EXHIBIT 4.9
HOME EQUITY LOAN TRUST 199_-__
Issuer
AND
INDENTURE TRUSTEE
------------------------------
INDENTURE
Dated as of ____________
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HOME EQUITY LOAN TERM NOTES
HOME EQUITY LOAN ASSET BACKED VARIABLE FUNDING NOTES
______________________
CROSS-REFERENCE TABLE/*/
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
(S) 310(a)(1) .......................... 3.02, 6.11
(a)(2) .......................... 6.11
(a)(3) .......................... 6.01(a) and (b)
(a)(4) .......................... Not Applicable
(a)(5) .......................... 6.11
(b) .......................... 6.11
(c) .......................... Not Applicable
(S) 311(a) .......................... 6.12
(b) .......................... 6.12
(c) .......................... Not Applicable
(S) 312(a) .......................... 7.01, 7.02(a)
(b) .......................... 7.02(b)
(c) .......................... 7.02(c)
(S) 313(a) .......................... 7.04
(b) .......................... 7.04
(c) .......................... 7.04
(d) .......................... 7.04
(S) 314(a)(1) .......................... 7.03(a)(i)
(a)(2) .......................... 7.03(a)(ii)
(a)(3) .......................... 7.03(a)(iii)
(a)(4) .......................... 3.10
(b)(1) .......................... 3.07(a)
(b)(2) .......................... 3.07(b)
(c)(1) .......................... 10.01(a) and (b)
(c)(2) .......................... 10.01(a) and (b)
(c)(3) .......................... Not Applicable
(d) .......................... 10.01(b)
(e) .......................... 10.01(a)
(f) .......................... Not Necessary
(S) 315(a) .......................... 6.01(b)
(b) .......................... 6.05
(c) .......................... 6.01(a)
(d) .......................... 6.01(c)
(d)(1) .......................... 6.01(c)(i) and 6.01(b)
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/*/ This Cross-Reference Table shall not, for any purpose be deemed to be part
of the Indenture.
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
(d)(2) .......................... 6.01(c)(ii)
(d)(3) .......................... 6.01(c)(iii)
(e) .......................... 6.13
(S) 316(a) .......................... 5.11 and 5.12
(b) .......................... 5.07
(c) .......................... 4.01(a)
(S) 317(a)(1) .......................... 5.03(b)
(a)(2) .......................... 5.03(d)(i)
(b) .......................... 3.03
(S) 318(a) .......................... 10.07
TABLE OF CONTENTS
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Section Page
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ARTICLE I.
Definitions 1
1.01. Definitions................................................................ 1
1.02. Incorporation by Reference of Trust Indenture Act.......................... 2
1.03. Rules of Construction...................................................... 2
ARTICLE II.
Original Issuance of Notes
2.01. Form........................................................................ 3
2.02. Execution, Authentication and Delivery...................................... 3
ARTICLE III.
Covenants
3.01. Collection of Payments with respect to the Class A Ownership Interest....... 5
3.02. Maintenance of Office or Agency............................................. 5
3.03. Money for Payments To Be Held in Trust; Paying Agent........................ 5
3.04. Existence................................................................... 6
3.05. Payment of Principal and Interest; Defaulted Interest....................... 7
3.06. Protection of Trust Estate.................................................. 9
3.07. Opinions as to Trust Estate................................................. 9
3.08. Performance of Obligations; Servicing Agreement............................. 10
3.09. Negative Covenants.......................................................... 11
3.10. Annual Statement as to Compliance........................................... 11
3.11. Recording of Assignments.................................................... 12
3.12. Representations and Warranties Concerning Mortgage Loans.................... 12
3.13. Amendments to Servicing Agreement........................................... 12
3 14. Master Servicer as Agent and Bailee of the Class A Ownership Interest Holder 12
3.15. Investment Company Act...................................................... 12
3.16. Issuer May Consolidate, etc................................................. 12
3.17. Successor or Transferee..................................................... 14
3.18. No Other Business........................................................... 14
3.19. No Borrowing................................................................ 15
3 20. Guarantees, Loans, Advances and Other Liabilities........................... 15
3.21. Capital Expenditures........................................................ 15
3.22. [Reserved].................................................................. 15
3.23. Restricted Payments......................................................... 15
3.24. Notice of Events of Default................................................. 15
3 25. Further Instruments and Acts................................................ 15
3.26. Statements to Noteholders................................................... 15
3 27. Determination of Note Rate and Certificate Rate............................. 15
3.28. Payments under the Credit Enhancement Instrument............................ 16
3.29. Replacement Credit Enhancement Instrument................................... 16
ARTICLEI V.
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TABLE OF CONTENTS
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Section Page
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The Notes; Satisfaction and Discharge of Indenture
4.01. The Notes: Increase of Maximum Variable Funding Balance: Additional Variable
Funding Notes.............................................................. 18
4.02. Registration of and Limitations on Transfer and Exchange of Notes; Appointment
of Certificate Registrar.................................................... 20
4.03. Mutilated. Destroyed Lost or Stolen Notes................................... 21
4.04. Persons Deemed Owners....................................................... 22
4.05. Cancellation................................................................ 22
4.06. Book-Entry Notes............................................................ 23
4.07. Notices to Depository....................................................... 23
4.08. Definitive Notes............................................................ 24
4 09. Tax Treatment............................................................... 24
4 10. Satisfaction and Discharge of Indenture..................................... 24
4.11. Application of Trust Money.................................................. 25
4.12. Subrogation and Cooperation................................................. 25
4.13. Repayment of Monies Held by Paying Agent.................................... 26
4.14. Temporary Notes............................................................. 26
ARTICLE V.
Default and Remedies
5.01. Events of Default........................................................... 28
5.02. Acceleration of Maturity: Rescission and Annulment.......................... 28
5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee... 29
5.04. Remedies, Priorities........................................................ 31
5.05. Optional Preservation of the Trust Estate................................... 32
5.06. Limitation of Suits......................................................... 33
5.07. Unconditional Rights of Noteholders To Receive Principal and Interest....... 33
5.08. Restoration of Rights and Remedies.......................................... 34
5.09. Rights and Remedies Cumulative.............................................. 34
5.10. Delay or Omission Not a Waiver.............................................. 34
5.11. Control by Noteholders...................................................... 34
5.12. Waiver of Past Defaults..................................................... 35
5.13. Undertaking for Costs....................................................... 35
5.14. Waiver of Stay or Extension Laws............................................ 35
5.15. Sale of Trust Estate........................................................ 36
5.16. Action on Notes............................................................. 37
5.17. Performance and Enforcement of Certain Obligations.......................... 37
ARTICLE VI.
The Indenture Trustee
6.01. Duties of Indenture Trustee................................................. 39
6.02. Rights of Indenture Trustee................................................. 40
6.03. Individual Rights of Indenture Trustee...................................... 40
6.04. Indenture Trustee's Disclaimer.............................................. 40
6.05. Notice of Event of Default.................................................. 41
6 06. Reports by Indenture Trustee to Holders..................................... 41
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TABLE OF CONTENTS
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Section Page
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6.07. Compensation and Indemnity.................................................. 41
6.08. Replacement of Indenture Trustee............................................ 41
6.09. Successor Indenture Trustee by Merger....................................... 42
6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee........... 43
6.11. Eligibility; Disqualification............................................... 44
6.12. Preferential Collection of Claims Against Issuer............................ 44
6.13. Representation and Warranty................................................. 44
6.14. Directions to Indenture Trustee............................................. 45
6.15. No Consent to Certain Acts of Depositor..................................... 45
6.16. Indenture Trustee May Own Securities........................................ 45
ARTICLE VII.
Noteholders' Lists and Reports
7 01. Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders...... 46
7.02. Preservation of information; Communications to Noteholders.................. 46
7.03. Reports by Issuer........................................................... 46
7.04. Reports by Indenture Trustee................................................ 47
ARTICLE VIII.
Accounts, Disbursements and Releases
8.01. Collection of Money......................................................... 48
8 02. Trust Accounts.............................................................. 48
8.03. Officer's Certificate....................................................... 49
8 04. Termination Upon Distribution to Noteholders................................ 49
8.05. Release of Trust Estate..................................................... 49
8.06. Surrender of Notes Upon Final Payment....................................... 50
ARTICLE IX.
Supplemental Indentures
9.01. Supplemental Indentures Without Consent of Noteholders...................... 51
9 02. Supplemental Indentures With Consent of Noteholders......................... 52
9.03. Execution of Supplemental Indentures........................................ 53
9.04. Effect of Supplemental Indenture............................................ 54
9 05. Conformity with Trust Indenture Act......................................... 54
9 06. Reference in Notes to Supplemental Indentures............................... 54
ARTICLE X.
Miscellaneous
10 01. Compliance Certificates and Opinions, etc.......................................55
10.02. Form of Documents Delivered to Indenture Trustee............................ 56
10.03. Acts of Noteholders......................................................... 57
10 04. Notices, etc., to Indenture Trustee. Issuer, Credit Enhancer and Rating
Agencies.................................................................... 58
10.05. Notices to Noteholders; Xxxxxx.............................................. 58
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Section Page
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10.06. Alternate Payment and Notice Provisions..................................... 59
10.07. Conflict with Trust Indenture Act........................................... 59
10.08. Effect of Headings.......................................................... 59
10.09. Successors and Assigns...................................................... 60
10.10. Separability................................................................ 60
10.11. Benefits of Indenture....................................................... 60
10.12. Legal Holidays.............................................................. 60
10.13. GOVERNING LAW............................................................... 60
10.14. Counterparts................................................................ 60
10.15. Recording of Indenture...................................................... 60
10.16. Issuer Obligation........................................................... 60
10.17. No Petition................................................................. 61
10.18. Inspection.................................................................. 61
10.19. Authority of the Administrator.............................................. 61
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EXHIBITS
Exhibit A-1 -- Form of Term Notes
Exhibit A-2 -- Form of Variable Funding Notes
Exhibit B -- Form of Opinion to be delivered pursuant
to Section 4.01(b)(ii)
Exhibit C -- Form of Opinion to be delivered pursuant
to Section 4.01(b)(iii)
Exhibit D -- Investment Letter
Appendix A Definitions
i
This Indenture. dated as of _________. between HOME EQUITY LOAN TRUST
199__ - ____, a Delaware business trust, as Issuer (the "Issuer"), and
____________________, a ___________________ as Indenture Trustee (the "Indenture
Trustee").
WlTNESSETH 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 Issuer's Series
______ Asset Backed Term Notes and Asset Backed Variable Funding Notes,
(together the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Holders of the Notes, all of the Issuer's
right, title and interest in and to whether now existing or hereafter created
(a) the Class A Ownership Interest in ____________, a limited liability company
(the "199_-___ Trust LLC") created by the Depositor [under New York or Delaware
law], (b) all funds on deposit in the Funding Account. including all income from
the investment and reinvestment of funds therein, (c) all funds on deposit from
time to time in the Collection Account allocable to the Mortgage Loans excluding
any investment income from such funds; (d) all funds on deposit from time to
time in the Payment Account and in all proceeds thereof; (e) the Policy and (f)
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 trustee on behalf of the Holders of the
Notes, acknowledges such Xxxxx, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
ARTICLE I.
Definitions
Section 1.01. Definitions. For all purposes of this Indenture.
except as otherwise expressly provided herein or unless the context otherwise
requires. capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in the
Definitions attached hereto as Appendix A which is incorporated by reference
herein. All other capitalized terms used herein shall have the meanings
specified herein.
Section 1.02. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the Trust Indenture Act (the
"TIA"), 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 Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission
rule have the meaning assigned to them by such definitions.
Section 1.03. Rules of Construction. Unless the context otherwise
---------------------
requires:
(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 Exhibits A-l
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 and A-2 are
part of the terms of this Indenture.
Section 2.02. Execution, Authentication and Delivery. The Notes
--------------------------------------
shall be executed on behalf of the Issuer by any of its Authorized Officers.
The signature of any such Authorized Officer on the Notes may be manual or
facsimile
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes
The Indenture Trustee shall upon Issuer Request authenticate and
deliver Term Notes for original issue in an aggregate initial principal amount
of $_________ and Variable Funding Notes for original issue in an aggregate
initial principal amount of zero. 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 $100,000 and in integral multiples of
$1,000 in excess thereof.
Each Variable Funding Note shall be initially issued with a Security
Balance of $0 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.
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ARTICLE III
Covenants
Section 3.01. Collection of Payments with respect to the Class A
--------------------------------------------------
Ownership Interest. 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 Class A Ownership Interest. The Indenture Trustee
shall make all payments of principal of and interest on the Notes, subject to
Section 3 03 as provided in Section 3 05 herein from monies on deposit in the
Payment Account.
Section 3.02. Maintenance of Office or Agency. The Issuer 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 Issuer in respect of the Notes and this Indenture may be
served. The Issuer hereby initially appoints the Indenture Trustee to serve as
its agent for the foregoing purposes. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Indenture
Trustee with the address thereof, such surrenders, notices and demands may be
made or served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
Section 3.03. Money for Payments To Be Held in Trust; Paying Agent.
----------------------------------------------------
(a) 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
Issuer 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 Issuer except as provided in this Section 3 03.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent it hereby so agrees), subject to the provisions of
this Section 3.03, that such Paying Agent will:
(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 Issuer
of which it has actual knowledge in the making of any payment required to
be made with respect to the Notes;
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(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 Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Request
direct any Paying Agent to pay to the Indenture Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Indenture Trustee upon the
same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held
by the Indenture Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for one year after
such amount has become due and payable shall be discharged from such trust and
be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper 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 Issuer. The
Indenture Trustee may also adopt and employ, at the expense and direction of the
Issuer, any other reasonable means of notification of such repayment (including,
but not limited to, mailing notice of such repayment to Holders whose Notes have
been called but have not been surrendered for redemption or whose right to or
interest in monies due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).
Section 3.04. Existence. The Issuer will keep in full effect its
---------
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which such case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be
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necessary to protect the validity and enforceability of this Indenture, the
Notes, the Class A Ownership Interest and each other instrument or agreement
included in the Trust Estate.
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 shall pay to the Noteholders, the
Certificate Paying Agent, on behalf of the Certificateholders, and 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 Certificate Paying Agent,
the Certificate Distribution Amount for such Payment Date;
(ii) if such Payment Date is after the Funding Period, to the
Noteholders and the Certificate Paying Agent 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
Certificate Paying Agent 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 Certificate Paying Agent, 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 Certificate Paying Agent, 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;
(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 Certificate Paying Agent. as the
case may be, as principal on the Term Notes, Variable Funding Notes and the
Certificates, pro rata, based
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on the Security Balances from Security Interest Collections, up to the
Special Capital Distribution Amount for such Payment Date;
(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 Issuer with respect to the performance of its duties under the
Indenture; and
(xi) any remaining amount, to the Certificate Paying Agent, on
behalf of the Designated Certificates.
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 to the Certificate Paying
Agent 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.
On each Payment Date, the Certificate Paying Agent shall deposit in the
Certificate Distribution Account all amounts it received pursuant to this
Section 3 05 for the purpose of distributing such funds to the
Certificateholders.
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 Issuer on the
applicable Payment Date shall, if such Holder holds Notes or Certificates of an
aggregate initial Principal Balance of at least $1,000,000, 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.]
