Exhibit 4.3
Form of Indenture
HOME EQUITY LOAN TRUST 200_-__,
ISSUING ENTITY
and
[__________________]
INDENTURE TRUSTEE
_____________________________________________
INDENTURE
Dated as of _________, 200_
_____________________________________________
HOME EQUITY LOAN NOTES
SERIES 200__-__
TABLE OF CONTENTS
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ARTICLE I Definitions................................................................................1
Section 1.01 Definitions.......................................................................1
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 Opinions of Counsel...............................................................4
ARTICLE III Covenants..................................................................................4
Section 3.01 Collection of Payments on Mortgage Loan Accounts..................................4
Section 3.02 Maintenance of Office or Agency...................................................4
Section 3.03 Money for Payments To Be Held in Trust; Paying Agent; Certificate Paying Agent....4
Section 3.04 Existence.........................................................................6
Section 3.05 Payment of Principal and Interest; Defaulted Interest.............................7
Section 3.06 Protection of Trust Estate........................................................9
Section 3.07 Opinions as to Trust Estate......................................................10
Section 3.08 [Reserved].......................................................................10
Section 3.09 Performance of Obligations; Servicing Agreement..................................10
Section 3.10 Negative Covenants...............................................................12
Section 3.11 Annual Statement as to Compliance................................................12
Section 3.12 Recording of Assignments.........................................................13
Section 3.13 Representations and Warranties Concerning the Mortgage Loans.....................13
Section 3.14 Indenture Trustee's Review of Related Documents..................................13
Section 3.15 Trust Estate; Related Documents..................................................14
Section 3.16 Amendments to Servicing Agreement................................................15
Section 3.17 Master Servicer as Agent and Bailee of Indenture Trustee.........................15
Section 3.18 Investment Company Act...........................................................15
Section 3.19 Issuing Entity May Consolidate, etc., Only on Certain Terms......................16
Section 3.20 Successor or Transferee..........................................................17
Section 3.21 No Other Business................................................................17
Section 3.22 No Borrowing.....................................................................18
Section 3.23 Guarantees, Loans, Advances and Other Liabilities................................18
Section 3.24 Capital Expenditures.............................................................18
Section 3.25 [Reserved].......................................................................18
Section 3.26 Restricted Payments..............................................................18
Section 3.27 Notice of Events of Default......................................................18
Section 3.28 Further Instruments and Acts.....................................................18
Section 3.29 Statements to Noteholders........................................................18
Section 3.30 [Reserved] [Grant of the Additional Loans].......................................18
Section 3.31 Determination of Note Rate and Certificate Rate..................................19
Section 3.32 Payments under the Credit Enhancement Instrument.................................20
Section 3.33 Replacement Credit Enhancement Instrument........................................20
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TABLE OF CONTENTS
(continued)
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ARTICLE IV The Notes; Satisfaction and Discharge of Indenture........................................21
Section 4.01 The Notes[; Increase of Maximum Variable Funding Balance; Additional
Variable Funding Notes]..........................................................21
Section 4.02 Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate Registrar.............................................23
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes.......................................25
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............................................................27
Section 4.08 Definitive Notes.................................................................27
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......................................................29
Section 4.13 Repayment of Moneys Held by Paying Agent.........................................29
ARTICLE V 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........................................34
Section 5.06 Limitation of Suits..............................................................35
Section 5.07 Unconditional Rights of Noteholders To Receive Principal and Interest............35
Section 5.08 Restoration of Rights and Remedies...............................................35
Section 5.09 Rights and Remedies Cumulative...................................................36
Section 5.10 Delay or Omission Not a Waiver...................................................36
Section 5.11 Control by Noteholders...........................................................36
Section 5.12 Waiver of Past Defaults..........................................................36
Section 5.13 Undertaking for Costs............................................................37
Section 5.14 Waiver of Stay or Extension Laws.................................................37
Section 5.15 Sale of Trust Estate.............................................................37
Section 5.16 Action on Notes..................................................................39
Section 5.17 Performance and Enforcement of Certain Obligations...............................39
ARTICLE VI The Indenture Trustee.....................................................................40
Section 6.01 Duties of Indenture Trustee......................................................40
Section 6.02 Rights of Indenture Trustee......................................................41
Section 6.03 Individual Rights of Indenture Trustee...........................................42
Section 6.04 Indenture Trustee's Disclaimer...................................................42
Section 6.05 Notice of Event of Default.......................................................42
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TABLE OF CONTENTS
(continued)
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Section 6.06 Reports by Indenture Trustee to Holders..........................................42
Section 6.07 Compensation and Indemnity.......................................................42
Section 6.08 Replacement of Indenture Trustee.................................................43
Section 6.09 Successor Indenture Trustee by Merger............................................44
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee................44
Section 6.11 Eligibility; Disqualification....................................................45
Section 6.12 Preferential Collection of Claims Against Issuing Entity.........................45
Section 6.13 Representation and Warranty......................................................45
Section 6.14 Directions to Indenture Trustee..................................................46
Section 6.15 No Consent to Certain Acts of Depositor..........................................46
ARTICLE VII Noteholders' Lists and Reports............................................................46
Section 7.01 Issuing Entity To Furnish Indenture Trustee Names and Addresses of Noteholders...46
Section 7.02 Preservation of Information; Communications to Noteholders.......................46
Section 7.03 Reports by Issuing Entity........................................................47
Section 7.04 Reports by Indenture Trustee.....................................................47
ARTICLE VIII Accounts, Disbursements and Releases......................................................47
Section 8.01 Collection of Money..............................................................47
Section 8.02 Trust Accounts...................................................................48
Section 8.03 Opinion of Counsel...............................................................49
Section 8.04 Termination Upon Distribution to Noteholders.....................................49
Section 8.05 Release of Trust Estate..........................................................49
Section 8.06 Surrender of Notes Upon Final Payment............................................50
ARTICLE IX Supplemental Indentures...................................................................50
Section 9.01 Supplemental Indentures Without Consent of Noteholders...........................50
Section 9.02 Supplemental Indentures With Consent of Noteholders..............................51
Section 9.03 Execution of Supplemental Indentures.............................................53
Section 9.04 Effect of Supplemental Indenture.................................................53
Section 9.05 Conformity with Trust Indenture Act..............................................53
Section 9.06 Reference in Notes to Supplemental Indentures....................................53
ARTICLE X [Reserved]................................................................................54
ARTICLE XI Miscellaneous.............................................................................54
Section 11.01 Compliance Certificates and Opinions, etc........................................54
Section 11.02 Form of Documents Delivered to Indenture Trustee.................................55
Section 11.03 Acts of Noteholders..............................................................56
Section 11.04 Notices, etc., to Indenture Trustee, Issuing Entity, Credit Enhancer and Rating
Agencies.........................................................................57
Section 11.05 Notices to Noteholders; Waiver...................................................57
Section 11.06 Alternate Payment and Notice Provisions..........................................58
Section 11.07 Conflict with Trust Indenture Act................................................58
Section 11.08 Effect of Headings...............................................................58
Section 11.09 Successors and Assigns...........................................................58
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TABLE OF CONTENTS
(continued)
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Section 11.10 Separability.....................................................................59
Section 11.11 Benefits of Indenture............................................................59
Section 11.12 Legal Holidays...................................................................59
Section 11.13 Governing Law....................................................................59
Section 11.14 Counterparts.....................................................................59
Section 11.15 Recording of Indenture...........................................................59
Section 11.16 Issuing Entity Obligation........................................................59
Section 11.17 No Petition......................................................................60
Section 11.18 Inspection.......................................................................60
Section 11.19 Authority of the Administrator...................................................60
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EXHIBITS
Exhibit A-1 - Form of Term Notes
Exhibit A-2 - Form of Variable Funding Notes
Exhibit B - Mortgage Loan Schedule
Exhibit C - Form of Opinion to be delivered pursuant to Section 4.01(b)(ii)
Exhibit D - Form of Opinion to be delivered pursuant to Section 4.01(b)(iii)
Exhibit E - Loan Agreement
Exhibit F - Investment Letter
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This Indenture, dated as of ______, 200_, between HOME EQUITY LOAN
TRUST 200_-_, a Delaware business trust, as Issuing Entity (the "Issuing
Entity"), and [________________], as Indenture Trustee (the "Indenture
Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Issuing Entity's
Series 200__-__ Asset Backed Term Notes (the "Notes").
GRANTING CLAUSE
The Issuing Entity hereby Grants to the Indenture Trustee at the
Closing Date, as Indenture Trustee for the benefit of the Holders of the Notes,
all of the Issuing Entity's right, title and interest in and to whether now
existing or hereafter created (a) the Mortgage Loans and all monies and proceeds
due thereon after the Cut-off Date, (b) the Servicing Agreement and the Mortgage
Loan Purchase Agreement, (c) all funds on deposit in the Funding Account,
including all income from the investment and reinvestment of funds therein, (d)
all funds on deposit from time to time in the Collection Account allocable to
the Mortgage Loans; (e) all funds on deposit from time to time in the Payment
Account and in all proceeds thereof; (f) the Policy; and (g) all present and
future claims, demands, causes and chooses 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 Indenture Trustee, as Indenture Trustee on behalf of the Holders of
the Notes, acknowledges such Xxxxx, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
ARTICLE I
Definitions
Section 1.01 Definitions. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuing Entity and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
Section 1.03 Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented 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.
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ARTICLE II
Original Issuance of Notes
Section 2.01 Form. The Term Notes [and the Variable Funding Notes, in
each case] together with the Indenture Trustee's certificate of authentication,
shall be in substantially the forms set forth in Exhibit[s] 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 such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibits A-1[, A-2] and A-3 are
part of the terms of this Indenture.
Section 2.02 Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuing Entity 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 Issuing Entity shall bind the Issuing
Entity, 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 Issuing Entity Request authenticate
and deliver Term Notes for original issue in an aggregate initial principal
amount of $[______________] [and Variable Funding Notes for original issue in an
aggregate initial principal amount of $[_____________]]. [The Security Balance
of the Variable Funding Notes in the aggregate may not exceed the Maximum
Variable Funding Balance.] The aggregate principal amount of Notes outstanding
at any time may not exceed [the sum of] $[_____________] [and the Security
Balance of Additional Variable Funding Notes issued pursuant to the terms of
Section 4.01 hereof].
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes and the Term Notes shall be issuable in
the minimum initial Security Balances of $[________] and in integral multiples
of $[______] in excess thereof.
[Each Variable Funding Note shall be initially issued with a Security
Balance of $[______] or, if applicable, with a Security Balance in the amount
equal to the Additional Balance Differential for the Collection Period related
to the Payment Date following the date of issuance of such Variable Funding Note
pursuant to Section 4.01(c).]
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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 Opinions of Counsel. On the Closing Date, the Indenture
Trustee shall have received: (i) an Opinion of Counsel, in form and substance
reasonably satisfactory to the Indenture Trustee and its counsel, with respect
to securities law matters; (ii) an Opinion of Counsel, in form and substance
reasonably satisfactory to the Indenture Trustee and its counsel, with respect
to the tax status of the arrangement created by the Indenture; and (iii) an
Opinion of Counsel to the Issuing Entity, in form and substance reasonably
satisfactory to the Indenture Trustee and its counsel, with respect to the due
authorization, valid execution and delivery of this Indenture and with respect
to its binding effect on the Issuing Entity.
ARTICLE III
Covenants
Section 3.01 Collection of Payments on Mortgage Loan Accounts. The
Indenture Trustee shall establish and maintain with itself a trust account (the
"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 Master
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 moneys on deposit in the Payment Account.
Section 3.02 Maintenance of Office or Agency. The Issuing Entity will
maintain in the Borough of Manhattan, The City of New York, 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 Issuing Entity in respect of the Notes and this Indenture
may be served. The Issuing Entity hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the
Issuing Entity shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders, notices
and demands may be made or served at the Corporate Trust Office, and the Issuing
Entity 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;
Certificate 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 Payment Account pursuant to Section 3.01 shall be made on
behalf of the Issuing Entity by the Indenture Trustee or by the Paying Agent,
and no amounts so withdrawn from the Payment Account for payments of Notes shall
be paid over to the Issuing Entity except as provided in this Section 3.03.
