HOME LOAN TRUST 2005-HI2
ISSUER
AND
JPMORGAN CHASE BANK, N.A.
INDENTURE TRUSTEE
INDENTURE
DATED AS OF JUNE 29, 2005
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HOME LOAN-BACKED NOTES
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TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS
Section 1.01. Definitions.................................................................2
Section 1.02. Incorporation by Reference of Trust Indenture Act...........................2
Section 1.03. Rules of Construction.......................................................2
ARTICLE II ORIGINAL ISSUANCE OF NOTES
Section 2.01. Form........................................................................3
Section 2.02. Execution, Authentication and Delivery......................................3
ARTICLE III COVENANTS
Section 3.01. Collection of Payments with respect to the Home Loans.......................4
Section 3.02. Maintenance of Office or Agency.............................................4
Section 3.03. Money for Payments To Be Held in Trust; Paying Agent........................4
Section 3.04. Existence...................................................................5
Section 3.05. Payment of Principal and Interest; Defaulted Interest.......................5
Section 3.06. Protection of Trust Estate.................................................10
Section 3.07. Opinions as to Trust Estate................................................11
Section 3.08. Performance of Obligations; Servicing Agreement............................11
Section 3.09. Negative Covenants.........................................................12
Section 3.10. Annual Statement as to Compliance..........................................12
Section 3.11. Recording of Assignments...................................................12
Section 3.12. Representations and Warranties Concerning the Home Loans...................12
Section 3.13. Reserved......................................... .........................12
Section 3.14. Reserved......................................... .........................12
Section 3.15. Investment Company Act.....................................................13
Section 3.16. Issuer May Consolidate, etc................................................13
Section 3.17. Successor or Transferee....................................................15
Section 3.18. No Other Business..........................................................15
Section 3.19. No Borrowing...............................................................15
Section 3.20. Guarantees, Loans, Advances and Other Liabilities..........................15
Section 3.21. Capital Expenditures.......................................................15
Section 3.22. Owner Trustee Not Liable for the Certificate or Related Documents..........15
Section 3.23. Restricted Payments........................................................16
Section 3.24. Notice of Events of Default................................................16
Section 3.25. Further Instruments and Acts...............................................16
Section 3.26. Statements to Noteholders..................................................16
Section 3.27. Allocation of Liquidation Loss Amounts.....................................16
Section 3.28. Reserved...................................................................17
Section 3.29. Determination of Class A-1 Note Rate.......................................17
Section 3.30. Liquidation on Final Scheduled Payment Date................................17
Section 3.31. No Recourse................................................................17
Section 3.32. Additional UCC Representations and Warranties..............................17
ARTICLE IV THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01. The Notes..................................................................19
Section 4.02. Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate Registrar.......................................19
Section 4.03. Xxxxxxxxx, Xxxxxxxxx, Lost or Stolen Notes.................................21
Section 4.04. Persons Deemed Owners......................................................21
Section 4.05. Cancellation...............................................................21
Section 4.06. Book-Entry Notes...........................................................22
Section 4.07. Notices to Depository......................................................23
Section 4.08. Definitive Notes...........................................................23
Section 4.09. Tax Treatment..............................................................23
Section 4.10. Satisfaction and Discharge of Indenture....................................23
Section 4.11. Application of Trust Money.................................................24
Section 4.12. Reserved...................................................................24
Section 4.13. Repayment of Monies Held by Paying Agent...................................25
Section 4.14. Temporary Notes............................................................25
ARTICLE V DEFAULT AND REMEDIES
Section 5.01. Events of Default..........................................................26
Section 5.02. Acceleration of Maturity; Rescission and Annulment.........................26
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee....................................................................26
Section 5.04. Remedies; Priorities.......................................................28
Section 5.05. Optional Preservation of the Trust Estate..................................30
Section 5.06. Limitation of Suits........................................................30
Section 5.07. Rights of Noteholders to Receive Principal and Interest....................31
Section 5.08. Restoration of Rights and Remedies.........................................31
Section 5.09. Rights and Remedies Cumulative.............................................31
Section 5.10. Delay or Omission Not a Waiver.............................................31
Section 5.11. Control by Noteholders.....................................................31
Section 5.12. Waiver of Past Defaults....................................................32
Section 5.13. Undertaking for Costs......................................................32
Section 5.14. Waiver of Stay or Extension Laws...........................................32
Section 5.15. Sale of Trust Estate.......................................................33
Section 5.16. Action on Notes............................................................34
ARTICLE VI THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee................................................36
Section 6.02. Rights of Indenture Trustee................................................37
Section 6.03. Individual Rights of Indenture Trustee.....................................37
Section 6.04. Indenture Trustee's Disclaimer.............................................37
Section 6.05. Notice of Event of Default.................................................37
Section 6.06. Reports by Indenture Trustee to Holders....................................37
Section 6.07. Compensation and Indemnity.................................................38
Section 6.08. Replacement of Indenture Trustee...........................................38
Section 6.09. Successor Indenture Trustee by Merger......................................39
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee..........39
Section 6.11. Eligibility; Disqualification..............................................40
Section 6.12. Preferential Collection of Claims Against Issuer...........................41
Section 6.13. Representations and Warranties.............................................41
Section 6.14. Directions to Indenture Trustee............................................41
Section 6.15. Indenture Trustee May Own Securities.......................................42
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders................................................................43
Section 7.02. Preservation of Information; Communications to Noteholders.................43
Section 7.03. Reports by Issuer..........................................................43
Section 7.04. Reports by Indenture Trustee...............................................43
Section 7.05. Exchange Act Reporting.....................................................44
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money........................................................45
Section 8.02. Trust Accounts.............................................................45
Section 8.03. Officer's Certificate......................................................45
Section 8.04. Termination Upon Distribution to Noteholders...............................45
Section 8.05. Release of Trust Estate....................................................46
Section 8.06. Surrender of Notes Upon Final Payment......................................46
ARTICLE IX SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.....................47
Section 9.02. Supplemental Indentures With Consent of Noteholders........................48
Section 9.03. Execution of Supplemental Indentures.......................................50
Section 9.04. Effect of Supplemental Indenture...........................................50
Section 9.05. Conformity with Trust Indenture Act........................................50
Section 9.06. Reference in Notes to Supplemental Indentures..............................50
ARTICLE X MISCELLANEOUS
Section 10.01.Compliance Certificates and Opinions, etc..................................51
Section 10.02.Form of Documents Delivered to Indenture Trustee...........................52
Section 10.03.Acts of Noteholders........................................................53
Section 10.04.Notices, etc., to Indenture Trustee, Issuer and Rating Agencies............53
Section 10.05.Notices to Noteholders; Waiver.............................................54
Section 10.06.Alternate Payment and Notice Provisions....................................55
Section 10.07.Conflict with Trust Indenture Act..........................................55
Section 10.08.Effect of Headings.........................................................55
Section 10.09.Successors and Assigns.....................................................55
Section 10.10.Separability...............................................................55
Section 10.11.Benefits of Indenture......................................................55
Section 00.00.Xxxxx Holidays.............................................................55
Section 10.13.GOVERNING LAW..............................................................55
Section 10.14.Counterparts...............................................................55
Section 10.15.Recording of Indenture.....................................................56
Section 10.16.Issuer Obligation..........................................................56
Section 00.00.Xx Petition................................................................56
Section 10.18.Inspection.................................................................56
Signatures and Seals
Acknowledgments
EXHIBITS
Exhibit A-1 Form of Class A Notes
Exhibit A-2 Form of Class M Notes
Exhibit B Form of Back-up Certification to Form 10-K Certificate
Appendix A Definitions
This is the Indenture, dated as of June 29, 2005, between HOME LOAN
TRUST 2005-HI2, a Delaware statutory trust, as Issuer (the "Issuer"), and
JPMorgan Chase Bank, N.A., as Indenture Trustee (the "Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Issuer's Series
2005-HI2 Home Loan-Backed Notes (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 Home Loans, (b) all funds on deposit from time to time in the Payment
Account and in all proceeds thereof; and (c) all present and future claims,
demands, causes and choses in action in respect of any or all of the foregoing
and all payments on or under, and all proceeds of every kind and nature
whatsoever in respect of, any or all of the foregoing and all payments on or
under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The 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.
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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 Notes, together with the Indenture Trustee's certificate
of authentication, shall be in substantially the form set forth in Exhibit A-1
and A-2, 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
Exhibit 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
Notes for original issue in an aggregate initial principal amount of $78,315,000
with respect to the Class A-1 Notes, $20,999,000 with respect to the Class A-2
Notes, $43,781,000 with respect to the Class A-3 Notes, $15,951,000 with respect
to the Class A-4 Notes, $28,154,000 with respect to the Class A- 5 Notes,
$9,000,000 with respect to the Class M-1 Notes, $7,800,000 with respect to the
Class M-2 Notes, $7,200,000 with respect to the Class M-3 Notes, $6,000,000 with
respect to the Class M-4 Notes, $5,400,000 with respect to the Class M-5 Notes,
$4,200,00 with respect to the Class M-6 Notes, $4,800,000 with respect to the
Class M-7 Notes, $5,160,000 with respect to the Class M-8 Notes and $3,240,000
with respect to the Class M-9 Notes.
The Notes shall be dated the date of their authentication. The Notes
shall be issuable as registered Notes. The Class A Notes and the Class M-1 Notes
shall be issuable in the minimum initial Note Balances of $25,000 and in
integral multiples of $1 in excess thereof. The Class M-2 Notes, Class M-3
Notes, Class M-4 Notes, Class M-5 Notes, Class M-6 Notes, Class M-7 Notes, Class
M-8 Notes and Class M-9 Notes shall be issuable in the minimum initial Note
Balances of $250,000 and in integral multiples of $1 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
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ARTICLE III
COVENANTS
Section 3.01. Collection of Payments with respect to the Home Loans. The
Indenture Trustee shall establish and maintain with itself 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 Home Loans. The
Indenture Trustee shall make all payments of principal of and interest on the
Notes, subject to Section 3.03, as provided in Section 3.05 herein from monies
on deposit in the Payment Account.
Section 3.02. Maintenance of Office or Agency. The Issuer will maintain in 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 written notice of any default by the Issuer of
which it has actual knowledge in the making of any payment required to be made
with respect to the Notes;
(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;
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(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; and
(vi) deliver to the Indenture Trustee a copy of the report to Noteholders
prepared with respect to each Payment Date by the Master Servicer pursuant to
Section 4.01 of the Servicing Agreement.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the 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, 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 statutory trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Home Loans 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 (other than amounts
deposited constituting prepayment charges), the Paying Agent shall pay to the
Noteholders, the Certificate Paying Agent on behalf of the Certificateholder and
to other Persons the amounts to which they are entitled, as set forth in the
statements delivered to the Indenture Trustee pursuant to Section 4.01 of the
Servicing Agreement, as set forth in this Section 3.05.
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(b) On each Payment Date, Interest Collections shall be distributed to the Notes
in the following order of priority:
(i) first, to the Senior Notes, Accrued Note Interest on that Class for such
Payment Date, plus any unpaid Accrued Note Interest remaining unpaid from any
prior Payment Date, pro rata, to the extent of the Interest Collections for that
Payment Date as provided in clause (c) below;
(ii) second, to the Class M-1 Notes, Accrued Note Interest on that Class for
such Payment Date, plus any unpaid Accrued Note Interest remaining unpaid from
any prior Payment Date, to the extent of Interest Collections for the Payment
Date after distributions of interest to the Senior Notes;
(iii) third, to the Class M-2 Notes, Accrued Note Interest on that Class for
such Payment Date, plus any unpaid Accrued Note Interest remaining unpaid from
any prior Payment Date, to the extent of Interest Collections for the Payment
Date after distributions of interest to the Senior Notes and the Class M-1
Notes;
(iv) fourth, to the Class M-3 Notes, Accrued Note Interest on that Class for
such Payment Date, plus any unpaid Accrued Note Interest remaining unpaid from
any prior Payment Date, to the extent of Interest Collections for the Payment
Date after distributions of interest to the Senior Notes, the Class M-1 Notes
and the Class M-2 Notes;
(v) fifth, to the Class M-4 Notes, Accrued Note Interest on that Class for such
Payment Date, plus any unpaid Accrued Note Interest remaining unpaid from any
prior Payment Date, to the extent of Interest Collections for the Payment Date
after distributions of interest to the Senior Notes, the Class M-1 Notes, the
Class M-2 Notes and the Class M-3 Notes;
(vi) sixth, to the Class M-5 Notes, Accrued Note Interest on that Class for such
Payment Date, plus any unpaid Accrued Note Interest remaining unpaid from any
prior Payment Date, to the extent of Interest Collections for the Payment Date
after distributions of interest to the Senior Notes, the Class M-1 Notes, the
Class M-2 Notes, the Class M-3 Notes and the Class M-4 Notes;
(vii) seventh, to the Class M-6 Notes, Accrued Note Interest on that Class for
such Payment Date, plus any unpaid Accrued Note Interest remaining unpaid from
any prior Payment Date, to the extent of Interest Collections for the Payment
Date after distributions of interest to the Senior Notes, the Class M-1 Notes,
the Class M-2 Notes, the Class M-3 Notes, the Class M-4 Notes and the Class M-5
Notes;
(viii) eighth, to the Class M-7 Notes, Accrued Note Interest on that Class for
such Payment Date, plus any unpaid Accrued Note Interest remaining unpaid from
any prior Payment Date, to the extent of Interest Collections for the Payment
Date after distributions of interest to the Senior Notes, the Class M-1 Notes,
the Class M-2 Notes, the Class M-3 Notes, the Class M-4 Notes, the Class M-5
Notes and the Class M-6 Notes;
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(ix) ninth, to the Class M-8 Notes, Accrued Note Interest on that Class for such
Payment Date, plus any unpaid Accrued Note Interest remaining unpaid from any
prior Payment Date, to the extent of Interest Collections for the Payment Date
after distributions of interest to the Senior Notes, the Class M-1 Notes, the
Class M-2 Notes, the Class M-3 Notes, the Class M-4 Notes, the Class M-5 Notes,
the Class M-6 Notes and the Class M-7 Notes; and
(x) tenth, to the Class M-9 Notes, Accrued Note Interest on that Class for such
Payment Date, plus any unpaid Accrued Note Interest remaining unpaid from any
prior Payment Date, to the extent of Interest Collections for the Payment Date
after distributions of interest to the Senior Notes, the Class M-1 Notes, the
Class M-2 Notes, the Class M-3 Notes, the Class M-4 Notes, the Class M-5 Notes,
the Class M-6 Notes, the Class M-7 Notes and the Class M-8 Notes.
(c) On each Payment Date, other than the Payment Date in May 2035, the Principal
Distribution Amount shall be distributed in the following order of priority:
(i) first, the Senior Principal Distribution Amount shall be distributed to the
Class A Notes in the manner and priority set forth below;
(ii) second, the Class M-1 Principal Distribution Amount shall be distributed to
the Class M-1 Notes until the Note Balance thereof has been reduced to zero;
(iii) third, the Class M-2 Principal Distribution Amount shall be distributed to
the Class M-2 Notes until the Note Balance thereof has been reduced to zero;
(iv) fourth, the Class M-3 Principal Distribution Amount shall be distributed to
the Class M-3 Notes until the Note Balance thereof has been reduced to zero;
(v) fifth, the Class M-4 Principal Distribution Amount shall be distributed to
the Class M-4 Notes until the Note Balance thereof has been reduced to zero;
(vi) sixth, the Class M-5 Principal Distribution Amount shall be distributed to
the Class M-5 Notes until the Note Balance thereof has been reduced to zero;
(vii) seventh, the Class M-6 Principal Distribution Amount shall be distributed
to the Class M-6 Notes until the Note Balance thereof has been reduced to zero;
(viii) eighth, the Class M-7 Principal Distribution Amount shall be distributed
to the Class M-7 Notes until the Note Balance thereof has been reduced to zero;
(ix) ninth, the Class M-8 Principal Distribution Amount shall be distributed to
the Class M-8 Notes until the Note Balance thereof has been reduced to zero;
(x) tenth, the Class M-9 Principal Distribution Amount shall be distributed to
the Class M-9 Notes until the Note Balance thereof has been reduced to zero; and
(xi) eleventh, the balance, if any, remaining of the Principal Distribution
Amount after the distributions described in clauses (i) through (x) hereof above
shall be paid to the Class M Notes in accordance with the provisions for the
payment of the Net Monthly Excess Cash Flow as described in subsection (e)
below, commencing with clause (iii) thereof.