(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-l and A-2. All principal payments on each Class of
Notes shall be made to the Noteholders of such
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Class entitled thereto in accordance with the Percentage Interests represented
by such Notes. Upon notice to the Indenture Trustee by the Issuer, 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 Issuer 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) cause the 199_-_ Trust LIC to enforce any of the .Mortgage
Loans; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture Trustee
shall not remove any portion of the Trust Estate that consists of money or is
evidenced by an instrument, certificate or other writing from the jurisdiction
in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant to Section 3 07 (or from the jurisdiction in which it was held as
described in the Opinion of Counsel delivered at the Closing Date pursuant to
Section 3.07(a), if no Opinion of Counsel has yet been delivered pursuant to
Section 3.07(b) unless the Trustee shall have first received an Opinion of
Counsel to the effect that the lien and security interest created by this
Indenture with respect to such property will continue to be maintained after
giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent and attorney-
in-fact to execute any financing statement, continuation statement or other
instrument required to be executed pursuant to this Section 3.06.
Section 3.07. Opinions as to Trust Estate.
---------------------------
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee and the Owner Trustee an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording and filing of this Indenture, any indentures
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supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of, any financing statements and continuation statements,
as are necessary to perfect and make effective the lien and security interest in
the Class A Ownership Interest 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 _______ in each calendar year, beginning in _____,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and security interest in the Class A Ownership Interest and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion
of Counsel shall also describe the recording, filing, re-recording and refiling
of this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Class A Ownership Interest
until December 31 in the following calendar year.
Section 3.08. Performance of Obligations; Servicing Agreement.
-----------------------------------------------
(a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in The Trust Estate.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Administrator to assist the Issuer in performing
its duties under this Indenture.
(c) The Issuer 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 Class A
Ownership Interest 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. The Indenture Trustee, as pledgee of the Class A Ownership Interest,
shall be able to exercise the rights of the Class A Ownership Interest holder,
as managing member of the 199__-____ Trust LLC, to direct the actions of the
Master Servicer.
(d) The Issuer 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 Issuer's obligations
hereunder, and performance of such obligations by such Persons shall be deemed
to be performance of such obligations by the Issuer.
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Section 3.09. Negative Covenants. So long as any Notes are
------------------
Outstanding, the Issuer 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 asset 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;
(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; or
(iv) waive or impair, or fail to assert rights under, the Class A
Ownership Interest. or impair or cause to be impaired the Class A
Ownership's Interest in the 199_ _ Trust LLC or the 199_-_ Trust LLC's
interest in the Mortgage Loans. the Mortgage Loan Purchase Agreement or in
any Basic Document. if any such action would materially and adversely
affect the interests of the Noteholders.
Section 3.10. Annual Statement as to Compliance. The Issuer will
---------------------------------
deliver to the Indenture Trustee. within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year ______, an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:
(i) a review of the activities of the Issuer during such year and of
IRS performance under this Indenture has been made under such Authorized
Officers supervision: and
(ii) to the best of such Authorized Officer's knowledge, based on such
review. the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in its
compliance with any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status thereof.
Section 3.11 Recording of Assignments. The Issuer shall cause the
------------------------
199_-_ Trust LLC to 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
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prior to with respect to the Initial Loans and within 60 days following the
related Deposit Date with respect to any Additional Loans.
Section 3.12. Representations and Warranties Concerning Mortgage
--------------------------------------------------
Loans. The Indenture Trustee, as pledgee of the Class A Ownership Interest, has
-----
the benefit of the representations and warranties made by the Seller in Section
3. I(a) -.l Section 3.1(b) of the Mortgage Loan Purchase Agreement concerning
the Mortgage Loans and the right to enforce the remedies against the Seller
provided in such Section 3. I(a) or Section 3. I(b) to the same extent as though
such representations and warranties were made directly to the Indenture Trustee.
Section 3.13 Amendments to Servicing Agreement. The Issuer covenants
---------------------------------
with the Indenture Trustee that it will not enter into any amendment or
supplement to the Servicing Agreement in accordance with Section 8 01 of the
Servicing Agreement without the prior written consent of the Indenture Trustee
The Indenture Trustee. as pledgee of the Class A Ownership Interest. 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 14. Master Servicer as Agent and Bailee of the Class A
--------------------------------------------------
Ownership Interest Holder. 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 Class A Ownership Interest holder 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 3.06(c) of the Servicing
Agreement. and any other items constituting a part of the Trust Estate which
from time to time come into the possession of the 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 of the
Class A Ownership Interest, will be deemed to have possession of such Related
Documents, such monies 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 Servicers.
Section 3.15. Investment Company Act. The Issuer shall not become an
----------------------
"investment company" or under the "control" of an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
provided, however, that the Issuer shall be in compliance with this Section 3.15
if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions imposed
in such order.
Section 3.16. Issuer May Consolidate, etc.
---------------------------
(a) The Issuer shall not consolidate or merge with or into any
other Person, unless:
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(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any state
or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the indenture
Trustee, in form reasonably satisfactory to the Indenture Trustee, the
due and punctual payment of the principal of an interest on all Notes
and to the Certificate Payment, on behalf of the Certificateholders
and the performance or observance of every agreement and covenant of
this Indenture on the part of the Issuer to be performed or observed,
all as provided herein;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that
such transaction shall not cause the rating of the Notes [or the
Certificates] to be reduced. suspended withdrawn or to be considered
by either Rating Agency to be below investment grade without taking
into account the Credit Enhancement Instrument;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets. including those included in the Trust Estate, to any Person. unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any state, (B) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee,
in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issue: 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,
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defend and hold harmless the Issuer against and from any loss,
liability or expense arising under or related to this Indenture and
the Notes and (E) expressly agrees by means of such supplemental
indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission and any
other appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such transaction. w
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that
such transaction shall not cause the rating of the Notes or the
Certificates to be reduced, suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental indenture comply
with this Article III and Thai all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act)
Section 3.17. Successor or Transferee.
------------------------
(a) Issuer in accordance with Section 3.16(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to. and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.161b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the pan
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.
Section 3.18. No Other Business. The Issuer shall not engage in any
-----------------
business other than financing, purchasing, owning and selling and managing the
Class A Ownership Interest and the issuance of the Notes and Certificates in the
manner contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.
Section 3.19. No Borrowing. The Issuer shall not issue, incur,
------------
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
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Section 3.20. Guarantees, Loans, Advances and Other Liabilities.
-------------------------------------------------
Except as contemplated by this Indenture or the Basic Documents, the Issuer
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or won, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution, to any other Person.
Section 3.21. Capital Expenditures. The Issuer shall not make any
--------------------
expenditure (by long term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.22. [Reserved]
Section 3.23. Restricted Payments. The Issuer shall not, directly or
-------------------
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security of (iii) set aside or
otherwise segregate any amounts for any such propose; provided, however, that
the Issuer may make, or cause to be made, (x) distributions to the Owner Trustee
and the Certificateholders as contemplated by, and to the extent funds are
available for such purpose under the Trust Agreement, (y) payments to the Master
Servicer pursuant to the terms of the Servicing Agreement and (z) payments to
the Indenture Trustee pursuant to Section 1(a)(ii) of the Administration
Agreement. The Issuer 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 3.24. Notice of Events of Default. The issuer 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 25. Further Instruments and Acts. Upon request of the
----------------------------
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
Section 3.26. 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 27. 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
for such Interest Period and shall inform the Issuer, the Master Servicer and
the Depositor at their respective facsimile numbers given to the Indenture
Trustee in writing thereof.
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Section 3.28. Payments under the Credit Enhancement Instrument.
------------------------------------------------
(a) On any Payment, 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 interest accrued at the Note Rate on the Security
Balance of the Notes 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 (and the Certificate Paying Agent on behalf of the Certificates)
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) 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 3.29. 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
Issuer, 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 shall be
rated no lower than the rating assigned by each Rating Agency to the Notes
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
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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 or (b) cause the Issuer to be subject to a tax at
the entity level. 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 Issuer 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 $1,000 and integral multiples of $1,000 in excess thereof.
The Capped Funding Notes will be issued as physical notes in fully registered
form in minimum initial Principal Balances of $10,000 and integral multiples of
$1,000 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 he 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 Issuer and the
Indenture Trustee. No Term Note may be transferred by the Depository except to
a successor Depository that agrees to hold such Note for the account of the
Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Notes it
beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the
Issuer by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Note Registrar and delivered by the Indenture
Trustee to or upon the order of the Issuer.
(b) So long as no Amortization Event has occurred ,he Maximum Variable
Funding Balance on the Closing Date may be increased from time to time by an
aggregate amount not
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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 B;
(iii) the Indenture Trustee shall have received an Opinion of
Counsel in the form attached hereto as Exhibit C;
(iv) the Indenture Trustee shall have received the documents
specified in Section 10.01(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
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 this
issuance.
Any Additional Variable Funding Notes shall be in the form of Exhibit A-2
hereof and for all purposes shall be Noes issued pursuant to this Indenture and
all references to Variable Funding Notes herein shall include Additional
Variable Funding Noes issued pursuant to this Section 4.01(b).
Upon the issuance of any Additional Variable Funding Notes the Issuer will
deliver written notice thereof to the Rating Agencies.
(c) 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 Issuer by the Owner Trustee, not in its individual
capacity but solely as Owner Trustee, authenticated by the Note Registrar and
delivered by the Indenture Trustee to or upon the order of the Issuer. All
subsequent amounts in respect of the Additional Balance Differential shall be
added to the Security Balance of such new Variable
-19-
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. One each Payment Date on
or after the end of the Revolving Period 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 Issuer 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 and Capped Funding Notes, may be
transferred. Subject to the provision 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.
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 Issuer 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 Issuer that such transfer may be
made pursuant to an exemption, describing the applicable exemption and the basis
therefor, from said Act and law 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
Issuer and (ii) the Indenture Trustee shall require the transferee to execute an
investment letter (in substantially the form attached hereto as Exhibit D)
acceptable to and in form and substance reasonably satisfactory to the Issuer
and the Indenture Trustee certifying to the Issuer and the Indenture Trustee the
facts surrounding such transfer, which investment letter shall not be an expense
of the Indenture Trustee or the Issuer. The Holder of a Variable Funding Note
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Indenture Trustee the Credit
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Enhancer and Issuer against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
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 2.4 of the
Mortgage Loan Purchase Agreement.
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 with such
signature guaranteed by a commercial bank or trust company located or having a
correspondent located in the city of New York. Notes delivered upon any such
transfer or exchange will evidence the same rights and privileges, and the Notes
surrendered.
No service charge shall be made for any registration of transfer or
exchange of Noes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer, and exchange shall
be canceled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
The Issuer 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 and of transfers and exchanges
thereof pursuant to Section 3.05 of the Trust Agreement, ______________________
hereby accepts such appointment.
Section 4.03. Mutilated. Destroyed Lost or Stolen Notes. If (i) any
-----------------------------------------
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction. loss or theft o, any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then. in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8405 of the UCC are met. the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, 2 replacement Note of the same Class; provided
however, that if any such destroyed, lost or stolen .Note, but not a mutilated
Note, shall have become or within seven days shall be due and payable, instead
of issuing a replacement Note the Issuer may pay such destroyed, lost or stolen
Note when so due or payable without surrender thereof. If, after the delivery of
such replacement Note or payment of a
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destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence. a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
and the Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was delivered or any Person taking such
replacement 'Note from such Person to whom such replacement Note was delivered
or any assignee of such Person, except a bona fide purchaser, and shall be
entitled to recover upon the security or indemnity provided therefor to the
extent of any loss, damage, cost or expense incurred by the Issuer or the
Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4 03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be impose in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of his Section 4.03 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04. Persons Deemed Owners. Prior to due presentment for
---------------------
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue. and neither the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 4.05. Cancellation. All Notes surrendered for payment,
------------
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section 4.05. except as expressly
permitted by this Indenture. All canceled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Request that they
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be destroyed or returned to It provided however, that such Issuer Request is
timely and the Notes have not been previously disposed of by the Indenture
Trustee.
Section 4.06. Book-Entry Notes The Term Notes. upon original
----------------
issuance, 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 Issuer Such Term Notes shall initially be
registered on the Note Register in the name of Cede & Co. the nominee of the
initial Depository. and no Beneficial Owner 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:
(iv) the rights of Beneficial Owners shall be exercised only through
the Depository and shall be limited to those established by law and
agreements between such Owners of Term Notes and the Depository and/or the
Depository Participants Unless ! and until Definitive Term Notes are issued
pursuant to Section 4.08. the initial Depository will make book-entry
transfers among the Depository Participants and receive and transmit
payments of principal of and interest on the Notes to such Depository
Participants; and
(v) 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
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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 Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Term Notes in accordance
with the instructions of the Depository. None of the Issuer, the Note Registrar
or the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on. and shall be protected in relying on.
such instructions Upon the issuance of Definitive Notes. the Indenture Trustee
shall recognize the Holders of the Definitive Notes as Noteholders.
Section 4 09. Tax Treatment. The Issuer has entered into this
-------------
Indenture, and the Notes will he issued, with the intention that. for federal,
state and local income. single business and franchise tax purposes, the Notes
will qualify as indebtedness of the Issuer. The Issuer. by entering into this
Indenture. and each Noteholder, by its acceptance of its None (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 Issuer.
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,
3W, 306. 3.09. 3.16. 3 18 and 3 19. (v)the rights, obligations and immunities of
the Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.07 b and the obligations of the Indenture Trustee under Section
4.11) and (vi) the rights of Noteholders as beneficiaries hereof with respect to
the property so deposited with the Indenture Trustee payable to all or any of
them. and the Indenture Trustee. on demand of and at the expense of the Issuer.
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 4.03 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust. as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation: or
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(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
a. have become due and payable.
b. will become due and payable at the Final Scheduled
Payment Date within one year, or
c. have been called for early redemption pursuant to
Section ..02.
and the issuer, in the case of a. or b. above. has irrevocably deposited or
cause 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 Issuer has paid or caused to be paid all other sums
payable hereunder and under the Insurance Agreement by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee and the
Credit Enhancer an Officer's Certificate, an Opinion of Counsel and each
meeting the applicable requirements of Section, 10.01 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 the Issuer, any Noteholders
or any Certificateholders.
Section 4.11. Application of Trust Money. All monies deposited with
--------------------------
the Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the Holders
of Securities, of all sums due and to become due thereon for principal and
interest; but such monies need not be segregated from other funds except to the
extent required herein or required by law.
Section 4.12. Subrogation and Cooperation. (a) The Issuer and the
---------------------------
Indenture Trustee acknowledge that (i) to the extent the Credit Enhancer makes
payments under the Credit Enhancement Instrument on account of principal of or
interest on the Notes, the Credit Enhancer will be fully subrogated to the
rights of such Holders to receive such principal and interest from the Issuer,
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
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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 the Notes and
all amounts payable under the Insurance Agreement enforce any judgment
obtained and collect from the Issuer monies adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private Sales 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 Monies Held by Paying Agent. In
----------------------------------------
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all monies then held by any Administrator other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes shall.
upon demand of the Issuer. be paid to the Indenture Trustee to be held and
applied according to Section 3.05 and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.