The Issuing Entity 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:
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(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuing Entity of which it has actual knowledge in the making of any
payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met
by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuing Entity may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuing Entity 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 two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuing Entity on Issuing Entity Request; and the Holder of
such Note shall thereafter, as an unsecured general creditor, look only to the
Issuing Entity for payment thereof (but only to the extent of the amounts so
paid to the Issuing Entity), 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 Issuing
Entity cause to be published once, in an Authorized Newspaper published in the
English language, 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 Issuing Entity. The Indenture Trustee shall also adopt and employ,
at the expense and direction of the Issuing Entity, any other reasonable means
of notification of such repayment (including, but not limited to, mailing notice
of such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
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The Issuing Entity hereby appoints [__________________] as Certificate
Paying Agent and Residual Ownership Interest Paying Agent to make payments to
Certificateholders and holders of the Residual Ownership Interest on behalf of
the Issuing Entity in accordance with the provisions of the Certificates,
Section 3.05 hereof and the provisions of the Trust Agreement, and
$[_______________] hereby accepts such appointment and further agrees that it
will be bound by the provisions of the Trust Agreement relating to the
Certificate Paying Agent and Residual Ownership Interest Paying Agent and will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Certificates and the Residual Ownership Interest 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 as provided in the Trust Agreement and pay such sums to
such Persons as herein and therein provided;
(ii) give the Owner Trustee notice of any default by the
Issuing Entity of which it has actual knowledge in the making of any
payment required to be made with respect to the Certificates;
(iii) at any time during the continuance of any such default,
upon the written request of the Owner Trustee forthwith pay to the
Owner Trustee on behalf of the Issuing Entity all sums so held in Trust
by such Certificate Paying Agent;
(iv) immediately resign as Certificate Paying Agent and
forthwith pay to the Owner Trustee on behalf of the Issuing Entity all
sums held by it in trust for the payment of Certificates and the
Residual Ownership Interest if at any time it ceases to meet the
standards required to be met by the Certificate Paying Agent or the
Residual Ownership Interest Paying Agent at the time of its
appointment;
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Certificates or the
holders of the Residual Ownership Interest of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith; and
(vi) deliver to the Owner Trustee a copy of the report to
Certificateholders and holders of Residual Ownership Interest prepared
with respect to each Payment Date by the Master Servicer pursuant to
Section 4.01 of the Servicing Agreement.
Section 3.04 Existence. The Issuing Entity will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuing Entity hereunder is or
becomes, organized under the laws of any other state or of the United States of
America, in which case the Issuing Entity 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.
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Section 3.05 Payment of Principal and Interest; Defaulted Interest.
(a) On each Payment Date from amounts on deposit in the Payment
Account after making (x) any deposit to the Funding Account pursuant to Section
8.02(b) and (y) any deposits to the Payment Account pursuant to Section
8.02(c)(ii) and Section 8.02(c)(i)(2), the Indenture Trustee, on behalf of the
Issuing Entity shall pay to the Noteholders and the Certificate Paying Agent, on
behalf of the Issuing Entity shall pay to the Certificateholders and the
Certificate Paying Agent, on behalf of the Issuing Entity shall pay to the
holders of the Residual Ownership Interest, and the Indenture Trustee, in its
capacity as agent for the Issuing Entity shall pay to other Persons, the amounts
to which they are entitled as set forth below:
(i) The sum of (x) to the Noteholders the sum of (a) one
month's interest at the Note Rate on the Security Balances of Notes
immediately prior to such Payment Date and (b) any previously accrued
and unpaid interest for prior Payment Dates and (y) to the
Certificateholders, the Certificate Distribution Amount for such
Payment Date;
(ii) [if such Payment Date is after the Funding Period, to the
Noteholders and the Certificateholders as the case may be,] as
principal on the Term Notes[, Variable Funding Notes,] and the
Certificates, the applicable Security Percentage of the Principal
Collection Distribution Amount [and if such Payment Date is the first
Payment Date following the end of the Funding Period (if ending due to
an Amortization Event) or the Payment Date on which the Funding Period
ends, to the Noteholders and Certificateholders as principal on the
Term Notes, Variable Funding Notes, and Certificates the applicable
Security Percentage of the amount deposited from the Funding Account in
respect of Security Principal Collections];
(iii) to the Noteholders and the Certificateholders, as the
case may be, as principal on the Term Notes[, Variable Funding Notes]
and the Certificates, pro rata, based on the Security Balances from the
amount remaining on deposit in the Payment Account, up to the
applicable Security Percentage of Liquidation Loss Amounts for the
related Collection Period;
(iv) to the Noteholders and the Certificateholders, as the
case may be, as principal on the Term Notes[, Variable Funding Notes]
and the Certificates, pro rata, based on the Security Balances from the
amount remaining on deposit in the Payment Account, up to the
applicable Security Percentage of Carryover Loss Amounts;
(v) to the Credit Enhancer, in the amount of the premium for
the Credit Enhancement Instrument [and for any Additional Credit
Enhancement Instrument];
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(vi) to the Credit Enhancer, to reimburse it for prior draws
made on the Credit Enhancement Instrument [and on any Additional Credit
Enhancement Instrument] (with interest thereon as provided in the
Insurance Agreement);
(vii) to the Noteholders and the Certificateholders, as the
case may be, as principal on the Term Notes[, Variable Funding Notes]
and the Certificates, pro rata, based on the Security Balances from
Security Interest Collections, up to the Accelerated Principal
Distribution Amount for such Payment Date (such amount, if any, paid
pursuant to this clause (vii) being referred to herein as the
"Accelerated Principal Payment Amount");
(viii) to the Credit Enhancer, any other amounts owed to the
Credit Enhancer pursuant to the Insurance Agreement;
(ix) [Reserved];
(x) to reimburse the Administrator for expenditures made on
behalf of the Issuing Entity with respect to the performance of its
duties under the Indenture; and
(xi) any remaining amounts to the holders of the Residual
Ownership Interest as described in Section 5.01 of the Trust Agreement;
provided, however, in the event that on a Payment Date a Credit Enhancer Default
shall have occurred and be continuing then the priorities of distributions
described above will be adjusted such that payments of the Certificate
Distribution Amount and all other amounts to be paid in respect of principal on
the Certificates will not be paid until the full amount of interest and
principal in accordance with clauses (i)(x) and (ii) through (iv) above that are
due on the Notes on such Payment Date have been paid and provided, further, that
on the Final Scheduled Payment Date or other final Payment Date, the amount to
be paid pursuant to clause (ii) above shall be equal to the Security Balances of
the Securities immediately prior to such Payment Date.
The amounts paid to Noteholders shall be paid to each Class in
accordance with the Class Percentage as set forth in paragraph (b) below.
Interest will accrue on the Notes during an Interest Period on the basis of the
actual number of days in such Interest Period and a year assumed to consist of
360 days.
Any installment of interest or principal, if any, payable on any Note
or Certificate that is punctually paid or duly provided for by the Issuing
Entity on the applicable Payment Date shall, if such Holder holds Notes or
Certificates other than the Designated Certificate of an aggregate initial
Principal Balance of at least $[___________] be paid to each Holder of record on
the preceding Record Date, by wire transfer to an account specified in writing
by such Holder reasonably satisfactory to the Indenture Trustee as of the
preceding Record Date or in all other cases or if no such instructions have been
delivered to the Indenture Trustee, by check to such Noteholder mailed to such
Holder's address as it appears in the Note Register the amount required to be
distributed to such Holder on such Payment Date pursuant to such Holder's
Securities; provided, however, that the Indenture Trustee shall not pay to such
Holders any amount required to be withheld from a payment to such Holder by the
Code.
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(b) The principal of each Note shall be due and payable in full on
the Final Scheduled Payment Date for such Note as provided in the related form
of Note set forth in Exhibits A-1 [and A-2]. All principal payments on each
Class of Notes shall be made to the Noteholders of such Class entitled thereto
in accordance with the Percentage Interests represented by such Notes. Upon
notice to the Indenture Trustee by the Issuing Entity, the Indenture Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Final Scheduled Payment Date or other
final Payment Date. Such notice shall be mailed no later than five Business Days
prior to such Final Scheduled Payment Date or other final Payment Date and shall
specify that payment of the principal amount and any interest due with respect
to such Note at the Final Scheduled Payment Date or other final Payment Date
will be payable only upon presentation and surrender of such Note and shall
specify the place where such Note may be presented and surrendered for such
final payment.
Section 3.06 Protection of Trust Estate.
(a) The Issuing Entity will from time to time execute and deliver
all such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) 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) 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 the Servicing Agreement or 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 3.06 (or from the
jurisdiction in which it was held as described in the Opinion of Counsel
delivered at the Closing Date pursuant to Section 3.07(a), if no Opinion of
Counsel has yet been delivered pursuant to Section 3.07(b) unless the Trustee
shall have first received an Opinion of Counsel to the effect that the lien and
security interest created by this Indenture with respect to such property will
continue to be maintained after giving effect to such action or actions.
The Issuing Entity 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.
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Section 3.07 Opinions as to Trust Estate.
(a) On the Closing Date, the Issuing Entity shall furnish to the
Indenture Trustee, the Owner Trustee and to the Administrator an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the delivery of the Mortgage Notes, the recording of
the Assignments of Mortgage, the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and security
interest of this Indenture and reciting the details of such action, or stating
that, in the opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) On or before December 31 in each calendar year, beginning in
200_, the Issuing Entity shall furnish to the Indenture Trustee and to the
Administrator an Opinion of Counsel at the expense of the Issuing Entity either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording of the Assignments of Mortgage, the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and with respect to the execution and filing
of any financing statements and continuation statements as is necessary to
maintain the lien and security interest created by this Indenture and reciting
the details of such action or stating that in the opinion of such counsel no
such action is necessary to maintain such lien and security interest. Such
Opinion of Counsel shall also describe the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until December 31
in the following calendar year.
Section 3.08 [Reserved]
Section 3.09 Performance of Obligations; Servicing Agreement.
(a) The Issuing Entity will punctually perform and observe all of
its obligations and agreements contained in this Indenture, the Basic Documents
and in the instruments and agreements included in the Trust Estate. Except as
otherwise expressly provided therein, the Issuing Entity shall not waive, amend,
modify, supplement or terminate any Basic Document, including without limitation
the Servicing Agreement or any provision thereof without the consent of the
Indenture Trustee or the Holders of at least a majority of the Security Balances
of the Notes, the Master Servicer and the Credit Enhancer. Upon the taking of
any such action with respect to any Basic Document the Issuing Entity shall give
written notice thereof to the Rating Agencies.
(b) The Issuing Entity 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 Issuing Entity shall be deemed to be action taken by the
Issuing Entity. Initially, the Issuing Entity has contracted with the
Administrator to assist the Issuing Entity in performing its duties under this
Indenture.
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(c) The Issuing Entity will not take any action or permit any action
to be taken by others which 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 which 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 Master
Servicer is expressly permitted to take in the Servicing Agreement.
(d) If the Issuing Entity shall have knowledge of the occurrence of
an Event of Servicing Termination, the Issuing Entity shall promptly notify the
Indenture Trustee thereof, and shall specify in such notice the action, if any,
the Issuing Entity is taking in respect of such Event of Servicing Termination.
If such Event of Servicing Termination arises from the failure of the Master
Servicer to perform any of its duties or obligations under the Servicing
Agreement with respect to the Mortgage Loans, the Issuing Entity may remedy such
failure, provided that if such Event of Servicing Termination arises from the
failure by the Master Servicer to comply with requirements imposed upon it under
Section 3.04 of the Servicing Agreement with respect to hazard insurance for the
Mortgaged Properties securing the Mortgage Loans, the Issuing Entity shall
promptly, as the case may be, pay such premiums or obtain substitute insurance
coverage meeting the requirements of said Section 3.04. So long as any such
Event of Servicing Termination shall be continuing, the Indenture Trustee may
exercise its remedies set forth in Section 7.01 of the Servicing Agreement.
Unless granted or permitted by the Credit Enhancer or the Holders of Securities
to the extent provided above, the Issuing Entity may not waive any such Event of
Servicing Termination or terminate the rights and powers of the Master Servicer
under the Servicing Agreement.
(e) Upon any termination of the Master Servicer's rights and powers
pursuant to Section 7.01 of the Servicing Agreement, all rights, powers, duties
and responsibilities of the Master Servicer with respect to the Mortgage Loans
shall vest in and be assumed by the Indenture Trustee, and the Indenture Trustee
shall be the successor in all respect to the Master Servicer in its capacity as
servicer with respect to the Mortgage Loans under the Servicing Agreement. Upon
any such termination, the Indenture Trustee is hereby authorized, and the
Indenture Trustee hereby agrees, to mail a notice to each Mortgagor directing
each such Mortgagor to mail all payments in respect of the related Mortgage Loan
to the Indenture Trustee or its agent at the address specified in such notice.