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Any payments of principal allocable to the Class A Notes shall be paid
to the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and
Class A-5 Notes, in that order, in each case until the outstanding Note Balance
of each of these Notes has been reduced to zero.
In the event that the Class M Notes have been reduced to zero while any
Class A Note is outstanding, all priorities relating to Senior Principal
Distribution Amount referenced above will be disregarded. Instead, an amount
equal to the Senior Principal Distribution Amount will be distributed to the
Class A Notes remaining, pro rata in accordance with their respective
outstanding Note Balances.
On the Payment Date in May 2035, principal will be due and payable on
each Class of Notes in amounts equal to the related Note Balance, if any. In no
event will principal payments on any Class of Notes on any Payment Date exceed
the related Note Balance on that date.
(d) On each Payment Date, the Net Monthly Excess Cash Flow will be distributed
in the following order of priority:
(i) first, to pay the aggregate Liquidation Loss Distribution Amount for that
Payment Date to the Notes;
(ii) second, to pay the Reserve Increase Amount for that Payment Date to the
Notes;
(iii) third, to pay any Allocable Loss Interest on the Class M-1 Notes until
fully reimbursed;
(iv) fourth, to reimburse the Class M-1 Notes for Liquidation Loss Amounts
previously allocated thereto pursuant to Section 3.27 until fully reimbursed;
(v) fifth, to pay any Allocable Loss Interest on the Class M-2 Notes until fully
reimbursed;
(vi) sixth, to reimburse the Class M-2 Notes for Liquidation Loss Amounts
previously allocated thereto pursuant to Section 3.27 until fully reimbursed;
(vii) seventh, to pay any Allocable Loss Interest on the Class M-3 Notes, until
fully reimbursed;
(viii) eighth, to reimburse the Class M-3 Notes for Liquidation Loss Amounts
previously allocated thereto pursuant to Section 3.27 until fully reimbursed;
(ix) ninth, to pay any Allocable Loss Interest on the Class M-4 Notes, until
fully reimbursed;
(x) tenth, to reimburse the Class M-4 Notes for Liquidation Loss Amounts
previously allocated thereto pursuant to Section 3.27 until fully reimbursed;
(xi) eleventh, to pay any Allocable Loss Interest on the Class M-5 Notes, until
fully reimbursed;
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(xii) twelfth, to reimburse the Class M-5 Notes for Liquidation Loss Amounts
previously allocated thereto pursuant to Section 3.27 until fully reimbursed;
(xiii) thirteenth, to pay any Allocable Loss Interest on the Class M-6 Notes,
until fully reimbursed;
(xiv) fourteenth, to reimburse the Class M-6 Notes for Liquidation Loss Amounts
previously allocated thereto pursuant to Section 3.27 until fully reimbursed;
(xv) fifteenth, to pay any Allocable Loss Interest on the Class M-7 Notes, until
fully reimbursed;
(xvi) sixteenth, to reimburse the Class M-7 Notes for Liquidation Loss Amounts
previously allocated thereto pursuant to Section 3.27 until fully reimbursed;
(xvii) seventeenth, to pay any Allocable Loss Interest on the Class M-8 Notes,
until fully reimbursed;
(xviii) eighteenth, to reimburse the Class M-8 Notes for Liquidation Loss
Amounts previously allocated thereto pursuant to Section 3.27 until fully
reimbursed;
(xix) nineteenth, to pay any Allocable Loss Interest on the Class M-9 Notes,
until fully reimbursed;
(xx) twentieth, to reimburse the Class M-9 Notes for Liquidation Loss Amounts
previously allocated thereto pursuant to Section 3.27 until fully reimbursed;
and
(xxi) twenty-first, any remaining amounts will be distributed to the
Certificate.
(e) 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
Certificateholder.
(f) The amounts paid to Noteholders shall be paid to the Notes in accordance
with the applicable percentage as set forth in the definition of Note Rate.
Interest will accrue on the Notes (other than the Class A-1 Notes) on the basis
of a 360-day year consisting of twelve 30-day months. Interest will accrue on
the Class A-1 Notes on the basis of a 360-day year and the actual number of days
in the related Interest Accrual Period.
(g) Any installment of interest or principal, if any, payable on any Note that
is punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall, if such Holder holds Notes of an aggregate initial Note 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 or money order to such Noteholder mailed to such
Holder's address as it appears in the Note Register the amount required to be
distributed to such Holder on such Payment Date pursuant to such Holder's
Securities; provided, however, that the Indenture Trustee shall not pay to such
Holders any amount required to be withheld from a payment to such Holder by the
Code.
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(h) The Note Balance of each Note shall be due and payable in full on the Final
Scheduled Payment Date as provided in the related form of Note set forth in
Exhibit A-1 and A-2. All principal payments on the Notes shall be made to the
Noteholders entitled thereto in accordance with the Percentage Interests
represented by such Notes. Upon written notice to the Indenture Trustee by the
Issuer (or by the Master Servicer on behalf of the Issuer, pursuant to Section
8.08(c) of the Servicing Agreement) of the Final Scheduled Payment Date for the
Notes or other final Payment Date, the Indenture Trustee shall notify the
related Noteholders of record of the Final Scheduled Payment Date or other final
Payment Date, by mail or facsimile, no later than five Business Days prior to
the Final Scheduled Payment Date or other final Payment Date and shall specify:
(i) that the Record Date otherwise applicable to such Payment Date is not
applicable;
(ii) 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; and
(iii) the amount of any such final payment, if known.
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 Trust to enforce any of the Home Loans; and
(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.
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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 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 and filing of
this Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the lien and security interest in the Home Loans and reciting the
details of such action, or stating that, in the opinion of such counsel, no such
action is necessary to make such lien and security interest effective.
(b) On or before December 31st in each calendar year, beginning in 2006, 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, rerecording 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 Home Loans 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 Home Loans 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.
(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 Home Loans or under any
instrument included in the Trust Estate, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the documents relating to the Home Loans or
any such instrument, except such actions as the Master Servicer is expressly
permitted to take in the Servicing Agreement.
(d) The Issuer may retain an administrator and may enter into contracts with
other Persons for the performance of the Issuer's obligations hereunder, and
performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.
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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 assert any claim against any present or former
Noteholder by reason of the payment of the taxes levied or assessed upon any
part of the Trust Estate;
(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, 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 (B)
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 Home Loans, or impair
or cause to be impaired the Home Loans or the Issuer's interest in the Home
Loans, the Home 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 2005), an Officer's Certificate stating,
as to the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and of its
performance under this Indenture and the Trust Agreement has been made under
such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such review,
the Issuer has complied with all conditions and covenants under this Indenture
and the provisions of the Trust Agreement throughout such year, or, if there has
been a default in its compliance with any such condition or covenant, specifying
each such default known to such Authorized Officer and the nature and status
thereof.
Section 3.11. Recording of Assignments. The Issuer shall enforce the obligation
of the Seller under the Home Loan Purchase Agreement to submit or cause to be
submitted for recording all Assignments of Mortgages within 60 days of receipt
of recording information by the Master Servicer.
Section 3.12. Representations and Warranties Concerning the Home Loans. The
Indenture Trustee, as pledgee of the Home Loans, has the benefit of the
representations and warranties made by the Seller in Section 3.1(a) and Section
3.1(b) of the Home Loan Purchase Agreement concerning the Home Loans and the
right to enforce the remedies against the Seller provided in such Section 3.1(a)
or Section 3.1(b) to the same extent as though such representations and
warranties were made directly to the Indenture Trustee.
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Section 3.13. Assignee of Record of the Home Loans. The Issuer hereby directs
and authorizes the Indenture Trustee to hold record title to the Home Loans by
being named as payee in the endorsements of the Mortgage Notes and assignee in
the Assignments of Mortgage to be recorded under Section 2.1 of the Home Loan
Purchase Agreement. Except as expressly provided in the Home Loan Purchase
Agreement or in the Servicing Agreement with respect to any specific Home Loan,
the Indenture Trustee shall not execute any endorsement or assignment or
otherwise release or transfer such record title to any of the Home Loans until
such time as the remaining Trust Estate may be released pursuant to Section
8.05(b). The Indenture Trustee's holding of such record title shall in all
respects be subject to its fiduciary obligations to the Noteholders hereunder.
Section 3.14. Master Servicer as Agent and Bailee of the Indenture Trustee.
Solely for purposes of perfection under Section 9-305 of the Uniform Commercial
Code or other similar applicable law, rule or regulation of the state in which
such property is held by the Master Servicer, the Issuer and the Indenture
Trustee hereby acknowledge that the Master Servicer is acting as agent and
bailee of the Indenture Trustee in holding amounts on deposit in the Custodial
Account pursuant to Section 3.02 of the Servicing Agreement that are allocable
to the Home Loans, 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 Indenture Trustee, as a pledgee of
the Home Loans, 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
Servicer.
Section 3.15. Investment Company Act. The Issuer shall not become an "investment
company" or "controlled by" an investment company as such terms are defined in
the Investment Company Act of 1940, as amended (or any successor or amendatory
statute), and the rules and regulations thereunder (taking into account not only
the general definition of the term "investment company" but also any available
exceptions to such general definition); provided, however, that the Issuer shall
be in compliance with this Section 3.15 if it shall have obtained an order
exempting it from regulation as an "investment company" so long as it is in
compliance with the conditions imposed in such order.
Section 3.16. Issuer May Consolidate, etc. (a) The Issuer shall not consolidate
or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the laws
of the United States of America or any state or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form reasonably satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of and interest
on all Notes and to the Certificate Paying Agent, on behalf of the
Certificateholder 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;
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(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 to be reduced, suspended or withdrawn or
to be considered by either Rating Agency to be below investment grade;
(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 assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual payment of the
principal of and interest on all Notes and the performance or observance of
every agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agree 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
agree to indemnify, defend and hold harmless the Issuer against and from any
loss, liability or expense arising under or related to this Indenture and the
Notes and (E) expressly agree by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make all
filings with the Commission (and any other appropriate Person) required by the
Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that such transaction
shall not cause the rating of the Notes to be reduced, suspended or withdrawn;
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(iv) the Issuer shall have received an Opinion of Counsel (and shall have
delivered copies thereof to the Indenture Trustee) to the effect that such
transaction will not have any material adverse tax consequence to the Issuer or
any Noteholder;
(v) any action that is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to such transaction have
been complied with (including any filing required by the Exchange Act).
Section 3.17. Successor or Transferee. (a) Upon any consolidation or merger of
the Issuer in accordance with Section 3.16(a), the Person formed by or surviving
such consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the Issuer
pursuant to Section 3.16(b), the Issuer will be released from every covenant and
agreement of this Indenture to be observed or performed on the part of the
Issuer with respect to the Notes immediately upon the delivery of written notice
to the Indenture Trustee of such conveyance or transfer.
Section 3.18. No Other Business. The Issuer shall not engage in any business
other than financing, purchasing, owning and selling and managing the Home Loans
and the issuance of the Notes and the Certificate in the manner contemplated by
this Indenture and the Basic Documents and all activities incidental thereto.
Section 3.19. No Borrowing. The Issuer shall not issue, incur, assume, guarantee
or otherwise become liable, directly or indirectly, for any indebtedness except
for the Notes.
Section 3.20. Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by this Indenture or the Basic Documents, the Issuer shall not make
any loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
Section 3.21. Capital Expenditures. The Issuer shall not make any expenditure
(by long-term or operating lease or otherwise) for capital assets (either realty
or personalty).
Section 3.22. Owner Trustee Not Liable for the Certificate or Related Documents.
The recitals contained herein shall be taken as the statements of the Depositor,
and the Owner Trustee assumes no responsibility for the correctness thereof. The
Owner Trustee makes no representations as to the validity or sufficiency of this
Indenture, of any Basic Document or of the Certificate (other than the
signatures of the Owner Trustee on the Certificate) or the Notes, or of any
Related Documents. The Owner Trustee shall at no time have any responsibility or
liability with respect to the sufficiency of the Trust Estate or its ability to
generate the payments to be distributed to the Certificateholder under the Trust
15
Agreement or the Noteholders under this Indenture, including, the compliance by
the Depositor or the Seller with any warranty or representation made under any
Basic Document or in any related document or the accuracy of any such warranty
or representation, or any action of the Certificate Paying Agent, the
Certificate Registrar or the Indenture Trustee taken in the name of the Owner
Trustee.
Section 3.23. Restricted Payments. The Issuer shall not, directly or indirectly,
(i) pay any dividend or make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to
the Owner Trustee or any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest or security in or of
the Issuer, (ii) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; provided, however, that the Issuer
may make, or cause to be made, (x) distributions to the Owner Trustee and the
Certificateholder as contemplated by, and to the extent funds are available for
such purpose under the Trust Agreement, and (y) payments to the Master Servicer
pursuant to the terms of the Servicing Agreement. The Issuer will not, directly
or indirectly, make payments to or distributions from the Custodial Account
except in accordance with this Indenture and the Basic Documents.
Section 3.24. Notice of Events of Default. The Issuer shall give the Indenture
Trustee and the Rating Agencies prompt written notice of each Event of Default
hereunder, 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. On each Payment Date, the Indenture
Trustee and the Certificate Registrar shall forward by mail or otherwise make
available electronically to the Depositor, the Rating Agencies and to each
Noteholder and Certificateholder, respectively, the statement delivered to it,
on the Business Day following the related Determination Date pursuant to Section
4.01 of the Servicing Agreement.
Section 3.27. Allocation of Liquidation Loss Amounts. The subordination provided
to the Senior Notes by the Class M Notes and the subordination provided to each
class of Class M Notes by any class of Class M Notes subordinate thereto will
cover Liquidation Loss Amounts on the Home Loans. On each Payment Date, any
Liquidation Loss Amounts will be allocated as follows: first, by a payment of
the Liquidation Loss Distribution Amount, second by a reduction in the
Outstanding Reserve Amount, third, to the Class M-9 Notes, until the Note
Balance thereof has been reduced to zero; fourth, to the Class M-8 Notes, until
the Note Balance thereof has been reduced to zero; fifth, to the Class M-7
Notes, until the Note Balance thereof has been reduced to zero; sixth, to the
Class M-6 Notes, until the Note Balance thereof has been reduced to zero;
seventh, to the Class M-5 Notes, until the Note Balance thereof has been reduced
to zero; eighth, to the Class M-4 Notes, until the Note Balance thereof has been
reduced to zero; ninth, to the Class M-3 Notes, until the Note Balance thereof
has been reduced to zero; tenth, to the Class M-2 Notes, until the Note Balance
thereof has been reduced to zero; and eleventh, to the Class M-1 Notes, until
the Note Balance thereof has been reduced to zero. Liquidation Loss Amounts will
not be allocated to the Senior Notes.
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Any allocation of Liquidation Loss Amounts to a Class of Notes, shall be
made by reducing the Note Balance thereof, by the amount so allocated, which
allocation shall be deemed to have occurred on such Payment Date. All
Liquidation Loss Amounts and all other losses allocated to a Class of Notes
hereunder, will be allocated among the Notes, of such Class in proportion to the
Percentage Interests evidenced thereby.
Section 3.28. Reserved.
Section 3.29. Determination of Class A-1 Note Rate. On the second LIBOR Business
Day immediately preceding (i) the Closing Date in the case of the first Interest
Accrual Period and (ii) the first day of each succeeding Interest Accrual
Period, the Indenture Trustee shall determine LIBOR and the Note Rate for the
Class A-1 Notes for such Interest Accrual Period and shall inform the Issuer,
the Master Servicer and the Depositor at their respective facsimile numbers
given to the Indenture Trustee in writing. All determinations of LIBOR by the
Indenture Trustee shall, in the absence of manifest error, be conclusive for all
purposes, and each holder of a Class A-1 Note, by accepting its Class A-1 Note,
agrees to be bound by such determination.
