EXHIBIT 99.3
EXECUTION COPY
MSDWCC HELOC TRUST 2005-1
Issuer
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION
Indenture Trustee
INDENTURE
Dated as of January 1, 2005
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HELOC ASSET-BACKED NOTES
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Table of Contents
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. .............................................................................................4
Section 2.02. Execution, Authentication and Delivery. .......................................................... 4
ARTICLE III.
Covenants
Section 3.01. Collection of Payments with respect to the Home Equity Loans. .................................... 5
Section 3.02. Maintenance of Office or Agency. ..................................................................5
Section 3.03. Money for Payments to Be Held in Trust; Paying Agent. .............................................5
Section 3.04. Existence. ........................................................................................ 6
Section 3.05. Payment of Principal and Interest; Defaulted Interest.............................................. 7
Section 3.06. Protection of Trust Estate......................................................................... 9
Section 3.07. Opinions as to Trust Estate........................................................................ 9
Section 3.08. Performance of Obligations; Servicing Agreement................................................... 10
Section 3.09. Negative Covenants. .............................................................................. 10
Section 3.10. Annual Statement as to Compliance. ...............................................................11
Section 3.11. Recording of Assignments. ........................................................................11
Section 3.12. Representations and Warranties Concerning the Home Equity Loans....................................11
Section 3.13. Assignee of Record of the Home Equity Loans. .................................................... 12
Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee. ........................................... 13
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 Certificates or Related Documents.....................................16
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. Determination of Note Rate. ...................................................................... 16
Section 3.28. Claims under the Credit Enhancement Instrument.....................................................17
Section 3.29. Treatment of the Notes as Debt for All Purposes. .................................................17
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Section 3.30. Rights in Respect of Insolvency Proceedings....................................................... 18
Section 3.31. Effect of Payments by the Credit Enhancer: Subrogation............................................ 19
Section 3.32. Protection of Trust Estate. ....................................................................: 19
ARTICLE IV.
The Notes; Satisfaction and Discharge of Indenture
Section 4.01. The Notes. .......................................................................................21
Section 4.02. Registration of and Limitations on Transfer and Exchange of Notes; Appointment of
Certificate Registrar. .......................................................................21
Section 4.03. Xxxxxxxxx, Xxxxxxxxx, Lost or Stolen Notes. ...................................................... 22
Section 4.04. Persons Deemed Owners. ........................................................................... 23
Section 4.05. Cancellation. ................................................................................... 23
Section 4.06. Book-Entry Notes. ................................................................................24
Section 4.07. Notices to Depository. ...........................................................................24
Section 4.08. Definitive Notes. ............................................................................... 24
Section 4.09. Tax Treatment. .................................................................................. 25
Section 4.10. Satisfaction and Discharge of Indenture. .........................................................25
Section 4.11. Application of Trust Money. ......................................................................26
Section 4.12. Reserved.......................................................................................... 26
Section 4.13. Repayment of Monies Held by Paying Agent. ....................................................... 26
Section 4.14. Temporary Notes. ................................................................................ 26
ARTICLE V.
Default and Remedies
Section 5.01. Events of Default. .............................................................................. 28
Section 5.02. Acceleration of Maturity; Rescission and Annulment. .............................................. 28
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..........................29
Section 5.04. Remedies; Priorities.............................................................................. 31
Section 5.05. Optional Preservation of the Trust Estate. .......................................................32
Section 5.06. Limitation of Suits. .............................................................................32
Section 5.07. Unconditional Rights of Noteholders to Receive Principal and Interest. .......................... 33
Section 5.08. Restoration of Rights and Remedies. ...............................................................33
Section 5.09. Rights and Remedies Cumulative. .................................................................. 33
Section 5.10. Delay or Omission Not a Waiver. .................................................................. 33
Section 5.11. Control by Credit Enhancer or Noteholders. .......................................................33
Section 5.12. Waiver of Past Defaults. ........................................................................ 34
Section 5.13. Undertaking for Costs. ........................................................................... 34
Section 5.14. Waiver of Stay or Extension Laws. ............................................................... 35
Section 5.15. Sale of Trust Estate. .............................................................................35
Section 5.16. Action on Notes. .................................................................................36
Section 5.17. Performance and Enforcement of Certain Obligations................................................ 37
ARTICLE VI.