The Indenture Trustee may resign as the Master Servicer by giving written notice
of such resignation to the Issuing Entity and the Credit Enhancer and in such
event will be released from such duties and obligations, such release to be
effective on the date a new servicer enters into a servicing agreement with the
Issuing Entity as provided below. Upon delivery of any such notice to the
Issuing Entity, the Issuing Entity shall obtain a new servicer, satisfactory in
all respects to the Indenture Trustee and the Credit Enhancer, which shall enter
into a servicing agreement with the Issuing Entity and the Indenture Trustee,
such agreement to be not less favorable to the Credit Enhancer in its reasonable
judgment, or the Noteholders if a Credit Enhancer Default shall have occurred
and be continuing, than the Servicing Agreement in any material respect. If,
within 30 days after the delivery of the notice referred to above, the Issuing
Entity shall not have obtained such new servicer, the Indenture Trustee may
appoint, or may petition a court of competent jurisdiction to appoint, a
successor servicer acceptable to the Credit Enhancer to service the Mortgage
Loans. In connection with any such appointment, the Indenture Trustee may make
such arrangements for the compensation of such successor as it and such
successor shall agree, and the Issuing Entity shall enter into an agreement with
such successor for the servicing of the Mortgage Loans, such agreement to be
substantially similar to the Servicing Agreement or otherwise acceptable to the
Credit Enhancer; provided that any such compensation of the successor servicer
unless otherwise agreed to by the Credit Enhancer, shall not be in excess of the
Servicing Fee payable to the Master Servicer under the Servicing Agreement. If
the Indenture Trustee shall succeed to the Master Servicer's duties as servicer
of the Mortgage Loans as provided herein, it shall do so in its individual
capacity and not in its capacity as Indenture Trustee.
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(f) The Issuing Entity shall at all times retain an Administrator
(approved by the Credit Enhancer under the Administration Agreement) and may
enter into contracts with other Persons for the performance of the Issuing
Entity's obligations hereunder, and performance of such obligations by such
Persons shall be deemed to be performance of such obligations by the Issuing
Entity.
Section 3.10 Negative Covenants. So long as any Notes are Outstanding,
the Issuing Entity shall not:
(i) 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;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein or
the proceeds thereof or (C) permit the lien of this Indenture not to
constitute a valid first priority security interest in the Trust
Estate.
Section 3.11 Annual Statement as to Compliance. The Issuing Entity will
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuing Entity (commencing with the fiscal year 200_), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:
(i) a review of the activities of the Issuing Entity during
such year and of its performance under this Indenture has been made
under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuing Entity has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
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Section 3.12 Recording of Assignments. The Issuing Entity shall
exercise its right under the Mortgage Loan Purchase Agreement with respect to
the obligation of the Seller to submit or cause to be submitted for recording
all Assignments of Mortgages on or prior to _________, 200_ with respect to the
Initial Loans and within [__] days following the related Deposit Date with
respect to any Additional Loans.
Section 3.13 Representations and Warranties Concerning the Mortgage
Loans. The Issuing Entity has pledged to the Indenture Trustee all of its right
under the Mortgage Loan Purchase Agreement and the Indenture Trustee has the
benefit of the representations and warranties made by the Seller in Section
[_____] thereof, Section [____] thereof and Section [__] thereof concerning the
Mortgage Loans and the right to enforce any remedy against the Seller provided
in such Section [_____] or Section [_____] to the same extent as though such
representations and warranties were made directly to the Indenture Trustee.
Section 3.14 Indenture Trustee's Review of Related Documents.
(a) The Indenture Trustee agrees, for the benefit of the holders of
the Notes, to review, or the related Custodian shall review, unless the
Indenture Trustee or such Custodian made such review prior to the Closing Date,
on or prior to ________, 200_ the Related Documents delivered to it on or prior
to the Closing Date and within 90 days of the related Deposit Date, the Related
Documents delivered to it in connection with any Additional Loan, in each case
in connection with the Grant of the Mortgage Loan listed on the Schedule of
Mortgage Loans as security for the Notes. Such review shall be limited to a
determination that all documents referred to in the definition of the term
Related Documents have been executed and are appropriately endorsed in the
manner called for in the Mortgage Loan Purchase Agreement and that the Related
Documents have been delivered with respect to each such Mortgage Loan (other
than the documents related to (i) any Mortgage Loan so listed which has been
subject to a Prepayment in full and termination of related Mortgage Loan, the
proceeds of which have been deposited in the Collection Account in lieu of
delivery of the applicable Related Documents, (ii) any Mortgage Loan with
respect to which the related Mortgaged Property was foreclosed, repossessed or
otherwise converted subsequent to the Cut-Off Date and prior to the Closing Date
or with respect to which foreclosure proceedings have been commenced and for
which the related Related Documents are required in connection with the
prosecution of such foreclosure proceedings and for which the Issuing Entity has
delivered a trust receipt called for by Section 3.15(c) and (iii) any Mortgage
Loan as to which the original Assignment of Mortgage has been submitted for
recording), that all such documents have been executed, and that all such
documents relate to the Mortgage Loans listed on the Schedule of Mortgage Loans.
In performing such review, the Trustee may rely upon the purported genuineness
and due execution of any such document and on the purported genuineness of any
signature thereon.
(b) If any Related Document is defective in any material respect
which may materially and adversely affect the value of the related Mortgage
Loan, the interest of the Indenture Trustee or the Noteholders in such Mortgage
Loan, or if any document required to be delivered to the Indenture Trustee has
not been delivered, the Indenture Trustee or the related Custodian on behalf of
the Indenture Trustee shall notify the Issuing Entity, the Seller, the Credit
Enhancer and the Master Servicer immediately after obtaining knowledge thereof
and the Indenture Trustee, as assignee of the Issuing Entity's rights under the
Mortgage Loan Purchase Agreement, shall exercise its remedies in respect of any
such defect against the Seller as provided in the Mortgage Loan Purchase
Agreement.
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Section 3.15 Trust Estate; Related Documents.
(a) When required by the provisions of this Indenture, the Indenture
Trustee 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 which are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture Trustee
as provided in this Article III shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any moneys.
(b) In order to facilitate the servicing of the Mortgage Loans, the
Master Servicer is hereby authorized in the name and on behalf of the Indenture
Trustee and the Issuing Entity, to execute assumption agreements, substitution
agreements, and instruments of satisfaction or cancellation or of partial or
full release or discharge, or any other document contemplated by the Servicing
Agreement and other comparable instruments with respect to the Mortgage Loans
and with respect to the Mortgaged Properties subject to the Mortgages (and the
Indenture Trustee and the Owner Trustee shall promptly execute any such
documents on request of the Master Servicer), subject to the obligations of the
Master Servicer under the Servicing Agreement. If from time to time the Master
Servicer shall deliver to the Indenture Trustee or the related Custodian copies
of any written assurance, assumption agreement or substitution agreement or
other similar agreement pursuant to Section 3.05 of the Servicing Agreement, the
Indenture Trustee or the related Custodian shall check that each of such
documents purports to be an original executed copy (or a copy of the original
executed document if the original executed copy has been submitted for recording
and has not yet been returned) and, if so, shall file such documents, and upon
receipt of the original executed copy from the applicable recording office or
receipt of a copy thereof certified by the applicable recording office shall
file such originals or certified copies with the Related Documents. If any such
documents submitted by the Master Servicer do not meet the above qualifications,
such documents shall promptly be returned by the Indenture Trustee or the
related Custodian to the Master Servicer, with a direction to the Master
Servicer to forward the correct documentation.
(c) Upon Issuing Entity Request accompanied by an Officers'
Certificate of the Master Servicer pursuant to Section 3.07 of the Servicing
Agreement to the effect that a Mortgage Loan has been the subject of a final
payment or a prepayment in full and the related Mortgage Loan has been
terminated or that substantially all Liquidation Proceeds which have been
determined by the Master Servicer in its reasonable judgment to be finally
recoverable have been recovered, and upon deposit to the Collection Account of
such final monthly payment, prepayment in full together with accrued and unpaid
interest to the date of such payment with respect to such Mortgage Loan or, if
applicable, Liquidation Proceeds, the Indenture Trustee and the Issuing Entity
shall promptly release the Related Documents to the Master Servicer upon the
order of the Issuing Entity, along with such documents as the Master Servicer or
the Mortgagor may request as contemplated by the Servicing Agreement to evidence
satisfaction and discharge of such Mortgage Loan. If from time to time and as
appropriate for the servicing or foreclosure of any Mortgage Loan, the Master
Servicer requests the Indenture Trustee or the related Custodian to release the
Related Documents and delivers to the Indenture Trustee or the related Custodian
a trust receipt reasonably satisfactory to the Indenture Trustee or the related
Custodian and signed by a Responsible Officer of the Master Servicer, the
Issuing Entity and the Indenture Trustee or the related Custodian shall release
the Related Documents to the Master Servicer. If such Mortgage Loans shall be
liquidated and the Indenture Trustee or the related Custodian receives a
certificate from the Master Servicer as provided above, then, upon request of
the Issuing Entity, the Indenture Trustee or the related Custodian shall release
the trust receipt to the Master Servicer upon the order of the Issuing Entity.
14
(d) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and no amounts due to the Credit Enhancer, release all of the Trust
Estate to the Issuing Entity (other than any cash held for the payment of the
Notes pursuant to Section 3.03 or 4.11), subject, however, to the rights of the
Indenture Trustee under Section 6.07.
Section 3.16 Amendments to Servicing Agreement. The Indenture Trustee
may enter into any amendment or supplement to the Servicing Agreement only in
accordance with Section 8.01 of the Servicing Agreement. The Indenture Trustee
may, in its discretion, decline to enter into or consent to any such supplement
or amendment if its own rights, duties or immunities shall be adversely
affected.
Section 3.17 Master Servicer as Agent and Bailee of Indenture Trustee.
Solely for purposes of perfection under Section 9-305 of the Uniform Commercial
Code or other similar applicable law, rule or regulation of the state in which
such property is held by the Master Servicer, the Indenture Trustee hereby
acknowledges that the Master Servicer is acting as agent and bailee of the
Indenture Trustee in holding amounts on deposit in the Collection Account
pursuant to Section 3.02 of the Servicing Agreement, as well as its agent and
bailee in holding any Related Documents released to the Master Servicer pursuant
to Section 3.15(c), and any other items constituting a part of the Trust Estate
which from time to time come into the possession of the Master Servicer. It is
intended that, by the Master Servicer's acceptance of such agency pursuant to
Section 3.02 of the Servicing Agreement, the Trustee, as a secured party, will
be deemed to have possession of such Related Documents, such moneys and such
other items for purposes of Section 9-305 of the Uniform Commercial Code of the
state in which such property is held by the Master Servicer.
Section 3.18 Investment Company Act. The Issuing Entity 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 Issuing Entity shall be in compliance with this
Section 3.18 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.
15
Section 3.19 Issuing Entity May Consolidate, etc., Only on Certain
Terms.
(a) The Issuing Entity shall not consolidate or merge with or into
any other Person, unless:
(i) the Person (if other than the Issuing Entity) 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
Certificates and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuing Entity 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 Rating Agencies shall have notified the Issuing
Entity that such transaction shall not cause the rating of the Notes or
the Certificates to be reduced, suspended or withdrawn or to be
considered by either Rating Agency to be below investment grade without
taking into account the Credit Enhancement Instrument;
(iv) the Issuing Entity 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 Issuing Entity, 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 Issuing Entity 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 Issuing Entity 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 Issuing Entity 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 Issuing Entity to be performed or
observed, all as provided herein, (C) expressly agrees by means of such
supplemental indenture that all right, title and interest so conveyed
or transferred shall be subject and subordinate to the rights of
Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuing Entity 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;
16
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuing
Entity that such transaction shall not cause the rating of the Notes or
the Certificates to be reduced, suspended or withdrawn;
(iv) the Issuing Entity 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 Issuing Entity, 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 Issuing Entity 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 3.20 Successor or Transferee.
(a) Upon any consolidation or merger of the Issuing Entity in
accordance with Section 3.19(a), the Person formed by or surviving such
consolidation or merger (if other than the Issuing Entity) shall succeed to, and
be substituted for, and may exercise every right and power of, the Issuing
Entity under this Indenture with the same effect as if such Person had been
named as the Issuing Entity herein.
(b) Upon a conveyance or transfer of all the assets and properties
of the Issuer pursuant to Section 3.19(b), the Issuing Entity will be released
from every covenant and agreement of this Indenture to be observed or performed
on the part of the Issuing Entity with respect to the Notes immediately upon the
delivery of written notice to the Indenture Trustee that the Issuing Entity is
to be so released.