Section 3.30. Liquidation on Final Scheduled Payment Date. On the Final
Scheduled Payment Date, if the Notes are not paid in full on or prior to the
Final Scheduled Payment Date, the Indenture Trustee shall take full account of
the assets and liabilities of the Owner Trust, shall liquidate the assets, in a
commercially reasonable manner and on commercially reasonable terms, as promptly
as is consistent with obtaining the fair value thereof and in accordance with
Section 5.15, and shall apply and distribute the proceeds therefrom in the order
of priority described in Section 3.05(c).
Section 3.31. No Recourse. Upon the occurrence of an Event of Default under the
Notes, this Indenture or the other Basic Documents, Holders of the Notes shall
have recourse only to the Collateral and all proceeds thereof, as and to the
extent provided herein, and no recourse shall be had by such Holders against the
Issuer or its other assets or properties.
Section 3.32. Additional UCC Representations and Warranties. The Issuer hereby
represents and warrants that:
(i) this Agreement creates a valid and continuing security interest (as defined
in the applicable UCC) in the Trust Estate in favor of the Indenture Trustee on
behalf of the Holders of the Notes, which security interest is prior to all
other liens, and is enforceable as such as against creditors of the Issuer.
(ii) the Issuer owns and has good and marketable title to the Trust Estate free
and clear of any lien, claim or encumbrance of any Person.
(iii) the Issuer will cause the filing of all appropriate financing statements
in the proper filing office in the appropriate jurisdictions under applicable
law within 10 days of the Closing Date in order to perfect the security interest
in the Trust Estate granted to the Indenture Trustee on behalf of the Holders of
the Notes.
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(iv) other than the security interest granted to the Indenture Trustee on behalf
of the Holders of the Notes pursuant to the Basic Documents, the Issuer has not
pledged, assigned, sold, granted a security interest in, or otherwise conveyed
any of the Trust Estate. The Issuer is not aware of any judgment or tax lien
filings against it. The Issuer has not authorized the filing of and is not aware
of any financing statements against the Issuer that include a description of
collateral covering the Trust Estate other than any financing statement (i)
relating to the security interest granted to Indenture Trustee on behalf of the
Holders of the Notes hereunder or (ii) that has been terminated.
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ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01. The Notes. The Notes shall be registered in the name of a nominee
designated by the Depository. Beneficial Owners will hold interests in the Notes
as set forth in Section 4.06 herein. The minimum initial Note Balances with
respect to the Class A Notes and the Class M-1 Notes shall be $25,000 and
integral multiples of $1 in excess thereof, with respect to the Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Notes
shall be $250,000 and integral multiples of $1 in excess thereof.
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Notes for the
purposes of exercising the rights of Holders of Notes hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the 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 Notes
as to which they are the Beneficial Owners. Requests and directions from, and
votes of, the Depository as Holder of the 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 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.
Section 4.02. Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate Registrar. The Issuer shall cause to be kept at the
Indenture Trustee's 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 Issuer shall execute and the Note Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes in authorized initial Note Balances evidencing the same aggregate
Percentage Interests.
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Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged for other Notes of like tenor, in authorized initial Note Balances
evidencing the same aggregate Percentage Interests upon surrender of the Notes
to be exchanged at the Corporate Trust Office of the Note Registrar. Whenever
any Notes are so surrendered for exchange, the Issuer shall execute and the Note
Registrar shall authenticate and deliver the Notes which the Noteholder making
the exchange is entitled to receive. Each Note presented or surrendered for
registration of transfer or exchange shall (if so required by the Note
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed by,
the 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 obligations, and will be entitled to
the same rights and privileges, as the Notes surrendered.
No service charge shall be imposed for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall be
cancelled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate
Registrar to keep at its 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 the Certificate and of transfers and exchanges thereof pursuant
to Section 3.05 of the Trust Agreement. The Indenture Trustee hereby accepts
such appointment.
Each purchaser of a Note, by its acceptance of the Note, shall be deemed
to have represented that either (i) it is not a Plan nor is it acquiring a Note
with Plan Assets or (2) the acquisition of such Note by the purchaser does not
constitute or give rise to a prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code, for which no statutory, regulatory or
administrative exemption is available.
The Notes may not be purchased with the assets of an ERISA plan if the
Depositor, the Master Servicer, the owner of the Certificate, the Indenture
Trustee, the Owner Trustee or any of their Affiliates:
(i) has investment or administrative discretion with respect to the ERISA plan's
assets;
(ii) has authority or responsibility to give, or regularly gives, investment
advice regarding the ERISA plan's assets, for a fee and under an agreement or
understanding that the advice will serve as a primary basis for investment
decisions regarding the ERISA plan's assets and will be based on the particular
investment needs for the ERISA plan; or
(iii) is an employer maintaining or contributing to the ERISA plan.
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Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated
Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, and
(ii) there is delivered to the Indenture Trustee such security or indemnity as
may be required by it to hold the Issuer and the Indenture Trustee harmless,
then, in the absence of notice to the Issuer, the Note Registrar or the
Indenture Trustee that such Note has been acquired by a bona fide purchaser, and
provided that the requirements of Section 8- 405 of the UCC are met, the Issuer
shall execute, and upon its request the Indenture Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a replacement Note; provided, however, that if any such destroyed,
lost or stolen Note, but not a mutilated Note, shall have become or within seven
days shall be due and payable, instead of issuing a replacement Note, the Issuer
may pay such destroyed, lost or stolen Note when so due or payable without
surrender thereof. If, after the delivery of such replacement Note or payment of
a destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
and the Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was delivered or
any assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder. The
provisions of this Section 4.03 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes.
Section 4.04. Persons Deemed Owners. Prior to due presentment for registration
of transfer of any Note, the Issuer, the Indenture Trustee and any agent of the
Issuer or the Indenture Trustee may treat the Person in whose name any Note is
registered (as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
none of the Issuer, the Indenture Trustee or any agent of the Issuer or the
Indenture Trustee shall be affected by notice to the contrary.
Section 4.05. Cancellation. All Notes surrendered for payment, registration of
transfer, exchange or redemption shall, if surrendered to any Person other than
the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section 4.05, except as expressly permitted by
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this Indenture. All cancelled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Request that they
be destroyed or returned to it; provided however, that such Issuer Request is
timely and the Notes have not been previously disposed of by the Indenture
Trustee.
Section 4.06. Book-Entry Notes. Each Class of Notes shall initially be issued as
one or more Notes held by the Book-Entry Custodian or, if appointed to hold such
Notes as provided below, the Depository Trust Company, the initial Depository,
and registered in the name of its nominee Cede & Co. Except as provided below,
registration of such Notes may not be transferred by the Indenture Trustee
except to another Depository that agrees to hold such Notes for the respective
Beneficial Owners. The Indenture Trustee is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and, if it is no longer qualified
to act as such, the Book-Entry Custodian shall, appoint, by a written instrument
delivered to the Depositor, the Master Servicer and, if the Indenture Trustee is
not the Book-Entry Custodian, the Indenture Trustee, any other transfer agent
(including the Depository or any successor Depository) to act as Book-Entry
Custodian under such conditions as the predecessor Book-Entry Custodian and the
Depository or any successor Depository may prescribe, provided that the
predecessor Book-Entry Custodian shall not be relieved of any of its duties or
responsibilities by reason of any new appointment, except if the Depository is
the successor to the Book-Entry Custodian. If the Indenture Trustee resigns or
is removed in accordance with the terms hereof, the successor trustee or, if it
so elects, the Depository shall immediately succeed to its predecessor's duties
as Book-Entry Custodian. The Depositor shall have the right to inspect, and to
obtain copies of, any Notes held as Book-Entry Notes by the Book-Entry
Custodian. 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 Notes, and shall have no
obligation to the Owners of 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 Notes and the Depository and/or the Depository
Participants. Unless and until Definitive Notes are issued pursuant to Section
4.08, the initial Depository will make Book-Entry transfers among the Depository
Participants and receive and transmit payments of principal of and interest on
the Notes to such Depository Participants; and
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(v) whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of Holders of Notes evidencing a specified percentage
of the aggregate Note Balance of the 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 Notes and has delivered such instructions to the Indenture Trustee.
Section 4.07. Notices to Depository. Whenever a notice or other communication to
the Note Holders is required under this Indenture, unless and until Definitive
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 Notes to the Depository, and shall have no
obligation to the Beneficial Owners.
Section 4.08. Definitive Notes. If (i) the Indenture Trustee determines that the
Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the Book-Entry system through the Depository or (iii) after the occurrence of an
Event of Default, Owners of Notes representing beneficial interests aggregating
at least a majority of the aggregate Note Balance of the Notes advise the
Depository in writing that the continuation of a Book-Entry system through the
Depository is no longer in the best interests of the Beneficial Owners, then the
Depository shall notify all Beneficial Owners and the Indenture Trustee of the
occurrence of any such event and of the availability of Definitive Notes to
Beneficial Owners requesting the same. Upon surrender to the Indenture Trustee
of the typewritten Notes representing the Book-Entry Notes by the Book-Entry
Custodian or the Depository, as applicable, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Depository. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and 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 be issued, with the intention that, for federal, state and local
income, single business and franchise tax purposes, the Notes will qualify as
indebtedness of the Issuer. The Issuer, by entering into this Indenture, and
each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness 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, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.11) and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes, when
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(A) either
(1) the Notes theretofore authenticated and delivered (other than (i) Notes
that have been destroyed, lost or stolen and that have been replaced or
paid as provided in Section 4.03 and (ii) Notes for whose payment money
has theretofore been deposited in trust or segregated and held in trust
by the Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.03) have been delivered to the
Indenture Trustee for cancellation; or
(2) the Notes not theretofore delivered to the Indenture Trustee for
cancellation
a. have become due and payable,
b. will become due and payable within one year, or
c. have been declared immediately due and payable pursuant to Section 5.02.
and the Issuer, in the case of a. or b. above, has irrevocably deposited
or caused to be irrevocably deposited with the Indenture Trustee cash or
direct obligations of or obligations guaranteed by the United States of
America (which will mature prior to the date such amounts are payable),
in trust for such purpose, in an amount sufficient to pay and discharge
the entire indebtedness on such Notes 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
(C) the Issuer has delivered to the Indenture Trustee an Officer's Certificate
and an Opinion of Counsel, each meeting the applicable requirements of Section
10.01 and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with and, if the Opinion of Counsel relates to a deposit made in connection with
Section 4.10(A)(2)b. above, such opinion shall further be to the effect that
such deposit will not have any material adverse tax consequences to the Issuer,
any Noteholders or any Certificateholder.
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. Reserved.
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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 Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
Section 4.14. Temporary Notes. Pending the preparation of any Definitive Notes,
the Issuer may execute and upon its written direction, the Indenture Trustee may
authenticate and make available for delivery, temporary Notes that are printed,
lithographed, typewritten, photocopied or otherwise produced, in any
denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to
be prepared without unreasonable delay. After the preparation of the Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Indenture
Trustee, without charge to the 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. The Issuer shall deliver to the Indenture
Trustee within five calendar days after learning of the occurrence 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" written
notice in the form of an Officer's Certificate of its status and what action the
Issuer is taking or proposes to take with respect thereto.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of
Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Holders of Notes representing not less than a majority
of the aggregate Note Balance 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 Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Holders of Notes representing a
majority of the aggregate Note Balance of all Notes, by written notice to the
Issuer and the Indenture Trustee may in writing waive the related Event of
Default and rescind and annul such declaration and its consequences if:
(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
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation,
expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of
the principal of the Notes that has become due
solely by such acceleration, have been cured or
waived as provided in Section 5.12.
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) Subject to Section 3.31, the Issuer covenants that if default in the payment
of (i) any interest on any Note when the same becomes due and payable, and such
default continues for a period of five days, or (ii) the principal of or any
installment of the principal of any Note when the same becomes due and payable,
the Issuer shall, upon demand of the Indenture Trustee, pay to it, for the
benefit of the Holders of Notes, 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.
26
(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 upon 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, by such appropriate Proceedings as the
Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other obligor
upon the Notes or any Person having or claiming an ownership interest in the
Trust Estate, Proceedings under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or other similar law, or in
case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, 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, willful
misconduct or bad faith) and of the Noteholders allowed in such Proceedings;
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(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, willful misconduct or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Indenture Trustee to vote in respect of the claim of any Noteholder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the 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, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such Notes
monies adjudged due;
28
(ii) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take any other
appropriate action to protect and enforce the rights and remedies of the
Indenture Trustee and the Holders of the Notes;
(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 Note Balance of the Notes, (B) the proceeds of such Sale distributable
to Holders are sufficient to discharge in full all amounts then due and unpaid
upon the Notes for principal and interest or (C) the Indenture Trustee
determines that the Home Loans will not continue to provide sufficient funds for
the payment of principal of and interest on the Notes as they would have become
due if the Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of the Holders of 66 2/3% of the aggregate Note
Balance of the Notes. In determining such sufficiency or insufficiency with
respect to clause (B) and (C), 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 a Servicing Default has not occurred, any Sale of the
Trust Estate shall be made subject to the continued servicing of the Home 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 all amounts due under Section 6.07
herein; and
SECOND: to the Holders of the Notes for amounts due and unpaid on the
Notes interest, according to the order and priority set forth in Section
3.05(b), from amounts available in the Trust Estate for such
Noteholders;
THIRD: to the Holders of the Class A Notes, on a pro rata basis, for
amounts due and unpaid on such Class A Notes for principal, from amounts
available in the Trust Estate, until the Note Balance thereof has been
reduced to zero;
FOURTH: to the holders of the Class M Notes, for amounts due and unpaid
on the Class M Notes for principal, from amounts available in the Trust
Estate, until the Note Balance thereof has been reduced to zero, in the
following order of priority: first, to the Class M-1 Notes, second, to
the Class M-2 Notes, third, to the Class M-3 Notes, fourth, to the Class
M-4 Notes, fifth, to the Class M-5 Notes, sixth, to the Class M-6 Notes,
seventh, to the Class M-7 Notes, eighth, to the Class M-8, and ninth, to
the Class M-9 Notes.
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FIFTH: to the Certificate Paying Agent for amounts due under Article
VIII of the Trust Agreement; and
SIXTH: to the payment of the remainder, if any, to the Issuer or any
other person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05. Optional Preservation of the Trust Estate. If the Notes have been
declared to be due and payable under Section 5.02 following an Event of Default
and such declaration and its consequences have not been rescinded and annulled,
the Indenture Trustee may, but need not, elect to 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 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 (at the expense of the Issuer) 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, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless and subject to the provisions of Section 10.17 hereof:
(i) such Holder has previously given written notice to the Indenture Trustee of
a continuing Event of Default;
(ii) the Holders of not less than 25% of the aggregate Note Balance 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
aggregate Note Balance 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.
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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 aggregate Note Balance 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. Rights of Noteholders to Receive Principal and Interest.
Notwithstanding any other provisions in this Indenture, but subject to Section
3.31, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture Trustee or
any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their respective 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 is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
Section 5.11. Control by Noteholders. The Holders of a majority of the aggregate
Note Balance 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;
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(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 aggregate Note Balance 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 aggregate Note Balance of Notes to sell or liquidate the
Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines
might involve it in liability or might materially adversely affect the rights of
any Noteholders not consenting to such action.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the aggregate Note Balance 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. 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 any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
aggregate Note Balance 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,
liquidation 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 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 consent to, or direct the Indenture Trustee to
make, such Sale, or
(2) the proceeds of such Sale would not be less than the entire amount which
would be payable to the Noteholders under the Notes, the Indenture
Trustee hereunder and the Certificateholder under the Certificate 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 Section 5.05
cannot be satisfied (in making any such determination, the Indenture
Trustee may rely upon an opinion of an Independent investment banking
firm obtained and delivered as provided in Section 5.05), and the
Holders representing at least 66-2/3% of the aggregate Note Balance of
the Notes consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) Unless the Holders have otherwise consented or directed the Indenture
Trustee, at any public Sale of all or any portion of the Trust Estate at
which a minimum bid equal to or greater than the amount described in
paragraph (2) of subsection (b) of this Section 5.15 has not been
established by the Indenture Trustee and no Person bids an amount equal
to or greater than such amount, the Indenture Trustee shall bid an
amount at least $1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(1) any Holder or Holders of Notes may bid for and purchase the property
offered for sale, and upon compliance with the terms of sale may hold,
retain and possess and dispose of such property, without further
accountability, and may, in paying the purchase money therefor, deliver
any Notes or claims for interest thereon in lieu of cash up to the
amount which shall, upon distribution of the net proceeds of such sale,
be payable thereon, and such Notes, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be returned to
the Holders thereof after being appropriately stamped to show such
partial payment;
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(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 the Holder of the Certificate 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 all 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. (a) Promptly
following a written request from the Indenture Trustee, the Issuer, in its
capacity as holder of the Home Loans, shall, take all such lawful action as the
Indenture Trustee may request to cause the Issuer to compel or secure the
performance and observance by the Seller and the Master Servicer, as applicable,
of each of their obligations to the Issuer under or in connection with the Home
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 Home Loan Purchase Agreement and the Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee, as
pledgee of the Home Loans, 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 Home
Loan Purchase Agreement and the Servicing Agreement.
