer a notice of the proposed retransfer of Mortgage
Loans, pursuant to Section 3.15(c) of the Servicing Agreement.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership Interest in a Certificate.
Treasury Regulations: Regulations, including proposed or temporary Regulations, promulgated under the
Code. References herein to specific provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury Regulations.
Trust Agreement: The trust agreement dated as of the Closing Date, between the Owner Trustee and the
Depositor.
Trust Estate: The meaning specified in the Granting Clause of the Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as amended from time to time, as in effect
on any relevant date.
UCC: The Uniform Commercial Code, as in effect from time to time, as in effect in any specified
jurisdiction.
Uniform Single Attestation Program for Mortgage Bankers: The Uniform Single Attestation Program for
Mortgage Bankers, as published by the Mortgage Bankers Association of America and effective with respect to
fiscal periods ending on or after December 15, 1995.
Unpaid Principal Amount: As defined in Section 3.05(a) of the Indenture.
Variable Pay Revolving Notes: Collectively, the [Class A-1 Variable Pay Revolving Notes, the Class A-2
Variable Pay Revolving Notes and the Class A-3 Variable Pay Revolving Notes].