Section 3.21 No Other Business. The Issuing Entity shall not engage in
any business other than financing, purchasing, owning and selling and managing
the Mortgage Loans in the manner contemplated by this Indenture and the Basic
Documents and all activities incidental thereto.
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Section 3.22 No Borrowing. The Issuing Entity shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.23 Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture, the Issuing Entity 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 3.24 Capital Expenditures. The Issuing Entity shall not make
any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty).
Section 3.25 [Reserved]
Section 3.26 Restricted Payments. The Issuing Entity 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 Issuing Entity or otherwise with respect to any ownership or equity
interest or security in or of the Issuing Entity, (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 Issuing Entity may make, or cause to be made, (w)
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, (x) payment to the Master Servicer pursuant to the terms of the
Servicing Agreement and (y) payments to the Indenture Trustee pursuant to
Section 1(a)(ii) of the Administration Agreement and (z) make distributions to
the holders of the Residual Ownership Interest as contemplated by the Trust
Agreement. The Issuing Entity will not, directly or indirectly, make payments to
or distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.
Section 3.27 Notice of Events of Default. The Issuing Entity shall give
the Indenture Trustee the Credit Enhancer and the Rating Agencies prompt written
notice of each Event of Default hereunder and under the Trust Agreement.
Section 3.28 Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuing Entity will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
Section 3.29 Statements to Noteholders. The Indenture Trustee and the
Certificate Registrar shall forward by mail to each Noteholder and
Certificateholder, respectively, the Statement delivered to it pursuant to
Section 4.01 of the Servicing Agreement.
Section 3.30 [Reserved] [Grant of the Additional Loans].
(a) In consideration of the delivery on each Deposit Date to or upon
the order of the Issuing Entity of all or a portion of the amount in respect of
Security Principal Collections on deposit in the Funding Account, the Issuing
Entity shall, to the extent of the availability thereof, on such Deposit Date
during the Funding Period Grant to the Indenture Trustee all of its right, title
and interest in the Additional Loans and simultaneously with the Grant of the
Additional Loans the Issuing Entity will deliver the related Related Documents
to the Indenture Trustee or the related Custodian.
18
(b) The obligation of the Indenture Trustee to accept the Grant of
the Additional Loans and the other property and rights related thereto described
in paragraph (a) above is subject to the satisfaction of each of the following
conditions on or prior to each Deposit Date:
(i) the Indenture Trustee shall not have received written
notice from any Rating Agency or the Credit Enhancer to the effect that
such transfer of Additional Loans would adversely affect the then
current rating of the Notes or cause the rating assigned to the
Securities to be below investment grade without taking into account the
Credit Enhancement Instrument;
(ii) the Indenture Trustee shall have received a revised
Mortgage Loan Schedule, listing the Additional Loans;
(iii) the Master Servicer shall confirm to the Indenture
Trustee that it has deposited in the Collection Account all Principal
Collections and Interest Collections in respect of such Additional
Loans on or after the related Deposit Date for the Additional Loans;
(iv) the Indenture Trustee shall have received a duly
completed and executed Transfer Certificate in the form of Exhibit 1 to
the Mortgage Loan Purchase Agreement;
(v) the Seller at its expense and the Issuing Entity at its
expense, as appropriate, shall have provided the Rating Agencies and
the Credit Enhancer with an opinion of counsel relating to the sale of
the Additional Loans to the Issuing Entity and the Grant of the
Additional Loans to the Indenture Trustee which opinion shall be in the
form of Exhibit 2 to the Mortgage Loan Purchase Agreement; and
(vi) the Issuing Entity shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel confirming
the satisfaction of each condition precedent specified in this
paragraph (b). (c) The obligation of the Indenture Trustee to accept
the Grant of an Additional Loan on the related Deposit Date is subject
to each Additional Loan and the Additional Loans in the aggregate, as
the case may be, satisfying the conditions set forth in the Mortgage
Loan Purchase Agreement.]
Section 3.31 Determination of Note Rate and Certificate Rate. On the
second LIBOR Business Day immediately preceding (i) the Closing Date in the case
of the first Interest Period and (ii) the first day of each succeeding Interest
Period, the Indenture Trustee shall determine LIBOR and the Note Rate and the
Certificate Rate for such Interest Period and shall inform the Issuing Entity,
the Master Servicer and the Depositor at their respective facsimile numbers
given to the Indenture Trustee in writing thereof.
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Section 3.32 Payments under the Credit Enhancement Instrument.
(a) On any Payment Date, other than a Dissolution Payment Date, the
Indenture Trustee on behalf of the Noteholders, and in its capacity as
Certificate Paying Agent on behalf of the Certificateholders shall make a draw
on the Credit Enhancement Instrument in an amount if any equal to the sum of (x)
the amount by which the sum of (i) interest accrued at the Note Rate on the
Security Balance of the Notes plus (ii) the Certificate Distribution Amount
exceeds the amount on deposit in the Payment Account available to be distributed
therefor on such Payment Date and (y) the Guaranteed Principal Payment Amount
(the "Credit Enhancement Draw Amount").
(b) The Indenture Trustee shall submit, if a Credit Enhancement Draw
Amount is specified in any Statement to Holders prepared by the Master Servicer
pursuant to Section 4.01 of the Servicing Agreement, the Notice for Payment (as
defined in the Credit Enhancement Instrument) in the amount of the Credit
Enhancement Draw Amount to the Credit Enhancer no later than 2:00 P.M., New York
City time, on the second Business Day prior to the applicable Payment Date. Upon
receipt of such Credit Enhancement Draw Amount in accordance with the terms of
the Credit Enhancement Instrument, the Indenture Trustee shall deposit such
Credit Enhancement Draw Amount in the Payment Account for distribution to
Holders pursuant to Section 3.05.
In addition, a draw may be made under the Credit Enhancement Instrument
in respect of any Avoided Payment (as defined in and pursuant to the terms and
conditions of the Credit Enhancement Instrument) and the Indenture Trustee shall
submit a Notice for Payment with respect thereto together with the other
documents required to be delivered to the Credit Enhancer pursuant to the Credit
Enhancement Instrument in connection with a draw in respect of any Avoided
Payment.
(c) In the event that any Additional Credit Enhancement Instruments
are issued pursuant to Section 4.01 and Section 2.02(B) of the Insurance
Agreement, the Indenture Trustee shall be authorized to make draws thereon
subject to the terms and conditions therein.
Section 3.33 Replacement Credit Enhancement Instrument. In the event of
a Credit Enhancer Default or if the claims paying ability rating of the Credit
Enhancer is downgraded and such downgrade results in a downgrading of the then
current rating of the Securities (in each case, a "Replacement Event"), the
Issuing Entity, at its expense, in accordance with and upon satisfaction of the
conditions set forth in the Credit Enhancement Instrument, including, without
limitation, payment in full of all amounts owed to the Credit Enhancer, may, but
shall not be required to, substitute a new surety bond or surety bonds for the
existing Credit Enhancement Instrument or may arrange for any other form of
credit enhancement; provided, however, that in each case the Notes and the
Certificates shall be rated no lower than the rating assigned by each Rating
Agency to the Notes and the Certificates immediately prior to such Replacement
Event and the timing and mechanism for drawing on such new credit enhancement
shall be reasonably acceptable to the Indenture Trustee and provided further
that the premiums under the proposed credit enhancement shall not exceed such
premiums under the existing Credit Enhancement Instrument. It shall be a
condition to substitution of any new credit enhancement that there be delivered
to the Indenture Trustee (i) an Opinion of Counsel, acceptable in form to the
Indenture Trustee, from counsel to the provider of such new credit enhancement
with respect to the enforceability thereof and such other matters as the
Indenture Trustee may require and (ii) an Opinion of Counsel to the effect that
such substitution would not (a) adversely affect in any material respect the tax
status of the Notes and the Certificates or (b) cause the Issuing Entity to be
subject to a tax at the entity level or to be classified as a taxable mortgage
pool within the meaning of Section 7701(i) of the Code. Upon receipt of the
items referred to above and payment of all amounts owing to the Credit Enhancer
and the taking of physical possession of the new credit enhancement, the
Indenture Trustee shall, within five Business Days following receipt of such
items and such taking of physical possession, deliver the replaced Credit
Enhancement Instrument to the Credit Enhancer. In the event of any such
replacement the Issuing Entity shall give written notice thereof to the Rating
Agencies.
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ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01 The Notes[; Increase of Maximum Variable Funding Balance;
Additional Variable Funding Notes].
(a) The Term Notes shall be registered in the name of a nominee
designated by the Depository. Beneficial Owners will hold interests in the Term
Notes through the book-entry facilities of the Depository in minimum initial
Principal Balances of $[________] and integral multiples of $[_________] in
excess thereof. [The Capped Funding Notes will be issuable in minimum initial
Principal Balances of $[_______] and integral multiples of $[________] in excess
thereof, together with any additional amount necessary to cover the aggregate
initial Principal Balance of the Capped Funding Notes surrendered at the time of
the initial denominational exchange thereof (with such initial Principal Balance
in each case being deemed to be the Principal Balance of the Capped Funding
Notes at the time of such initial denominational exchange 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 Holders of Term Notes hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Term Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive certificates for the Term
Notes as to which they are the Beneficial Owners. Requests and directions from,
and votes of, the Depository as Holder of the Term Notes shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Noteholders and give notice to the
Depository of such record date. Without the consent of the Issuing Entity and
the Indenture Trustee, no Term Note may be transferred by the Depository except
to a successor Xxxxxxxxxx that agrees to hold such Note for the account of the
Beneficial Owners.
21
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuing Entity 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
Issuing Entity by the Owner Trustee, not in its individual capacity but solely
as Owner Trustee, authenticated by the Note Registrar and delivered by the
Indenture Trustee to or upon the order of the Issuing Entity.
(b) [So long as no Amortization Event has occurred the Maximum
Variable Funding Balance on the Closing Date may be increased from time to time
by an aggregate amount not to exceed $[______________] and Additional Variable
Funding Notes may be issued upon satisfaction of the following conditions:
(i) the Indenture Trustee shall have received an Additional
Credit Enhancement Instrument pursuant to the terms and conditions of
the Insurance Agreement, including without limitation Section 2.02(B)
thereof;
(ii) the Indenture Trustee shall have received an Opinion of
Counsel to the Credit Enhancer in the form attached hereto as Exhibit
C;
(iii) the Indenture Trustee shall have received an Opinion of
Counsel in the form attached hereto as Exhibit D;
(iv) the Indenture Trustee shall have received the documents
specified in Section 11.01(a) (other than clause (iii) thereof).
The Security Balance of such Additional Variable Funding Notes in the
aggregate will reflect the sum of (i) the related Excess Additional Balance
Differential and (ii) the Additional Balance Differential for each Collection
Period from the Collection Period during which the Additional Variable Funding
Notes are issued until the new Maximum Variable Funding Balance is reached.
Notwithstanding the foregoing, the Security Balance of each specific Additional
Variable Funding Note will be limited to the Maximum Individual Variable Funding
Balance as provided in subsection (c) below.
The Additional Variable Funding Notes issued in connection with the
first increase in the Maximum Variable Funding Balance pursuant to this
subsection will bear the designation "A" (in addition to the numerical
designation pursuant to subsection (c) below) and any subsequent Additional
Variable Funding Notes issued in connection with any subsequent increases in the
Maximum Variable Funding Balance will bear alphabetical designations in the
order of their issuance.
Any Additional Variable Funding Notes shall be in the form of Exhibit
A-2 hereof and for all purposes shall be Notes issued pursuant to this Indenture
and all references to Variable Funding Notes herein shall include Additional
Variable Funding Notes issued pursuant to this Section 4.01(b).
22
Upon the issuance of any Additional Variable Funding Notes the Issuing
Entity will deliver written notice thereof to the Rating Agencies.
(b) Subject to the Maximum Variable Funding Balance at such time as
the Security Balance of any Variable Funding Note reaches the Maximum Individual
Variable Funding Balance no subsequent amounts in respect of the Additional
Balance Differential shall be added to the Security Balance of such Variable
Funding Note and instead a new Variable Funding Note shall be issued and
executed on behalf of the Issuing Entity by the Owner Trustee, not in its
individual capacity but solely as Owner Trustee, authenticated by the Note
Registrar and delivered by the Indenture Trustee to or upon the order of the
Issuing Entity. All subsequent amounts in respect of the Additional Balance
Differential shall be added to the Security Balance of such new Variable Funding
Note (subject to the Maximum Variable Funding Balance) until the Security
Balance thereof reaches the Maximum Individual Variable Funding Balance.