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(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee, as pledgee of the Home Loans, 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 aggregate Note
Balance 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 Home 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 Home Loan Purchase
Agreement and the Servicing Agreement, as the case may be, and any right of the
Issuer to take such action shall not be suspended. In connection therewith, as
determined by the Indenture Trustee, the Issuer shall take all actions necessary
to effect the transfer of the Home Loans to the Indenture Trustee.
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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 pursuant to Section 5.11, 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 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.
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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 Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Indenture Trustee
must comply with Sections 6.11 and 6.12.
Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee shall not be
(i) responsible for and makes no representation as to the validity or adequacy
of this Indenture or the Notes, (ii) accountable for the Issuer's use of the
proceeds from the Notes or (iii) responsible for any statement of the Issuer in
the Indenture or in any document issued in connection with the sale of the Notes
or in the Notes other than the Indenture Trustee's certificate of
authentication.
Section 6.05. Notice of Event of Default. The Indenture 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.
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Section 6.07. Compensation and Indemnity. The Issuer shall pay to the Indenture
Trustee on each Payment Date reasonable compensation for its services. The
Indenture Trustee shall be compensated and indemnified by the Master Servicer in
accordance with Section 6.06 of the Servicing Agreement, and all amounts owing
to the Indenture Trustee hereunder in excess of such amount shall be paid solely
as provided in Section 3.05 hereof (subject to the priorities set forth
therein). The Indenture Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuer shall reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall indemnify the Indenture Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify the
Issuer promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder. The Issuer shall defend any such claim, and the Indenture
Trustee may have separate counsel and the Issuer shall pay the fees and expenses
of such counsel. The Issuer is not obligated to reimburse any expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith. The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of an Event of Default
specified in clause (iv) or (v) of the definition thereof 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. The Holders of a majority of the aggregate Note
Balance of the Notes may remove the Indenture Trustee by so notifying the
Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer
shall remove the Indenture Trustee 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 the Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee. In addition, the Indenture
Trustee will resign to avoid being directly or indirectly controlled by the
Issuer.
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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 the aggregate Note
Balance of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.09. Successor Indenture Trustee by Xxxxxx. If the Indenture Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, 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
written notice of any such transaction after the Closing Date.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Trust Estate may at the time be located, the Indenture Trustee shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Owner Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Noteholders, such title to
39
the Trust Estate, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the
Indenture Trustee shall be conferred or imposed upon and exercised or performed
by the Indenture Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the Indenture
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Indenture Trustee, to the extent permitted by law, without the appointment of a
new or successor trustee.
Section 6.11. Eligibility; Disqualification. The Indenture Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition and it or its parent shall have
a long-term debt rating of A or better by Xxxxx'x. The Indenture Trustee shall
40
second sentence of TIA ss. 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA ss. 310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against Issuer. The Indenture
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). An Indenture Trustee who has resigned or been removed
shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13. Representations and Warranties. The Indenture Trustee hereby
represents that:
(i) The Indenture Trustee is a banking association duly organized, validly
existing and in good standing under the laws of the United States 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 organization or bylaws of the
Indenture Trustee or any agreement or other instrument to which the Indenture
Trustee is a party or by which it is bound.
(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.
(v) The Indenture Trustee does not have notice of any adverse claim (as such
terms are used in Delaware UCC Section 8-302) with respect to the Home Loans.
Section 6.14. Directions to Indenture Trustee. The Indenture Trustee is hereby
directed:
(a) to accept the pledge of the Home Loans and hold the assets of the Trust in
trust for the Noteholders;
(b) to authenticate and deliver the Notes substantially in the form prescribed
by Exhibit A-1 and A-2 in accordance with the terms of this Indenture; and
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(c) to take all other actions as shall be required to be taken by the terms of
this Indenture.
Section 6.15. Indenture Trustee May Own Securities. The Indenture Trustee, in
its individual or any other capacity may become the owner or pledgee of
Securities with the same rights it would have if it were not Indenture Trustee.
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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 and, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
Section 7.02. Preservation of Information; Communications to Noteholders. (a)
The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.01
and the names and addresses of Holders of Notes received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the
protection of TIA ss. 312(c).
Section 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer is required
to file the same with the Commission, copies of the annual reports and the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) that the Issuer may be required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee, and the Commission in accordance with
rules and regulations prescribed from time to time by the Commission such
additional information, documents and reports with respect to compliance by the
Issuer with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit
by mail to all Noteholders described in TIA ss. 313(c)) such summaries of any
information, documents and reports required to be filed by the Issuer pursuant
to clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall
end on December 31 of each year.
Section 7.04. Reports by Indenture Trustee. If required by TIA ss. 313(a),
within 60 days after each January 1 beginning with January 1, 2006, the
Indenture Trustee shall mail to each Noteholder as required by TIA ss. 313(c) a
brief report dated as of such date that complies with TIA ss. 313(a). The
Indenture Trustee also shall comply with TIA ss. 313(b). A copy of each report
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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 Notes
are listed. The Issuer shall notify the Indenture Trustee if and when the Notes
are listed on any stock exchange.
Section 7.05. Exchange Act Reporting. In connection with the preparation and
filing of periodic reports by the Master Servicer pursuant to Section 4.04 of
the Servicing Agreement, the Indenture Trustee shall timely provide to the
Master Servicer (I) a list of Holders as shown on the Note Register or
Certificate Register as of the end of each calendar year, (II) copies of all
pleadings, other legal process and any other documents relating to any claims,
charges or complaints involving the Indenture Trustee, as indenture trustee
hereunder, or the Trust Estate that are received by the Indenture Trustee, (III)
notice of all matters that, to the actual knowledge of a Responsible Officer of
the Indenture Trustee, have been submitted to a vote of the Holders, other than
those matters that have been submitted to a vote of the Holders at the request
of the Depositor or the Master Servicer, and (IV) notice of any failure of the
Indenture Trustee to make any distribution to the Holders as required pursuant
to this Indenture. Neither the Master Servicer nor the Indenture Trustee shall
have any liability with respect to the Master Servicer's failure to properly
prepare or file such periodic reports resulting from or relating to the Master
Servicer's inability or failure to obtain any information not resulting from the
Master Servicer's own negligence or willful misconduct. In connection with the
Form 10-K Certification (as defined in the Servicing Agreement), the Indenture
Trustee shall provide the Master Servicer with a back-up certification
substantially in the form attached hereto as Exhibit B. A supplemental indenture
may be entered into in accordance with the provisions of this Indenture to
revise this Section 7.05 without the consent of the Holders.
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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 Certificateholder, 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 Certificateholder 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, the Indenture Trustee shall distribute all amounts
on deposit in the Payment Account to Noteholders in respect of the Notes and in
its capacity as Certificate Paying Agent to the Certificateholder in the order
of priority set forth in Section 3.05 (except as otherwise provided in Section
5.04(b)).
The Master Servicer shall direct the Indenture Trustee in writing to
invest any funds in the Payment Account in Permitted Investments maturing no
later than the Business Day preceding each Payment Date and shall not be sold or
disposed of prior to the 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 the Noteholders,
the Certificate Paying Agent (on behalf of the Certificateholder) 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.
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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 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 and (ii) all sums due the Indenture Trustee pursuant to this
Indenture and other Basic Documents 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.
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 prior notice to the
Rating Agencies, 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 any error, or to correct or supplement any
provision herein or in any supplemental indenture that may be inconsistent with
any other provision herein, in any supplemental indenture or in the Prospectus
Supplement;
(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 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.
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(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 prior
notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the 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.
(c) The Issuer and the Indenture Trustee shall, as directed by the Holders of
Certificates which represent not less than 100% of the Certificate Percentage
Interests thereof, enter into an indenture or indentures supplemental hereto for
the purpose of providing for the issuance of one or more additional classes of
Notes entitled to payments derived solely from all or a portion of the payments
to which the Certificate issued on the Closing Date pursuant to the Trust
Agreement are entitled; 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. Each such class of Notes shall be a non-recourse obligation of
the Issuer and shall be entitled to interest and principal in such amounts, and
to such security for the repayment thereof, as shall be specified in such
amendment or amendments. Promptly after the execution by the Issuer and the
Indenture Trustee of any amendments pursuant to this Section or the creation of
a new indenture and the issuance of the related class or classes of Notes, the
Issuer shall require the Indenture Trustee to give notice to the Holders of the
Notes and the Rating Agencies setting forth in general terms the substance of
the provisions of such amendment. Any failure of the Indenture Trustee to
provide such notice as is required under this paragraph, or any defect therein,
shall not, however, in any way impair or affect the validity of such amendment
or any class of Notes issued pursuant thereto.
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 consent of the Holders of not
less than a majority of the aggregate Note Balance of the 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 related Note Balance of any Class of 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;
48
(iii) modify or alter the provisions of the proviso to the definition of the
term "Outstanding" or modify or alter the exception in the definition of the
term "Holder";
(iv) reduce the percentage of the aggregate Note Balance of the Notes required
to direct the Indenture Trustee to direct the Issuer to sell or liquidate the
Trust Estate pursuant to Section 5.04;
(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.
and provided, further, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
entering into such indenture supplement will not adversely affect in any
material respect the interests of the Certificateholder or shall have received
the express written consent of the Certificateholder to the indenture
supplement.
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 (as defined in
Section 10.03) 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 and the Custodian to which such amendment
or supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
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Section 9.03. Execution of Supplemental Indentures. In executing, or permitting
the additional trusts created by, any supplemental indenture permitted by this
Article IX or the modification thereby of the trusts created by this Indenture,
the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01
and 6.02, shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture and conforms to the requirements of the Trust
Indenture Act. The Indenture Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that affects the Indenture Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the 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 (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished. Every certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture shall include:
(1) a statement that each signatory of such certificate or opinion has read
or has caused to be read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory, such signatory
has made such examination or investigation as is necessary to enable
such signatory to express an informed opinion as to whether or not such
covenant or condition has been complied with;
(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 described in clause (i) above, the Issuer
shall also deliver to the Indenture Trustee an Independent Certificate
as to the same matters, if the fair value to the Issuer of the
securities to be so deposited and of all other such securities made the
basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause (ii), is 10% or
more of the aggregate Note Balance of the Notes, but such a certificate
need not be furnished with respect to any securities so deposited, if
the fair value thereof to the Issuer as set forth in the related
Officer's Certificate is less than $25,000 or less than one percent of
the aggregate Note Balance of the Notes.
51
(iii) Whenever any property or securities are to be released from the lien 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 aggregate Note Balance of the Notes, but such
certificate need not be furnished in the case of any release of property
or securities if the fair value thereof as set forth in the related
Officer's Certificate is less than $25,000 or less than one percent of
the then aggregate Note Balance 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 Home Loans 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 six months after
the closing date, 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.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Seller or the
Issuer, stating that the information with respect to such factual matters is in
the possession of the Seller or the Issuer, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
52
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 10.03. Acts of Noteholders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any such instrument or
writing may be proved in any manner that the Indenture Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note 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 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 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:
53
(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 Loan Trust 2005-HI2, in care of
Wilmington Trust Company, or at any other address previously furnished in
writing to the Indenture Trustee by the Issuer. The Issuer shall promptly
transmit any notice received by it from the Noteholders to the Indenture
Trustee.
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, A
Division of the XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx - 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention of Asset Backed Surveillance Department; or as
to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
Section 10.05. Notices to Noteholders; Waiver. Where this Indenture provides for
notice to Noteholders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class, postage prepaid to each Noteholder affected by such event, at such
Person's address as it appears on the Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Noteholders is given by mail, neither the
failure to mail such notice nor any defect in any notice so mailed to any
particular Noteholder shall affect the sufficiency of such notice with respect
to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
54
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of Default.
Section 10.06. Alternate Payment and Notice Provisions. Notwithstanding any
provision of this Indenture or any of the Notes to the contrary, the Issuer may
enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee 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 provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control. The provisions of TIA xx.xx. 310
through 317 that impose duties on any Person (including the provisions
automatically deemed included herein unless expressly excluded by this
Indenture) are a part of and govern this Indenture, whether or not physically
contained herein.
Section 10.08. Effect of Headings. The Article and Section headings herein are
for convenience only and shall not affect the construction hereof.
Section 10.09. Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents.
Section 10.10. 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. 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 THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 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.
55
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 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.
56
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 LOAN TRUST 2005-HI2,
as Issuer
By: Wilmington Trust Company
not in its individual
capacity but solely as
Owner Trustee
By: /s/ Xxxxxxx X. Xxxxx..
Name: Xxxxxxx X. Xxxxx
------------------------------------
Title: Financial Services Officer
JPMORGAN CHASE BANK, N.A.,
as Indenture Trustee
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
------------------------------------
Title: Assistant Vice President
JPMORGAN CHASE BANK, N.A.
xxxxxx accepts the appointment as Paying Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section 4.02 hereof.
By: /s/ Xxxxxx Xxxxxx.....
Name: Xxxxxx Xxxxxx
------------------------------------
Title: Assistant Vice President
STATE OF TEXAS )
) ss.:
COUNTY OF )
On this 29th day of June, 2005, before me personally appeared Xxxxxx
Xxxxxx, to me known, who being by me duly sworn, did depose and say, that she
resides at Houston, Texas, that she is the Assistant Vice President of the
Indenture Trustee, one of the corporations described in and which executed the
above instrument; and that she signed her name thereto by like order.
----------------------
Notary Public
STATE OF TEXAS )
) ss.:
COUNTY OF )
On this 29th day of June, 2005, before me the undersigned, Notary Public
of said State, personally appeared Xxxxxx Xxxxxx, personally known to me to be a
duly authorized officer of JPMorgan Chase Bank, N.A. that executed the within
instrument and personally known to me to be the person who executed the within
instrument on behalf of JPMorgan Chase Bank, N.A. xxxxxxx named, and
acknowledged to me such JPMorgan Chase Bank, N.A. executed the within instrument
pursuant to its by-laws.
-----------------------
Notary Public
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this 29th day of June, 2005, before me personally appeared
___________, to me known, who being by me duly sworn, did depose and say, that
he resides at Wilmington, DE, that he is the Vice President of Wilmington Trust
Company, as Owner Trustee, one of the corporations described in and which
executed the above instrument; and that he signed his name thereto by like
order.
-----------------------
Notary Public
NOTARIAL SEAL
EXHIBIT A-1
FORM OF NOTES
CLASS A-__ NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER,
THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE
INDENTURE OR THE BASIC DOCUMENTS.
THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT EITHER (1) IT
IS NOT A PLAN NOR IS IT ACQUIRING THIS NOTE WITH PLAN ASSETS OR (2) THE
ACQUISITION OF THIS NOTE BY THE HOLDER DOES NOT CONSTITUTE OR GIVE RISE TO A
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
FOR WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION IS AVAILABLE.
HOME LOAN TRUST 2005-HI2
HOME LOAN-BACKED NOTE
Registered Principal Amount: $___________
Class A-__
No. __ Percentage Interest: _____%
CUSIP No. ___________ Note Rate: [___%][Adjustable Rate]
Home Loan Trust 2005-HI2, a statutory trust duly organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of $___________, payable on each Payment Date in an amount
equal to the Percentage Interest specified above of the aggregate amount, if
any, payable from the Payment Account in respect of principal on the Class A-__
Notes pursuant to Section 3.05 of the Indenture dated as of June 29, 2005 (the
"Indenture") between the Issuer, as Issuer, and JPMorgan Chase Bank, N.A., as
Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the Payment
Date in May 2035, to the extent not previously paid on a prior Payment Date.