Section 4.14. Temporary Notes. Pending the preparation of any
---------------
Definitive Notes, the Issuer may execute and upon its written direction, the
Indenture Trustee may authenticate and make available for delivery, temporary
Notes that are printed, lithographed, typewritten, photocopied or otherwise
produced, in any denomination, substantially of -he tenor of the Definitive
Notes in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of the
Definitive Notes, the temporary Notes shall be exchangeable t-o; Definitive
Notes upon surrender of the temporary Notes at the office or agency of the
Indenture Trustee, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Notes, the Issuer shall execute and the indenture
Trustee shall authenticate and make available for delivery, in exchange
therefor, Definitive Notes of authorized denominations and of like tenor and
aggregate principal amount. Until so . exchanged, such temporary Notes shall in
all respects be entitled to the same benefits under this Indenture as Definitive
Notes.
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ARTICLE V.
Default and Remedies
Section 5.01. Events of Default. "Event of Default," wherever used
-----------------
herein, shall have the meaning provided in Article 1 provided, however, that no
Event of Default will occur under clause (i) or clause (ii) of the determination
of "Event of Default" if the Issuer 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 Issuer shall deliver to the Indenture Trustee and the Credit
Enhancer, within five days after learning of 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 Issuer 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 or if the Master Servicer
shall purchase ail of the Mortgage Loans pursuant to Section 8 08 of the
Servicing Agreement. 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 Issuer (and to the Indenture Trustee if given by
Noteholders), and upon any such declaration the unpaid principal amount. of such
Class o' Notes. together with accrued o 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 29 to make a draw
therefor.
Section At any time after such declaration of acceleration of maturity
with respect to an Event of Default has been made and before a judgment or
decree for payment of the money due has been obtained by the Indenture Trustee
as hereinafter in this Article V provided, the Holders of Notes representing a
majority of the Security Balances Of all Notes, by written notice to the Issuer
and the Indenture Trustee, may waive the related Event of Default and rescind
and annul such declaration and its consequences if:
(i) the Issuer 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
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(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee credits agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of !he Notes that has become due solely by such acceleration.
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Indenture Trustee.
-----------------
(a) The Issuer covenants that if (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 i.. the payment of
the principal of or any installment of the principal of any Note when the same
becomes due and payable, the Issue shall, 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 Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10 17 hereof may institute a
Proceeding for the collection of the sums so due and unpaid. and may prosecute
such Proceeding to judgment or final decree and may enforce the same against the
Issuer or other obligor upon the Notes and collect in the manner provided by law
out of the property of the Issuer or other obligor the Notes, wherever situated,
the monies 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 10.17 hereof may. as more
particularly provided in Section 5.04, in its discretion, proceed to protect and
enforce its rights and the rights of the Noteholders 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 Issuer Of 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 o; 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
-28-
possession of the Issuer or its property or such other obligor or Person, or !a
case of any other comparable judicial Proceedings relative to the Issuer or
other obligor upon the Notes, or to the creditors or property of the Issuer or
such other obligor, the Indenture Trustee, irrespective of whether the
principals of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether - the Indenture Trustee
shall have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the 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 monies or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf: and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee or the Holders of Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver. liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders 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 Note
holder- m any such proceeding except, as aforesaid, to vote for the election of
a trustee in bankruptcy or similar Person,
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(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Term Notes or the Variable Funding Notes,
as applicable.
(g) In any Proceedings 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 10.17 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 Issuer and any other obligor
upon such Notes monies adjudged due:
(ii) institute Proceedings from time to time tier 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, unless (A) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Principal Balances of the Notes and the Credit Enhancer, which consent will not
be unreasonably withheld, (B) the proceeds of such sale or liquidation
distributable to Holders are sufficient to discharge in full all amounts then
due and unpaid upon the Notes for principal and interest and to reimburse the
Credit Enhancer for any amounts drawn under the Credit Enhancement Instrument
and any other amounts due the Credit Enhancer under a the Insurance Agreement or
(C) the Indenture Trustee determines that the Class A Ownership Interest will,
not continue to provide sufficient funds for the payment of principal of and
interest on the Notes as they would have become due if the Notes had not been
declared due and payable, and the Indenture Trustee obtains the consent of the
Credit Enhancer, which consent will not be unreasonably withheld, and of the
Holders of a majority of the aggregate Principal Balances the
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Notes. In determining such sufficiency or insufficiency with respect to clause
(B) and (C'), the Indenture Trustee may, but need not. obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the 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.
(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 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 Issuer for amounts required to be distributed to the
Certificateholders in respect of interest and principal pursuant to
the Trust Agreement:
FIFTH: To the payment of ail amounts due and owing to the Credit
Enhancer under the Insurance Agreement;
SIXTH: to the Issuer for amounts due under Article V111 of the Trust
Agreement; and
SEVENTH: to the payment of the remainder, if any to the Issuer or any
other person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5,04. At least 15 days before
such record date, the f Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05. Optional Preservation of the Trust Estate. If the Notes
-----------------------------------------
have been declared 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,
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elect to take and maintain possession of the Trust Estate. It is the desire of
the parties hereto and the Noteholders that there be at all times sufficient
funds for the payment of principal of and interest on the Notes and other
obligations of the Issuer including payment the Credit Enhancer, and the
Indenture Trustee shall take such desire into account when determining whether
or not to take and maintain possession of the Trust Estate. In determining
whether to take and maintain possession of the Trust Estate, the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
Section 5.06. Limitation of Suits. No Holder of any Note shall have
-------------------
any right to institute any Proceeding, judicial or otherwise this Indenture, or
for the appointment of a receiver or trustee, or for any other remedy hereunder,
unless and subject to the provisions of Section 10.17 hereof:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default:
(ii) the Holders o, 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
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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 of
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder. then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy
------------------------------
herein conferred upon or reserved to the Indenture Trustee or to the Noteholders
in 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 o Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholder 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
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(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.
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,
shareholder 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 Issuer, 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 X any court may in its discretion require, m any
suit for the enforcement of any right or remedy under ;his 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 Issuer covenants
--------------------------------
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
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Section 5.15. Sale of Trust Estate.
--------------------
(a) The power to effect any sale or other disposition (a "Sale") of
any portion of the Trust Estate pursuant to Section 5.04 is expressly subject to
the provisions of Section 5.05 and this Section 5.15. The power to effect any
such Sale shall not be exhausted by any one or more Sales as to any portion of
the Trust Estate remaining unsold, but shall continue unimpaired until the
entire Trust Estate shall have been sold or all amounts payable on the Notes and
under this Indenture and under the Insurance Agreement shall have been paid. The
Indenture Trustee may from time to time postpone any public Sale by public
announcement made at the time and place of such Sale. The Indenture Trustee
hereby expressly waives its right to any amount fixed by law as compensation for
any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the
Trust Estate, or any portion thereof, unless
(1) the Holders of all Notes and the Credit Enhancer consent to or
direct the Indenture Trustee to make, such Sale. or
(2) the proceeds of such Sale would be not less than the entire
amount which would be payable to the Noteholders under the Notes 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
(3) The Indenture Trustee determines, in its sole discretion, that
the conditions for retention of the Trust Estate set forth in Sec[ion 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 66-21370 of the Security
Balances of the Notes consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) Unless the Holders and the Credit Enhancer have otherwise consented or
directed the Indenture Trustee. at any public Sale of all or any portion of :he
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
(1) 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
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terms of sale may hold, retain and possess and dispose of such property,
without further accountability, and may, in paving 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;
(2) 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:
(3) 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:
(4) the Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the Trust Estate in connection with a Sale thereof. and to take
ail action necessary to effect such Sale: and
(5) no purchaser or .transferee at such a Sale shall be bound to
ascertain the Indenture Trustee's authority. inquire into the satisfaction
of any conditions precedent or see to the application of any monies.
Section 5.16. Action on Notes. The Indenture Trustee's right to seek
---------------
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate
or upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.04(b).
Section 5.17. Performance and Enforcement of Certain Obligations.
--------------------------------------------------
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(a) Promptly following a request from the Indenture Trustee to do so
and at the Administrator's expense, the Issuer in its capacity as holder of the
Class A Ownership Interest. shall take all such lawful action as the Indenture
Trustee may request to cause the 199- Trust LLC to compel or secure the
performance and observance by the Seller and the Master Servicer. as applicable,
of each of their obligations to the Issuer 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
Issuer 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, as pledgee of the Class A Ownership Interest, 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.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee, as pledgee of the Class A Ownership Interest, 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 e
Balances of the Notes shall. exercise all rights, remedies, powers, privileges
and claims of the Issuer 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 Issuer thereunder and to give any
consent, request, notice, direction. approval. extension or waiver under the
Mortgage Loan Purchase Agreement and the Servicing Agreements as the case may
be, and any right of the Issuer to take such action shall not be suspended.
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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:
(i) this paragraph does not limit the effect of paragraph (b) 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.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to
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believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
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.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
--------------------------------------
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any 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
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
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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 Issuer's written request, the Indenture Trustee shall
promptly furnish information reasonably requested by the Issuer that is
reasonably available to the Indenture Trustee to enable the Issuer to perform
its federal and state income tax reporting obligations.
Section 6.07. Compensation and Indemnity. The Issuer 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 Issuer 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 Issuer 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 issuer and the Administrator promptly of any claim for
which it may seek indemnity. Failure by the Indenture Trustee to so notify the
Issuer and the Administrator shall not relieve the Issuer or the Administrator
of its obligations hereunder. The Issuer shall or shall cause the Administrator
to defend any such claim, and the Indenture Trustee may have separate counsel
and the Issuer shall or shall cause the Administrator to pay the fees and
expenses of such counsel. Neither the Issuer 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.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of an Event of Default
specified in Section 5.01(iv) or (v) with respect to the Issuer, the expenses
are intended to constitute expenses of administration under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee. No resignation or
--------------------------------
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture
Trustee may resign at any time by so notifying the Issuer and the Credit
Enhancer. The Holders of a majority of Security Balances of the Notes may
remove the
-40-
Indenture Trustee by so notifying the Indenture Trustee and the Credit Enhancer
and may appoint a successor Indenture Trustee. The Issuer 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 Issuer
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 Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to 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 Issuer 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.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer'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
-41-
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;
(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,
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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 (S) 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-tern debt rating of [Baa3] or better by [Xxxxx'x]. The
Indenture Trustee shall comply with TIA (S) 310(b), including the optional
provision permitted by the second sentence of TIA (S) 310(b)(9); provided.
however, that there shall be excluded from the operation of TIA (S) 310(b)(1)
any indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against Issuer. The
------------------------------------------------
Indenture Trustee shall comply with XXX (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA (S) 311(a) to the extent indicated.
Section 6.13. Representation and Warranty. The Indenture Trustee
---------------------------
hereby represents that:
(i) The Indenture Trustee is duly organized and validly
existing as a corporation in good standing under the laws of the State of
_______________, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is presently conducted.
(ii) The Indenture Trustee has the power and authority to
execute and deliver this Indenture and to carry out its terms; and the
execution, delivery and performance of this Indenture have been duly
authorized by the Indenture Trustee by all necessary corporate action.
(iii) The consummation of the transactions contemplated by
this Indenture and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the Indenture Trustee or any
agreement or other instrument to which the Indenture Trustee is a party or
by which it is bound.
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(iv) To the Indenture Trustee's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Indenture Trustee or its
properties: (A) asserting the invalidity of this Indenture (B} seeking to
prevent the consummation of any of the transactions contemplated by this
Indenture or (C) seeking any determination or ruling that might materially
and adversely affect the performance by the Indenture Trustee of its
obligations under, or the validity or enforceability of, this Indenture.
Section 6.14. Directions to Indenture Trustee. The Indenture Trustee
-------------------------------
is hereby directed:
(a) to accept the pledge of the Class A Ownership Interest 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 EIGHTH or Article ELEVENTH of the Depositor's Restated
Certificate of Incorporation.
Section 6.16. Indenture Trustee May Own Securities. The Indenture
------------------------------------
Trustee, in its individual or any other capacity may become the owner or pledgee
of Securities with the same rights it would have if it were not Indenture
Trustee.
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ARTICLE VII
Noteholders' Lists and Reports
Section 7 01. Issuer To Furnish Indenture Trustee Names and Addresses
-------------------------------------------------------
of Noteholders. The Issuer will furnish or cause to be furnished to the
--------------
Indenture Trustee (a) not more than five days after each Record Date, a list, in
such form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date, (b) at such other
times as the Indenture Trustee and the Credit Enhancer may request in writing,
within 30 days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; provided, however, that 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 (S) 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA (S) 312(c).
Section 7.03. Reports by Issuer. (a) The Issuer shall:
-----------------
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and 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 Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee, and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA (S) 313(c)) such
summaries of any information. documents and reports required to be filed by
the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and by
rules and regulations prescribed from time to time by the Commission.
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(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.04. Reports by Indenture Trustee. If required by XXX (S)
----------------------------
313(a), within 60 days after each January 1 beginning with January 1, 1996, the
Indenture Trustee shall mail to each Noteholder as required by XXX (S) 313(c)
and to the Credit Enhancer a brief report dated as of such date that complies
with TIA (S) 313(a). The Indenture Trustee also shall comply with TIA (S)
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 Issuer shall notify the
Indenture Trustee if and when the Term Notes are listed on any stock exchange.
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ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01. Collection of Money. Except as otherwise expressly
-------------------
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it as provided in this
Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Trust Estate, the Indenture Trustee may take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article V.
Section 8 02. Trust Accounts. (a) On or prior to the Closing Date,
--------------
the Issuer shall cause the Indenture Trustee to establish and maintain, in the
name of the Indenture Trustee, for the benefit of the Noteholders and the
Certificate Paying Agent, on behalf of the Certificateholders and the Credit
Enhancer, the Payment Account as provided in Section 3.01 of this Indenture.
(b) All monies 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 and the Certificate Paying
Agent, on behalf of the Certificateholders and all investments made with such
monies including all income or other gain from such investments are for the
benefit of the 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 Eligible
Investments.
(c) On or before the Closing Date the Issuer shall open, at the
Corporate Trust Office, an account which shall be the "Funding Account". The
Master Servicer may direct the Indenture
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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 monies 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: 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 Issuer 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.
(d) (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. Officer's Certificate. The Indenture Trustee shall
---------------------
receive at least [seven] days notice when requested by the Issuer to take any
action pursuant to Section 8.05(a), accompanied by copies of any instruments to
be executed, and the Indenture Trustee shall also require, as a condition to
such action, an Officer's Certificate, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with.
Section 8 04. Termination Upon Distribution to Noteholders. This
--------------------------------------------
Indenture and the respective obligations and responsibilities of the Issuer and
the Indenture Trustee created hereby shall terminate upon the distribution to
Noteholders, Certificate Paying Agent, on behalf of the Certificateholders and
the Indenture Trustee of all amounts required to be distributed pursuant to
Article III; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. 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 VIII hereunder shall be bound to
ascertain the Indenture Trustee's
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authority, inquire into the satisfaction of any conditions precedent, or see to
the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no
Notes Outstanding, (ii) all sums due the Indenture Trustee pursuant to this
Indenture have been paid, and (iii) all sums due the Credit Enhancer have been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture.
[(c) The Indenture Trustee shall release property from the lien of
this Indenture pursuant to this Section 8.05 only upon receipt of a request from
the Issuer accompanied by an [Officers' Certificate], [an Opinion of Counsel,]
and a letter from the Credit Enhancer, stating that the Credit Enhancer has no
objection to such request from the Issuer.]
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.