The Indenture Trustee
Section 6.01. Duties of Indenture Trustee....................................................................... 38
Section 6.02. Rights of Indenture Trustee. ......................................................................39
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Section 6.03. Individual Rights of Indenture Trustee. ..........................................................39
Section 6.04. Indenture Trustee's Disclaimer. ................................................................. 39
Section 6.05. Notice of Event of Default. ......................................................................39
Section 6.06. Reports by Indenture Trustee to Holders. ......................................................... 40
Section 6.07. Tax. .............................................................................................40
Section 6.08. Compensation and Indemnity. .......................................................................40
Section 6.09. Replacement of Indenture Trustee. ................................................................41
Section 6.10. Successor Indenture Trustee by Merger. ...........................................................42
Section 6.11. Appointment of Co-Indenture Trustee or Separate Indenture Trustee..................................42
Section 6.12. Eligibility; Disqualification. ...................................................................43
Section 6.13. Preferential Collection of Claims Against Issuer. ............................................... 43
Section 6.14. Representations and Warranties. ................................................................. 43
Section 6.15. Directions to Indenture Trustee. .................................................................44
Section 6.16. Indenture Trustee May Own Securities. ........................................................... 44
Section 6.17. Other Capacities of Indenture Trustee. ........................................................ 44
ARTICLE VII.
Noteholders' Lists and Reports
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders. ......................... 45
Section 7.02. Preservation of Information; Communications to Noteholders........................................ 45
Section 7.03. Reports by Issuer. ................................................................................47
Section 7.04. Reports by Indenture Trustee. .................................................................... 47
ARTICLE VIII.
Accounts, Disbursements and Releases
Section 8.01. Collection of Money. .............................................................................48
Section 8.02. Trust Accounts. ...................................................................................48
Section 8.03. Officer's Certificate. ............................................................................48
Section 8.04. Mandatory Auction; Termination Upon Distribution to Noteholders....................................49
Section 8.05. Release of Trust Estate........................................................................... 50
Section 8.06. Surrender of Notes Upon Final Payment. .......................................................... 50
ARTICLE IX.
Supplemental Indentures
Section 9.01. Supplemental Indentures Without Consent of Noteholders............................................ 51
Section 9.02. Supplemental Indentures With Consent of Noteholders. .............................................52
Section 9.03. Execution of Supplemental Indentures. ........................................................... 53
Section 9.04. Effect of Supplemental Indenture. ............................................................... 54
Section 9.05. Conformity with Trust Indenture Act. ............................................................ 54
Section 9.06. Reference in Notes to Supplemental Indentures. ................................................... 54
ARTICLE X.
Miscellaneous
Section 10.01. Compliance Certificates and Opinions, etc........................................................ 55
Section 10.02. Form of Documents Delivered to Indenture Trustee. ............................................... 55
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Section 10.03. Acts of Noteholders.............................................................................. 56
Section 10.04. Notices, etc., to Indenture Trustee, Issuer, Credit Enhancer and Rating Agencies. ...............57
Section 10.05. Notices to Noteholders; Waiver. ................................................................ 57
Section 10.05. ...............................................................................................57
Section 10.06. Alternate Payment and Notice Provisions. .........................................................58
Section 10.07. Conflict with Trust Indenture Act. ..............................................................58
Section 10.08. Effect of Headings. ............................................................................ 58
Section 10.09. Successors and Assigns. .........................................................................58
Section 10.10. Separability. .................................................................................. 58
Section 10.11. Benefits of Indenture. ......................................................................... 58
Section 10.12. Legal Holidays. .................................................................................59
Section 10.13. GOVERNING LAW. ..................................................................................59
Section 10.14. Counterparts. ...................................................................................59
Section 10.15. Recording of Indenture. ........................................................................ 59
Section 10.16. Issuer Obligation. ..............................................................................59
Section 10.17. No Petition. ....................................................................................59
Section 10.18. Inspection. .................................................................................... 60