Capitalized terms used but not defined herein are defined in Appendix A of the
Indenture.
[Interest on the Class A-__ Notes will be paid monthly on each Payment
Date at the Note Rate. The Note Rate for the Class A-__ Notes will be _____% per
annum. Interest will be computed on the basis of a 30-day month and a 360-day
year. Principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof. On the Step-Up Date, the Note Rate on the Class
A-_ Notes will increase by 0.50% per annum.]
[Interest on the Class A-1 Notes will be paid monthly on each Payment
Date at the Note Rate for the related Interest Accrual Period. The Note Rate for
each Interest Accrual Period will be equal to the lesser of (i) LIBOR plus___%
per annum and (ii) ___% per annum. LIBOR for each applicable Interest Accrual
Period will be determined on the second LIBOR Business Day immediately preceding
(i) the Closing Date in the case of the first Interest Accrual Period and (ii)
the first day of each succeeding Interest Accrual Period by the Indenture
Trustee as set forth in the Indenture. All determinations of LIBOR by the
Indenture Trustee shall, in the absence of manifest error, be conclusive for all
purposes, and each holder of this Class A-1 Note, by accepting this Class A-1
Note, agrees to be bound by such determination. Interest on this Class A-1 Note
will accrue for each Payment Date from the most recent Payment Date on which
interest has been paid (in the case of the first Payment Date, from the Closing
Date) to but excluding such Payment Date. Interest will be computed on the basis
of the actual number of days in each Interest Accrual Period and a year assumed
to consist of 360 days. Principal of and interest on this Class A-1 Note shall
be paid in the manner specified in the Indenture.]
Principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Home Loan-Backed Notes (herein called the "Notes"), all issued
under the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each Payment
Date, commencing on July 25, 2005, as described in the Indenture. "Payment Date"
means the twenty-fifth day of each month, or, if any such date is not a Business
Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due and payable
in full on the Payment Date in May 2035 pursuant to the Indenture, to the extent
not previously paid on a prior Payment Date. Notwithstanding the foregoing, if
an Event of Default shall have occurred and be continuing, then the Indenture
Trustee or the holders of Notes representing not less than a majority of the
aggregate Note Balance of all Notes may declare the Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Notes shall be distributed in the manner and priority
set forth in Section 3.05 of the Indenture.
Any installment of interest or principal, if any, payable on any Note
that is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall, if such Holder holds Notes of an aggregate initial Note
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 or money order 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.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the Corporate Trust
Office, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee duly executed by, the holder hereof
or such holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes
in authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the 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 this Note.
Each holder or Beneficial Owner of a Note, by acceptance of a Note, or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees that no recourse may be taken, directly or indirectly, with
respect to the obligations of the Issuer, the Owner Trustee, the Seller, the
Master Servicer, the Depositor or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the 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 and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a Note or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees by accepting the benefits of the Indenture that such holder
or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Master Servicer or the Issuer, or join in any
institution against the Depositor, the Seller, the Master Servicer or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer.
Each holder of a Note, by acceptance of a Note (and each Beneficial Owner of a
Note by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered (as of the
day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the holders of the Notes
under the Indenture at any time by the Issuer and the Indenture Trustee with the
consent of the holders of Notes representing a majority of the aggregate Note
Balance of all Notes at the time Outstanding and with prior notice to the Rating
Agencies. The Indenture also contains provisions permitting the holders of Notes
representing specified percentages of the aggregate Note Balance of all Notes,
on behalf of the holders of all the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon such holder and upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Issuer and the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
holders of the Notes issued thereunder but with prior notice to the Rating
Agencies.
The term "Issuer" as used in this Note includes any successor or the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair, the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company in its
individual capacity, JPMorgan Chase Bank, N.A., in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder shall have no claim against
any of the foregoing for any deficiency, loss or claim therefrom; provided,
however, that nothing contained herein shall be taken to prevent recourse to,
and enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
HOME LOAN TRUST 2005-HI2
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
Dated: June 29, 2005
By
Authorized Signatory
----------------------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-__ Notes referred to in the within mentioned
Indenture.
JPMORGAN CHASE BANK, N.A., not in its
individual capacity but solely as Indenture
Trustee
Dated: June 29, 2005
By
Authorized Signatory
----------------------------------------
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
___________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
___________________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: _____________________ __________________________ */
Signature Guaranteed:
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-2
FORM OF NOTES
CLASS M-__ NOTES
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR NOTES AS
DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER,
THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE
INDENTURE OR THE BASIC DOCUMENTS.
THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT EITHER (1) IT
IS NOT A PLAN NOR IS IT ACQUIRING THIS NOTE WITH PLAN ASSETS OR (2) THE
ACQUISITION OF THIS NOTE BY THE HOLDER DOES NOT CONSTITUTE OR GIVE RISE TO A
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
FOR WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION IS AVAILABLE.
HOME LOAN TRUST 2005-HI2
HOME LOAN-BACKED NOTE
Registered Principal Amount: $___________
Class M-__
No. __ Percentage Interest: _____%
CUSIP No. ___________ Note Rate: [___%]
Home Loan Trust 2005-HI2, a statutory trust duly organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of $___________, payable on each Payment Date in an amount
equal to the Percentage Interest specified above of the aggregate amount, if
any, payable from the Payment Account in respect of principal on the Class M-__
Notes pursuant to Section 3.05 of the Indenture dated as of June 29, 2005 (the
"Indenture") between the Issuer, as Issuer, and JPMorgan Chase Bank, N.A., as
Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the Payment
Date in May 2035, to the extent not previously paid on a prior Payment Date.
Capitalized terms used but not defined herein are defined in Appendix A of the
Indenture.
[Interest on the Class M-__ Notes will be paid monthly on each Payment
Date at the Note Rate. The Note Rate for the Class M-__ Notes will be _____% per
annum. Interest will be computed on the basis of a 30-day month and a 360-day
year. Principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof. On the Step-Up Date, the Note Rate on the Class
M-__ Note will increase by 0.50% per annum.]
Principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Home Loan-Backed Notes (herein called the "Notes"), all issued
under the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each Payment
Date, commencing on July 25, 2005, as described in the Indenture. "Payment Date"
means the twenty-fifth day of each month, or, if any such date is not a Business
Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due and payable
in full on the Payment Date in May 2035 pursuant to the Indenture, to the extent
not previously paid on a prior Payment Date. Notwithstanding the foregoing, if
an Event of Default shall have occurred and be continuing, then the Indenture
Trustee or the holders of Notes representing not less than a majority of the
aggregate Note Balance of all Notes may declare the Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Notes shall be distributed in the manner and priority
set forth in Section 3.05 of the Indenture.
Any installment of interest or principal, if any, payable on any Note
that is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall, if such Holder holds Notes of an aggregate initial Note
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 or money order 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.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the Corporate Trust
Office, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee duly executed by, the holder hereof
or such holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes
in authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the 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 this Note.
Each holder or Beneficial Owner of a Note, by acceptance of a Note, or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees that no recourse may be taken, directly or indirectly, with
respect to the obligations of the Issuer, the Owner Trustee, the Seller, the
Master Servicer, the Depositor or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the 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 and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a Note or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees by accepting the benefits of the Indenture that such holder
or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Master Servicer or the Issuer, or join in any
institution against the Depositor, the Seller, the Master Servicer or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer.
Each holder of a Note, by acceptance of a Note (and each Beneficial Owner of a
Note by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered (as of the
day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the holders of the Notes
under the Indenture at any time by the Issuer and the Indenture Trustee with the
consent of the holders of Notes representing a majority of the aggregate Note
Balance of all Notes at the time Outstanding and with prior notice to the Rating
Agencies. The Indenture also contains provisions permitting the holders of Notes
representing specified percentages of the aggregate Note Balance of all Notes,
on behalf of the holders of all the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon such holder and upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Issuer and the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
holders of the Notes issued thereunder but with prior notice to the Rating
Agencies.
The term "Issuer" as used in this Note includes any successor or the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair, the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company in its
individual capacity, JPMorgan Chase Bank, N.A., in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder shall have no claim against
any of the foregoing for any deficiency, loss or claim therefrom; provided,
however, that nothing contained herein shall be taken to prevent recourse to,
and enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
HOME LOAN TRUST 2005-HI2
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
Dated: June 29, 2005
By
Authorized Signatory
----------------------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-__ Notes referred to in the within mentioned
Indenture.
JPMORGAN CHASE BANK, N.A., not in its
individual capacity but solely as Indenture
Trustee
Dated: June 29, 2005
By
Authorized Signatory
----------------------------------------
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
___________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
___________________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: _____________________ __________________________ */
Signature Guaranteed:
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT B
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
The undersigned, a Responsible Officer of JPMorgan Chase Bank, N.A. (the
"Indenture Trustee") certifies that:
1. The Indenture Trustee has performed all of the duties specifically
required to be performed by it pursuant to the provisions of the Indenture dated
as of June 29, 2005 (the "Indenture") by and between Home Loan Trust 2005-HI2,
as the issuer (the "Issuer") and the Indenture Trustee in accordance with the
standards set forth therein.
2. Based on my knowledge, the information that is provided by the
Indenture Trustee pursuant to Section 7.05(I) of the Indenture is accurate as of
the last day of the 20___ calendar year.
Capitalized terms used and not defined herein shall have the meanings
given such terms in the Indenture.
IN WITNESS THEREOF, I have duly executed this certificate as of
____________, 20___
Name:
------------------------------------
Title:
-----------------------------------
APPENDIX A
DEFINITIONS
Administrative Fees: The Servicing Fees and the fees payable to the Owner
Trustee and the Indenture Trustee.
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.
Appraised Value: For any Home Loan the value of the related Mortgaged Property
determined by the appraisal, sales price for such Mortgaged Property or
alternative valuation method used in the origination of such Home Loan (which
may have been obtained at an earlier time); provided that if such Home Loan was
originated simultaneously with or not more than 12 months after a senior lien on
the related Mortgaged Property which was originated in a purchase or cash-out
refinance transaction, the appraised value shall be the lesser of the appraised
value at the origination of the senior lien and the sales price for such
Mortgaged Property.
Assignment of Mortgage: With respect to any Mortgage, an assignment, notice of
transfer or equivalent instrument, in recordable form, sufficient under the laws
of the jurisdiction in which the related Mortgaged Property is located to
reflect the sale of the Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages secured by Mortgaged Properties located in the same
jurisdiction.
Authorized Newspaper: A newspaper of general circulation in the Borough of
Manhattan, The City of New York, printed in the English language and customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays.
Authorized Officer: With respect to the Issuer, any officer of the Owner Trustee
who is authorized to act for the Owner Trustee in matters relating to the Issuer
and who is identified on the list of Authorized Officers delivered by the Owner
Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basic Documents: The Trust Agreement, the Indenture, the Home Loan Purchase
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 a
Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).
Book-Entry Custodian: The custodian appointed pursuant to Section 4.06 of the
Indenture.
Book-Entry Notes: Beneficial interests in the Notes, ownership and transfers of
which shall be made through book entries by the Depository as described in
Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on
which banking institutions in the States of New York, California, Texas,
Minnesota, Pennsylvania, Illinois or Delaware are required or authorized by law
to be closed.
Calendar Quarter: A Calendar Quarter shall consist of one of the following time
periods in any given year: January 1 through March 31, April 1 through June 30,
July 1 though September 30, and October 1 through December 31.
Certificate: The certificate issued in the form of Exhibit A to the Trust
Agreement and outstanding pursuant to the terms of the Trust Agreement,
evidencing a beneficial ownership interest in the Trust.
Certificate Distribution Account: The account or accounts created and maintained
by the Certificate Paying Agent pursuant to Section 3.10(c) of the Trust
Agreement. The Certificate Paying Agent will make all distributions on the
Certificate from money on deposit in the Certificate Distribution Account. The
Certificate Distribution Account shall be an Eligible Account.
Certificate Distribution Amount: The amount payable to the Certificate Paying
Agent under Section 3.05 of the Indenture for payment to the holders of the
Certificate under the Trust Agreement.
Certificate Paying Agent: The meaning specified in Section 3.10 of the Trust
Agreement.
Certificate Percentage Interest: With respect to the Certificate and any date of
determination, the percentage interest as stated on the face of the Certificate,
which percentage may be recalculated in accordance with Section 3.03 of the
Trust Agreement.
Certificate Principal Balance: As of any Payment Date, with respect to the
Certificate, an amount equal to the then applicable Certificate Percentage
Interest of such Certificate, multiplied by the Outstanding Reserve Amount
immediately prior to such Payment Date.
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 the Certificates.
Certificate Registrar: Initially, the Indenture Trustee, 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 Statutory Trust Statute, including all amendments and
restatements.
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 the 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: Collectively, all of the Notes bearing the same designation.
Class A Notes or Senior Notes: The Class A-1, Class A-2, Class A-3, Class A-4
and Class A-5 Notes.
Class M Notes: The Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Notes.
Class M-1 Principal Distribution Amount: With respect to any Payment Date: (1)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event
is in effect, the remaining Principal Distribution Amount for that Payment Date
after distribution of the Senior Principal Distribution Amount, or (2) on or
after the Stepdown Date if a Trigger Event is not in effect for that Payment
Date, the lesser of:
o the remaining Principal Distribution Amount for that
Payment Date after distribution of the Senior Principal
Distribution Amount; and
o the excess of (A) the sum of (1) the aggregate Note
Balance of the Class A Notes (after taking into account
the payment of the Senior Principal Distribution Amount
for that Payment Date) and (2) the Note Balance of the
Class M-1 Notes immediately prior to that Payment Date
over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the Pool
Balance after giving effect to distributions to be made on
that Payment Date and (y) the excess of the Pool Balance
after giving effect to distributions to be made on that
Payment Date, over the Reserve Amount Floor.
In no event will the Class M-1 Principal Distribution Amount be greater
than the Note Balance of the Class M-1 Notes.
Class M-2 Principal Distribution Amount: With respect to any Payment Date: (1)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event
is in effect, the remaining Principal Distribution Amount for that Payment Date
after distribution of the Senior Principal Distribution Amount and the Class M-1
Principal Distribution Amount, or (2) on or after the Stepdown Date if a Trigger
Event is not in effect for that Payment Date, the lesser of:
o the remaining Principal Distribution Amount for that Payment
Date after distribution of the Senior Principal Distribution
Amount and the Class M-1 Principal Distribution Amount; and
o the excess of (A) the sum of (1) the aggregate Note Balance of
the Class A Notes and the Class M-1 Notes (after taking into
account the payment of the sum of the Senior Principal
Distribution Amount and Class M-1 Principal Distribution Amount
for that Payment Date) and (2) the Note Balance of the Class M-2
Notes immediately prior to that Payment Date over (B) the lesser
of (x) the product of (1) the applicable Subordination
Percentage and (2) the Pool Balance after giving effect to
distributions to be made on that Payment Date and (y) the excess
of the Pool Balance after giving effect to distributions to be
made on that Payment Date, over the Reserve Amount Floor.
In no event will the Class M-2 Principal Distribution Amount be greater
than the Note Balance of the Class M-2 Notes.
Class M-3 Principal Distribution Amount: With respect to any Payment Date: (1)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event
is in effect, the remaining Principal Distribution Amount for that Payment Date
after distribution of the Senior Principal Distribution Amount, the Class M-1
Principal Distribution Amount and the Class M-2 Principal Distribution Amount,
or (2) on or after the Stepdown Date if a Trigger Event is not in effect for
that Payment Date, the lesser of:
o the remaining Principal Distribution Amount for that Payment
Date after distribution of the Senior Principal Distribution
Amount, the Class M-1 Principal Distribution Amount and the
Class M-2 Principal Distribution Amount; and
o the excess of (A) the sum of (1) the aggregate Note Balance of
the Class A, Class M-1 and Class M-2 Notes (after taking into
account the payment of the sum of the Senior Principal
Distribution Amount, the Class M-1 Principal Distribution Amount
and the Class M-2 Principal Distribution Amount for that Payment
Date) and (2) the Note Balance of the Class M-3 Notes
immediately prior to that Payment Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage
and (2) the Pool Balance after giving effect to distributions to
be made on that Payment Date and (y) the excess of the Pool
Balance after giving effect to distributions to be made on that
Payment Date, over the Reserve Amount Floor.