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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 Issuer and the Indenture Trustee, when authorized by an Issuer Request, at
any time and from time to time, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required to
be subjected to the lien of this Indenture, or to subject to the lien of
this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein and
in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign. mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be inconsistent
with any other provision herein or in any supplemental indenture;
(vi) to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental indenture;
provided, that such action shall not materially and adversely affect the
interests of the Holders of the Notes;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes and
to add to or change any of the provisions of this Indenture as shall be
necessary to facilitate the administration of the trusts hereunder by more
than one trustee, pursuant to the requirements of Article VI; or
(viii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as may
be expressly required by the TIA; provided, however, that no such indenture
-------- -------
supplements shall be entered into unless the Indenture Trustee shall have
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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 Issuer and the Indenture Trustee, when authorized by an Issuer
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 Issuer to be subject to an entity level tax.
Section 9 02. Supplemental Indentures With Consent of Noteholders.
---------------------------------------------------
The Issuer and the Indenture Trustee, when authorized by an Issuer Request, 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 affected thereby, by
Act of such Holders delivered to the Issuer and the Indenture Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
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;
(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";
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(vi) reduce the percentage of the Security Balances of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
(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 Issuer to be subject to an
entity level tax.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing,
------------------------------------
or permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
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Section 9.04. Effect of Supplemental Indenture. Upon the execution
--------------------------------
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the 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 Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
Miscellaneous
Section 10 01. Compliance Certificates and Opinions, etc. (a) Upon
-----------------------------------------
any application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee and to the 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 and (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any have been complied with, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture. No additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in .his Indenture shall include:
(1) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the
definitions herein .relating hereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based:
(3) a statement that. in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with:
(4) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with; and
(5) if the Signer of such Certificate or Opinion is required to be
Independent, the Statement required by the definition of the term
"Independent".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to, be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any signer
thereof as to the matters
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described in clause (i) above, the Issuer shall also deliver to the Indenture
Trustee an Independent Certificate as to the same matters, if the fair value to
the Issuer of the securities to be so deposited and of all other such securities
made the basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause (ii) is 10% or more of
the 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
Issuer as set forth in the related Officer's Certificate is less than 525,000 or
less than one percent of the Security Balances of the Notes.
(iii) Whenever any property or securities are to be released from the
lieu of this Indenture, the Issuer 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 Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (iii) above, the Issuer shall also
furnish to the Indenture Trustee an Independent Certificate as to the same
matters if the fair value of the property or securities and of all other
property other than property as contemplated by clause (v) below or securities
released from the lien of this Indenture since the commencement of the then-
current calendar year, as set forth in the certificates required by clause (iii)
above and this clause (iv), equals 10% or more of the 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 Issuer may.
without compliance with the requirements of the other provisions of this Section
10 01, (A) collect, sell or otherwise dispose of the Class A Ownership Interest
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 Issuer shall deliver to the
Indenture Trustee every six months, commencing _____________, an Officer's
Certificate of the Issuer stating that all the dispositions of Collateral
described in clauses (A) or (B) above that occurred during the preceding six
calendar months were in the ordinary course of the Issuer's, business and that
the proceeds thereof were applied in accordance with the Basic Documents].
Section 10.02. Form of Documents Delivered to Indenture Trustee. In
------------------------------------------------
any case where several matters are required to be certified by, or covered by an
opinion of. any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but, one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
-55-
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such of officer knows. or in the
exercise of reasonable care should know, that the certificate Of 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 representation by. an officer or officers
of the Seller, the Issuer or the Administrator, stating that the information
with respect to such factual matters is in the possession of the Seller, the
Issuer 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, he consolidated and
form one instrument
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be). of the
facts and ! opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy or any statement or opinion contained in any such document as provided
in Article VI.
Section 10.03. Acts of Noteholders. (a) Any request, demand,
-------------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in an
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee, and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section 10.03.
(b) The fact date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction. notice, consent,
waiver or other action by the Holder of any 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
-56-
or suffered to be done by the Indenture Trustee or the Issuer in reliance
thereon, whether or not notation of such action is made upon such Note.
Section 10 04. Notices, etc., to Indenture Trustee. Issuer, 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 Issuer 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. The Indenture Trustee shall promptly transmit any notice received
by it from the Noteholders to the Issuer or
(ii) the Issuer by the Indenture Trustee or by any ,Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed first-
class, postage prepaid to the Issuer addressed to: Home Equity Loan Trust
199_ - ____ in care of [Name of Owner Trustee] ____________, ___________,
_______________ Attention of _____________________ with a copy to the
Administrator at 0000 Xxxxxxxxxx Xxxxxxxxx. Suite 600, Minneapolis,
Minnesota 55437, Attention: of ___________________ or at any other address
previously furnished in writing to the Indenture Trustee by the Issuer or
the Administrator. The Issuer shall promptly transmit any notice received
by it from the Noteholders to the Indenture Trustee, or
(iii) the Credit Enhancer by the Issuer. the Indenture Trustee or
by any t Noteholders shall be sufficient for every purpose hereunder to in
writing and mailed, first-class postage, pre-paid. or personally delivered
or telecopied to: [Name of Credit 2 Enhancer], ____________,
______________, ___________, Attention: __________, ________________,
Telephone _________. Telecopier ________. The Credit Enhancer shall
promptly transmit any notice received by it from the Issuer the Indenture
Trustee or the Noteholders to the Issuer or Indenture Trustee, as the case
may be.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified mail, return receipt requested, to (i) in the case of
[Moody's], at the following address: [Xxxxx'x Investors Service Inc., ABS
Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000] and (ii) in
the case of [Standard & Poor's], at the following address: [Standard & Poor's
Corporation, 00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention of
Asset Backed Surveillance Department; or as to each of the foregoing, at such
other address as shall b be designated by written notice to the other parties.
Section 10.05. Notices to Noteholders; Waiver. Where this Indenture
------------------------------
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if-in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Person's as it appears on the Note Register, not late than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice.
-57-
In any case where notice to Noteholders is given by mail, neither the failure to
mail such notice nor any defect in any notice so mailed to any particular
Noteholder shall affect the sufficiency of such notice with respect to other
Noteholders. and any notice that is mailed in the manner herein provided shall
conclusively be presumed to have been duly given regardless of whether such
notice is in fact actually received.
Where this Indenture provides for notice in any manner, such notice
may he 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 any
action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity. it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture. then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
Section 10.06. Alternate Payment and Notice Provisions.
---------------------------------------
Notwithstanding any provisions of this Indenture or any of the Notes to the
contrary, the Issuer 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 Issuer shall furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee shall
cause payments to be made and notices to be given in accordance with such
agreements.
Section 10.07. Conflict with Trust Indenture Act. If any provisions
---------------------------------
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 (S)(S) 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 10.08. Effect of Headings. The Article and Section headings
------------------
herein, are for convenience only and shall not affect the construction hereof.
Section 10.09. Successors and Assigns. All covenants and agreements
----------------------
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
-58-
Section 10.10. 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 10.11. 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 10.12. Legal Holidays. IN any case where the date on which
--------------
any payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 10.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THIS 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 10.14. Counterparts. This Indenture may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 10.15. Recording of Indenture. If this Indenture is subject
----------------------
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
Section 10.16. Issuer Obligation. No recourse may be taken, directly
-----------------
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under this Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent
-59-
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Article VI, VII and
VIII of the Trust Agreement.
Section 10.17. No Petition. The Indenture Trustee, by entering into
-----------
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Depositor or the
Issuer, or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Basic Documents.
Section 10.18. Inspection. The Issuer agrees that, on reasonable
----------
prior notice, it shall permit any representative of the Indenture Trustee,
during the Issuer's normal business hours, to examine all the books of account,
records, reports and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees, and Independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The
Indenture Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
Section 10.19 Authority of the Administrator. Each of the parties to
------------------------------
this Indenture acknowledges that the Issuer and the Owner Trustee have each
appointed the Administrator to act as its agent to perform the duties and
obligations of the Issuer hereunder. Unless otherwise instructed by the Issuer
or the Owner Trustee, copies of all notices, requests, demands and other
documents to be delivered to the Issuer or the Owner Trustee pursuant to the
terms hereof shall be delivered to the Issuer or the Owner Trustee pursuant to
the terms hereof shall be delivered to the Administrator. Unless otherwise
instructed by the Issuer or the Owner Trustee , all notices, requests, demands
and other documents to be executed or delivered, and any action to be taken, by
the Issuer or the Owner Trustee pursuant to the terms hereof may be executed,
delivered and/or taken by the Administrator pursuant to the Administration
Agreement.
-60-
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
Home Equity Loan Trust 199_ - ________________
as Issuer
By: _______________________________________
not in its individual capacity
but solely as Owner Trustee
By: _______________________________________
Name:
Title:
______________________________________________
as Indenture Trustee, as Certificate Paying Agent
and as Note 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: ______________________________
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]
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]
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]
Exhibit B
[FORM OF OPINION]
[Date]
To: The Persons Listed On the attached Schedule
Re: Home Equity Loan Trust 199_-____
Home Equity Loan Asset-Backed Securities
----------------------------------------
Ladies and Gentlemen:
We have acted as counsel to __________ ("_____") in connection with
the issuance by __________ it Surety Bond Number [SB_____] (the "Surety Bond")
issued pursuant to the [Insurance and Reimbursement Agreement dated as of
_______________ among _______________, _________________, as Depositor (the
"Depositor"), ____________ ("___"), as Seller and Master Servicer and Home
Equity Loan Trust 199_, (the "Issuer") (the "Insurance Agreement") with respect
to the Additional Variable funding Notes issued pursuant to the Indenture, dated
as of ____________ between the Issuer 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 Certificate of Incorporation 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 of appropriate as a basis for the opinion set forth below.
Capitalized terms used herein an 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 opinion 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:
B-1
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.
3. Except as have already been obtained, no authorization, consent,
approval, license, formal exemption, or declaration from, nor any
registration or filing with, any xxxx, or government agency or body of he
United States of America or the State of New York, which if not obtained
would affect of 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 __________ 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, a 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 processing 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 discussion 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,
B-2
Schedule A
Opinion of [Date]
Re: Home Equity Loan Trust 199_, ____
Home Equity Loan Asset-Backed Securities
---_____________________________________
[Name of Depositor]
[Name of Seller]
[Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000]
[Standard & Poor's Ratings Group
00 Xxxxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000]
_____________________________,
as Indenture Trustee
_____________________________
____________
________________________
_____________________________,
As Owner Trustee
____________
________________________
B-3
Exhibit C
__________, 199_
[Name of Depositor]
[Name of Underwriter]
______________________
______________________
[Name of Credit Enhancer]
______________________
______________________
[Name of Indenture Trustee]
______________________
______________________
Re: Home Equity Loan Trust 199_ -____
---------------------------------
Ladies and Gentlemen:
We have acted as counsel to___________, a Delaware 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 __________ (the "Mortgage Loan
Purchase Agreement") between _________ as seller (the "Seller"), and the
Depositor, and (ii) the sale by the Depositor of he Class A Ownership Interest
to Home Equity Loan Trust 19_-___, a Delaware business trust (the "Issuer"),
created by a Trust Agreement dated as of __________-__________ (the "Trust
Agreement") between the Depositor and _______________, as owner trustee (the
"Owner Trustee"). In exchange for the Class A Ownership Interest, the Issuer
has issued Home Equity Asset-Backed Term Notes, Series _____ (the "Term Notes"),
Home Equity Loan asset-Backed Variable Funding Notes, Series _____ (the
"Variable Funding Notes", and together with the Term Notes, the "Notes") and
Home Equity Loan Asset-Backed Certificates, Series _____ (the "Certificates",
and together with the Notes, the "Securities"). The Issuer 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 5.01(b)(iii) of the
Indenture.
C-1
In arriving at the opinions expressed below, we have examined such
documents and records as we gave 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 he 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.
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 the conclusion 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,
C-2
APPENDIX A
DEFINITIONS
Additional Balance: With respect to any Mortgage Loan, any future
------------------
Draw made by the related Mortgagor pursuant to the related Loan Agreement after
the Cut-Off-Date in the case of an Initial Loan, or after the Deposit Date in
the case of an Additional Loan; provided, however, that if an Amortization Event
-------- -------
occurs, then any Draw after such Amortization Event shall not be acquired by the
100_-_LLC and shall not be an Additional Balance.
Additional Balance Differential: With respect to any Payment Date,
-------------------------------
(x) during the Revolving Period the amount by which Draws under the Mortgage
Loans during the related Collection Period exceed Principal Collections during
such Collection Period and (y) on and after the end of the Revolving Period the
aggregate amount of Additional Balances conveyed to the 100_-_LLC during the
related Collection Period.
Additional Credit Enhancement Instrument: The credit enhancement
----------------------------------------
instrument which may be issued by the Credit Enhancer to the Indenture Trustee
to guaranty the Additional Variable Funding Notes for the benefit of holders of
the Additional Variable Funding Notes.
Additional Loans: All home equity line of credit loans sold by the
----------------
Seller to the Purchaser after the Closing Date pursuant to Section 2.3 of the
Mortgage Loan Purchase Agreement.
Additional Variable Funding Notes: The Additional Variable Funding
---------------------------------
Notes issued pursuant to Section 4.01(b) of the Indenture, which shall be in
addition to those Variable Funding Notes that are insured by the Credit
Enhancement Instrument.
Additional Variable Funding Note Issuance Date:
----------------------------------------------
The date on which any Additional Variable Funding Note is issued.
Administration Agreement: The Administration Agreement dated as of
------------------------
____________ among the Issuer, the Indenture Trustee and _________, as
Administration, as it may be amended from time to time.
Administrator: ______________, as administrator under the
-------------
Administration Agreement or any successor Administrator appointed pursuant to
the terms of the Administration Agreement.
Affiliate: With respect to any Person, any other Person controlling,
---------
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
Aggregate Additional Balance Differential: With respect to any
-----------------------------------------
Payment Date, the sum of Additional Balance Differentials that have been added
to the Principal Balance of the Variable Funding Notes prior to such Payment
Date.
Aggregate Credit Enhancement Instrument Amounts: The sum of (i) with
-----------------------------------------------
respect to the Credit Enhancement Instrument the lesser of the Maximum Credit
Enhancement Instrument Amount and the aggregate of the Security Balances of the
Notes other than any Additional Variable Funding Notes and (ii) with respect to
any Additional Credit Enhancement Instrument the lesser of the Maximum
Additional Credit Enhancement Instrument Amount and the Security Balance of the
Additional Variable Funding Notes.
Aggregate Increased Maximum Credit Enhancement Instrument Amount: The
----------------------------------------------------------------
Aggregate Credit Enhancement Instrument Amounts of the Credit Enhancement
Instrument and of any Additional Credit Enhancement Instruments issued under the
Insurance Agreement not to exceed the Maximum Credit Enhancement Instrument
Amount, plus the Maximum Additional Credit Enhancement Instrument Amount.
Aggregate Security Balance: With respect to any Payment Date, the
--------------------------
aggregate of the Principal Balances of all Securities as of such date.