The Variable Funding Note issued on the Closing Date shall bear the
Designation "1" and each new Variable Funding Note will bear sequential
numerical designations in the order of their issuance. On each Payment Date on
or after the Accelerated Amortization Date a new Variable Funding Note will be
issued on each Payment Date in a principal amount equal to the lesser of (a) the
Maximum Individual Variable Funding Balance and (b) the Additional Balance
Differential for such Payment Date, but in no event will the Principal Balance
of the Variable Funding Notes exceed the Maximum Variable Funding Balance
without satisfying the conditions of Section 4.01 hereof.]
Section 4.02 Registration of and Limitations on Transfer and Exchange
of Notes; Appointment of Certificate Registrar. The Note Registrar shall cause
to be kept at its Corporate Trust Office a Note Register in which, subject to
such reasonable regulations as it may prescribe, the Note Registrar shall
provide for the registration of Notes and of transfers and exchanges of Notes as
herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office, the Indenture Trustee 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 Security Balances
evidencing the same aggregate Percentage Interests.
[No Variable Funding Note, other than any Capped Funding Notes, may be
transferred. Subject to the provisions set forth below Capped Funding Notes may
be transferred, provided that with respect to the initial transfer thereof by
the Seller prior written notification of such transfer shall have been given to
the Rating Agencies and to the Credit Enhancer by the Seller along with an
Opinion of Counsel to the effect that such transfer will not constitute a
fraudulent conveyance under the laws of the relevant jurisdiction.
23
No transfer of a Capped Funding Note shall be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws. In the event of any such transfer, (i) unless such transfer
is made in reliance upon Rule 144A under the 1933 Act, the Indenture Trustee or
the Issuing Entity may, require a written Opinion of Counsel (which may be
in-house counsel) acceptable to and in form and substance reasonably
satisfactory to the Indenture Trustee and the Issuing Entity that such transfer
may be made pursuant to an exemption, describing the applicable exemption and
the basis therefor, from said Act and laws or is being made pursuant to said Act
and laws, which Opinion of Counsel shall not be an expense of the Indenture
Trustee or the Issuing Entity and (ii) the Indenture Trustee shall require the
transferee to execute an investment letter (in substantially the form attached
hereto as Exhibit F) acceptable to and in form and substance reasonably
satisfactory to the Issuing Entity and the Indenture Trustee certifying to the
Issuing Entity and the Indenture Trustee the facts surrounding such transfer,
which investment letter shall not be an expense of the Indenture Trustee or the
Issuing Entity. The Holder of a Variable Funding Note desiring to effect such
transfer shall, and does hereby agree to, indemnify the Indenture Trustee the
Credit Enhancer and the Issuing Entity 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. Notwithstanding the foregoing, the restriction of transfer specified
in this paragraph is not applicable to any Capped Funding Notes that have been
registered under the Securities Act of 1933 pursuant to Section 2.5 of the
Mortgage Loan Purchase Agreement.]
Each transferee of a Note, by its acceptance of such Note, shall be
deemed to have represented either (i) that it is not, and is not purchasing the
note with assets of, an employee benefit plan subject to Section 406 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") or a plan
subject to Section 4975 of the Code or a governmental plan or church plan that
is subject to applicable federal, state or local law similar to the foregoing
provisions of ERISA and/or the Code ("Similar Law") or (ii) that a class or
individual exemption under Section 406 of ERISA or Section 4975 of the Code is
applicable to the acquisition and holding of the Note by such transferee or the
acquisition and holding of the Note by such transferee does not constitute or
give rise to a prohibited transaction under Section 406 of ERISA, Section 4975
of the Code or Similar Law, for which no statutory, regulatory or administrative
exemption is available.
Subject to the foregoing, at the option of the Noteholders, Notes may
be exchanged for other Notes of like tenor or, in each case in authorized
initial Principal Balances evidencing the same aggregate Percentage Interests
upon surrender of the Notes to be exchanged at the Corporate Trust Office of the
Note Registrar. [With respect to any surrender of Capped Funding Notes for
exchange the new Notes delivered in exchange therefor will bear the designation
"Capped" in addition to any other applicable designations.] Whenever any Notes
are so surrendered for exchange, the Indenture Trustee shall execute and the
Note Registrar shall authenticate and deliver the Notes which the Noteholder
making the exchange is entitled to receive. Each Note presented or surrendered
for registration of transfer or exchange shall (if so required by the Note
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed by,
the Holder thereof or his attorney duly authorized in writing. 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 made 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.
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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 Issuing Entity hereby appoints [___________________] as Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates Residual Ownership Interests and of transfers and
exchanges thereof pursuant to Section 3.05 of the Trust Agreement.
[___________________] xxxxxx accepts such appointment.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuing Entity and the Indenture
Trustee harmless, then, in the absence of notice to the Issuing Entity, 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 Issuing Entity 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 Issuing Entity 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 Issuing Entity 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 Issuing Entity or the Indenture
Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Issuing Entity may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuing Entity, 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.
25
Section 4.04 Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuing Entity, the Indenture Trustee
and any agent of the Issuing Entity 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 neither the Issuing Entity, the Indenture Trustee
nor any agent of the Issuing Entity 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 Issuing Entity may
at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuing Entity 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 Issuing Entity
shall direct by an Issuing Entity Request that they be destroyed or returned to
it; provided, that such Issuing Entity Request is timely and the Notes have not
been previously disposed of by the Indenture Trustee.
Section 4.06 Book-Entry Notes. The Term Notes, upon original issuance,
will 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 Issuing Entity. 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 will receive a definitive Note
representing such Beneficial Owner's interest in such Note, except as provided
in Section 4.08. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Beneficial Owners pursuant to Section
4.08:
(i) the provisions of this Section 4.06 shall be in full force
and effect;
(ii) 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 Owners of Term
Notes; (iii) 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;
(iii) the rights of Beneficial Owners shall be exercised only
through the Depository and shall be limited to those established by law
and agreements between such Owners of Term Notes and the Depository
and/or the Depository Participants pursuant to the Note Depository
Agreement. Unless and until Definitive Term Notes are issued pursuant
to Section 4.08, the initial Depository will make book-entry transfers
among the Depository Participants and receive and transmit payments of
principal of and interest on the Notes to such Depository Participants;
and
26
(iv) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Term Notes
evidencing a specified percentage of the Security Balances of the Term
Notes, the Depository shall be deemed to represent such percentage only
to the extent that it has received instructions to such effect from
Beneficial Owners and/or Depository Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Term Notes and has delivered such instructions to the
Indenture Trustee.
Section 4.07 Notices to Depository. Whenever a notice or other
communication to the Term Note Holders is required under this Indenture, unless
and until Definitive Term Notes shall have been issued to Beneficial Owners
pursuant to Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Term Notes to the
Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08 Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities with respect to the Term Notes and the
Administrator is unable to locate a qualified successor, (ii) the Administrator
at its option advises the Indenture Trustee in writing that it elects to
terminate the book-entry system through the Depository or (iii) after the
occurrence of an Event of Default, Owners of Term Notes representing beneficial
interests aggregating at least a majority of the Security Balances of the Term
Notes advise the Depository in writing that the continuation of a book-entry
system through the Depository is no longer in the best interests of the
Beneficial Owners, then the Depository shall notify all Beneficial Owners and
the Indenture Trustee of the occurrence of any such event and of the
availability of Definitive Term Notes to Beneficial Owners requesting the same.
Upon surrender to the Indenture Trustee of the typewritten Term Notes
representing the Book-Entry Notes by the Depository, accompanied by registration
instructions, the Issuing Entity shall execute and the Indenture Trustee shall
authenticate the Definitive Term Notes in accordance with the instructions of
the Depository. None of the Issuing Entity, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
Section 4.09 Tax Treatment. The Issuing Entity has entered into this
Indenture, and the Notes will be issued, with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Notes
will qualify as indebtedness of the Issuing Entity. The Issuing Entity, 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 of the Issuing
Entity.
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, 3.10,
3.19, 3.21 and 3.22, (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 Issuing Entity, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, when
27
(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 Issuing Entity and thereafter repaid to the
Issuing Entity 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, or
b. will become due and payable at the Final
Scheduled Payment Date within one year,
and the Issuing Entity, in the case of a. or b. above, has
irrevocably deposited or caused to be irrevocably deposited with
the Indenture Trustee cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature
prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire
indebtedness on such Notes and Certificates then outstanding not
theretofore delivered to the Indenture Trustee for cancellation
when due on the Final Scheduled Payment Date;
(B) the Issuing Entity has paid or caused to be paid all
other sums payable hereunder and under the Insurance Agreement by
the Issuing Entity; and
(C) the Issuing Entity has delivered to the Indenture
Trustee and the Credit Enhancer an Officer's Certificate, an
Opinion of Counsel and (if required by the TIA or the Indenture
Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of
Section 11.01 and, subject to Section 11.01 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 Issuing Entity, any
Noteholders or any Certificateholders.
Section 4.11 Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the Holders
of Securities, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to the
extent required herein or required by law.
28
Section 4.12 Subrogation and Cooperation.
(a) The Issuing Entity and the Indenture Trustee acknowledge that
(i) to the extent the Credit Enhancer makes payments under the Credit
Enhancement Instrument on account of principal of or interest on the Notes or
the Certificates, the Credit Enhancer will be fully subrogated to the rights of
such Holders to receive such principal and interest from the Issuing Entity, and
(ii) the Credit Enhancer shall be paid such principal and interest but 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 Credit Enhancer for action to preserve or enforce the
Credit Enhancer's rights or interest under this Indenture or the Insurance
Agreement without limiting the rights of the Noteholders as otherwise set forth
in the Indenture, including, without limitation, upon the occurrence and
continuance of a default under the Insurance Agreement, a request to take any
one or more of the following actions:
(i) institute Proceedings for the collection of all amounts
then payable on the Notes, or under this Indenture in respect to Notes
and all amounts payable under the Insurance Agreement enforce any
judgment obtained and collect from the Issuing Entity moneys adjudged
due;
(ii) 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;
(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 Uniform
Commercial Code and take any other appropriate action to protect and
enforce the rights and remedies of the Credit Enhancer hereunder.
Section 4.13 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Administrator other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuing Entity, 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 moneys.
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ARTICLE V
Remedies
Section 5.01 Events of Default. "Event of Default," wherever used
herein, shall have the meaning provided in Appendix A; provided, however, that
no Event of Default will occur under clause (i) or clause (ii) of the definition
of "Event of Default" if the Issuing Entity fails to make payments of principal
of and interest on the Notes so long as the Credit Enhancer makes payments
sufficient therefore under the Credit Enhancement Instrument.
The Issuing Entity shall deliver to the Indenture Trustee and the
Credit Enhancer, within five days after the occurrence of an Event of Default,
written notice in the form of an Officer's Certificate of any event which with
the giving of notice and the lapse of time would become an Event of Default
under clause (iii) of the definition of "Event of Default", its status and what
action the Issuing Entity is taking or proposes to take with respect thereto.
Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Holders of Notes representing not less than a majority
of the Security Balances of all Notes may declare the Notes to be immediately
due and payable, by a notice in writing to the Issuing Entity (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
unpaid principal amount of such Class of Notes, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately due
and payable. Unless the prior written consent of the Credit Enhancer shall have
been obtained by the Indenture Trustee, the Payment Date upon which such
accelerated payment is due and payable shall not be a Payment Date under the
Credit Enhancement Instrument and the Indenture Trustee shall not be authorized
under Section 3.32 to make a draw therefor.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Holders of Notes representing a majority of the Security Balances of all Notes,
by written notice to the Issuing Entity and the Indenture Trustee, may rescind
and annul such declaration and its consequences if:
(i) the Issuing Entity has paid or deposited with the
Indenture Trustee a sum sufficient to pay:
(A) 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; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel;
and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
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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 Issuing Entity covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable, the Issuing Entity will, upon demand of the
Indenture Trustee, pay to it, for the benefit of the Holders of Notes and of the
Credit Enhancer, the whole amount then due and payable on the Notes for
principal and interest, with interest upon 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 Issuing Entity 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 11.17 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 Issuing Entity or other obligor upon the Notes and collect in the
manner provided by law out of the property of the Issuing Entity or other
obligor the Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee subject to the provisions of Section 11.17 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 and the Credit Enhancer, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuing Entity
or any other obligor upon the Notes or any Person having or claiming an
ownership interest in the Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuing Entity or its property or such
other obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuing Entity or other obligor upon the Notes, or to the
creditors or property of the Issuing Entity or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered, by intervention in
such Proceedings or otherwise:
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(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Indenture Trustee (including any
claim for reasonable compensation to the Indenture Trustee 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 or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and 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 Holders of Notes allowed in any
judicial proceedings relative to the Issuing Entity, its creditors and
its property;
(v) and any trustee, receiver, liquidator, custodian or other
similar official in any such Proceeding is hereby authorized by each of
such Noteholders to make payments to the Indenture Trustee, and, in the
event that the Indenture Trustee shall consent to the making of
payments directly to such Noteholders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor Indenture Trustee and their
respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee
and each predecessor Indenture Trustee except as a result of negligence
or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or proceedings
instituted by the Indenture Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Term Notes or the Variable
Funding Notes, as applicable.