In no event will the Class M-3 Principal Distribution Amount be greater
than the Note Balance of the Class M-3 Notes.
Class M-4 Principal Distribution Amount: With respect to any Payment Date: (1)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event
is in effect, the remaining Principal Distribution Amount for that Payment Date
after distribution of the Senior Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount and
the Class M-3 Principal Distribution Amount, or (2) on or after the Stepdown
Date if a Trigger Event is not in effect for that Payment Date, the lesser of:
o the remaining Principal Distribution Amount for that Payment
Date after distribution of the Senior Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount and the Class M-3 Principal
Distribution Amount; and
o the excess of (A) the sum of (1) the aggregate Note Balance of
the Class A, Class M-1, Class M-2 and Class M-3 Notes (after
taking into account the payment of the sum of the Senior
Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution Amount
and the Class M-3 Principal Distribution Amount for that Payment
Date) and (2) the Note Balance of the Class M-4 Notes
immediately prior to that Payment Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage
and (2) the Pool Balance after giving effect to distributions to
be made on that Payment Date and (y) the excess of the Pool
Balance after giving effect to distributions to be made on that
Payment Date, over the Reserve Amount Floor.
In no event will the Class M-4 Principal Distribution Amount be greater
than the Note Balance of the Class M-4 Notes.
Class M-5 Principal Distribution Amount: With respect to any Payment Date: (1)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event
is in effect, the remaining Principal Distribution Amount for that Payment Date
after distribution of the Senior Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount, the
Class M-3 Principal Distribution Amount and the Class M-4 Principal Distribution
Amount, or (2) on or after the Stepdown Date if a Trigger Event is not in effect
for that Payment Date, the lesser of:
o the remaining Principal Distribution Amount for that Payment
Date after distribution of the Senior Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution Amount and the Class M-4 Principal Distribution
Amount; and
o the excess of (A) the sum of (1) the aggregate Note Balance of
the Class A, Class M-1, Class M-2, Class M-3 and Class M-4 Notes
(after taking into account the payment of the sum of the Senior
Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution
Amount, the Class M-3 Principal Distribution Amount and the
Class M-4 Principal Distribution Amount for that Payment Date)
and (2) the Note Balance of the Class M-5 Notes immediately
prior to that Payment Date over (B) the lesser of (x) the
product of (1) the applicable Subordination Percentage and (2)
the Pool Balance after giving effect to distributions to be made
on that Payment Date and (y) the excess of the Pool Balance
after giving effect to distributions to be made on that Payment
Date, over the Reserve Amount Floor.
In no event will the Class M-5 Principal Distribution Amount be greater
than the Note Balance of the Class M-5 Notes.
Class M-6 Principal Distribution Amount: With respect to any Payment Date: (1)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event
is in effect, the remaining Principal Distribution Amount for that Payment Date
after distribution of the Senior Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount, the
Class M-3 Principal Distribution Amount, the Class M-4 Principal Distribution
Amount and the Class M-5 Principal Distribution Amount, or (2) on or after the
Stepdown Date if a Trigger Event is not in effect for that Payment Date, the
lesser of:
o the remaining Principal Distribution Amount for that Payment
Date after distribution of the Senior Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution Amount
and the Class M-5 Principal Distribution Amount; and
o the excess of (A) the sum of (1) the aggregate Note Balance of
the Class A, Class M-1, Class M-2, Class M-3, Class M-4 and
Class M-5 Notes (after taking into account the payment of the
sum of the Senior Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal
Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount and the
Class M-5 Principal Distribution Amount for that Payment Date)
and (2) the Note Balance of the Class M-6 Notes immediately
prior to that Payment Date over (B) the lesser of (x) the
product of (1) the applicable Subordination Percentage and (2)
the Pool Balance after giving effect to distributions to be made
on that Payment Date and (y) the excess of the Pool Balance
after giving effect to distributions to be made on that Payment
Date, over the Reserve Amount Floor.
In no event will the Class M-6 Principal Distribution Amount be greater
than the Note Balance of the Class M-6 Notes.
Class M-7 Principal Distribution Amount: With respect to any Payment Date: (1)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event
is in effect, the remaining Principal Distribution Amount for that Payment Date
after distribution of the Senior Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount, the
Class M-3 Principal Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount and the Class M-6 Principal
Distribution Amount, or (2) on or after the Stepdown Date if a Trigger Event is
not in effect for that Payment Date, the lesser of:
o the remaining Principal Distribution Amount for that Payment
Date after distribution of the Senior Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount and the
Class M-6 Principal Distribution Amount; and
o the excess of (A) the sum of (1) the aggregate Note Balance of
the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5 and Class M-6 Notes (after taking into account the payment
of the sum of the Senior Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class
M-5 Principal Distribution Amount and the Class M-6 Principal
Distribution Amount for that Payment Date) and (2) the Note
Balance of the Class M-7 Notes immediately prior to that Payment
Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the Pool Balance
after giving effect to distributions to be made on that Payment
Date and (y) the excess of the Pool Balance after giving effect
to distributions to be made on that Payment Date, over the
Reserve Amount Floor.
In no event will the Class M-7 Principal Distribution Amount be greater
than the Note Balance of the Class M-7 Notes.
Class M-8 Principal Distribution Amount: With respect to any Payment Date: (1)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event
is in effect, the remaining Principal Distribution Amount for that Payment Date
after distribution of the Senior Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount, the
Class M-3 Principal Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount, the Class M-6 Principal
Distribution Amount and the Class M-7 Principal Distribution Amount, or (2) on
or after the Stepdown Date if a Trigger Event is not in effect for that Payment
Date, the lesser of:
o the remaining Principal Distribution Amount for that Payment
Date after distribution of the Senior Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount, the Class
M-6 Principal Distribution Amount and the Class M-7 Principal
Distribution Amount; and
o the excess of (A) the sum of (1) the aggregate Note Balance of
the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6 and Class M-7 Notes (after taking into account
the payment of the sum of the Senior Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount, the Class
M-6 Principal Distribution Amount and the Class M-7 Principal
Distribution Amount for that Payment Date) and (2) the Note
Balance of the Class M-8 Notes immediately prior to that Payment
Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the Pool Balance
after giving effect to distributions to be made on that Payment
Date and (y) the excess of the Pool Balance after giving effect
to distributions to be made on that Payment Date, over the
Reserve Amount Floor.
In no event will the Class M-8 Principal Distribution Amount be greater
than the Note Balance of the Class M-8 Notes.
Class M-9 Principal Distribution Amount: With respect to any Payment Date: (1)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event
is in effect, the remaining Principal Distribution Amount for that Payment Date
after distribution of the Senior Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount, the
Class M-3 Principal Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount, the Class M-6 Principal
Distribution Amount, the Class M-7 Principal Distribution Amount and the Class
M-8 Principal Distribution Amount, or (2) on or after the Stepdown Date if a
Trigger Event is not in effect for that Payment Date, the lesser of:
o the remaining Principal Distribution Amount for that Payment
Date after distribution of the Senior Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount, the Class
M-6 Principal Distribution Amount, the Class M-7 Principal
Distribution Amount and the Class M-8 Principal Distribution
Amount; and
o the excess of (A) the sum of (1) the aggregate Note Balance of
the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7 and Class M-8 Notes (after taking into
account the payment of the sum of the Senior Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, the Class
M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount, the Class M-5 Principal Distribution
Amount, the Class M-6 Principal Distribution Amount, the Class
M-7 Principal Distribution Amount and the Class M-8 Principal
Distribution Amount for that Payment Date) and (2) the Note
Balance of the Class M-9 Notes immediately prior to that Payment
Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the Pool Balance
after giving effect to distributions to be made on that Payment
Date and (y) the excess of the Pool Balance after giving effect
to distributions to be made on that Payment Date, over the
Reserve Amount Floor.
In no event will the Class M-9 Principal Distribution Amount be greater
than the Note Balance of the Class M-9 Notes.
Closing Date: June 29, 2005.
Code: The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
Collateral: The meaning specified in the Granting Clause of the Indenture.
Collection Period: As to any Payment Date, the calendar month preceding the
month of that Payment Date.
Combined Loan-to-Value Ratio: With respect to each Home Loan, the ratio,
expressed as a percentage, of (i) the sum of (A) the original principal balance
of such Home Loan, and (B) any outstanding principal balance, at origination of
such Home Loan, of all other mortgage loans, if any, secured by senior or
subordinate liens on the related Mortgaged Property, to (ii) the Appraised
Value, or, if permitted by the Program Guide, a statistical valuation or the
Stated Value.
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 0 Xxx Xxxx Xxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Worldwide Securities
Services/Global Debt - Home Loan Trust 2005-HI2. 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 Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention:
Corporate Trust Administration.
Credit Repository: Equifax, Transunion and Experian, or their successors in
interest.
Credit Scores: The figure assigned to a Home Loan that is designed to assess the
Mortgagor's credit history which is obtained from credit reports provided by
various credit reporting organizations and obtained by many lenders in
connection with Home Loan applications to help assess a Xxxxxxxxx's
creditworthiness.
Custodial Account: The account or accounts created and maintained by the Master
Servicer pursuant to Section 3.02(b) of the Servicing Agreement, in which the
Master Servicer shall deposit or cause to be deposited certain amounts in
respect of the Home Loans.
Custodial Agreement: Any Custodial Agreement among the Custodian, the Issuer and
the Master Servicer relating to the custody of the Home Loans and the Related
Documents.
Custodian: Xxxxx Fargo Bank, N.A., a national association, and its successors
and assigns.
Cut-off Date: June 1, 2005.
Cut-off Date Loan Balance: With respect to any Home Loan, the unpaid principal
balance thereof as of the close of business on the Business Day 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.
Deficient Valuation: With respect to any Home Loan, a valuation by a court of
competent jurisdiction of the Mortgaged Property in an amount less than the then
outstanding indebtedness under the Home Loan, or any reduction in the amount of
principal to be paid in connection with any scheduled payment that constitutes a
permanent forgiveness of principal, which valuation or reduction results from a
proceeding under the Bankruptcy Code.
Definitive Notes: The meaning specified in Section 4.06 of the Indenture.
Deleted Loan: A Home Loan replaced or to be replaced with an Eligible Substitute
Loan.
Delinquent: As used herein, a Home Loan is considered to be "30 to 59 days" or
"30 or more days" delinquent when a payment due on any due date remains unpaid
as of the close of business on the next following monthly due date. Since the
determination as to whether a Home Loan falls into these categories is made as
of the close of business on the last business day of each month, a Home Loan
with a payment due on July 1 that remained unpaid as of the close of business on
July 31 would still be considered current as of July 31. If that payment
remained unpaid as of the close of business on August 31, the Home Loan would
then be considered 30-59 days delinquent. Delinquency information as of the
Cut-off Date is determined and prepared as of the close of business on the last
business day immediately prior to the Cut-off Date.
Depositor: Residential Funding Mortgage Securities II, Inc., 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.
Derivative Contract: Any ISDA Master Agreement, together with the related
schedule and confirmation, entered into by the Owner Trustee and a Derivative
Counterparty in accordance with Section 5.06 of the Trust Agreement.
Derivative Counterparty: Any counterparty to a Derivative Contract as provided
in Section 5.06 of the Trust Agreement.
Determination Date: With respect to any Payment Date, the 20th day of the month
in which such Payment Date occurs or if such day is not a Business Day, the next
succeeding Business Day.
Due Date: The date on which the Monthly Payment on the related Home Loan is due
in accordance with the terms of the related Mortgage Note.
Eligible Account: An account that is any of the following: (i) maintained with a
depository institution the short-term debt obligations of which have been rated
by each Rating Agency in its highest rating category available, or (ii) an
account or accounts in a depository institution in which such accounts are fully
insured to the limits established by the FDIC, provided that any deposits not so
insured shall, to the extent acceptable to each Rating Agency, as evidenced in
writing, be maintained such that (as evidenced by an Opinion of Counsel
delivered to the Indenture Trustee and each Rating Agency) the Indenture Trustee
has a claim with respect to the funds in such account or a perfected first
security interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (iii) in the case of the Custodial 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 AA- by Standard & Poor's (or the equivalent) or
better, by each Rating Agency, or (iv) in the case of the Custodial Account and
the Payment Account, a trust account or accounts maintained in the corporate
trust 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 Custodial Account or
the Payment Account will not reduce the rating assigned to any of the Securities
by such Rating Agency as of the Closing Date by such Rating Agency).
Eligible Substitute Loan: A Home Loan substituted by the Seller for a Deleted
Loan which must, on the date of such substitution, as confirmed in an Officers'
Certificate delivered to the Indenture Trustee, (i) have an outstanding
principal balance, after deduction of the principal portion of the monthly
payment due in the month of substitution (or in the case of a substitution of
more than one Home Loan for a Deleted Loan, an aggregate outstanding principal
balance, after such deduction), not in excess of the outstanding principal
balance of the Deleted Loan (the amount of any shortfall to be deposited by the
Seller in the Custodial Account in the month of substitution); (ii) comply with
each representation and warranty (other than a statistical representation or
warranty) set forth in Section 3.1(b) of the Home Loan Purchase Agreement as of
the date of substitution; (iii) have a Loan Rate no lower than and not more than
1% in excess of the Loan Rate of such Deleted Loan; (iv) have a Combined
Loan-to-Value Ratio at the time of substitution no higher than that of the
Deleted Loan at the time of substitution; (v) have, at the time of substitution,
a remaining term to stated maturity not greater than (and not more than one year
less than) that of the Deleted Loan; (vi) be ineligible for inclusion in a real
estate mortgage investment conduit ("REMIC") (a "REMIC Ineligible Loan") if the
Deleted Loan was a REMIC Ineligible Loan (because (a) the value of the real
property securing the Deleted Loan was not at least equal to eighty percent of
the adjusted issue price of such loan at the time of origination, calculated by
subtracting the amount of any liens that are senior to such Home Loan and a
proportionate amount of any lien of equal priority from the value of such
property when the Deleted Loan was originated and (b) substantially all of the
proceeds of the Deleted Loan were not used to acquire, improve or protect an
interest in the real property securing such loan and such real property was the
only security for such Deleted Loan); and (vii) not be 30 or more days
delinquent.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: With respect to the Indenture, any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(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, and such default
shall continue for a period of five days; or
(iii) 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 Note Balance of the Notes, a written notice specifying
such default or incorrect representation or warranty and requiring it to be
remedied and stating that such notice is a notice of default hereunder; or
(iv) 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) 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.
Event of Servicer Termination: With respect to the Servicing Agreement, a
Servicing Default as defined in Section 7.01 of the Servicing Agreement.
Excess Reserve Amount: With respect to any Payment Date, the lesser of (i) the
excess, if any, of the Outstanding Reserve Amount (after application of the
Principal Collections and any Liquidation Loss Distribution Amounts for such
Payment Date (assuming that the Net Monthly Excess Cash Flow is determined
solely with respect to clause (i) of the definition thereof)) over the Reserve
Amount Target and (ii) the Principal Collections for that Payment Date.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
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: The Payment Date in October 2013 with respect to
the Class A-1 Notes, April 2015 with respect to the Class A-2 Notes, September
2018 with respect to the Class A- 3 Notes, February 2020 with respect to the
Class A-4 Notes, and May 2035 with respect to the Class A-5 and Class M Notes.
FNMA: The Federal National Mortgage Association, or any successor thereto.
Foreclosure Profit: With respect to a Liquidated Home Loan, the excess, if any,
of (x) Net Liquidation Proceeds over (y) the sum of (a) the Loan Balance of the
related Home Loan immediately prior to the date it became a Liquidated Home
Loan, less any Net Liquidation Proceeds previously received with respect to such
Home Loan and applied as a recovery of principal, and (b) accrued and unpaid
interest on the related Home Loan at the Net Loan Rate through the date of
receipt of the proceeds.
Xxxxx: Pledge, bargain, sell, warrant, alienate, remise, release, convey,
assign, transfer, create, and xxxxx x xxxx upon and a security interest in and
right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
Holder: Any of the Noteholders or Certificateholders.
Homeownership Act: The Home Ownership Protection Act of 1994.