Amortization Event: [Any one of the following events:
------------------
(a) the failure on the part of the Seller (i) to make any
payment or deposit required to be made under the Mortgage Loan Purchase
Agreement within four Business Days after the date such payment or deposit
is required to be mad; or (ii) to observe or perform in any material
respect any other covenants or agreements of the Seller set forth in the
Mortgage Loan Purchase Agreement, which failure continues unremedied for a
period of 60 days after written notice and such failure materially and
adversely affects the interests of the Securityholders or the Credit
Enhancer;
(b) if any representation or warranty made by the Seller in the
Mortgage Loan Purchase Agreement proves to have been incorrect in any
material respect when made and which continues to be incorrect in any
material respect for a period of 45 days with respect to any representation
or warranty of the Seller made in Section 3.1(a) of the Mortgage Loan
Purchase Agreement or 90 days with respect to any representation or
warranty made in Section 3.1(b) or 3.2 of the Mortgage Loan Purchase
Agreement after written notice and as a result of which the interests of
the Securityholders or the Credit Enhancer are materially and adversely
affected; provided, however, that an Amortization Event shall not be deemed
-------- -------
to occur if the Seller has repurchased or substituted for the related
Mortgage Loans or all Mortgage Loans, if applicable during such period (or
within an additional 60 days with the consent of the Indenture Trustee and
the Credit Enhancer) in accordance with the provisions of the Indenture;
(c) the entry against the Seller of a decree or order by a court
or agency or supervisory authority having jurisdiction in the premises for
the appointment of a trustee,
2
conservator, receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding up or liquidation of its
affairs, and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days;
(d) The Seller shall voluntarily go into liquidation, consent to
the appointment of a conservator, receiver, liquidator or similar person in
any insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to the Seller or of or relating to
all or substantially all of its property, or a decree or order of a court,
agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, liquidator or similar person in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Seller and such decree or order shall
have remained in force undischarged, unbonded or unstayed for a period of
60 days; or the Seller shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations;
(e) the [199_-_LLC] [or] ]Issuer] becomes subject to regulation
by the Commission as an investment company within the meaning of the
Investment Company Act of 1940, as amended;
(f) an Event of Servicing Termination relating to the Master
Servicer occurs under the Servicing Agreement and the Master Servicer is
the Seller;
In the case of any event described in 9a), (b) or (f), an Amortization
Event will be deemed to have occurred only if, after any applicable grace period
described in such clauses, either the Indenture Trustee, the Credit Enhancer or,
with the consent of the Credit Enhancer, Securityholders evidencing not less
than 51% of the Security Balance of each of the Term Notes and the Certificates
by written notice to the Seller, the Master Servicer, the Depositor and the
Owner Trustee (and to the Indenture Trustee, if given by the Credit Enhancer or
the Securityholders) may declare that an Amortization Event has occurred as of
the date of such notice. In the case of any event described in clauses (c),
(d), (e), an Amortization Event will be deemed to have occurred without any
notice or other action on the part of the Indenture Trustee, the Securityholders
or the Credit Enhancer immediately upon the occurrence of such event; provided,
--------
that any Amortization Event may be waived and deemed of no effect with the
written consent of the Credit Enhancer and each Rating Agency, subject to the
satisfaction of any conditions to such waiver.]
Appraised Value: With respect to any Mortgaged Property, either (x)
---------------
the value set forth in an appraisal of such Mortgaged Property made to establish
compliance with the underwriting criteria then in effect in connection with the
later of the application for the Mortgage Loan secured by such Mortgaged
Property or any subsequent increase or decrease in the related Credit Limit or
to reduce or eliminate the amount of any primary insurance, or (y) if
3
the sales price of the Mortgaged Property is considered in accordance with the
underwriting criteria applicable to the Mortgage Loan, the lesser of (i) the
appraised value referred to in (x) above and (ii) the sales price of such
Mortgaged Property.
Asset Balance: With respect to any Mortgage Loan, other than a
-------------
Liquidated Mortgage Loan, and as of any day, the related Cut-Off Date Asset
Balance or Deposit Date Asset Balance, plus (i) any Additional Balances in
-----
respect of such Mortgage Loan conveyed to the 199_-_LLC, minus (ii) all
-----
collections credited as principal in respect of any such Mortgage Loan in
accordance with the related Loan Agreement (except for any such collections that
are allocable to the Excluded Amount) and applied in reduction of the Asset
Balance thereof. For purposes of this definition, a Liquidated Mortgage Loan
shall be deemed to have an Asset balance equal to the Asset Balance of the
related Mortgage Loan immediately prior to the final recovery of all related
Liquidation Proceeds and an Asset Balance of zero thereafter.
Assignment of Mortgage: With respect to any Mortgage, an assignment,
----------------------
notice of transfer or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction in which the related Mortgaged Property is
located to reflect the conveyance of the Mortgage, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering the Mortgage Loans secured by Mortgaged Properties located
in the same jurisdiction.
Authorized Newspaper: A newspaper of general circulation in the
--------------------
Borough of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
Authorized Officer: With respect to the Issuer, any officer of the
------------------
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized officers delivered
by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented form time to time thereafter) and, so long as
the Administration Agreement is in effect, any Responsible Officer of the
Administrator who is authorized to act for the Administrator in matters relating
to the Issuer and to be acted upon by the Administrator pursuant to the
Administration Agreement and who is identified on the list of Authorized
Officers delivered by the Administrator to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter).
Basic Documents: the Trust Agreement, the Certificate of Trust, the
---------------
Indenture, the Mortgage Loan Purchase Agreement, the Insurance Agreement, the
Administration Agreement, the Servicing Agreement, the Custodial Agreement and
the other documents and certificates delivered in connection with any of the
above.
Beneficial Owner: With respect to any Note, the Person who is the
----------------
beneficial owner of such Note as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as
Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).
4
Billing Cycle: With respect to any Mortgage Loan and Due Date, the
-------------
calendar month preceding such Due Date.
Billing Date: With respect to any Due Date and Mortgage Loan, the
------------
first day of the month preceding such Due Date on which date the bill is
generated for the amount due an payable on the related Mortgage Loan on such Due
Date.
Book-Entry Notes: Beneficial interests in the Notes, ownership and
----------------
transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
------------
day on which banking institutions in the State of New York, [Illinois] or
Minnesota are required or authorized by law to be closed.
Business Trust Statute: Chapter 38 of Title 12 of the Delaware Code,
----------------------
12 Del. Code (S)(S)3801 et seq., as the same may be amended from time to time.
--- -- ----
Capped Funding Note: Any Variable Funding Note that has reached its
-------------------
Maximum Individual Variable Funding Balance.
Carryover Loss Amount: With respect to any Payment Date, the
---------------------
aggregate of Loss Amounts (other than Loss amounts arising during the related
Collection Period) with respect to which either (i) payments of principal have
not been previously made on the Notes and the Certificates or (ii) were not
reflected in a reduction (not below zero) of the Outstanding Reserve Amount.
Certificate Distribution Account: The account or accounts created and
--------------------------------
maintained pursuant to Section ____ of the Servicing Agreement. The
Certificate Distribution Account shall be an Eligible Account.
Certificate Distribution Amount: With respect to any Payment Date,
-------------------------------
the sum of (x) the amount accrued during the related Interest Period on the
Principal Balance of the Certificates at the Certificate Rate for such Interest
Period and (y) any Unpaid Certificate Distribution Amount Shortfall. The amount
available for distribution on any Payment Date shall be allocated first to the
amount in clause (x) above, and second to the amount in clause (y) above.
Certificate Paying Agent: The meaning specified in Section 3.10 of
------------------------
the Trust Agreement.
Certificate Percentage: With respect to any Payment Date, the ration,
----------------------
expressed as a percentage, of the aggregate of the Principal Balance of the
Certificates immediately prior to such Payment Date to the sum of the aggregate
of the Principal Balance of the Securities immediately prior to such date.
5
Certificate Rate: With respect to any Interest Period, the per annum
----------------
rate determined by the Master Servicer equal tot he sum of (i) LIBOR and (ii)
0.__% provided, however, that in no event shall the Certificate Rate with
-------- -------
respect to any Interest Period exceed the Maximum Rate.
Certificate Register: The register maintained by the Certificate
--------------------
Registrar in which the Certificate Registrar shall provide for the registration
of Certificates and of transfers and exchanges of Certificates.
Certificate Registrar: Initially,
---------------------
___________________________________, in its capacity as Certificate Registrar,
or any successor to the Indenture Trustee in such capacity.
Certificate of Trust: The Certificate of Trust filed for the Trust
--------------------
pursuant to Section 3810(a) of the Business Trust Statute.
Certificates: The Home Equity Loan Asset-Backed Certificates, Series
------------
_____, each evidencing undivided beneficial interests in the issuer and executed
by the Owner Trustee in substantially the form set forth in Exhibit A to the
Trust Agreement.
Certificateholder: The Person in whose name a Certificate is
-----------------
registered in the Certificate Register except that, any Certificate registered
in the name of the Issuer, the Owner Trustee or the Indenture Trustee or any
Affiliate of any of them shall be deemed not to be outstanding and the
registered holder will not be considered a Certificateholder or a holder for
purposes of giving any request, demand, authorization, direction, notice,
consent or waiver under the Indenture or the Trust agreement provided that, in
determining whether the Indenture Trustee or the Owner Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that the Indenture Trustee or the
Owner Trustee knows to be so owned shall be so disregarded. Owners of
Certificates that have been pledged in good faith may be regarded as Holders if
the pledgee establishes to the satisfaction of the Indenture Trustee or the
Owner Trustee, as the case may be, the pledgee's right so to act with respect to
such Certificates and that the pledgee is not the Issuer, any other obligor upon
the Certificates or any Affiliate of any of the foregoing Persons.
Class: The Term Notes, the Variable Funding
-----
Notes, the Certificates or the Exchanged Notes, as the case may be.
Class A Ownership Interest: The ownership interest in the 199_-_
--------------------------
Trust LLC designated as the Class A Ownership Interest.
Class B Ownership Interest: The ownership interest in the 199_-_
----------------------------
Trust LLC designated as the Class B Ownership Interest.
6
Class Percentage: With respect to each Class of Notes and Payment
----------------
Date, the ratio, expressed as a percentage, of the aggregate Principal Balance
of such class of Notes to the aggregate Principal Balance of the Notes, in each
case immediately prior to such Payment Date.
Closing Date: ________________.
------------
Code: The Internal Revenue Code of 1986, as amended and the rules
----
Collateral: The meaning specified in the Granting Clause of the
----------
Indenture.
Collection Account: The account or accounts created and maintained
------------------
pursuant to Section 3.02(b) of the Servicing Agreement. The Collection Account
shall be an Eligible Account.
Collection Period: With respect to any Mortgage Loan and Payment Date
-----------------
other than the first Payment Date, the calendar month preceding any such Payment
Date and with respect to the first Payment Date, the period from
____________________ through ___________.
Combined Loan-to-Value Ratio: With respect to any Mortgage Loan and
----------------------------
any date, the percentage equivalent of a fraction, the numerator of which is the
sum of (i) the greater of (x) the Credit Limit and (y) the Cut-Off Date Asset
Balance of such Mortgage Loan and (ii) the outstanding principal balance as of
the date of the origination of such Mortgage Loan (or any subsequent date as of
which such outstanding principal balance may be determined in connection with an
increase or decrease in the Credit Limit or to reduce the amount of primary
insurance for such Mortgage Loan) of any mortgage loan or mortgage loans that
are secured by liens on the Mortgaged Property that are senior or subordinate to
the Mortgage and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Corporate Trust Office: With respect to the Indenture Trustee,
----------------------
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Note Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at
___________________________, ___________________, ___________________________,
___________________________, except that for purposes of Section 4.02 of the
Indenture and Section 3.09 of the Trust Agreement, such term shall include the
Indenture Trustee's office or agency at __________, ___________,
_______________, ______________. With respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee at which at any particular
time its corporate trust business shall be administered, which office at the
date of the execution of this Trust Agreement is located at ___________________,
__________________, _________________, Attention: _________________________.
Credit Enhancement Draw Amount: As defined in Section 3.32 of the
------------------------------
Indenture.
7
Credit Enhancement Instrument: The surety bond number SB ___, dated
-----------------------------
as of the Closing Date, issued by the Credit Enhancer to the Indenture Trustee
for the benefit of the Noteholders.
Credit Enhancer: __________________________________ _____________, a
---------------
___________________-domiciled___________________________________________
insurance company, any successor thereto or any replacement credit enhancer
substituted pursuant to Section 3.33 of the Indenture.
Credit Enhancer Default: If the Credit Enhancer fails to make a
-----------------------
payment required under the Credit Enhancement Instrument in accordance with its
terms.
Credit Limit: With respect to any Mortgage Loan, the maximum Asset
------------
Balance permitted under the terms of the related Loan Agreement.
Custodial Agreement: Any Custodial Agreement between the Custodian,
-------------------
the Indenture Trustee, the Issuer and the Master Servicer relating to the
custody of the Mortgage Loans and the Related Documents.
Custodian: With respect to the ______ Loans, _____________________, a
---------
______________________, and its successors and assigns, and with respect to the
______________________ Loans, ________________________, a ___________, and its
successors and assigns, provided, that in no event shall the Custodian be an
Affiliate of the Seller.
Cut-Off Date: With respect to the Initial Loans, ___________________.
------------
Cut-Off Date Asset Balance: With respect to any Initial Loan, the
--------------------------
unpaid principal balance thereof as of the opening of business on the last day
of the related Billing Cycle immediately prior to the Cut-Off Date.
Default: Any occurrence which is or with notice or the lapse of
-------
time or both would become an Event of Default.
Definitive Notes: The meaning specified in Section 4.06 of the
----------------
Indenture.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
---------------------
with an Eligible Substitute Mortgage Loan.
Deposit Date: The applicable date as of which any Additional Loan is
------------
sold to the Purchaser pursuant to the Mortgage Loan Purchase Agreement.
Deposit Date Asset Balance: With respect to any Additional Loan,
--------------------------
the Asset Balance thereof as of the Deposit Date.
8
Depositor:_______________, a Delaware corporation, or its successor
---------
in interest.
Depository or Depository Agency: The Depository Trust Company or a
-------------------------------
successor appointed by the Indenture Trustee with the approval of the Depositor.
Any successor to the Depository shall be an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act and the
regulations of the Securities and Exchange Commission thereunder.
Depository Participant: A Person for whom, from time to time, the
----------------------
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.
Designated Certificate: The meaning specified in Section 3.11 of
----------------------
the Trust Agreement.
Determination Date: With respect to any Payment Date, the later of
------------------
(i) the 15/th/ day of the month in which such Payment Date occurs or if such day
is not a Business Day, the next succeeding Business Day and (ii) the third
Business Day prior to such Payment Date.
Dissolution Payment Date: Following an Event of Default under the
------------------------
Indenture and an acceleration of the Maturity Date of the Notes, a date on which
the proceeds of the sale of the Trust Estate are paid to Securityholders.
Draw: With respect to any Mortgage Loan, a borrowing by the
----
Mortgagor under the related Loan Agreement.
Due Date: With respect to any __________ Loans, the [25/th/] day of
--------
the month. With respect to any __________ Loans ,the [10/th/] day of the month.
With respect to any __________ Loans, the [20/th/] day of the month.