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(g) In any Proceedings brought by the Indenture Trustee (and also
any Proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, 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,
the Indenture Trustee subject to the provisions of Section 11.17 hereof may do
one or more of the following (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 Issuing
Entity and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee, the Holders of the Notes and the
Credit Enhancer; 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, other than a default
in the payment of any principal or interest on the Notes for thirty (30) days or
more, unless (A) the Holders of 100% of the Security Balances of the Securities
and the Credit Enhancer, which consent will not be unreasonably withheld consent
thereto, (B) the proceeds of such sale or liquidation distributable to Holders
are sufficient to discharge in full all amounts then due and unpaid upon the
Securities for principal and interest and to reimburse the Credit Enhancer for
any amounts drawn under the Credit Enhancement Instrument and any other amounts
due the Credit 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 either the
Notes or the Certificates, 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 Credit Enhancer, which consent will not be unreasonably withheld, and of the
Holders of not less than 66-2/3% of the Security Balances of the Securities. In
determining such sufficiency or insufficiency with respect to clause (B) and
(C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of
an Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose. Notwithstanding the foregoing, so long as an
Event of Servicer Termination has not occurred, any Sale of the Trust Estate
shall be made subject to the continued Servicing of the Mortgage Loans by the
Master Servicer as provided in the Servicing Agreement.
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(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to each Class of Noteholders for amounts due and unpaid on the
related Class of Notes for interest and to each Noteholder of such Class in each
case, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Class of Notes for interest from amounts
available in the Trust Estate for such Noteholders;
THIRD: to Holders of each Class of Notes for amounts due and unpaid on
the related Class of Notes for principal, from amounts available in the Trust
Estate for such Noteholders, and to each Noteholder of such Class in each case
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Class of Notes for principal, until the Security
Balances of each Class of Notes is reduced to zero;
FOURTH: to the Issuing Entity for amounts required to be distributed to
the Certificateholders in respect of interest and principal pursuant to the
Trust Agreement;
FIFTH: [Reserved] [To the payment of all amounts due and owing to the
Credit Enhancer under the Insurance Agreement];
SIXTH: to the Issuing Entity for amounts due under Article VIII of the
Trust Agreement; and
SEVENTH: to the payment of the remainder, if any to the Issuing Entity
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 Issuing Entity shall mail to each Noteholder and the
Indenture Trustee 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 to be 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, elect to maintain possession
of the Trust Estate. It is the desire of the parties hereto and the Noteholders
that there be at all times sufficient funds for the payment of principal of and
interest on the Securities and other obligations of the Issuing Entity including
payment to the Credit Enhancer, and the Indenture Trustee shall take such desire
into account when determining whether or not to maintain possession of the Trust
Estate. In determining whether to maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
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Section 5.06 Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 11.17 hereof:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Security Balances
of the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute
such Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of a majority of the Security Balances of the Notes.
It is understood and intended that no one or more Holders of Notes
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Security Balances of the Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07 Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
Section 5.08 Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuing Entity,
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.
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Section 5.09 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10 Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
Section 5.11 Control by Noteholders. The Holders of a majority of the
Security Balances of Notes shall have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Indenture
Trustee with respect to the Notes or exercising any trust or power conferred on
the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) 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 Holders of Notes representing not less than 100% of
the Security Balances of Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee
by Holders of Notes representing less than 100% of the Security
Balances of Notes to sell or liquidate the Trust Estate shall be of no
force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction.
Notwithstanding the rights of Noteholders set forth in this Section,
subject to Section 6.01, the Indenture Trustee need not take any action that it
determines might involve it in liability or might materially adversely affect
the rights of any Noteholders not consenting to such action.
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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
Holders of Notes of not less than a majority of the Security Balances of the
Notes 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 which cannot be
modified or amended without the consent of the Holder of each Note or (c) the
waiver of which would materially and adversely affect the interests of the
Credit Enhancer or modify its obligation under the Credit Enhancement
Instrument. In the case of any such waiver, the Issuing Entity, the Indenture
Trustee and the Holders of the Notes shall be restored to their former positions
and rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other 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 Holder of any Note by such Xxxxxx's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the Security
Balances of the Notes or (c) any suit instituted by any Noteholder for the
enforcement of the payment of principal of or interest on any Note on or after
the respective due dates expressed in such Note and in this Indenture.
Section 5.14 Waiver of Stay or Extension Laws. The Issuing Entity
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 Issuing Entity (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 5.15 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.
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(b) The Indenture Trustee shall not in any private Sale sell the
Trust Estate, or any portion thereof, unless
(i) the Holders of all Securities and the Credit Enhancer
consent to or direct the Indenture Trustee to make, such Sale, or
(ii) the proceeds of such Sale would be not less than the
entire amount which would be payable to the Noteholders under the
Notes, Certificateholders under the Certificates and the Credit
Enhancer in respect of amounts drawn under the Credit Enhancement
Instrument and any other amounts due the Credit Enhancer under the
Insurance Agreement, in full payment thereof in accordance with Section
5.02, on the Payment Date next succeeding the date of such Sale, or
(iii) The Indenture Trustee determines, in its sole
discretion, that the conditions for retention of the Trust Estate set
forth in Section 5.05 cannot be satisfied (in making any such
determination, the Indenture Trustee may rely upon an opinion of an
Independent investment banking firm obtained and delivered as provided
in Section 5.05, and the Credit Enhancer consents to such Sale, which
consent will not be unreasonably withheld and the Holders representing
at least 66-2/3% of the Security Balances of the Securities 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 Holders and the Credit Enhancer 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 (2) of subsection (b) of this Section 5.15 has not
been established by the Indenture Trustee and no Person bids an amount equal to
or greater than such amount, the Indenture Trustee shall bid an amount at least
$1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust
Estate
(i) any Holder or Holders of Notes may bid for and with the
consent of the Credit Enhancer purchase the property offered for sale,
and upon compliance with the terms of sale may hold, retain and possess
and dispose of such property, without further accountability, and may,
in paying the purchase money therefor, deliver any Notes or claims for
interest thereon in lieu of cash up to the amount which shall, upon
distribution of the net proceeds of such sale, be payable thereon, and
such Notes, in case the amounts so payable thereon shall be less than
the amount due thereon, shall be returned to the Holders thereof after
being appropriately stamped to show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the
property offered for Sale in connection with any Sale thereof, and,
subject to any requirements of, and to the extent permitted by,
applicable law in connection therewith, may purchase all or any portion
of the Trust Estate in a private sale, and, in lieu of paying cash
therefor, may make settlement for the purchase price by crediting the
gross Sale price against the sum of (A) the amount which would be
distributable to the Holders of the Notes and Holders of Certificates
and amounts owing to the Credit 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 which 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;
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(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 Issuing Entity 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 moneys.
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 Issuing Entity 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 Issuing Entity. 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 request from the Indenture Trustee to do so
and at the Administrator's expense, the Issuing Entity shall take all such
lawful action as the Indenture Trustee may request to compel or secure the
performance and observance by the Seller and the Master Servicer, as applicable,
of each of their obligations to the Issuing Entity under or in connection with
the Mortgage Loan Purchase Agreement and the Servicing Agreement, and to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuing Entity under or in connection with the Mortgage Loan Purchase
Agreement and the Servicing Agreement to the extent and in the manner directed
by the Indenture Trustee, including the transmission of notices of default on
the part of the Seller or the Master Servicer thereunder and the institution of
legal or administrative actions or proceedings to compel or secure performance
by the Seller or the Master Servicer of each of their obligations under the
Mortgage Loan Purchase Agreement and the Servicing Agreement.
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(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee subject to the rights of the Credit Enhancer under the
Servicing Agreement may, and at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66-2/3% of the Security Balances of the Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Issuing Entity against
the Seller or the Master Servicer under or in connection with the Mortgage Loan
Purchase Agreement and the Servicing Agreement, including the right or power to
take any action to compel or secure performance or observance by the Seller or
the Master Servicer, as the case may be, of each of their obligations to the
Issuing Entity thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Mortgage Loan Purchase Agreement and the
Servicing Agreement, as the case may be, and any right of the Issuing Entity to
take such action shall not be suspended.
ARTICLE VI
The Indenture Trustee
Section 6.01 Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(d) (i) this paragraph does not limit the effect of paragraph of
this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it (A) pursuant to Section 5.11 or (B)
from the Credit Enhancer, which it is entitled to give under any of the
Basic Documents.
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(e) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section
6.01.
(f) 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 Issuing Entity.
(g) 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.
(h) 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.
(i) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
Section 6.02 Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, 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.
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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 Issuing Entity or its Affiliates with
the same rights it would have if it were not Indenture Trustee. Any
Administrator, 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 responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuing Entity's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Issuing Entity in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Indenture Trustee's certificate of authentication.
Section 6.05 Notice of Event of Default. If an Event of Default occurs
and is continuing and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall give notice thereof to the Credit Enhancer.
The Trustee shall mail to each Noteholder notice of the Event of Default within
90 days after it occurs. Except in the case of an Event of Default in payment of
principal of or interest on any Note, the Indenture Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
Section 6.06 Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns. In
addition, upon the Issuing Entity's written request, the Indenture Trustee shall
promptly furnish information reasonably requested by the Issuing Entity that is
reasonably available to the Indenture Trustee to enable the Issuing Entity to
perform its federal and state income tax reporting obligations.
Section 6.07 Compensation and Indemnity. The Issuing Entity shall or
shall cause the Administrator to pay to the Indenture Trustee on each Payment
Date reasonable compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuing Entity shall or shall cause the Administrator to
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 and expenses, disbursements and advances of the Indenture Trustee's
agents, counsel, accountants and experts. The Issuing Entity shall or shall
cause the Administrator to 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 Issuing Entity and the
Administrator promptly of any claim for which it may seek indemnity. Failure by
the Indenture Trustee to so notify the Issuing Entity and the Administrator
shall not relieve the Issuing Entity or the Administrator of its obligations
hereunder. The Issuing Entity shall or shall cause the Administrator to defend
any such claim, and the Indenture Trustee may have separate counsel and the
Issuing Entity shall or shall cause the Administrator to pay the fees and
expenses of such counsel. Neither the Issuing Entity nor the Administrator need
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Indenture Trustee through the Indenture Trustee's own willful
misconduct, negligence or bad faith.
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The Issuing Entity'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 Section 5.01(iv) or (v) with respect to the Issuing Entity,
the expenses are intended to constitute expenses of administration under Title
11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.
Section 6.08 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 Issuing Entity and the Credit
Enhancer. The Holders of a majority of Security Balances of the Notes may remove
the Indenture Trustee by so notifying the Indenture Trustee and the Credit
Enhancer and may appoint a successor Indenture Trustee. The Issuing Entity shall
remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuing
Entity shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuing Entity.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuing Entity or the Holders of a majority of Security
Balances 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.
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Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuing Entity's and the Administrator'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, 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 prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust Estate, or any part hereof, and, subject to the other
provisions of this Section, 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;
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(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11 Eligibility; Disqualification. The Indenture Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of [____] or better by [______]. The
Indenture Trustee shall comply with TIA ss. 310(b), including the optional
provision permitted by the second sentence of TIA ss. 310(b)(9); provided,
however, that there shall be excluded from the operation of TIA ss. 310(b)(1)
any indenture or indentures under which other securities of the Issuing Entity
are outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
Section 6.12 Preferential Collection of Claims Against Issuing Entity.
The Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13 Representation and Warranty. The Indenture Trustee
represents and warrants to the Issuing Entity, for the benefit of the
Noteholders, that this Indenture has been executed and delivered by one of its
Responsible Officers who is duly authorized to execute and deliver such document
in such capacity on its behalf.
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Section 6.14 Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept assignment of the Mortgage Loans and hold the assets
of the Trust in trust for the Noteholders;
(b) to issue, execute 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 No Consent to Certain Acts of Depositor. The Indenture
Trustee shall not consent to any action proposed to be taken by the Depositor
pursuant to Article [_______________] of the Depositor's Certificate of
Incorporation.