Section 10.19. Rights of the Credit Enhancer to Exercise Rights of Noteholder. ................................ 60
Section 10.20. Third-Party Beneficiary. ....................................................................... 60
EXHIBITS
Exhibit A - Form of Notes
Exhibit B - Form of Servicer Certification
Exhibit C - Form of Certification to be Provided to Servicer by Indenture Trustee
Appendix A Definitions
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EXECUTION COPY
This Indenture, dated as of January 1, 2005, between MSDWCC
HELOC TRUST 2005-1, a Delaware statutory trust, as Issuer (the "Issuer"), and
XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking association, 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 2005-1 Home Equity 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 Equity Loans; (b) all funds, cash, money and
investment property on deposit from time to time in, or credited from time to
time to, each of the Collection Account, the Certificate Distribution Account,
the Payment Account and all proceeds thereof; (c) all insurance policies,
including the right to payments thereunder, with respect to the Home Equity
Loans required to be maintained pursuant to the Servicing Agreement and to be
serviced by the Servicer; (d) all present and future claims, demands, causes
and choses in action in respect of any or all of the foregoing and all
payments thereon or thereunder, and all proceeds of every kind and nature
whatsoever in respect of, any or all of the foregoing and all payments thereon
or thereunder, 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, investment
property and other property which at any time constitute all or part of or are
included in the proceeds of any of the foregoing; (e) all rights of the
Seller/Servicer under the Insurance Policy as described in Section 2.1(a) of
the Home Equity Loan Purchase Agreement and (f) all of the Depositor's right,
title and interest under the Home Equity Loan Purchase Agreement (each of (a)
- (f) collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment
of principal of and interest on, and any other amounts owing in respect of,
the Notes, equally and ratably without prejudice, priority or distinction, and
to secure compliance with the provisions of this Indenture, all as provided in
this Indenture.
The foregoing Grant shall inure to the benefit of the Credit
Enhancer in respect of draws made on the Credit Enhancement Instrument and
amounts owing from time to time pursuant to the Insurance and Indemnity
Agreement (regardless of whether such amounts relate to the Notes), and such
Grant shall continue in full force and effect for the benefit of the Credit
Enhancer until all such amounts owing to it have been repaid in full.
The Indenture Trustee, as trustee on behalf of the Holders
of the Notes, acknowledges such Xxxxx, accepts the trust under this Indenture
in accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
ARTICLE I.
Definitions
Section 1.01. Definitions. For all purposes of this Indenture, except
as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the
meanings assigned to such terms in the Definitions attached hereto as Appendix
A which is incorporated by reference herein. All other capitalized terms used
herein shall have the meanings specified herein.
Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act (the
"TIA"), the provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined
by Commission rule have the meaning assigned to them by such
definitions.
Section 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles as
in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in
the plural include the singular; and
(vi) any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of
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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, 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 Authorized 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 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 $753,650,000.
Each Note shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes and shall be issuable in the
minimum initial Security Balances of $1,000 and in integral multiples of $1 in
excess thereof, except for one Note, evidencing the sum of an authorized
denomination thereof and the remainder of the aggregate Security Balance of
the Notes.
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 Equity
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 Servicer,
each remittance received by the Indenture Trustee with respect to the Home
Equity Loans. The Indenture Trustee shall make all payments of principal of
and interest on the Notes, subject to Section 3.03 and 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. 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 Indenture Trustee's Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its
agent to receive all such surrenders, notices and demands at the Indenture
Trustee's Corporate Trust Office.
Section 3.03. Money for Payments to Be Held in Trust; Paying Agent.
As provided in Section 3.01, all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn from the
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 hereby appoints the
Indenture Trustee as the initial Paying Agent hereunder. The Indenture Trustee
hereby accepts such appointment.
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 and the Credit Enhancer
written notice of any default by the Issuer of which it has actual knowledge
in the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
identified in clause (ii) above upon the written request of the Indenture
Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by
such Paying Agent;
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(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;
(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 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 Equity Loans and each
other instrument or agreement included in the Trust Estate.
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Section 3.05. Payment of Principal and Interest; Defaulted Interest.