Home Loans: At any time, the Home Loans that have been sold by the Seller under
the Home Loan Purchase Agreement, together with the Related Documents, and that
remain subject to the terms thereof.
Home Loan Purchase Agreement: The Home Loan Purchase Agreement, between the
Seller, as seller, and the Depositor, as purchaser, with respect to the Home
Loans, dated as of the Cut-off Date.
Home Loan Schedule: The initial schedule of Home Loans as of the Cut-off Date
set forth in Exhibit A of the Servicing Agreement, which schedule sets forth as
to each Home Loan, among other things:
(i) the Home Loan identifying number ("RFC LOAN #");
(ii) the state, city and zip code of the Mortgaged Property;
(iii) the maturity of the Mortgage Note ("MATURITY DATE");
(iv) the Loan Rate ("CUR RATE");
(v) the Principal Balance at origination ("ORG AMT");
(vi) the type of property securing the Mortgage Note ("PROPERTY TYPE");
(vii) the appraised value ("APPRSL");
(viii) the initial scheduled monthly payment of principal, if any, and interest
("ORIGINAL P & I");
(ix) the Cut-off Date Loan Balance ("CUT-OFF BAL");
(x) the Combined Loan-to-Value Ratio at origination ("CLTV");
(xi) the date of the Mortgage Note ("NOTE DATE");
(xii) the original term to maturity of the Home Loan ("ORIGINAL TERM");
(xiii) under the column "OCCP CODE," a code indicating whether the Home Loan is
secured by a non-owner occupied residence; (xiv) the Principal Balance of any
Home Loan senior thereto ("SR BAL");
(xv) the Credit Score ("CR SCORE");
(xvi) the debt to income ratio ("DTI");
(xvii) product code ("PRODUCT CODE");
(xviii) loan purpose ("PURPOSE");
(xix) the lien position of the related Mortgage ("LIEN");
(xx) the Subservicer loan number (SERVICER LOAN #); and
(xxi) the remaining term of the Home Loan (REMAINING TERM).
Such schedule may consist of multiple reports that collectively set forth all of
the information required.
Indemnified Party: The meaning specified in Section 7.02 of the Trust Agreement.
Indenture: The indenture dated as of June 29, 2005 between the Issuer, as
debtor, and the Indenture Trustee, as indenture trustee.
Indenture Trustee: JPMorgan Chase Bank, N.A., and its successors and assigns or
any successor indenture trustee appointed pursuant to the terms of the
Indenture.
Independent: When used with respect to any specified Person, the Person (i) is
in fact independent of the Issuer, any other obligor on the Notes, the Seller,
the Issuer, the Depositor and any Affiliate of any of the foregoing Persons,
(ii) does not have any direct financial or any material indirect financial
interest in the Issuer, any such other obligor, the Seller, the Issuer, 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 Issuer, 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.
Initial Certificate: The Home Loan-Backed Certificates, Series 2005-HI2, issued
on the Closing Date, each evidencing undivided beneficial interests in the
Issuer and executed by the Owner Trustee.
Initial Note Balance: With respect to the Class A-1 Notes, $78,315,000, with
respect to the Class A-2 Notes, $20,999,000, with respect to the Class A-3
Notes, $43,781,000, with respect to the Class A-4 Notes, $15,951,000, with
respect to the Class A-5 Notes, $28,154,000, with respect to the Class M-1
Notes, $9,000,000, with respect to the Class M-2 Notes, $7,800,000, with respect
to the Class M-3 Notes, $7,200,000, with respect to the Class M-4 Notes,
$6,000,000, with respect to the Class M-5 Notes, $5,400,000, with respect to the
Class M-6 Notes, $4,200,000, with respect to the Class M-7 Notes, $4,800,000,
with respect to the Class M-8 Notes, $5,160,000 and with respect to the Class
M-9 Notes, $3,240,000.
Insolvency Event: With respect to a specified Person, (a) the filing of a decree
or order for relief by a court having jurisdiction in the premises in respect of
such Person or any substantial part of its property in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by such Person to the entry of an
order for relief in an involuntary case under any such law, or the consent by
such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture Trustee shall have notice)
of its inability to pay its debts generally, or the adoption by the Board of
Directors or managing member of such Person of a resolution which authorizes
action by such Person in furtherance of any of the foregoing.
Insurance Proceeds: Proceeds paid by any insurer pursuant to any insurance
policy covering a Home 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 Home Loan.
Interest Accrual Period: With respect to the Notes (other than the Class A-1
Notes) and as to any Payment Date, will be the calendar month preceding the
month in which the related Payment Date occurs. With respect to the Class A-1
Notes and any Payment Date other than the first Payment Date, the period
beginning on the preceding Payment Date and ending on the day preceding such
Payment Date, and in the case of the first Payment Date, the period beginning on
the Closing Date and ending on the day preceding the first Payment Date.
Interest Collections: With respect to any Payment Date, the sum of (i) the
portion allocable to interest of all scheduled monthly payments on the Home
Loans received during the related Collection Period reduced by the
Administrative Fees for such Collection Period, (ii) the portion of all Net
Liquidation Proceeds and proceeds from repurchases of, and some amounts received
in connection with any substitutions for, the related Home Loans, received or
deemed received during the related Collection Period, reduced by any related
Administrative Fees for that Collection Period, (iii) the interest portion of
the Repurchase Price for any Deleted Loans and the interest portion of the cash
purchase price paid in connection with any optional purchase of the Home Loans
by the Master Servicer and (iv) any proceeds and recoveries received during the
related Collection Period on a Home Loan after it becomes a Liquidated Home Loan
allocated to Interest Collections in accordance with the last paragraph of
Section 3.07 of the Servicing Agreement, reduced by the Administrative Fees for
such Collection Period.
Issuer or Trust: The Home Loan Trust 2005-HI2, a Delaware statutory 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 Accrual Period other than the first Interest Accrual
Period, the rate for United States dollar deposits for one month which appears
on the Dow Xxxxx Telerate Screen Page 3750 as of 11:00 A.M., London, England
time, on the second LIBOR Business Day prior to the first day of such Interest
Accrual Period. With respect to the first Interest Accrual Period, the rate for
United States dollar deposits for one month which appears on the Dow Xxxxx
Telerate Screen Page 3750 as of 11:00 A.M., London, England time, two LIBOR
Business Days prior to the Closing Date. If such rate does not appear on such
page (or 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 city of London, England are required or
authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.
Limited Repurchase Right Holder: The Master Servicer.
Liquidated Home Loan: As to any Payment Date, any Home Loan which the Master
Servicer has determined, based on the servicing procedures specified in the
Servicing Agreement, as of the end of the preceding Collection Period, that all
Liquidation Proceeds which it expects to recover in connection with the
disposition of the related Mortgaged Property have been recovered. In addition,
the Master Servicer will treat any Home Loan that is 180 days or more delinquent
as having been finally liquidated.
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 Home 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 loan which is senior to such Home Loan and amounts
advanced to keep current or pay off a loan that is senior to such Home Loan)
respecting the related Home Loan and any related and unreimbursed expenditures
for real estate property taxes or for property acquisition, restoration,
preservation or disposition, or insurance against casualty loss or damage.
Liquidation Loss Amount: With respect to any Payment Date and any Home Loan that
became a Liquidated Home Loan during the related Collection Period, the
unrecovered portion of the related Loan Balance thereof at the end of such
Collection Period, after giving effect to the Net Liquidation Proceeds applied
to reduce the related Loan Balance. In addition, as to any Home Loan for which
the principal balance has been reduced in connection with bankruptcy
proceedings, the amount of the reduction will be treated as a Liquidation Loss
Amount.
Liquidation Loss Distribution Amount: As to any Payment Date, an amount equal to
the lesser of (i) 100% of the Liquidation Loss Amounts incurred on the related
Home Loans during the related Collection Period and (ii) the Net Monthly Excess
Cash Flow available for payment of the Liquidation Loss Distribution Amount for
that Payment Date, as provided in clause (i) of Section 3.05(d) of the
Indenture.
Liquidation Proceeds: Proceeds (including Insurance Proceeds) if any received in
connection with the liquidation of any Home Loan or related REO, whether through
trustee's sale, foreclosure sale, the exercise of the power of eminent domain or
condemnation or otherwise.
Loan Balance: With respect to any Home Loan, other than a Liquidated Home Loan,
and as of any day, the related Cut-off Date Loan Balance, minus all collections
in respect of principal in accordance with the related Mortgage Note and applied
in reduction of the Loan Balance thereof. For purposes of this definition, a
Liquidated Home Loan shall be deemed to have a Loan Balance equal to zero.
Loan Rate or Mortgage Rate: With respect to any Home Loan and any day, the per
annum rate of interest set forth in the related Mortgage Note.
Lost Note Affidavit: With respect to any Home Loan as to which the original
Mortgage Note has been permanently lost or destroyed and has not been replaced,
an affidavit from the Seller certifying that the original Mortgage Note has been
lost, misplaced or destroyed (together with a copy of the related Mortgage
Note).
Master Servicer: Residential Funding Corporation, a Delaware corporation, and
its successors and assigns.
Master Servicing Fee: With respect to any Home Loan and any Collection Period,
the product of (i) the Master Servicing Fee Rate divided by 12 and (ii) the Loan
Balance of such Home Loan as of the first day of such Collection Period.
Master Servicing Fee Rate: With respect to any Home Loan, 0.08% per annum.
Monthly Payment: With respect to any Home Loan (including any REO Property) and
any Due Date, the payment of principal and interest due thereon in accordance
with the amortization schedule at the time applicable thereto (after adjustment,
if any, for partial prepayments and for Deficient Valuations occurring prior to
such Due Date but before any adjustment to such amortization schedule by reason
of any bankruptcy, other than a Deficient Valuation, or similar proceeding or
any moratorium or similar waiver or grace period).
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 Home
Loan.
Mortgage File: The file containing the Related Documents pertaining to a
particular Home Loan and any additional documents required to be added to the
Mortgage File pursuant to the Home Loan Purchase Agreement or the Servicing
Agreement.
Mortgage Note: With respect to a Home Loan, the mortgage note 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 Home Loan.
Mortgagor: The obligor or obligors under a Mortgage Note.
Net Liquidation Proceeds: As to any Liquidated Home Loan, the proceeds,
including Insurance Proceeds, received in connection with the liquidation of the
Home Loan, whether through trustee's sale, foreclosure sale or otherwise,
reduced by related expenses, but not including the portion, if any, of the
proceeds that exceed the principal balance of the Home Loan at the end of the
Collection Period immediately preceding the Collection Period in which the Home
Loan became a Liquidated Home Loan.
Net Loan Rate: With respect to any Home Loan and any date of determination, a
per annum rate of interest equal to the then applicable Loan Rate for such Home
Loan minus the Servicing Fee Rate.
Net Monthly Excess Cash Flow: For any Payment Date, the sum of (i) the excess,
if any, of (a) Interest Collections for that Payment Date over (b) the amount
payable to the Notes in respect of interest as provided in subsection (b) of
Section 3.05 of the Indenture and (ii) the Excess Reserve Amount for that
Payment Date.
Note Balance: With respect to any Payment Date and any Class of Notes, the
Initial Note Balance thereof reduced by the sum of (x) all payments of the
Principal Distribution Amount thereon prior to and as of such Payment Date and
(y) in the case of the Class M Notes, the aggregate, cumulative amount of
Liquidation Loss Amounts allocated thereto on all prior Payment Dates.
Note Owner: The Beneficial Owner of a Note.
Note Rate: With respect to the Class A-1 Notes, will be the lesser of (a) LIBOR
plus 0.14% per annum and (b) 7.500% per annum; with respect to the Class A-2
Notes, 4.37% per annum; with respect to the Class A-3 Notes, 4.46% per annum;
with respect to the Class A-4 Notes, 4.84% per annum; with respect to the Class
A-5 Notes, 5.08% per annum; with respect to the Class M-1 Notes, 5.11% per
annum; with respect to the Class M-2 Notes, 5.24% per annum; with respect to the
Class M-3 Notes, 5.32% per annum; with respect to the Class M-4 Notes, 5.46% per
annum; with respect to the Class M-5 Notes, 5.61% per annum; with respect to the
Class M-6 Notes, 5.71% per annum; with respect to the Class M-7 Notes, 5.81% per
annum; with respect to the Class M-8 Notes, 6.00% per annum; with respect to the
Class M-9 Notes, 7.04% per annum; provided, that on the Step-Up Date, the Note
Rate on the Class A-5, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8 and Class M-9 Notes shall increase by 0.50% per
annum.
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 be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes that the Indenture Trustee or the Owner Trustee knows to be
so owned shall be so disregarded. Owners of Notes that have been pledged in good
faith may be regarded as Holders if the pledgee establishes 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: Any one of the Class A-1, Class A-2, Class A-3, Class A-4, Class A- 5,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 or Class M-9 Notes issued and outstanding at any time 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.
Opinion of Counsel: A written opinion of counsel. Any Opinion of Counsel for the
Master Servicer may be provided by in-house counsel for the Master Servicer if
reasonably acceptable to the Indenture Trustee and the Rating Agencies or
counsel for the Depositor, as the case may be.
Optional Redemption: The right of the Master Servicer to purchase the Home Loans
on any Payment Date on which the aggregate Principal Balance of the Home Loans
as of the end of the related Collection Period is less than 10% of the Cut-off
Date Balance, pursuant to Section 8.08 of the Servicing Agreement.
Original Trust Agreement: The Trust Agreement, dated as of June 27, 2005,
between the Owner Trustee and the Depositor.
Outstanding: With respect to the Notes, as of the date of determination, all
Notes theretofore executed, authenticated and delivered under this Indenture
except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to the
Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes have been executed,
authenticated and delivered pursuant to the Indenture unless proof satisfactory
to the Indenture Trustee is presented that any such Notes are held by a holder
in due course.
Outstanding Reserve Amount: With respect to any Payment Date, the amount, if
any, by which (i) the Pool Balance after applying payments received in the
related Collection Period exceeds (ii) the sum of the aggregate Note Balance of
the Notes on such Payment Date after application of Principal Collections and
the Liquidation Loss Amounts for that Payment Date.
Owner Trustee: Wilmington Trust Company not in its individual capacity but
solely as Owner Trustee of the Trust, and its successors and assigns or any
successor owner trustee appointed pursuant to the terms of the Trust Agreement.
Paying Agent: Any paying agent or co-paying agent appointed pursuant to Section
3.03 of the Indenture, which initially shall be the Indenture Trustee.
Payment Account: The account established by the Indenture Trustee pursuant to
Section 8.02 of the Indenture and Section 5.01 of the Servicing Agreement.
Amounts deposited in the Payment Account will be distributed by the Indenture
Trustee in accordance with Section 3.05 of the Indenture.
Payment Date: The 25th day of each month, or if such day is not a Business Day,
then the next Business Day.
Percentage Interest: With respect to any Note and any date of determination, the
percentage obtained by dividing the Note Balance of such Note, by the aggregate
of the Note Balances of all Notes of the same Class.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by
the United States or any agency or instrumentality thereof when such obligations
are backed by the full faith and credit of the United States;
(vi) 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 its highest
short-term rating category available;
(vii) 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 category 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;
(viii) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the United
States or any state thereof which on the date of acquisition has been rated by
each Rating Agency in its highest short-term rating category available; provided
that such commercial paper shall have a remaining maturity of not more than 30
days;
(ix) a money market fund or a qualified investment fund rated by
each Rating Agency in its highest long-term rating category available; and
(x) other obligations or securities that are acceptable to each
Rating Agency as an Permitted Investment hereunder and will not reduce the
rating assigned to any Securities by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Securities as of the Closing
Date by such Rating Agency, 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 Home
Loans;
provided, however, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations References herein to the highest rating available on unsecured
long-term debt shall mean AAA in the case of Standard & Poor's and Aaa in the
case of Xxxxx'x, and references herein to the highest rating available on
unsecured commercial paper and short-term debt obligations shall mean A-1+ in
the case of Standard & Poor's and P-1 in the case of Xxxxx'x.
Person: Any legal individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Plan: Any employee benefit plan subject to ERISA and any plan or other
arrangement described in Section 4975(e)(1) of the Code.
Plan Assets: The assets of a Plan as determined under Department of Labor
regulation section 2510.3-101 or other applicable law.