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01 Issuing Entity To Furnish Indenture Trustee Names and
Addresses of Noteholders. The Issuing Entity will furnish or cause to be
furnished to the Indenture Trustee (a) not more than five days after each Record
Date, a list, in such form as the Indenture Trustee may reasonably require, of
the names and addresses of the Holders of Notes as of such Record Date, (b) at
such other times as the Indenture Trustee and the Credit Enhancer may request in
writing, within 30 days after receipt by the Issuing Entity of any such request,
a list of similar form and content as of a date not more than 10 days prior to
the time such list is furnished; provided, however, that so long as the
Indenture Trustee is the Note Registrar, no such list shall be required to be
furnished.
Section 7.02 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 Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01 upon receipt
of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuing Entity, the Indenture Trustee and the Note Registrar
shall have the protection of TIA ss. 312(c).
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Section 7.03 Reports by Issuing Entity. (a) The Issuing Entity shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuing Entity is required to file the same with the Commission, copies
of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe)
that the Issuing Entity 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 Issuing Entity with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA ss.
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuing Entity 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 Issuing Entity otherwise determines, the fiscal year
of the Issuing Entity shall end on December 31 of each year.
Section 7.04 Reports by Indenture Trustee. If required by TIA ss.
313(a), within 60 days after each January 1 beginning with ___________, 200_,
the Indenture Trustee shall mail to each Noteholder as required by TIA ss.
313(c) and to the Credit Enhancer a brief report dated as of such date that
complies with TIA ss. 313(a). The Indenture Trustee also shall comply with TIA
ss. 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Term Notes are listed. The Issuing Entity 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.
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Section 8.02 Trust Accounts.
(a) On or prior to the Closing Date, the Issuing Entity shall cause
the Indenture Trustee to establish and maintain, in the name of the Indenture
Trustee, for the benefit of the Noteholders and the Certificateholders and the
Credit Enhancer, the Payment Account as provided in Section 3.01 of this
Indenture.
(b) All moneys deposited from time to time in the Payment Account
pursuant to the Servicing Agreement and all deposits therein pursuant to this
Indenture are for the benefit of the Noteholders, the Certificateholders and the
holders of the Residual Ownership Interest and all investments made with such
moneys including all income or other gain from such investments are for the
benefit of the Master Servicer as provided by the Servicing Agreement.
On each Payment Date during the Funding Period the Indenture Trustee
shall withdraw Net Principal Collections from the Payment Account and deposit
Net Principal Collections to the Funding Account.
On each Payment Date, the Indenture Trustee shall distribute all
amounts on deposit in the Payment Account (after giving effect to the withdrawal
referred to in the preceding paragraph) to Noteholders in respect of the Notes
and in its capacity as Certificate Paying Agent to Certificateholders in the
order of priority set forth in Section 3.05 (except as otherwise provided in
Section 5.04(b)).
The Master Servicer may direct the Indenture Trustee to invest any
funds in the Payment Account in Eligible Investments maturing no later than the
Business Day preceding each Payment Date and shall not be sold or disposed of
prior to the maturity. Unless otherwise instructed by the Master Servicer, the
Indenture Trustee shall invest all funds in the Payment Account in its
[__________] Short Term Investment Fund so long as it is an Eligible Investment.
(c) [On or before the Closing Date the Issuing Entity shall open, at
the Corporate Trust Office, an account which shall be the "Funding Account". The
Master Servicer may direct the Indenture Trustee to invest any funds in the
Funding Account in Eligible Investments maturing no later than the Business Day
preceding each Payment Date and shall not be sold or disposed of prior to the
maturity. Unless otherwise instructed by the Master Servicer, the Indenture
Trustee shall invest all funds in the Payment Account in its Corporate Trust
Short Term Investment Fund so long as it is an Eligible Investment. During the
Funding Period, any amounts received by the Indenture Trustee in respect of Net
Principal Collections for deposit in the Funding Account, together with any
Eligible Investments in which such moneys are or will be invested or reinvested
during the term of the Notes, shall be held by the Indenture Trustee in the
Funding Account as part of the Trust Estate, subject to disbursement and
withdrawal as herein provided.
(i) Amounts on deposit in the Funding Account in respect of
Net Principal Collections may be withdrawn on each Deposit Date and (1)
paid to the Issuing Entity in payment for Additional Loans by the
deposit of such amount to the Collection Account and (2) at the end of
the Funding Period any amounts remaining in the Funding Account after
the withdrawal called for by clause (1) shall be deposited in the
Payment Account to be included in the payment of principal on the
Payment Date that is the last day of the Funding Period.
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(ii) Amounts on deposit in the Funding Account in respect of
investment earnings shall be withdrawn on each Payment Date and
deposited in the Payment Account and included in the amounts paid to
Noteholders and Certificateholders.
(c) (i) Any investment in the institution with which the Funding
Account is maintained may mature on such Payment Date and (ii) any other
investment may mature on such Payment Date if the Indenture Trustee shall
advance funds on such Payment Date to the Funding Account in the amount payable
on such investment on such Payment Date, pending receipt thereof to the extent
necessary to make distributions on the Notes and the Certificates) and shall not
be sold or disposed of prior to maturity.]
Section 8.03 Opinion of Counsel. The Indenture Trustee shall receive at
least seven days notice when requested by the Issuing Entity 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 Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
will not materially and adversely impair the security for the Notes or the
rights of the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to express
an opinion as to the fair value of the Trust Estate. Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
Section 8.04 Termination Upon Distribution to Noteholders. This
Indenture and the respective obligations and responsibilities of the Issuing
Entity and the Indenture Trustee created hereby shall terminate upon the
distribution to Noteholders, Certificateholders, holders of the Residual
Ownership Interest 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. Xxxxx, living on the date
hereof.
Section 8.05 Release of Trust Estate.
(a) Subject to the payment of its fees and expenses, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in Article IV 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 moneys.
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(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 Credit Enhancer have been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture. The Indenture Trustee shall release property
from the lien of this Indenture pursuant to this Section 8.05 only upon receipt
of an request from the Issuing Entity accompanied by an Officers' Certificate,
an Opinion of Counsel, and (if required by the TIA) Independent Certificates in
accordance with TIA ss. 314(c) and 314(d)(1) meeting the applicable requirements
as described herein, and a letter from the President or any Vice President or
any Secretary of the Credit Enhancer, if any, stating that the Credit Enhancer
has no objection to such request from the Issuing Entity.
Section 8.06 Surrender of Notes Upon Final Payment. By acceptance of
any Note, the Holder thereof agrees to surrender such Note to the Indenture
Trustee promptly, prior to such Noteholder's receipt of the final payment
thereon.
ARTICLE IX
Supplemental Indentures
Section 9.01 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with the
consent of the Credit Enhancer and prior notice to the Rating Agencies and the
Credit Enhancer, the Issuing Entity and the Indenture Trustee, when authorized
by an Issuing Entity 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 Issuing Entity,
and the assumption by any such successor of the covenants of the
Issuing Entity herein and in the Notes contained;
(iii) to add to the covenants of the Issuing Entity, for the
benefit of the Holders of the Notes, or to surrender any right or power
herein conferred upon the Issuing Entity;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided, that such action shall not adversely affect the
interests of the Holders of the Notes; (vi) to evidence and provide for
the acceptance of the appointment hereunder by a successor trustee with
respect to the Notes and to add to or change any of the provisions of
this Indenture as shall be necessary to facilitate the administration
of the trusts hereunder by more than one trustee, pursuant to the
requirements of Article VI; or
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(vi) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA;
provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
entering into such indenture supplement will not have any material adverse tax
consequences 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 Issuing Entity and the Indenture Trustee, when authorized by
an Issuing Entity Request, may, also without the consent of any of the Holders
of the Notes but with the consent of the Credit Enhancer and prior notice to the
Rating Agencies and the Credit 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 Holders of the Notes 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 (ii) cause the Issuing Entity to be subject to an entity
level tax or be classified as a taxable mortgage pool within the meaning of
Section 7701(i) of the Code.
Section 9.02 Supplemental Indentures With Consent of Noteholders. The
Issuing Entity and the Indenture Trustee, when authorized by an Issuing Entity
Request, also may, with prior notice to the Rating Agencies and, with the
written consent of the Credit Enhancer and with the consent of the Holders of
not less than a majority of the Security Balances of each Class of Notes, by Act
of such Holders delivered to the Issuing Entity and the Indenture Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each Note
affected thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof or
the interest 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;
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(ii) reduce the percentage of the Security Balances of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception
in the definition of the term "Holder";
(iv) reduce the percentage of the Security Balances of the
Notes required to direct the Indenture Trustee to direct the Issuing
Entity to sell or liquidate the Trust Estate pursuant to Section 5.04;
(v) 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 Basic Documents cannot
be modified or waived without the consent of the Holder of each Note
affected thereby;
(vi) 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
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security
provided by the lien of this Indenture; and provided, further, that
such action shall not, as evidenced by an Opinion of Counsel, cause the
Issuing Entity to be subject to an entity level tax or be classified as
a taxable mortgage pool within the meaning of Section 7701(i) of the
Code.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders 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 Issuing Entity and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.02, the
Indenture Trustee shall mail to the Holders of the Notes to which such amendment
or supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
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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 Issuing Entity and the Holders of
the Notes shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
Section 9.05 Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
Section 9.06 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuing Entity or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuing Entity, to any such
supplemental indenture may be prepared and executed by the Issuing Entity and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding
Notes.
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ARTICLE X
[Reserved]
ARTICLE XI
Miscellaneous
Section 11.01 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuing Entity to the
Indenture Trustee to take any action under any provision of this Indenture, the
Issuing Entity shall furnish to the Indenture Trustee and to the Credit 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, (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with and (iii)
(if required by the TIA) an Independent Certificate from a firm of certified
public accountants meeting the applicable requirements of this Section 11.01,
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; and
(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
Issuing Entity shall, in addition to any obligation imposed in Section 11.01(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 Issuing
Entity of the Collateral or other property or securities to be so deposited.
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(ii) Whenever the Issuing Entity 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 Issuing Entity shall also deliver to the Indenture Trustee
an Independent Certificate as to the same matters, if the fair value to
the Issuing Entity 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 Issuing
Entity, as set forth in the certificates delivered pursuant to clause
(i) above and this clause (ii), is 10% or more of the Security Balances
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
Issuing Entity as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the Security Balances of
the Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuing Entity shall also furnish
to the Indenture Trustee an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair
value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person
the proposed release will not impair the security under this Indenture
in contravention of the provisions hereof.
(iv) Whenever the Issuing Entity 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 Issuing Entity 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
Security Balances of the Notes, but such certificate need not be
furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the then Security
Balances of the Notes.
(v) Notwithstanding any provision of this Indenture, the
Issuing Entity may, without compliance with the requirements of the
other provisions of this Section 11.01, (A) collect, sell or otherwise
dispose of Mortgage Loans and Mortgaged Properties as and to the extent
permitted or required by the Basic Documents or (B) make cash payments
out of the Payment Account as and to the extent permitted or required
by the Basic Documents, so long as the Issuing Entity shall deliver to
the Indenture Trustee every six months, commencing __________, 200_, an
Officer's Certificate of the Issuing Entity stating that all the
dispositions of Collateral described in clauses (A) or (B) above that
occurred during the preceding six calendar months were in the ordinary
course of the Issuing Entity's business and that the proceeds thereof
were applied in accordance with the Basic Documents.
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Section 11.02 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 Issuing
Entity may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller, the Issuing Entity or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Seller, the Issuing Entity or the Administrator, unless such counsel knows, or
in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuing
Entity shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuing Entity'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 Issuing Entity to have
such application granted or to the sufficiency of such certificate or report.
The foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained
in any such document as provided in Article VI.
Section 11.03 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 Issuing Entity. 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 Issuing Entity, if made in
the manner provided in this Section 11.03.
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(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuing Entity in reliance thereon, whether or not
notation of such action is made upon such Note.
Section 11.04 Notices, etc., to Indenture Trustee, Issuing Entity,
Credit 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:
(i) the Indenture Trustee by any Noteholder or by the Issuing
Entity shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at the
Corporate Trust Office, or
(ii) the Issuing Entity 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 Issuing Entity
addressed to: Home Equity Loan Trust 200_-__ in care of [_________],
[______________] Attention of [_________] with a copy to the
Administrator at [______________], Attention: [_____________], or at
any other address previously furnished in writing to the Indenture
Trustee by the Issuing Entity or the Administrator. The Issuing Entity
shall promptly transmit any notice received by it from the Noteholders
to the Indenture Trustee, or
(iii) the Credit Enhancer by the Issuing Entity, 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: [_______________], Attention:
[______________], Telephone: [_____________], Telecopier:
[___________].