(a) On each Payment Date from Investor P&I Collections on deposit in
the Payment Account, the Paying Agent shall pay to the Noteholders, the
Certificate Paying Agent, on behalf of the Certificateholders, and to other
Persons the amounts to which they are entitled, as set forth below in the
following order of priority:
(i) sequentially to (A) concurrently (I) the Indenture
Trustee, payment or reimbursement of any amounts owing to it pursuant to this
Indenture, including but not limited to Section 6.08, and pursuant to the
Servicing Agreement, including but not limited to Section 7.02, subject to a
$100,000 cap per annum for such Payment Date and no more than $20,000 on any
Payment Date and (II) the Owner Trustee, its fee for services rendered
pursuant to the Trust Agreement, for such Payment Date, and (B) the Servicer,
payment of any amounts owing to it pursuant to Section 6.03 of the Servicing
Agreement, subject to a $50,000 cap per annum;
(ii) to the Credit Enhancer, the Premium for the Credit
Enhancement Instrument (as set forth in the Premium Letter) and any such
Premium remaining unpaid for any prior Payment Date (with interest thereon as
provided in the Insurance and Indemnity Agreement) for such Payment Date;
(iii) to the Noteholders, interest accrued during the related
Interest Period at the Note Rate on the Security Balance of the Notes
immediately prior to such Payment Date, other than Interest Shortfalls;
(iv) to the Noteholders, principal equal to the Principal
Collection Distribution Amount for such Payment Date less the Principal
Reduction Amount for such Payment Date;
(v) to the Noteholders, an amount equal to (A) the Investor
Liquidation Loss Amounts on such Payment Date, plus (B) any Investor
Liquidation Loss Amounts remaining undistributed from any preceding Payment
Date, provided that any Investor Liquidation Loss Amount shall not be required
to be paid to the extent that such Investor Liquidation Loss Amount was paid
on the Notes by means of a draw on the Credit Enhancement Instrument;
(vi) to the Credit Enhancer, reimbursement for prior draws
made under the Credit Enhancement Instrument and any other amounts owed to the
Credit Enhancer pursuant to the Basic Documents (with interest thereon as
provided in the Insurance and Indemnity Agreement);
(vii) to the Noteholders, an amount equal to the
Overcollateralization Deficit for such Payment Date;
(viii) to the Noteholders, principal in the amount of the
Accelerated Principal Payment Amount for such Payment Date;
(ix) to the Servicer, payment of any amounts owing to it
pursuant to Section 6.03 of the Servicing Agreement, not subject to a per
annum cap;
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(x) to the Noteholders, an amount equal to Interest Shortfalls
not previously paid (together with interest thereon at the Note Rate, to the
extent permitted by law);
(xi) to the Indenture Trustee for any other amounts owing it
pursuant to this Indenture, including but not limited to Section 6.08 hereof,
and the Servicing Agreement, including but not limited to Section 7.02
thereof, and remaining unpaid after the payment of amounts under Section
3.05(a)(i) above or to the Owner Trustee for any other expenses due it under
the Trust Agreement; and
(xii) any remaining amount, including any Seller P&I
Collections, to the Certificate Paying Agent, on behalf of the holders of the
Certificates;
provided, however, that on the Scheduled Final Payment Date or other final
Payment Date, the amount to be paid pursuant to clause (iv) above shall be
equal to the Security Balance of the Notes immediately prior to such Payment
Date. For purposes of the foregoing, required payments of principal on the
Notes on each Payment Date will include the Investor Liquidation Loss Amounts
for such Payment Date and for all previous Collection Periods until paid or
covered in full, to the extent not otherwise covered by a Liquidation Loss
Distribution Amount, a reduction of the Overcollateralization Amount or a draw
on the Credit Enhancement Instrument (up to the outstanding Security Balance
thereof).
On each Payment Date, the Certificate Paying Agent shall
deposit in the Certificate Distribution Account all amounts it received
pursuant to this Section 3.05 for the purpose of distributing such funds to
the Certificateholders.
The amounts paid to Noteholders shall be paid in accordance
with the applicable percentage as set forth in paragraph (b) below. Interest
will accrue on the Notes during an Interest Period on the basis of the actual
number of days in such Interest Period and a year assumed to consist of 360
days.
Any installment of interest or principal, if any, payable on
any Note that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall be paid to each Holder of record on the
preceding Record Date, by wire transfer to an account specified in writing by
such Holder reasonably satisfactory to the Indenture Trustee as of the
preceding Record Date or in all other cases or if no such instructions have
been delivered to the Indenture Trustee, by check to such Noteholder mailed to
such Holder's address as it appears in the Note Register in the amount
required to be distributed to such Holder on such Payment Date pursuant to
such Holder's Securities; provided, however, that the Indenture Trustee shall
not pay to such Holders any amount required to be withheld from a payment to
such Holder by the Code.