Pool Balance: With respect to any date, the aggregate of the Loan Balances of
all Home Loans as of such date.
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.
Prepayment Assumption: A 100% Prepayment Assumption used solely for determining
the accrual of original issue discount, market discount and premium, if any, on
the Notes for federal income tax purposes. A 100% Prepayment Assumption assumes
a constant prepayment rate of 2% per annum for the first month, increasing each
month by an additional 1.285714% until the fifteenth month. Beginning in the
fifteenth month and in each month thereafter during the life of the Home Loans,
a 100% Prepayment Assumption assumes a constant prepayment rate of 20% per annum
each month.
Principal Collections: As to any Payment Date, an amount equal to the sum of:
(i) the principal portion of all scheduled Monthly Payments on the related Home
Loans received during the related Collection Period;
(ii) the principal portion of all proceeds of the repurchase of any Home Loans
(or, in the case of a substitution, any Substitution Adjustment Amounts) as
required by the Servicing Agreement received during the related Collection
Period and the principal portion of the cash purchase price paid in connection
with any optional purchase of the Home Loans by the Master Servicer; and
(iii) the principal portion of all other unscheduled collections received on the
Home Loans during the related Collection Period (or deemed to be received during
the related Collection Period) (including, without limitation, full and partial
Principal Prepayments made by the respective Mortgagors, Insurance Proceeds and
Net Liquidation Proceeds), to the extent not previously distributed;
provided, however, that Principal Collections shall be reduced by any amounts
withdrawn from the Custodial Account pursuant to Section 3.03(ii), (v), (vi) and
(vii) of the Servicing Agreement.
Principal Distribution Amount: As to any Payment Date, the sum of the following:
(i) the Principal Collections for that Payment Date;
(ii) any Liquidation Loss Distribution Amounts for that Payment Date; and
(iii) the amount of any Reserve Increase Amount for that Payment Date;
minus
(iv) the amount of any Excess Reserve Amount for that Payment Date.
Principal Prepayment: Any payment of principal made by the Mortgagor on a Home
Loan which is received in advance of its scheduled Due Date and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Program Guide: Together, the Seller's Seller Guide and Servicing Guide, as in
effect from time to time.
Prospectus Supplement: The prospectus supplement, dated June 24, 2005, relating
to the issuance of the Home Loan-Backed Notes, Series 2005-HI2.
Purchase Price: The meaning specified in Section 2.2(a) of the Home Loan
Purchase Agreement.
Purchaser: Residential Funding Mortgage Securities II, Inc., 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 issuance of the Securities, which initially shall be 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.
Record Date: With respect to the Class A-1 Notes and any Payment Date, the
Business Day next preceding such Payment Date and with respect to the Notes
(other than the Class A-1 Notes) and the Certificates 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 Accrual Period, as follows:
the arithmetic mean (rounded upwards, if necessary, to the nearest one sixteenth
of 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., London, England
time, on the second LIBOR Business Day prior to the first day of such Interest
Accrual 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 Note Balance
of the Class A-1 Notes; 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 Indenture Trustee after consultation with the Master
Servicer, as of 11:00 a.m., New York time, on such date for loans in U.S.
Dollars to leading European Banks for a period of one month in amounts
approximately equal to the aggregate Note Balance of the Class A-1 Notes. If no
such quotations can be obtained, the Reference Bank Rate shall be LIBOR
applicable to the preceding Payment Date; provided however, that if, under the
priorities indicated above, LIBOR for a Payment Date would be based on LIBOR for
the previous Payment Date for the third consecutive Payment Date, the Indenture
Trustee shall select an alternative comparable index over which the Indenture
Trustee has no control, used for determining one-month Eurodollar lending rates
that is calculated and published or otherwise made available by an independent
party.
Reference Banks: Barclays Bank PLC, Credit Suisse and Abbey National PLC.
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 Home Loan, the documents specified in
Section 2.1(c) of the Home Loan Purchase Agreement and any documents required to
be added to such documents pursuant to the Home Loan Purchase Agreement, the
Trust Agreement or the Servicing Agreement.
Release Agreement: A Release Agreement as defined in Section 3.05 of the
Servicing Agreement.
REO: A Mortgaged Property that is acquired by the Issuer in foreclosure or by
deed in lieu of foreclosure.
Repurchase Event: With respect to any Home Loan, one of the following: (i) a
discovery that, as of the Closing Date, 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 Home 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 Home Loan as to which the Seller delivers a Lost Note
Affidavit, a subsequent default on such Home Loan if the enforcement thereof or
of the related Mortgage is materially and adversely affected by the absence of
the original Mortgage Note.
Repurchase Price: With respect to any Home Loan required to be repurchased on
any date pursuant to the Home Loan Purchase Agreement or purchased by the Master
Servicer or the Limited Repurchase Right Holder pursuant to the Servicing
Agreement, an amount equal to the sum of (i) 100% of the Loan Balance thereof
(without reduction for any amounts charged off) and (ii) unpaid accrued interest
at the Loan Rate (or with respect to the last day of the month in the month of
repurchase, the Loan Rate will be the Loan Rate in effect as to the second to
last day in such month) on the outstanding principal balance thereof from the
Due Date to which interest was last paid by the Mortgagor to the first day of
the month following the month of purchase.
Request for Release: The form attached as Exhibit 4 to the Custodial Agreement
or an electronic request in a form acceptable to the Custodian.
Reserve Amount Floor: An amount equal to 0.50% of the Pool Balance as of the
Cut-off Date.
Reserve Amount Target: As to any Payment Date prior to the Stepdown Date, an
amount equal to 3.75% of the aggregate Cut-off Date Pool Balance. On any Payment
Date on or after the Stepdown Date so long as no Trigger Event is in effect, the
Reserve Amount Target will be equal to the greater of:
(a) 7.50% of the Pool Balance after applying payments received in the
related Collection Period; and
(b) the Reserve Amount Floor;
provided, however, that any scheduled reduction to the Reserve Amount Target on
or after the Stepdown Date as described above shall not be made on any Payment
Date when a Trigger Event is in effect. On any Payment Date on or after the
Stepdown Date, if a Trigger Event is in effect, the Reserve Amount Target will
equal the Reserve Amount Target on the previous Payment Date. In addition, the
Reserve Amount Target may be reduced with the consent of the Rating Agencies but
without the consent of the Noteholders.
Reserve Increase Amount: With respect to the any Payment Date, an amount equal
to the lesser of (i) the Net Monthly Excess Cash Flow available for payment of
the Reserve Increase Amount for that Payment Date, as provided in clause (ii) of
Section 3.05(d) of the Indenture and (ii) the excess, if any of (x) the Reserve
Amount Target over (y) the Outstanding Reserve Amount.
Responsible Officer: With respect to the Indenture Trustee, any officer of the
Indenture Trustee, with direct responsibility for the administration of the
Indenture, , as applicable, 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.
Sale: The meaning specified in Section 5.15 of the Indenture.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
Security: Any of the Certificates or Notes.
Securityholder or Holder: Any Noteholder or a Certificateholder.
Security Instrument: A written instrument creating a valid first lien on a
Mortgaged Property securing a Mortgage Note, which may be any applicable form of
mortgage, deed of trust, deed to secure debt or security deed, including any
riders or addenda thereto.
Seller: Residential Funding Corporation, a Delaware corporation, and its
successors and assigns.
Senior Enhancement Percentage: With respect to each Payment Date on or after the
Stepdown Date, a fraction (expressed as a percentage):
(1) the numerator of which is the excess of:
(a) the aggregate Principal Balance of the Home Loans for
the preceding Payment Date over
(b) (i) before the Note Principal Balances of the Class A
Notes have been reduced to zero, the aggregate Note Principal
Balance of the Class A Notes, or (ii) after the Note Principal
Balances of the Class A Notes have been reduced to zero, the Note
Principal Balance of the most senior Class of Notes outstanding
immediately prior to such Payment Date and
(2) the denominator of which is the aggregate Principal Balance
of the Home Loans for the preceding Payment Date.
Senior Principal Distribution Amount: With respect to any Payment Date, (1)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event
is in effect, the Principal Distribution Amount for that Payment Date, or (2) on
or after the Stepdown Date if a Trigger Event is not in effect for that Payment
Date, the lesser of:
o the Principal Distribution Amount for that Payment Date; and
o the excess of (A) the aggregate Note Balance of the Senior Notes
immediately prior to that Payment Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage
and (2) the Pool Balance after giving effect to distributions to
be made on that Payment Date and (y) the excess of the Pool
Balance after giving effect to distributions to be made on that
Payment Date, over the Reserve Amount Floor.
In no event will the Senior Principal Distribution Amount be greater than the
aggregate Note Balance of the Class A Notes.
Servicing Agreement: The Servicing Agreement dated as of June 29, 2005 among the
Indenture Trustee, the Issuer and the Master Servicer, as master servicer.
Servicing Certificate: A certificate prepared by a Servicing Officer on behalf
of the Master Servicer in accordance with Section 4.01 of the Servicing
Agreement.
Servicing Default: The meaning specified in Section 7.01 of the Servicing
Agreement.
Servicing Fee: With respect to any Home Loan, the sum of the related Master
Servicing Fee and the related Subservicing Fee.
Servicing Fee Rate: With respect to any Home 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 Home Loans whose name
and specimen signature appear on a list of servicing officers furnished to the
Indenture Trustee by the Master Servicer, as such list may be amended from time
to time.
Sixty-Plus Delinquency Percentage: For any Payment Date, the fraction, expressed
as a percentage, equal to the aggregate principal balance of the Home Loans that
are 60 or more days delinquent in payment of principal and interest, including
Home Loans in foreclosure and Home Loans in REO, over the Pool Balance.
Standard & Poor's: Standard & Poor's, a Division of The XxXxxx-Xxxx Companies,
Inc. or its successor in interest.
Stated Value: The value of the Mortgaged Property as stated by the related
Mortgagor in his or her application.
Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12 Del.
Code ss.ss.3801 et seq., as the same may be amended from time to time.
Step-Up Date: The second Payment Date immediately following the Payment Date on
which the Master Servicer can purchase all or some of the Home Loans from the
Trust pursuant to Section 8.08 of the Servicing Agreement.
Stepdown Date: The later of (a) the Payment Date in July 2008 and (b) the first
Payment Date on which the aggregate Pool Balance, after applying payments
received in the related Collection Period, is less than or equal to 50.00% of
the aggregate Pool Balance as of the Cut-off Date.
Subordinate Note: Any of the Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8 or Class M-9 Notes.
Subordination Percentage: As to any Class of Notes, the following percentages:
with respect to the Class A Notes, 48.50%, with respect to the Class M-1 Notes,
56.00%, with respect to the Class M-2 Notes, 62.50%, with respect to the Class
M-3 Notes, 68.50%, with respect to the Class M-4 Notes, 73.50%, with respect to
the Class M-5 Notes, 78.00%, with respect to the Class M-6 Notes, 81.50%, with
respect to the Class M-7 Notes, 85.50%, with respect to the Class M-8 Notes,
89.80% and with respect to the Class M-9 Notes, 92.50%.
Subservicer: Any Person with whom the Master Servicer has entered into a
Subservicing Agreement as a Subservicer by the Master Servicer.
Subservicing Account: An Eligible Account established or maintained by a
Subservicer as provided for in Section 3.02(c) of the Servicing Agreement.
Subservicing Agreement: The written contract between the Master Servicer and any
Subservicer relating to servicing and administration of certain Home Loans as
provided in Section 3.01 of the Servicing Agreement.
Subservicing Fee: With respect to any Collection Period, the fee retained
monthly by the Subservicer (or, in the case of a nonsubserviced Home Loan, by
the Master Servicer) equal to the product of (i) the Subservicing Fee Rate
divided by 12 and (ii) the Pool Balance as of the first day of such Collection
Period.
Subservicing Fee Rate: With respect to each Home Loan, the amount payable to the
related Subservicer, equal to 0.50% per annum.
Substitution Adjustment Amounts: With respect to any Eligible Substitute Loan,
the amount as defined in Section 3.1(b) of the Home Loan Purchase Agreement and
any Deleted Loan, the amount, if any, as determined by the Master Servicer, by
which the aggregate principal balance of all such Eligible Substitute Loans as
of the date of substitution is less than the aggregate principal balance of all
such Deleted Loans (after application of the principal portion of the Monthly
Payments due in the month of substitution that are to be distributed to the
Payment Account in the month of substitution).
Termination Price: In the event that all of the Home Loans are purchased by the
Master Servicer, the Termination Price will be an amount equal to 100% of the
unpaid Loan Balance of each Home Loan so purchased, plus accrued and unpaid
interest thereon at the weighted average of the Loan Rates through the day
preceding the Payment Date on which such purchase occurs, plus any amounts owed
by the Seller pursuant to the second paragraph of Section 3.1(c) of the Home
Loan Purchase Agreement in respect of any liability, penalty or expense that
resulted from a breach of the representation and warranty set forth in clause
(x) of Section 3.1(b) of the Home Loan Purchase Agreement, that remain unpaid on
the date of such purchase.
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.
Trigger Event: A Trigger Event is in effect with respect to any Payment Date on
or after the Stepdown Date if either:
(1) the three-month average of the Sixty-Plus Delinquency Percentage,
as determined as of that Payment Date and the immediately
preceding two Payment Dates equals or exceeds 15.75% of the
Senior Enhancement Percentage for such Payment Date; or
(2) on or after the Payment Date in July 2008:
o if the Payment Date occurs on or after the 37th Payment Date
through the 48th Payment Date, the aggregate amount of
Liquidation Loss Amounts on the Home Loans since the Cut-off
Date exceeds 7.75% of the Pool Balance as of the Cut-off Date on
the 37th Payment Date, plus an additional 1/12th of 3.50% of the
Pool Balance as of the Cut-off Date for each Payment Date
thereafter up to an including the 48th Payment Date; or
o if the Payment Date occurs on or after the 49th Payment Date
through the 60th Payment Date, the aggregate amount of
Liquidation Loss Amounts on the Home Loans since the Cut-off
Date exceeds 11.25% of the Pool Balance as of the Cut-off Date
on the 49th Payment Date, plus an additional 1/12th of 3.25% of
the Pool Balance as of the Cut-off Date for each Payment Date
thereafter up to an including the 60th Payment Date; or
o if the Payment Date occurs on or after the 61st Payment Date
through the 72nd Payment Date, the aggregate amount of
Liquidation Loss Amounts on the Home Loans since the Cut-off
Date exceeds 14.50% of the Pool Balance as of the Cut-off Date
on the 61st Payment Date, plus an additional 1/12th of 2.50% of
the Pool Balance as of the Cut-off Date for each Payment Date
thereafter up to an including the 72nd Payment Date; or
o if the Payment Date occurs on or after the 73rd Payment Date,
the aggregate amount of Liquidation Loss Amounts on the Home
Loans since the Cut-off Date exceeds 17.00% of the Pool Balance
as of the Cut-off Date;
provided, however, that if the six-month average of the aggregate Liquidation
Loss Amount, as determined for that Payment Date and the immediately preceding
five Payment Dates, is less than 50% of the six-month average of the Net Monthly
Excess Cash Flow, as determined for that Payment Date and the immediately
preceding five Payment Dates, a Trigger Event shall not be deemed to be in
effect. For purposes of determining whether a Trigger Event has occurred on any
Payment Date, Net Monthly Excess Cash Flow shall be determined assuming that the
Excess Reserve Amount is calculated without regard to the proviso set forth in
the definition of Reserve Amount Target.
Trust Agreement: The Amended and Restated Trust Agreement, dated as of June 29,
2005, 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.
Underwriters: Bear, Xxxxxxx & Co. Inc. and Residential Funding Securities
Corporation.
Uniform Single Attestation Program for Mortgage Bankers: The Uniform Single
Attestation Program for Mortgage Bankers, as published by the Mortgage Bankers
Association of America and effective with respect to fiscal periods ending on or
after December 15, 1995.
United States Person: A citizen or resident of the United States, a corporation,
partnership or other entity created or organized in, or under the laws of, the
United States or any state thereof or the District of Columbia (except, in the
case of a partnership, to the extent provided in regulations), or an estate
whose income is subject to United States federal income tax regardless of its
source, or a trust other than a "foreign trust" within the meaning of Section
7701(a)(30) of the Code.