Eligible Account: An account that is any of the following: (i)
----------------
maintained with a depository institution the debt obligations of which have been
rated by each Rating Agency in its highest rating available, or (ii) an account
or accounts in a depository institution in which such accounts are fully insured
to the limits established by the FDIC, provided that any deposits not so insured
--------
shall, to the extent acceptable to each Rating Agency, as evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel delivered to the
Indenture Trustee and each Rating Agency) the Indenture Trustee have a claim
with respect to the funds in such account or a perfected first security interest
against any collateral (which shall be limited to Eligible Investments) securing
such funds that is superior to claims of any other depositors or creditors of
the depository institution with which such account is maintained, or (iii) in
the case of the Collection Account, either (A) a trust account or accounts
maintained at the Corporate Trust Department of the Indenture Trustee or (B) an
account or accounts maintained at the Corporate Trust Department of the
Indenture Trustee, as long as its short term debt obligations are rated P-1 by
Xxxxx'x and A-1 by Standard & Poor's or the equivalent) or better by each Rating
Agency and its long term debt obligations are rated A2 by Xxxxx'x and A by
Standard & Poor's or the equivalent) or better, by each Rating Agency, or (iv)
in the case of the Collection Account and the Payment Account, a trust account
or accounts maintained in the corporate trust
9
division of the Indenture Trustee, or (v) an account or accounts of a depository
institution acceptable to each Rating Agency as evidenced in writing by each
Rating Agency that use of any such account as the Collection Account or the
Payment Account will not reduce the rating assigned to any of the Securities by
such Rating Agency below investment grade without taking into account the Credit
Enhancement Instrument.
Eligible Investments: One or more of the following:
--------------------
(i) obligations of or guaranteed as to principal and interest
by the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of acquisition thereof,
provided that the unsecured obligations of the party agreeing to repurchase
--------
such obligations are at the time rated by each Rating Agency in the highest
short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or a
remaining maturity of more than 30 days) denominated in United States
dollars of any U.S. depository institution or trust company incorporated
under the laws of the United States or any state thereof or of any domestic
branch of a foreign depository institution or trust company; provided that
--------
the debt obligations of such depository institution or trust company (or,
if the only Rating Agency is Standard & Poor's, in the case of the
principal depository institution in a depository institution holding
company, debt obligations of the depository institution holding company) at
the date of acquisition thereof have been rated by each Rating Agency in
its highest short-term rating available; and provided further that, if the
-------- -------
only Rating Agency is Standard & Poor's and if the depository or trust
company is a principal subsidiary of a bank holding company and the debt
obligations of such subsidiary are not separately rated, the applicable
rating shall be that of the bank holding company; and, provided further
-------- -------
that, if the original maturity of such short-term obligations of a domestic
branch of a foreign depository institution or trust company shall exceed 30
days, the short-term rating of such institution shall be A-1 / in the case
of Standard & Poor's if Standard & Poor's is the Rating Agency.
(iv) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the United
States or any state thereof which on the date of acquisition has been rated
by each Rating Agency in their highest short-term rating available;
provided that such commercial paper shall have a remaining maturity of not
--------
more than 30 days;
(v) interests in any money market fund or qualified investment
fund which at the date of acquisition of the interests in such fund and
throughout the time the
10
interest is held in such fund has a rating of P-1 or Aaa by Xxxxx'x and
either AAAm or AAAm-G by Standard & Poor's or such lower rating as will not
result in the qualification, downgrading or withdrawal of the then-current
rating assigned to the Certificates by each Rating Agency.
(vi) other obligations or securities that are acceptable to each
Rating Agency as an Eligible Investment hereunder and will not reduce the
rating assigned to any Class of Certificates by such Rating Agency below
the lower of the rating then assigned thereto or the rating assigned at the
Closing Date, and which are acceptable to the Credit Enhancer, as evidenced
in writing, provided that if the Master Servicer or any other Person
--------
controlled by the Master Servicer is the issuer or the obligor of any
obligation or security described in this clause (vi) such obligation or
security must have an interest rate or yield that is fixed or is variable
based on an objective index that is not affected by the rate or amount of
losses on the Mortgage Loans;
provided, however, that each such instrument shall be acquired in an arm's
-------- -------
length transaction and no such instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations.
Eligible Substitute Mortgage Loan: A Mortgage Loan substituted by the
---------------------------------
Seller for a Deleted Mortgage Loan which must, on the date of such substitution,
as confirmed in an Officers' Certificate delivered to the Indenture Trustee, (i)
have an outstanding principal balance, after deduction of the principal portion
of the monthly payment due in the month of substitution (or in the case of a
substitution of more than one Mortgage Loan for a Deleted Mortgage Loan, an
aggregate outstanding principal balance, after such deduction), not in excess of
the outstanding principal balance of the Deleted Mortgage Loan (the amount of
any shortfall to be deposited by the Seller in the Collection Account in the
month of substitution); (ii) comply with each representation and warranty set
forth in clauses (ii) through (xxxiv) of Section 3.1(b) of the Mortgage Loan
Purchase Agreement other than clauses (viii), (xiii), (xiv), (xxiv)(B),
(xxv)(B), (xxvi) and (xxvii); (iii) have a Loan Rate, Net Loan Rate and Gross
Margin no lower than and not more than [1]% per annum higher than the Loan Rate,
Net Loan Rate and Gross Margin, respectively, of the Deleted Mortgage Loan as of
the date of substitution; (iv) have a Combined Loan-to-Value Ratio at the time
of substitution no higher than that of the Deleted Mortgage Loan at the time of
substitution; (v) have a remaining term to stated maturity not greater than (and
not more than one year less than) that of the Deleted Mortgage Loan and (vi) not
be 30 days or more delinquent.
ERISA: The Employee Retirement Income Security Act of 19974, as
-----
amended.
Event of Default: With respect to the Indenture, any one of the
----------------
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary
11
or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(i) a default in the payment of any interest on any Note when
the same becomes due and payable, and such default shall continue for a
period of five days; or
(ii) a default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable; or
(iii) a Credit Enhancer Default shall have occurred and be
continuing and there occurs a default in the observance or performance of
any covenant or agreement of the Issuer made in the Indenture, or any
representation or warranty of the Issuer made in the Indenture or in any
certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the
time when the same shall have been made [which has a material adverse
effect on Securityholders], and such default shall continue or not be
cured, or the circumstance or condition in respect of which such
representation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 30 days after there shall have been given,
by registered or certified mail, to the Issuer by the Indenture Trustee or
to the Issuer and the Indenture Trustee by the Holders of at least 25% of
the Outstanding Amount of the Notes, a written notice specifying such
default or incorrect representation or warranty and requiring it to be
remedied and stating that such notice is a notice of default hereunder; or
(iv) a Credit Enhancer Default shall have occurred and be
continuing and there occurs the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Trust Estate in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(v) a Credit Enhancer Default shall have occurred and be
continuing and there occurs the commencement by the Issuer of a voluntary
case under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any such law, or
the consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the assets of the
Trust Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of any action by the Issuer
in furtherance of any of the foregoing.
12
Event of Servicer Termination: With respect to the Servicing
-----------------------------
Agreement, an Event of Default as defined in Section 7.01 of the Servicing
Agreement.
Excess Additional Balance Differential: With respect to any
--------------------------------------
Additional Variable Funding Notes, the amount by which the Additional Balance
Differential for the Collection Period immediately preceding the month in which
the related Additional Variable Funding Notes are issued, would have caused the
Security Balance of the Variable Funding Notes to exceed the Maximum Variable
Funding Balance immediately prior to the issuance of such Additional Variable
Funding Notes.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
------------
the rules and regulations promulgated thereunder.
Excluded Amount: For any Payment Date on or after the occurrence of
---------------
an Amortization Event, with respect to all collections whether interest or
principal (other than any amounts received in respect of a Repurchase Price and
pursuant to Section 3.05(c) of the Servicing Agreement) ("Total Collections") on
all Initial Loans and Additional Loans in each case including all Draws whether
or not transferred to the 199_-__ LLC (collectively, "Total Balances of
Obligors"), an amount equal to the product of (A) Total Collection during the
related Collection Period and (B) a fraction equal to one (1) minus a fraction
-----
the numerator of which is (x) the aggregate Asset Balances as of the end of the
last Collection Period and the denominator of which is (y) the Total Balances of
Obligors.
Expenses: The meaning specified in Section 7.02 of the Trust
--------
Agreement.
FDIC: The Federal Deposit Insurance Corporation or any successor
----
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
-----
thereto.
Final Scheduled Payment Date: To the extent not previously paid, the
----------------------------
principal balance of each Class of Notes will be due on the Payment Date in
__________.
FNMA: The Federal National Mortgage Association, or any successor
----
thereto.
Foreclosure Profit: With respect to a Liquidated Mortgage Loan, the
------------------
amount, if any, by which (i) the aggregate of its Net Liquidation Proceeds
exceeds (ii) the related Asset Balance (plus accrued and unpaid interest thereon
at the applicable Loan Rate from the date interest was last paid through the
date of receipt of the final Liquidation Proceeds) of such Liquidated Mortgage
Loan immediately prior to the final recovery of its Liquidation Proceeds.
Funding Account: The trust account created and maintained with the
---------------
Indenture Trustee pursuant to Section 8.02 of the Indenture and referred to
therein as the Funding Account. Funds deposited in the Funding Account shall be
held in trust for the uses and purposes set forth in Article VIII of the
Indenture.
13
Funding Period: The period commencing on the Cut-Off Date and ending
--------------
on the earlier of (x) the Payment Date in __________ and (y) the occurrence of
an Amortization Event.
Grant: Pledge, bargain, sell, warrant, alienate, remise, release,
-----
convey, assign, transfer, create, and xxxxx x xxxx upon and a security interest
in and right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
Gross Margin: With respect to any Mortgage Loan, the percentage set
------------
forth as the "Gross Margin" for such Mortgage Loan on the Mortgage Loan
Schedule, as adjusted from time to time with respect to any __________ Loan in
accordance with the terms of the Servicing Agreement.
Guaranteed Principal Payment Amount: [With respect to any Payment
-----------------------------------
Date, other than the Dissolution Payment Date, the amount, if any, by which the
Security Balance of the Notes (after giving effect to all amounts allocable and
distributable to principal on the Notes on such Payment Date) exceeds the sum of
(A) the Pool Balance plus (B) all amounts on deposit in the Funding Account on
----
such date (after giving effect to all withdrawals therefrom and deposits thereto
pursuant to Sections 8.02(b) and 8.02(c) of the Indenture on such Payment Date).
With respect to the Payment Date in __________, if such Payment Date is not a
Dissolution Payment Date, the amount, if any, by which the aggregate of the
Security Balances of the Notes (after giving effect to all amounts allocable and
distributable to principal on the Notes) exceeds the amount on deposit in the
Payment Account available to be paid as principal on the Notes (after giving
effect to all amounts allocable and distributable as principal on the Notes on
such date).
Holder: Any of the Noteholders or Certificateholders.
------
Indemnified Party: The meaning specified in Section 7.02 of the
-----------------
Trust Agreement.
Indenture: The indenture dated as of __________ between the Issuer,
---------
as debtor, and the Indenture Trustee, as Indenture Trustee.
Indenture Trustee: ____________________, and its successors and
-----------------
assigns or any successor indenture trustee appointed pursuant to the terms of
the Indenture.
14
Independent: When used with respect to any specified Person, the
-----------
Person (i) is in fact independent of the Issuer, any other obligor on the Notes,
the Seller, the 199_-__ LLC, the Depositor and any Affiliate of any of the
foregoing Persons, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Seller, the 199_-__ LLC, the Depositor or any Affiliate of any of the foregoing
Persons and (iii) is not connected with the Issuer, any such other obligor, the
Seller, the 199_-__ LLC, the Depositor or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to
-----------------------
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
made by an Independent appraiser or other expert appointed by an Issuer Order
and approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the definition
of "Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
Index: With respect to any Mortgage Loan, the prime rate from time to
-----
time for the adjustment of the Loan Rate set forth as such on the related
Mortgage Note.
Initial Loans: All home equity lines of credit sold by the Seller to
-------------
the Purchaser on __________ pursuant to the terms of the Mortgage Loan Purchase
Agreement, as specified in the Mortgage Loan Schedule.
Initial Principal Balance: With respect to the Certificates,
-------------------------
$__________; the Term Notes, $__________; and the Variable Funding Notes, zero.
Initial Subservicers: With respect to the __________ Loans,
--------------------
__________. With respect to the __________ Loans, __________. With respect to
the __________ Loans, __________.
Insolvency Event: With respect to a specified Person, (a) the filing
----------------
of a decree or order for relief by a court having jurisdiction in the premises
in respect of such Person or any substantial part of its property in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such Person to the
entry of an order for relief in an involuntary case under any such law, or the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture Trustee shall have notice)
of its inability to pay its debts
15
generally, or the adoption by the Board of Directors or managing member of such
Person of a resolution which authorizes action by such Person in furtherance of
any of the foregoing.
Insurance Agreement: The insurance and reimbursement agreement dated
-------------------
as of __________ among the Master Servicer, the Seller, the Depositor, [the
199_-__ LLC,] the Issuer and the Credit Enhancer, including any amendments and
supplements thereto.
Insurance Proceeds: Proceeds paid by any insurer (other than the
------------------
Credit Enhancer) pursuant to any insurance policy covering a Mortgage Loan which
are required to be remitted to the Master Servicer, or amounts required to be
paid by the Master Servicer pursuant to the next to last sentence of Section
3.04 of the Servicing Agreement, net of any component thereof (i) covering any
expenses incurred by or on behalf of the Master Servicer in connection with
obtaining such proceeds, (ii) that is applied to the restoration or repair of
the related Mortgaged Property, (iii) released to the Mortgagor in accordance
with the Master Servicer's normal servicing procedures or (iv) required to be
paid to any holder of a mortgage senior to such Mortgage Loan.
Interest Collections: With respect to any Payment Date, the sum of
--------------------
all payments by or on behalf of Mortgagors and any other amounts constituting
interest (including without limitation such portion of Insurance Proceeds, Net
Liquidation Proceeds and Repurchase Prices as is allocable to interest on the
applicable Mortgage Loan) as is paid by the Seller or the Master Servicer or is
collected by the Servicer under the Mortgage Loans, reduced by the Servicing
Fees for the related Collection Period and by any fees (including annual fees)
or late charges or similar administrative fees paid by Mortgagors during the
related Collection Period. The terms of the related Loan Agreement shall
determine the portion of each payment in respect of such Mortgage Loan that
constitutes principal or interest.
Interest Period: With respect to any Payment Date other than the
---------------
first Payment Date, the period beginning on the preceding Payment Date and
ending on the day preceding such Payment Date, and in the case of the first
Payment Date, the period beginning on the Closing Date and ending on the day
preceding the first Payment Date.
Interest Rate Adjustment Date: With respect to each Mortgage Loan,
-----------------------------
the date or dates on which the Loan Rate is adjusted in accordance with the
related Mortgage Note.
Issuer: The Home Equity Loan Trust 199_-__, a Delaware business
------
trust, or its successor in interest.
Issuer Request: A written order or request signed in the name of the
--------------
Issuer by any one of its Authorized Officers and delivered to the Indenture
Trustee.