(b) The principal of each Note shall be due and payable in full on
the Scheduled Final Payment Date for such Note as provided in the related form
of Note set forth in Exhibit A. All principal payments of each of 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, the Indenture Trustee shall notify the Person
in whose name a Note is registered at the close of business on the Record Date
preceding the Scheduled Final Payment Date or other final Payment Date. Such
notice shall be mailed no later than five Business Days prior to such
Scheduled Final Payment Date or other final Payment Date and shall
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specify that payment of the principal amount and any interest due with respect
to such Note at the Scheduled Final Payment Date or other final Payment Date
will be payable only upon presentation and surrender of such Note and shall
specify the place where such Note may be presented and surrendered for such
final payment.
Section 3.06. Protection of Trust Estate.
(a) The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture including but not limited to
the filing of one or more UCC-1 financing statements describing as collateral
all assets and other property of the Issuer and naming the Issuer as debtor
and the Indenture Trustee as secured party;
(iii) cause the Trust to enforce any of the Home Equity Loans;
or
(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Trust Estate
against the claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture
Trustee shall not remove any portion of the Trust Estate that consists of
money or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the most recent Opinion of
Counsel delivered pursuant to Section 3.07 (or from the jurisdiction in which
it was held as described in the Opinion of Counsel delivered at the Closing
Date pursuant to Section 3.07(a), if no Opinion of Counsel has yet been
delivered pursuant to Section 3.07(b)) unless the Indenture Trustee shall have
first received an Opinion of Counsel to the effect that the Lien and security
interest created by this Indenture with respect to such property will continue
to be maintained after giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent
and attorney-in-fact to execute (if required) and cause the Servicer to file
any financing statement, continuation statement or other instrument required
to be executed pursuant to this Section 3.06.
Section 3.07. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee, the Credit Enhancer 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
9
interest in the Trust Estate 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 January 31st in each calendar year, beginning in
2006, the Issuer shall furnish to the Indenture Trustee and the Credit
Enhancer an Opinion of Counsel at the expense of the Issuer either stating
that, in the opinion of such counsel, such action has been taken with respect
to the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and with
respect to the execution (if required) and filing of any financing statements
and continuation statements as is necessary to maintain the lien and security
interest in the Trust Estate 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 (if required) 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 Trust Estate until January
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
Equity 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 Equity Loans or any such instrument, except such actions
as the Servicer is expressly permitted to take pursuant to the Servicing
Agreement.
(d) The Issuer may retain an administrator and may enter into
contracts with other Persons for the performance of the Issuer's obligations
hereunder, and performance of such obligations by such Persons shall be deemed
to be performance of such obligations by the Issuer.
Section 3.09. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(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 or the Credit Enhancer pursuant to Section
5.04 or 8.05 hereof or as may be permitted or required pursuant to the
Servicing Agreement or the Home Equity Loan Purchase Agreement;
(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
10
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, (B) permit any
lien, charge, excise, claim, security interest, mortgage or other encumbrance
(other than the Lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part thereof or any
interest therein or the proceeds thereof or (C) permit the Lien of this
Indenture not to constitute a valid first priority security interest in the
Trust Estate; or
(iv) impair or cause to be impaired the Issuer's interest in
the Home Equity Loans, the Home Equity Loan Purchase Agreement or in any Basic
Document, if any such action would materially and adversely affect the
interests of the Noteholders or the Credit Enhancer.
Section 3.10. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee and the Credit Enhancer, within 120 days
after the end of each fiscal year (which currently ends December 31) of the
Issuer (commencing with the fiscal year 2006), 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 Equity Loan Purchase Agreement to
submit or cause to be submitted for recording all Assignments of Mortgages to
the extent required by the Home Equity Loan Purchase Agreement.
Section 3.12. Representations and Warranties Concerning the Home
Equity Loans.
(a) The Indenture Trustee, as pledgee of the Home Equity 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 Equity Loan Purchase Agreement
concerning the Home Equity 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.