Notices required to be given to the Rating Agencies by the Issuing
Entity, 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 Xxxx & Xxxxxx, at the following address: [___________];]
[and] [(ii) in the case of Fitch Ratings, at the following address:
[______________];] [and] [(iii) in the case of Xxxxx'x Investors Services, Inc.,
at the following address: [________________]; [and] [(iv) in the case of
Standard and Poor's, A Division of The XxXxxx-Xxxx Companies, Inc., at the
following address: [__________________]; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
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Section 11.05 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 his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
Section 11.06 Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuing
Entity may enter into any agreement with any Holder of a Note providing for a
method of payment, or notice by the Indenture Trustee or any Administrator to
such Holder, that is different from the methods provided for in this Indenture
for such payments or notices. The Issuing Entity will furnish to the Indenture
Trustee a copy of each such agreement and the Indenture Trustee will cause
payments to be made and notices to be given in accordance with such agreements.
Section 11.07 Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA xx.xx..xx.xx.. 310 through 317 that impose duties
on any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
Section 11.08 Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 11.09 Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuing Entity 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.
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Section 11.10 Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.11 Benefits of Indenture. The Credit Enhancer and its
successors and assigns shall be a third-party beneficiary to the provisions of
this Indenture. Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Noteholders, and any other party secured hereunder, and any
other Person with an ownership interest in any part of the Trust Estate, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 11.12 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 11.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.14 Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.15 Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuing Entity and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
Section 11.16 Issuing Entity Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuing Entity,
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 Issuing
Entity 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 Issuing Entity,
the Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance of
any duties or obligations of the Issuing Entity hereunder, the Owner Trustee
shall be subject to, and entitled to the benefits of, the terms and provisions
of Article VI, VII and VIII of the Trust Agreement.
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Section 11.17 No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Depositor or the Issuing
Entity, or join in any institution against the Depositor or the Issuing Entity
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the Basic Documents.
Section 11.18 Inspection. The Issuing Entity agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee, during
the Issuing Entity's normal business hours, to examine all the books of account,
records, reports and other papers of the Issuing Entity, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuing Entity's affairs, finances and
accounts with the Issuing Entity's officers, employees, and Independent
certified public accountants, all at such reasonable times and as often as may
be reasonably requested. The Indenture Trustee shall and shall cause its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
Section 11.19 Authority of the Administrator. Each of the parties to
this Indenture acknowledges that the Issuing Entity and the Owner Trustee have
each appointed the Administrator to act as its agent to perform the duties and
obligations of the Issuing Entity hereunder. Unless otherwise instructed by the
Issuing Entity or the Owner Trustee, copies of all notices, requests, demands
and other documents to be delivered to the Issuing Entity or the Owner Trustee
pursuant to the terms hereof shall be delivered to the Administrator. Unless
otherwise instructed by the Issuing Entity or the Owner Trustee, all notices,
requests, demands and other documents to be executed or delivered, and any
action to be taken, by the Issuing Entity or the Owner Trustee pursuant to the
terms hereof may be executed, delivered and/or taken by the Administrator
pursuant to the Administration Agreement.
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IN WITNESS WHEREOF, the Issuing Entity 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 200_-__
as Issuing Entity
By:
-----------------------------------------
not in its individual capacity but solely
as Owner Trustee
By:______________________________________
Name:
Title:
[_______________________],
as Indenture Trustee, as Certificate
Paying Agent and as Certificate Registrar
By:__________________________________________
Name:
Title:
[_____________________]
hereby accepts the appointment
as Certificate Paying Agent
pursuant to Section 3.03
hereof and as Certificate
Registrar pursuant to Section
4.02 hereof.
By:_________________________
Title:
61
STATE OF NEW YORK. )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared
______________, to me known, who being by me duly sworn, did depose and say,
that he resides at ________________, __________________ _____, that he is the of
the Owner Trustee, one of the corporations described in and which executed the
above instrument; that he 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 signed his name
thereto by like order.
_____________________________
Notary Public
[NOTARIAL SEAL]
62
STATE OF NEW YORK. )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared
______________________ , to me known, who being by me duly sworn, did depose and
say, that he resides at __________________________________________________ ,
that he is the ______________ of ________________, as Indenture Trustee, one of
the corporations described in and which executed the above instrument; that he
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 signed his name thereto by like order.
_____________________________
Notary Public
[NOTARIAL SEAL]
63
STATE OF NEW YORK. )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of __________, before me personally appeared
______________________ , to me known, who being by me duly sworn, did depose and
say, that he resides at __________________________________________________ ,
that he is an ________________ of _______________, as Indenture Trustee, one of
the corporations described in and which executed the above instrument; that he
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 signed his name thereto by like order.
_____________________________
Notary Public
[NOTARIAL SEAL]
64
[EXHIBIT C
[FORM OF OPINION]
[Date]
To: The Persons Listed On the Attached Schedule
Re: HOME EQUITY LOAN TRUST 200_-__Home Equity Loan Asset-Backed
Securities Series 200__-__
Ladies and Gentlemen:
We have acted as counsel to [____________________] ("[_____]") in
connection with the issuance by [________] of its Surety Bond Number [SB___]
(the "Surety Bond") issued pursuant to the [ ___________ ], dated as of
______________, 200_ among ["________"], [Chase Funding, Inc.] [Chase Manhattan
Acceptance Corporation], as Depositor (the "Depositor"), [_____________]
("[___]"), as Seller and Master Servicer and Home Equity Loan Trust 200_-__ (the
"Issuing Entity") (the "Insurance Agreement") with respect to the Additional
Variable Funding Notes issued pursuant to the Indenture, dated as of
____________, 200_ between the Issuing Entity and [_______________], as
Indenture Trustee.]
For the purposes of this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified to our satisfaction
of [(i) the [Articles of Incorporation] [Certificate of Incorporation] [Articles
of Association] and the By-Laws of [____]; (ii) resolutions adopted by the Board
of Directors of [____] relevant to the issuance of the Surety Bond; (iii) the
Surety Bond; (iv) the Insurance Agreement; (v) the certificate of the Secretary
of [_____] dated as of the date hereof (the "Certificate");] and (vi) such other
documents that we have deemed necessary or appropriate as a basis for the
opinion set forth below.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the [Definitions incorporated in and attached as an
Appendix to the Indenture.]
In our examination we have assumed the genuineness of all signatures
and the legal capacity of natural persons (other than with respect to officers
of [_____]), the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such copies. We
have relied upon the certificates, statements and representations of officers
and other representatives of [_____] with regard to all facts (but not
conclusions of law) material to the opinions set forth below and have not
conducted an independent inquiry as to such matters. Based upon and subject to
the foregoing, we are of the opinion that:
1. [____] is a corporation validly existing, in good standing and
licensed to transact the business of surety and financial guaranty insurance
under the laws of the State of New York.
2. [____] has the corporate power to execute and deliver, and to take
all action required of it under the Surety Bond.
65
3. Except as have already been obtained, no authorization, consent,
approval, license, formal exemption, or declaration from, nor any registration
or filing with, any court or governmental agency or body of the United States of
America or the State of New York, which if not obtained would affect or impair
the validity or enforceability of the Surety Bond is required in connection with
the execution and delivery by [____] of the Surety Bond or in connection with
[____]'s performance of its obligations thereunder.
4. The Surety Bond has been duly authorized, executed and delivered by
[____] and constitutes the legally valid and binding obligation of [____],
enforceable in accordance with its terms subject, as to enforcement, to (a)
bankruptcy, reorganization, insolvency, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights generally,
including, without limitation, laws relating to fraudulent transfers or
conveyances, preferential transfers and equitable subordination, presently or
from time to time in effect, and general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law), as
such laws may be applied in any such proceeding with respect to [_____] and (b)
the qualification that the remedy of specific performance may be subject to
equitable defenses and to the discretion of the court before which any
proceedings with respect thereto may be brought.
5. The Surety Bond is not required to be registered under the
Securities Act of 1933, as amended.
We express no opinion as to the laws of any jurisdiction other than the
federal laws of the United States of America and the laws of the State of New
York. This opinion is limited to the laws of New York and the United States of
America as in effect on the date hereof and, in rendering this opinion, we
assume no obligation to revise or supplement this opinion should the present
laws, or the interpretation thereof, be changed.
This opinion has been furnished solely for the benefit of the persons
listed on the attached Schedule A in connection with the transactions described
herein and on the condition that the opinions expressed herein may not be
published or otherwise communicated to any other party, or relied upon by any
other party, without prior written approval in each instance. Very truly yours,]
66
Schedule A
Opinion of [___________]
[Date]
Re: HOME EQUITY LOAN TRUST 200__-__
Home Equity Loan Asset-Backed Securities
Series 200__-__
Chase Funding, Inc.
[_______________________]
[_______________________]
[_______________________],
as Seller and Servicer
[_______________________]
[Dominion Bond Rating Services]
[_______________________]
[_______________________]
[Xxxxx'x Investors Service, Inc.
[_______________________]
New York, New York 10007]
[Fitch Ratings]
[_______________________]
[_______________________]
[Standard and Poor's, A Division of
The McGraw Hill Companies, Inc.]
[_______________________]
[_______________________]
[________________________],
as Indenture Trustee
[________________________]
[________________________],
as Owner Trustee
[________________________]
67
[EXHIBIT D
__________, 200_
Chase Funding, Inc.
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
[_______________________]
Re: Home Equity Loan Trust 200_-__
Ladies and Gentlemen:
We have acted as counsel to Chase Funding, Inc., a [__________]
corporation (the "Depositor"), in connection with (i) the purchase of certain
adjustable rate home equity revolving credit line loans (the "Mortgage Loans")
pursuant to a mortgage loan purchase agreement, dated as of __________, 200_
(the "Mortgage Loan Purchase Agreement") between [_____________________], as
seller (the "Seller") and the Depositor, dated as of __________, 200_ (the
"Agreement"), and (ii) the sale by the Depositor of the Mortgage Loans to Home
Equity Loan Trust 200_-__, a Delaware business trust (the "Issuing Entity"),
created by a Trust Agreement dated as of ____________, 200_ (the "Trust
Agreement") among the Depositor, and [___________] as owner trustee (the "Owner
Trustee"). In exchange for the Mortgage Loans, the Issuing Entity has issued
Home Equity Loan Asset-Backed Term Notes, Series 200__-__ (the "Term Notes"),
Home Equity Loan Asset-Backed Variable Funding Notes, Series 200__-__ (the
"Variable Funding Notes", and together with the Term Notes, the "Notes") and
Home Equity Loan Asset-Backed Certificates, Series 200__-__ (the "Certificates",
and together with the Notes, the "Securities"). The Issuing Entity wishes to
increase the Maximum Variable Funding Balance of the Variable funding Notes in
excess of $[___________] as provided for in Section 4.01 of the Indenture.
Capitalized terms not otherwise defined herein shall (unless otherwise
specifically set forth herein) have the meanings ascribed to such terms in the
Trust Agreement.
This opinion is rendered pursuant to Section 4.01(b)(iii) of the
Indenture.
68
In arriving at the opinions expressed below, we have examined such
documents and records as we have deemed appropriate, including the following:
1. A signed copy of the Indenture.
2. A signed copy of the Trust Agreement.
3. Specimens of the Notes.
As to any facts material to the following opinions which we did not
independently establish or verify, we have relied upon statements and
representations of the responsible officers and other representations of the
Depositor and of public officials and agencies.
Based upon the foregoing and consideration of such other matters as we
have deemed appropriate, we are of the opinion that:
1. For federal income tax purposes, as a result of the increase in the
Maximum Variable Funding Balance of the Variable Funding Notes in excess of
$[____________], the Issuer will not be classified as an association or a
publicly traded partnership taxable as a corporation, or as a taxable mortgage
pool within the meaning of section 7701(i) of the Code.
2. The Variable Funding Notes will be treated as debt for federal
income tax purposes and will not affect the Classification as debt of any other
class of Notes.
We do not express any opinion as to any laws other than the federal tax
law of the United States of America.
The opinions set forth herein are expressly subject to there being no
additional facts that would materially affect the validity of the assumptions
and conclusions set forth herein or upon which this opinion is based.
No one other than you shall be entitled to rely on the opinions
expressed herein. This opinion letter is not intended to be employed in any
transaction other than the one described above and is being delivered to you on
the understanding that neither it nor its contents may be published,
communicated or otherwise made available, in whole or in part, to any other
party or entity without, in each instance, our specific prior written consent.
Very truly yours,]
69