LIBOR: For any Interest Period other than the first Interest Period,
-----
the rate for United States dollar deposits for one month which appears on the
Telerate Screen Page 3750 as of 11:00 A.M., London time, on the second LIBOR
Business Day prior to the first day of such Interest Period. With respect to
the first Interest Period, the rate for United States dollar deposits
16
for one month which appears on the Telerate Screen Page 3750 as of 11:00 A.M.,
[Chicago, Illinois] time, two LIBOR Business Days prior to the Closing Date. If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, such other
service for displaying LIBOR or comparable rates as may be reasonably selected
by the Indenture Trustee after consultation with the Master Servicer), the rate
will be the Reference Bank Rate. If no such quotations can be obtained and no
Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Payment Date.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or
------------------
(ii) a day on which banking institutions in the State of New York, [Illinois] or
Minnesota, or in the city of London, England are required or authorized by law
to be closed.
Lien: Any mortgage, deed or trust, pledge, conveyance, hypothecation,
----
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
--------
however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
-------
shall not be deemed to constitute a Lien.
Lifetime Rate Cap: With respect to each Mortgage Loan with respect to
-----------------
which the related Mortgage Note provides for a lifetime rate cap, the maximum
Loan Rate permitted over the life of such Mortgage Loan under the terms of such
Mortgage Note, as set forth on the Mortgage Loan Schedule and initially as set
forth on Exhibit A to the Servicing Agreement.
Liquidated Mortgage Loan: With respect to any payment Date, any
------------------------
Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified in the Servicing agreement,
as of the end of the related Collection Period that substantially all
Liquidation proceeds which it reasonably expects to recover with respect to the
disposition of the related REO have been recovered.
Liquidation Expenses: Out-of-pocket expenses (exclusive of overhead)
--------------------
which are incurred by or on behalf of the Master Servicer in connection with the
liquidation of any Mortgage Loan and not recovered under any insurance policy,
such expenses including, without limitation, legal fees and expenses, any
unreimbursed amount expended (including, without limitation, amounts advanced to
correct defaults on any mortgage loan which is senior to such Mortgage Loan and
amounts advanced to keep current or pay off a mortgage loan that is senior to
such Mortgage Loan) respecting the related Mortgage Loan and any related and
unreimbursed expenditures for real estate property taxes or for property
restoration, preservation or insurance against casualty loss or damage.
Liquidation Loss Amounts: With respect to any Payment Date and any
------------------------
Mortgage Loan that became a Liquidated Mortgage Loan during the related
Collection Period, the
17
unrecovered portion of the related Asset Balance thereof at the end of such
Collection Period, after giving effect to the Net Liquidation Proceeds applied
in reduction of the Asset Balance.
Liquidation Proceeds: Proceeds (including Insurance Proceeds but not
--------------------
including amounts drawn under the Credit Enhancement Instrument) received in
connection with the liquidation of any Mortgage Loan or related REO, whether
through trustee's sale, foreclosure sale or otherwise.
LLC or 199 - LLC: 199_-_ Trust LLC, a limited
----------------
liability company.
Loan Agreement: With respect to any Mortgage Loan, the credit line
--------------
account agreement executed by the related Mortgagor and any amendment or
modification thereof.
Loan Rate: With respect to any Mortgage Loan and any day , the per
----------
annum rate of interest applicable under the related Loan Agreement.
Loan Rate Cap: With respect to each Mortgage Loan, the lesser of (i)
-------------
the Lifetime Rate Cap, if any, or (ii) the applicable state usury ceiling, if
any.
Loan Year: With respect to any Mortgage Loan, the one year period
---------
commencing on the day succeeding the origination of such Mortgage Loan and
ending on the anniversary date of such Mortgage Loan, and each annual period
thereafter.
Lost Note Affidavit: With respect to any Mortgage Loan as to which
-------------------
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Seller or the related Underlying Seller
certifying that the original Mortgage Note has been lost, misplaced or destroyed
(together with a copy of the related Mortgage Note).
Master Servicer: _____________ a Delaware corporation, and its
---------------
successor and assigns.
Master Servicing Fee: With respect to any __________ Loan or
--------------------
_________ Loan any Collection Period, the product of (i) the Master Servicing
Fee Rate divided by 12 and (ii) the aggregate Asset Balance of the ______ Loans
or ________ Loans, as applicable, as of the first day of such Collection Period,
and with respect to any ______ Loan and any Collection Period, the product of
(i) the Master Servicing Fee Rate divided by 12 and (ii) the aggregate Asset
Balance of the _______ Loans as of the first day of such Collection Period.
Master Servicing Fee Rate: With respect to any _____ Line Loan or any
-------------------------
________, ______% per annum. With respect to any _____ Loan, _____% per annum.
MATI: Mortgage Assets Trading, Inc., a Delaware corporation, or
----
its successors.
18
Maximum Additional Credit Enhancement Instrument Amount: $________,
-------------------------------------------------------
comprised of the Initial principal Balance of the Term Notes ($________), plus
the Maximum Variable Funding Balance as of the Closing Date ($_______).
Maximum Individual Variable Funding Balance: As to any Variable
-------------------------------------------
Funding Note and date of determination $_______ reduced by the aggregate amount
of principal previously paid on such Variable Funding Note.
Maximum Pool Balance: As to any Payment Date the highest Pool Balance
--------------------
at the end of any Collection Period from the Closing Date up to and including
the related Collection Period.
Maximum Rate: With respect to any Interest Period, the Weighted
------------
Average Net Loan Rate related to the Due Date in the month preceding the month
in which such Interest Period ends (adjusted to an effective rate reflecting
accrued interest calculated on the basis of the actual number of days in the
Collection Period commencing in the month in which such Interest Period
commences and a year assumed to consist of 360 days).
Maximum Variable Funding Balance: The maximum Principal Balance of
--------------------------------
the Variable Funding Notes which is an of any day of determination $_______
reduced by the aggregate amount of principal previously paid on the Variable
Funding Notes; provided that the Maximum Variable Funding Balance may be
--------
increased pursuant to Section 4.01 of the Indenture.
Minimum Monthly Payment: With respect to any Mortgage Loan and any
-----------------------
month, the minimum amount required to be paid by the related Mortgagor in that
month.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in
-------
interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
---------
first or second lien on an estate in fee simple interest in real property
securing a Mortgage Loan.
Mortgage File: The file containing the Related documents pertaining t
-------------
a particular Mortgage Loan and any additional documents required to be added to
the Mortgage File pursuant to the Mortgage Loan purchase Agreement or the
Servicing Agreement.
Mortgage Loan Group: Any of the ________ Loans, _________ Loans or
-------------------
the _______ Loans.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
--------------------------------
Agreement, dated as of the Cut-Off Date, between the Seller, as seller, and the
Depositor, as purchaser, with respect to the Mortgage Loans, dated as of
___________.
Mortgage Loan Schedule: With respect to any date, the schedule of
----------------------
Mortgage Loans held by the 199_-_ LLC on such date. The initial schedule of
Mortgage Loans as of the Cut-Off Date is the schedule set fourth in Exhibit A of
the Servicing Agreement, which schedule
19
sets forth as to each Mortgage Loan (i) the Cut-Off Date Asset Balance, (ii) the
Credit Limit, (iii) the Gross Margin, (iv) the name of the Mortgagor, (v) the
Lifetime Rate Cap, if any, (vi) the loan number, (vii) an indication as to the
applicable Mortgage Loan Group, and (viii) the lien position of the related
Mortgage. The Mortgage Loan Schedule will be amended from time to time by annex
to reflect Additional Loans.
Mortgage Loans: At any time, collectively, all Initial Loans and
--------------
Additional Loans, in each case including Additional Balances, if any, that have
been sold to the Depositor under the Mortgage Loan Purchase Agreement, in each
case together with the Related Documents, and that remain subject to the terms
thereof.
Mortgage Note: With respect to a Mortgage Loan, the Loan Agreement
-------------
pursuant to which the related mortgagor agrees to pay the indebtedness evidenced
thereby and secured by the related Mortgage as modified or amended.
Mortgaged Property: The underlying property, including real property
------------------
and improvements thereon, securing a Mortgage Loan.
Mortgagor: The obligor or obligors under a Loan Agreement.
---------
Net Liquidation Proceeds: With respect to any Liquidated Mortgage
------------------------
Loan, Liquidation Proceeds net of Liquidation Expenses.
Net Loan Rate: With respect to any ______ Loan and any _______ Loan
-------------
and any day, the related Loan Rate less the related Servicing Fee Rate. [With
respect to any _____ Loan and any day, the Prime Rate then applicable to the
Loan Rate plus 1.00%, less the related Master Servicing Fee Rate.]
Net Principal Collections: With respect to any Distribution Date, the
-------------------------
excess, if any, of Security Principal Collections for the related Collection
Period over the amount of Additional balances created during the related
Collection Period.
Net Owner: The Beneficial Owner of a Note.
---------
Note Percentage: With respect to any Payment Date, the ratio
---------------
expressed as a percentage of the aggregate of the Principal Balances of all
Notes immediately prior to such Payment Date to the sum of the Pool Balance on
the first day of the related Collection Period and the amount on deposit in the
Funding Account from Net Principal Collections immediately prior to such Payment
Date.
Note Rate: With respect to any Interest Period, a per annum rate
---------
determined by the Master Servicer equal to LIBOR as of the second LIBOR Business
Day prior to the first day of such Inters Period and 0._%; provided however,
-------- -------
that in no event shall the Note Rate with respect to any Interest Period exceed
the Maximum Rate for such Interest Period.
20
Note Register: The register maintained by the Note Registrar in which
-------------
the Note Registrar shall provide for the registration of Notes and of transfers
and exchanges of Notes.
Note Registrar: The Indenture Trustee, in its capacity as Note
--------------
Registrar.
Noteholder: The person in whose name a Note is registered in the Note
----------
Register, except that, any Note registered in the name of the Depositor the
Issuer or the Indenture Trustee or any Affiliate of any of them shall be deemed
not to be outstanding and the registered holder will not be considered a
Noteholder or holder for purposes of giving any request, demand, authorization,
direction, notice, consent or waiver under the Indenture or the Trust Agreement
provided that, in determining whether the Indenture trustee shall e protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Notes that the Indenture Trustee or the Owner Trustee knows to
be so owned shall be so disregarded. Owners of Notes that have been pledged in
good faith may be regarded as Holders if the pledgee established to the
satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Issuer, any
other obligor upon the Notes or any Affiliate of any of the foregoing Persons.
Notes: Collectively, the Term Notes and the Variable Funding Notes
-----
which are anticipated to be issued on the Closing Date pursuant to the
Indenture.
Officer's Certificate: With respect to the Master Servicer, a
---------------------
certificate signed by the President, Managing Director, a Director, a Vice
President or an Assistant Vice President, of the Master Servicer and delivered
to the Indenture Trustee. With respect to the Issuer, a certificate signed by
any Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section [10.01] of the
Indenture, and delivered to the Indenture Trustee. Unless otherwise specified,
any reference in the Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
Operating Agreement: The Agreement pursuant to which the 199_-_
-------------------
LLC is established.
Opinion of Counsel: A written opinion of counsel who may be in-house
------------------
counsel for the Master Servicer if acceptable to the Indenture Trustee, the
Credit Enhancer and the Rating Agencies or counsel for the Depositor, as the
case may be.
Outstanding: With respect to the notes, as of the date of
-----------
determination, all Notes theretofore executed, authenticated and delivered under
this Indenture except;
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes have
been executed, authenticated and delivered pursuant
21
to the Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a holder in due course;
provided, however, that for purposes of effectuating the Credit Enhancer's right
-------- -------
of subrogation as set forth in Section 4.12 of the Indenture only, all Notes
that have been paid with funds provided under the Credit Enhancement Instrument
shall be deemed to be Outstanding until the Credit Enhancer has been reimbursed
with respect thereto.
Outstanding Reserve Amount: With respect to any Payment Date, the
--------------------------
amount by which the sum of (x) the Pool Balance as of the last day of the
related Collection Period and (y) the amount on deposit in the Funding Account
in respect of Net Principal Collections, on such Payment Date exceeds the
Aggregate Security Balance on such Payment Date )after giving effect to all
amounts distributed and allocable to principal on the Securities and deposits to
and withdrawals from the Funding Account that are applied to reduce the Security
Balances on such Payment Date).
Owner Trust: The Home Equity Loan Trust 199_-_. Series 199_-_ to
-----------
be created pursuant to the Trust Agreement.
Owner Trust Estate: The corpus of the Issuer created by the Trust
------------------
Agreement which consists of the Class A Ownership Interest.
Paying Agent: Any paying agent or co-paying agent appointed pursuant
------------
to Section 3.03 of the Indenture, which initially shall be
__________________________.
Payment Account: The account established by the Indenture Trustee
---------------
pursuant to Section 8.02 of the Indenture and Section 5.01 of the Servicing
Agreement. The Payment Account shall be an Eligible Account.
Payment Date: The [20/th/] day of each month, or if such day is
------------
not a Business Day, then the next Business Day.
Percentage Interest: With respect to any Note, the percentage
-------------------
obtained by dividing the Security Balance of such Note by the aggregate of the
Security Balances of all Notes of the same Class. With respect to any
Certificate, the percentage obtained by dividing the denomination specified on
such Certificate by the Initial principal Balance of the Certificates.
Person: Any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pool Balance: With respect to any date, the aggregate of the Asset
------------
Balances of all Mortgage Loans as of such date.
22
Predecessor Note: With respect to any particular Note, every previous
----------------
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note authenticated
and delivered under Section 4.03 of the Indenture in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
Primary Insurance Policy: Each primary policy of mortgage guaranty
------------------------
insurance issued by a Qualified Insurer or any replacement policy thereof.
Prime Rate: The prime rate for corporate loans at U.S. commercial
----------
banks, as published in The Wall Street Journal.
-----------------------
Principal Balance: With respect to any Payment Date and each Security
-----------------
other than the Variable Funding Notes, the Initial Principal Balance thereof,
reduced by all distributions of principal thereon prior to such Payment Date
and, in the case of the Variable Funding Notes, (i) increased by the Aggregate
Additional Balance Differential immediately prior to such Payment Date and (ii)
reduced by all distributions of principal thereon prior to such Payment Date.
Principal Collection Distribution Amount: for any Payment Date, (i)
----------------------------------------
at any time during the Revolving Period, so long as an Amortization Event has
not occurred, Net Principal Collections and (ii) following an Amortization Event
or at any time after the end of the Revolving Period, Security Principal
Collections; provided, however, on any Payment Date with respect to which the
-------- -------
Outstanding Reserve Amount that would result if determined without regard to
this proviso exceeds the Reserve Amount Target the Principal Collection
Distribution Amount will be reduced by the amount of such excess until the
Outstanding Reserve Amount equals the Reserve Amount Target.
Principal Collections: With respect to any Payment Date and any
---------------------
Mortgage Loan, the aggregate of the following amounts;
(i) the total amount of payments made by or on behalf of the
Mortgagor, received and applied as payments of principal on the Mortgage
Loan during the related Collection Period, as reported by the related
Subservicer;
(ii) any Net Liquidation Proceeds, allocable as a recovery of
principal, received in connection with the Mortgage Loan during the
related Collection Period:
(iii) if the Mortgage Loan was purchased by the Master Servicer
pursuant to Section 3.14 of the Servicing Agreement, or was repurchased by
the Seller pursuant to the Mortgage Loan Purchase Agreement, during the
related Collection Period,
23
100% of the Asset Balance of the Mortgage Loan as of the date of such
purchase or repurchase; and
(iv) any of the amounts received as payments on or proceeds of
the Mortgage Loan during the Collection Period to the extent applied in
reduction of the principal amount thereof;
provided that Principal Collections shall not include any Foreclosure Profits,
--------
and shall be reduced by any amounts withdrawn from the Collection Account
pursuant to clauses (iii), (iv), (vii) and (viii) of Section 3.03 of the
Servicing agreement other than any portion of such amounts that are attributable
to the Excluded Amount in respect of any Mortgage Loan that are allocable to
principal of such Mortgage Loan and not otherwise excluded from the amounts
specified in (i)-(iv) above.