(b) The Issuer hereby makes the following representations and
warranties as of the Closing Date with respect to the Home Equity Loans:
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(i) The Issuer represents and warrants that the Indenture
creates a valid and continuing security interest (as defined in the UCC) in
the Home Equity Loans in favor of the Noteholders, which security interest is
prior to all other Liens, and is enforceable as such as against creditors of
and purchasers from the Issuer.
(ii) The Issuer represents and warrants that the Home Equity
Loans constitute "instruments" within the meaning of the UCC.
(iii) The Issuer represents and warrants that the Issuer owns
and has good and marketable title to the Home Equity Loans free and clear of
any Lien, claim or encumbrance of any Person.
(iv) The Issuer represents and warrants that the Issuer has
caused or will have caused, on or prior to the Closing Date the filing of all
appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the
security interest in the Home Equity Loans granted to the Noteholders
hereunder.
(v) The Issuer represents and warrants that other than the
security interest granted to the Noteholders pursuant to this Agreement, the
Issuer has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Home Equity Loans. 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 Home Equity Loans other
than any financing statement relating to the security interest granted to the
Noteholders hereunder or that has been terminated. The Issuer is not aware of
any judgment or tax lien filings against the Issuer.
(vi) The Issuer represents and warrants that the Issuer has
in its possession all original copies of the security certificates that
constitute or evidence the Home Equity Loans. The security certificates that
constitute or evidence the Home Equity Loans do not have any marks or
notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Noteholders. All financing statements
filed or to be filed against the Issuer in favor of the Noteholders in
connection herewith describing the Home Equity Loans contain a statement to
the following effect: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the
Noteholders."
Section 3.13. Assignee of Record of the Home Equity Loans. As pledgee
of the Home Equity Loans, the Indenture Trustee may, upon the occurrence of
certain events, hold record title to the Home Equity Loans by being named as
payee in the endorsements of the Mortgage Notes and assignee in the
Assignments of Mortgage as provided under Section 2.1 of the Home Equity Loan
Purchase Agreement. Except as expressly provided in the Home Equity Loan
Purchase Agreement or in the Servicing Agreement with respect to any specific
Home Equity Loan, the Indenture Trustee shall not execute any endorsement or
assignment or otherwise release or transfer such record title to any of the
Home Equity Loans until such time as the remaining Trust Estate may be
released pursuant to Section 8.05(b).
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Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee.
Solely for purposes of perfection under Section 9-305 of the UCC or other
similar applicable law, rule or regulation of the state in which such property
is held by the Servicer, the Issuer and the Indenture Trustee hereby
acknowledge that the Servicer is acting as agent and bailee of the Indenture
Trustee in holding amounts on deposit in the Collection Account pursuant to
Section 3.02 of the Servicing Agreement that are allocable to the Home Equity
Loans, as well as the agent and bailee of the Indenture Trustee in holding any
Related Documents released to the Servicer pursuant to Section 3.06(b) of the
Servicing Agreement, and any other items constituting a part of the Trust
Estate which from time to time come into the possession of the Servicer. It is
intended that, by the Servicer's acceptance of such agency pursuant to Section
3.02 of the Servicing Agreement, the Indenture Trustee, as a pledgee of the
Home Equity 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 UCC of the state in which such property is held by the Servicer.
Section 3.15. Investment Company Act. The Issuer shall not become an
"investment company" or come under the "control" of an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (or
any successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
provided, however, that the Issuer shall be in compliance with this Section
3.15 if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions
imposed in such order.
Section 3.16. Issuer May Consolidate, etc.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless the Credit Enhancer consents thereto and:
(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 thereof
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 and the Credit Enhancer, the
due and punctual payment of the principal of and interest on all Notes and to
the Certificate Paying Agent, on behalf of the Certificateholders and the
performance or observance of every agreement and covenant of this Indenture on
the part of the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
(iii) the Issuer receives prior written consent of the Credit
Enhancer and the Rating Agencies shall have notified the Issuer that such
transaction shall not cause the rating of the Notes or the Certificates to be
reduced, suspended or withdrawn or to be considered by either Rating Agency to
be below investment grade without taking into account the Credit Enhancement
Instrument;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee and the
Credit Enhancer as addressees thereof)
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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
and the Credit Enhancer 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) Except as otherwise provided in the Servicing Agreement or the
Home Equity Loan Purchase Agreement, the Issuer shall not convey or transfer
any of its properties or assets, including those included in the Trust Estate,
to any Person, unless the Credit Enhancer consents to such conveyance or
transfer and:
(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
thereof, or the District of Columbia, (B) expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee and the Credit Enhancer, 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 Issuer receives consent of the Credit Enhancer and
the Rating Agencies shall have notified the Issuer that such transaction shall
not cause the rating of the Notes or the Certificates to be reduced, suspended
or withdrawn, as determined without regard to the Credit Enhancement
Instrument;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee and the
Credit Enhancer as addressees thereof) 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
14
(vi) the Issuer shall have delivered to the Indenture Trustee
and the Credit Enhancer 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 Equity Loans and the issuance of the Notes and Certificates in the manner
contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.
Section 3.19. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.20. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by this Indenture or the Basic Documents, the Issuer
shall not make any loan or advance or extend credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or make
any capital contribution to, any other Person.
Section 3.21. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.22. Owner Trustee Not Liable for Certificates or Related
Documents. The recitals contained herein shall be taken as the statements of
the Depositor, and the Owner Trustee assumes no responsibility for the
correctness thereof. The Owner Trustee and the Indenture Trustee make no
representations as to the validity or sufficiency of this Indenture, of any
Basic Document or of the Certificates (other than the signatures of the Owner
Trustee on the Certificates) or the Notes, or of any Related Documents. The
Owner Trustee and the Indenture Trustee shall at no time have any
responsibility or liability with respect to the sufficiency of the Owner Trust
Estate or its ability to generate the payments to be distributed to
Certificateholders under the Trust Agreement or to the Noteholders under this
Indenture including, the compliance by the Depositor or the Seller with any
warranty or representation made under any Basic
15
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 Certificateholders as contemplated by, and to the
extent funds are available for such purpose under the Trust Agreement and (y)
payments to the Servicer pursuant to the terms of the Servicing Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account except in accordance with this Indenture and the
Basic Documents.
Section 3.24. Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Credit Enhancer and the Rating Agencies prompt written
notice of each Event of Default hereunder and under the Trust Agreement.
Section 3.25. Further Instruments and Acts. Upon request of the
Indenture Trustee or the Credit Enhancer, 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 make available to DTC,
the Rating Agencies, the Issuer, the Depositor, the Servicer, the Credit
Enhancer, each Noteholder and Certificateholder, respectively, the Statement
prepared by the Indenture Trustee and based on the Servicing Reports provided
to the Indenture Trustee by the Servicer pursuant to Section 4.01 of the
Servicing Agreement.
The Indenture Trustee will make the Statement (and, at its option,
any additional files containing the same information in an alternative format)
available each month to Noteholders, the other parties described in the
preceding paragraph and the general public via the Indenture Trustee's
internet website. The Indenture Trustee's internet website shall initially be
located at "xxx.xxxxxxx.xxx". Assistance in using the website can be obtained
by calling the Indenture Trustee's customer service desk at (000) 000-0000.
Parties that are unable to use the above distribution option are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Indenture Trustee shall have the right
to change the way the Statement is distributed in order to make such
distribution more convenient and/or more accessible to the above parties and
the Indenture Trustee shall provide timely and adequate notification to all
above parties regarding any such changes.
Section 3.27. Determination of Note Rate. On the second LIBOR
Business Day immediately preceding (i) the Closing Date in the case of the
first Interest Period and (ii) the first day of each succeeding Interest
Period, the Indenture Trustee shall determine LIBOR and the Note Rate for such
Interest Period and shall provide the Issuer, the Servicer and the Depositor
16
with the rates of LIBOR and the Note Rate by making such rates available on
the Indenture Trustee's internet website, as set forth in Section 3.26.
Section 3.28. Claims under the Credit Enhancement Instrument.
(a) By the close of business on the second Business Day preceding
each Payment Date the Indenture Trustee shall determine from the Servicing
Report with respect to the immediately following Payment Date, the Deficiency
Amount, if any.
(b) If the Indenture Trustee determines pursuant to paragraph (a)
above that a Deficiency Amount would exist, the Indenture Trustee shall
complete a notice in the form of Exhibit A to the Credit Enhancement
Instrument and submit such notice to the Credit Enhancer no later than 12:00
noon New York City time on the second Business Day preceding such Payment Date
as a claim for the payment of an Insured Amount in an amount equal to the
Deficiency Amount.