Proceeding: Any suit in equity, action at law or other judicial or
----------
administrative proceeding.
Program Group: With respect to any _____ Loan, the ______ Loans taken
-------------
together, with respect to any ________ Loan, the _______ Loans taken together;
and with respect to any ________ Loan, the ________ Loans taken together.
Program Guide: Together, the Seller's Seller Guide and Servicing
-------------
Guide, as in effect from time to time.
Program Seller: With respect to any ____ Loan, the Person that sold
--------------
such ______ Loan to the Seller.
Purchase Seller: With respect to any ______ Loan,
---------------
the Person that sold such ______ Loan to the Seller.
Purchase Price: The meaning specified in Section
--------------
2.2(a) of the Mortgage Loan Purchase Agreement.
Purchaser:_______________, a Delaware corporation,
---------
and its successors and assigns.
Qualified Insurer: A mortgage guaranty insurance company duly
-----------------
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as
an insurer by the Master Servicer and as a FNMA-approved mortgage insurer.
Rating Agency: Any nationally recognized statistical rating
-------------
organization, or its successor, that rated the Securities at the request of the
Depositor at the time of the initial
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issuance of the Securities. Initially, Xxxxx'x or Standard & Poor's. If such
organization or a successor is no longer in existence, "Rating Agency" shall be
such nationally recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation shall be given
to the Indenture Trustee. References herein to the highest short term unsecured
rating category of a Rating Agency shall mean A-1 or better in the case of
Standard & Poor's and P-1 or better in the case of Xxxxx'x and in the case of
any other Rating Agency shall mean such equivalent ratings. References herein to
the highest long-term rating category of a Rating Agency shall mean "AAA" in the
case of Standard & Poor's and "Aaa" in the case of Xxxxx'x and in the case of
any other Rating Agency, such equivalent rating.
Realized Losses: Any losses incurred on defaulted HELOCs that have
---------------
been finally liquidated.
Record Date: With respect to the Term Notes and any Payment Date, the
-----------
Business Day next preceding such Payment Date and with respect to the
Certificates or the Variable Funding Notes and any Payment Date, the last
Business Day of the month preceding the month of such Payment Date.
Reference Bank Rate: With respect to any Interest Period, as follows:
-------------------
the arithmetic mean (rounded upwards, if necessary, to the nearest one sixteenth
or a percent) of the offered rates for United States dollar deposits for one
month which are offered by the Reference Banks as of 11:00 A.M., __________,
________ time, on the second LIBOR Business Day prior to the first day of such
Interest Period to prime banks in the London interbank market for a period of
one month in amounts approximately equal to the sum of the Outstanding Amount of
Notes and the Certificate Principal Balance; provided that at least two such
--------
Reference Banks provide such rate. If fewer than two offered rates appear, the
Reference Bank Rate will be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by the Depositor after consultation
with the Indenture Trustee, as of 11:00 a.m., _______, [Illinois] time, on such
date for loans in U.S. Dollars to leading European Banks for a period of one
month in amounts approximately equal to the Aggregate Security Balance. If no
such quotations can be obtained, the Reference Bank Rate shall be the Reference
Bank Rate applicable to the preceding Interest Period.
Reference Banks: [Bank of Tokyo, Barclays Bank PLC, National
---------------
Westminster Bank and Bankers Trust company].
Registered Holder: The person in whose name a Note is registered
-----------------
in the Note Register on the applicable Record Date.
Related Documents: With respect to each Mortgage Loan, the documents
-----------------
specified in Section 2.1(c) of the Mortgage Loan Purchase Agreement and any
documents required to be added to such documents pursuant to the Mortgage Loan
Purchase Agreement, the Trust agreement or the Servicing Agreement.
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REO: A Mortgage Property that is acquired by the 199_-_ LLC in
---
foreclosure or by deed in lieu of foreclosure.
Repurchase Event: With respect to any Mortgage Loan, either (i) a
----------------
discovery that, as of the Closing Date with respect to an Initial Loan, or as of
the related Deposit Date with respect to an Additional Loan, as applicable, the
related Mortgage was not a valid lien on the related Mortgaged Property subject
only to (A) the lien of any prior mortgage indicated on the Mortgage Loan
Schedule, (B) the lien of real property taxes and assessments not yet due and
payable, (C) covenants, conditions, and restrictions, rights of way, easements
and other matters of public record as of the date of recording of such Mortgage
and such other permissible title exceptions as are listed in the Program Guide
and (D) other matters to which like properties are commonly subject which do not
materially adversely affect the value, use, enjoyment or marketability of the
related Mortgaged Property or (ii) with respect to any Mortgage Loan as to which
the Seller delivers an affidavit certifying that the original Mortgage Note has
been lost or destroyed, a subsequent default on such Mortgage Loan if the
enforcement thereof or of the related Mortgage is materially and adversely
affected by the absence of such original Mortgage Note.
Repurchase Price: With respect to any Mortgage Loan required to be
----------------
repurchased on any date pursuant to the Mortgage Loan Purchase Agreement or
purchased by the Master Servicer pursuant to the Servicing Agreement, an amount
equal to the sum of (i) 100% of the Asset Balance thereof (without reduction for
any amounts charged off) and (ii) unpaid accrued interest at the Loan Rate on
the outstanding principal balance thereof from the Due Date to which interest
was last paid by the Mortgagor to the first day of the month following the month
of purchase. No portion of any Repurchase Price shall be included in the
Excluded Amount for any Payment Date.
Revolving Period: The period commencing on the Closing date and
----------------
ending on _____________.
Reserve Amount Target: As to any Payment Date prior to the Payment
---------------------
Date in _________, 1.5% of the greater of (i) the Pool Balance as of the Cut-Off
Date and (ii) the Maximum Pool Balance as of the end of the Related Collection
Period (the "Initial Reserve Amount Target"). As to any Payment Date on or
after the Payment Date in _____, the greater of (A) the lesser of (x) the
Initial Reserve Amount Target and (y) [3]% of the Pool Balance as of the end of
the related Collection Period and (B) [0.75]% of the greater of (i) the Pool
balance as of the end of the Cut-Off Date and (ii) the Maximum Pool Balance;
provided, any scheduled reduction to the Reserve Amount Target described above
shall not be made as of any Payment Date unless (i) the outstanding Principal
Balance of the Mortgage Loans delinquent 60 days or more averaged over the last
12 months as a percentage of the aggregate outstanding Principal Balance of all
Mortgage Loans averaged over the last 12 month does not exceed [2]% (or if the
Pool Balance is less than [40%] of the Maximum Pool balance, [4%]) and (ii)
aggregate Liquidated Loss Amounts on the Mortgage Loans to date for such Payment
Date occurring during the first two years after the Closing Date or occurring
during the 3/rd/, 4/th/, 5/th/, or 6/th/ (or any year thereafter) after the
Closing Date, are less than {.5], [1.0], [1.5], [2.0] or [2.5]% respectively, of
the Maximum Pool Balance and (iii) there has been no draw on the Credit
Enhancement instrument. The Reserve Amount Target may be reduced with the prior
written consent of the Credit Enhancer and the Rating Agencies.
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Responsible Officer: With respect to the Indenture Trustee, any
-------------------
officer of the Indenture Trustee with direct responsibility for the
administration of the Trust Agreement and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
Revolving Period: With respect to each Mortgage Loan, the period
----------------
consisting of either the first five, ten or fifteen years after the date of
origination of such Mortgage Loan, during which the related Mortgage Note
provides for monthly payments of interest only with no payments of principal
(except with respect to certain Mortgage Loans that require non-amortizing
minimum payments of principal) and during which the Mortgagor is permitted to
make Draws.
Schedule Annex: With respect to any Additional Loans, the schedule
--------------
provided by the Seller to the Depositor or its assignee pursuant to Section 2.3
of the Mortgage Loan Purchase Agreement, which shall include all items of
information of the type shown on, and shall be deemed to be incorporated in, the
Mortgage Loan Schedule.
Securities Act: The Securities Act of 1933, as
--------------
amended, and the rules and regulations promulgated thereunder.
Security: Any of the Certificates or Notes.
--------
Security Balance: The Principal Balance of the Term Notes, the
----------------
Variable Funding Notes or the Certificates, as the case may be.
Security Collections: With respect to any Payment
--------------------
Date, the sum of the following amounts:
(i) the aggregate of all Security Interest Collections received
during the related Collection Period [plus net investment earnings or
amounts on deposit in the Funding Account]:
(ii) (A) at any time during the Revolving Period, so long as an
Amortization Event has not occurred, Net Principal Collections for such
Payment Date or (B) if such an Amortization Event has occurred or at any
time after the end of the Revolving Period, the aggregate of all Security
Principal Collections with respect to such Payment date; and
(iii) all
Substitution Adjustment Amounts to be deposited to the Payment Account for
such Payment Date.
Securityholder or Holder: Any Noteholder or a Certificateholder.
-------------- ------
27
Security Interest Collections: With respect to any Payment Date,
-----------------------------
Interest Collections during the related Collection Period excluding the portion
thereof allocable to the Excluded Amount.
Security Percentage: With respect to any Payment Date and Security,
-------------------
the percentage equivalent of a fraction the numerator of which is the Security
balance of such Security immediately prior to such Payment Date and the
denominator of which is the aggregate of the Security Balances of all Securities
as of such date.
Security Principal Collections: With respect to any Payment Date,
------------------------------
Principal Collections during the related Collection Period excluding the portion
thereof allocable to the Excluded Amount.
Seller: _______________, a Delaware corporation, and its successors
------
and assigns.
Seller's Agreement: With respect to each ________ Loan, the agreement
------------------
between the Seller, as purchaser, and the related Program Seller, as seller.
Servicing Agreement: The Servicing Agreement dated as of ________
-------------------
between _________________ _________, as Indenture Trustee, and the Master
Servicer, as master servicer.
Servicing Certificate: A certificate completed and executed by a
-----------------------
Servicing Officer on behalf of the Master Servicer in accordance with Section
4.01 of the Servicing agreement.
Servicing Fee: With respect to any Mortgage Loan, the sum of the
-------------
related Mater Servicing Fee and the related Subservicing Fee.
Servicing Fee Rate: With respect to any Mortgage Loan, the sum of the
------------------
related Master Servicing Fee rate and the related Subservicing Fee Rate.
Servicing Officer: Any officer of the Master Servicer involved in,
-----------------
or responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Indenture Trustee (with a copy to the Credit Enhancer) by the Master
Servicer, as such list may be amended from time to time.
Single Certificate: A Certificate in the denomination of $1,000.
------------------
Single Note: A Note in the amount of $1,000.
-----------
28
Special Capital Distribution Amount: With respect to any payment
-----------------------------------
Date, the lesser of (x) the amount remaining in the Payment Account after the
application of funds on deposit therein in accordance with clauses (i) through
(vi) of Section 3.05 of the Indenture and (y) the amount required to bring the
Outstanding Revenue Amount up to the Reserve Amount Target
Standard & Poor's: Standard & Poor's Ratings Group or its successor
-----------------
in interest.
Subservicer: Any Person with whom the Master Servicer has entered
-----------
into a Subservicing Agreement as a Subservicer by the Master Servicer, including
the Initial Subservicers.
Subservicing Account: An Eligible Account established or maintained
--------------------
by a Subservicer as provided for in Section 3.01 of the Servicing Agreement.
Subservicing Fee: With respect to any ______ Loan and nay Collection
----------------
Period, the fee retained monthly by the Subservicer (or, in the case of a
nonsubserviced Mortgage Loan, by the Master Servicer) equal to the product of
(i) the Subservicing Fee Rate divided by 12 and (ii) the aggregate Asset Balance
of the _____ Loans as of the first day of such Collection Period. With respect
to any _____ Loan and any Collection Period, the fee retained monthly by the
Subservicer (or, in the case of a nonsubserviced Mortgage Loan, by the Master
Servicer) equal to the product of (i) the Subservicing Fee Rate divided by 12
and (ii) the aggregate Asset Balance of the _____ Loans as of the first day of
such collection Period. With respect to any _______ loan and any Collection
Period, the fee retained monthly by the Subservicer (or, in the case of a
nonsubserviced Mortgage Loan, by the Master Servicer) equal to (i) the weighted
average of the applicable Subservicing Fee Rates divided by 12 and (ii) the
aggregate Asset Balance of the ______ Loans as of the first day of such
Collection Period.
Subservicing Fee Rate: With respect to _________ Loan, 0.50% per
---------------------
annum.
Substitution Adjustment Amounts: With respect to any Eligible
-------------------------------
Substitute Mortgage Loan, the amount as defined in Section 3.1(b) of the
Mortgage Loan Purchase Agreement.
Teaser Loan: With respect to the Additional Loans, any Mortgage Loan
-----------
which provides for an initial period during which the Loan Rate is less than the
sum of the current Index plus the applicable Gross Margin.
Telerate Screen Page 3750: The display designated as page 3750 on the
-------------------------
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks).
If such rate does not appear on such page ( or such other page as may replace
that page on that service, or if such service is no longer offered, such other
service for displaying LIBOR or comparable rates as may be selected by the
Issuer after consolation with the Indenture Trustee), the rate will be the
Reference Bank Rate.
29
Term Notes: The Notes designated as the "Term Notes" in the
----------
Indenture.
Treasury Regulations: Regulations, including proposed or temporary
--------------------
Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Trust Agreement: The Trust Agreement dated as of
---------------
____________ between the Owner Trustee and the Depositor.
Trust Estate: The meaning specified in the
------------
Granting Clause of the Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as
--------------------------
amended from time to time, as in effect on any relevant date.
UCC: The Uniform Commercial Code, as amended from
---
time to time, as in effect in any specified jurisdiction.
Underlying Seller: With respect to the ________ Loans, _______. With
-----------------
respect to the _______ Loans, ____. With respect to the _________ Loans, the
related Program Seller.
Unpaid Certificate Distribution Amount Shortfall: With respect to any
------------------------------------------------
Payment Date, the aggregate amount, if any, of Certificate Distribution Amount
that was accrued in respect of a prior Payment Date and has not been distributed
to Certificateholders.
Variable Funding Notes: The Notes designated as the "Variable Funding
----------------------
Notes" in the Indenture including any Capped Funding Notes and Additional
Variable Funding Notes.
Weighted Average Net Loan Rate: With respect to the Mortgage Loans in
------------------------------
the aggregate, and any Due Date, the aggregate of the Net Loan Rate for each
Mortgage Loan as of the last day of the related billing Cycle weighted on the
basis of the related Asset Balances outstanding as of the last day of the
related Billing Cycle (except for the _______ Loans where the Net Loan Rate will
represent the average Net Loan Rate during the related Billing Cycles weighted
on the basis of the daily Asset Balance during the related Billing Cycle for
such Mortgage Loans) for each Mortgage Loan as determined by the Master Servicer
in accordance with the Master Servicer's normal servicing procedures.
30