(c) The Indenture Trustee shall establish an Eligible Account (which
may be a sub-account of the Payment Account) for the benefit of the
Noteholders and the Credit Enhancer referred to herein as the "Policy Payment
Account" over which the Indenture Trustee shall have exclusive control and
sole right of withdrawal. The Indenture Trustee shall deposit upon receipt any
amount paid under the Credit Enhancement Instrument into the Policy Payment
Account and distribute such amount only for purposes of payment to the
Noteholders of the Insured Amount for which a claim was made and such amount
may not be applied to satisfy any costs, expenses or liabilities of the
Depositor, the Servicer, the Indenture Trustee or the Trust. Amounts paid
under the Credit Enhancement Instrument, to the extent needed to pay the
Insured Amount, shall be disbursed by the Indenture Trustee to the Noteholders
in accordance with Section 3.05(a)(iii), (iv) and (v), as applicable. It shall
not be necessary for such payments to be made by check or wire transfers
separate from checks or wire transfers used to pay the Insured Amount with
other funds available to make such payment. However, the amount of any payment
of principal or interest on the Notes to be paid from funds transferred from
the Policy Payment Account shall be noted as provided in subsection (d) of
this Section 3.28 and in the Servicing Report. Funds held in the Policy
Payment Account shall not be invested. Any funds remaining in the Policy
Payment Account on the first Business Day following a Payment Date shall be
returned to the Credit Enhancer pursuant to the written instructions of the
Credit Enhancer by the end of such Business Day.
(d) The Indenture Trustee shall keep a complete and accurate record
of the amount of interest and principal paid in respect of any Note from
moneys received under the Credit Enhancement Instrument. The Credit Enhancer
shall have the right to inspect such records at reasonable times during normal
business hours upon one (1) Business Day's prior written notice to the
Indenture Trustee.
(e) The Indenture Trustee shall, upon retirement of the Notes,
furnish to the Credit Enhancer a notice of such retirement, and, upon
retirement of the Notes and the expiration of the term of the Credit
Enhancement Instrument, surrender the Credit Enhancement Instrument to the
Credit Enhancer for cancellation.
Section 3.29. [Reserved.]
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Section 3.30. Rights in Respect of Insolvency Proceedings.
Until all Notes have been paid in full, all amounts owed to the
Credit Enhancer have been paid in full, the Insurance and Indemnity Agreement
has terminated and the Credit Enhancement Instrument has been returned to the
Credit Enhancer for cancellation, the following provisions shall apply:
(a) Unless the Credit Enhancer is in default resulting from the
failure of the Credit Enhancer to make payments under the Credit Enhancement
Instrument, notwithstanding anything contained herein or in the other Basic
Documents to the contrary, the Credit Enhancer shall have the right to
participate in, to direct the enforcement or defense of, and, at the Credit
Enhancer's sole option, to institute or assume the defense of, any action,
proceeding or investigation that could adversely affect the Issuer, the
Collateral, the Trust Estate or the rights or obligations of the Credit
Enhancer hereunder or under the Credit Enhancement Instrument or the Basic
Documents, including (without limitation) any insolvency or bankruptcy
proceeding in respect of the Servicer, the Seller, the Depositor, the Issuer
or any affiliate thereof. Following notice to the Indenture Trustee and
subject to the preceding sentence, the Credit Enhancer shall have exclusive
right to determine, in its sole discretion, the actions necessary to preserve
and protect the Issuer, the Collateral, and the Trust Estate. All reasonable
costs and expenses of the Credit Enhancer in connection with such action,
proceeding or investigation, including (without limitation) any judgment or
settlement entered into affecting the Credit Enhancer or the Credit Enhancer's
interests, shall be included in the Reimbursement Amount.
(b) In connection with any action, proceeding or investigation that
could adversely affect the Issuer, the Collateral, the Trust Estate or the
rights or obligations of the Credit Enhancer hereunder or under the Credit
Enhancement Instrument or the Basic Documents, including (without limitation)
any insolvency or bankruptcy proceeding in respect of the Servicer, the
Seller, the Depositor, the Issuer or any affiliate thereof, the Indenture
Trustee hereby agrees to cooperate with, and to take such action as directed
by, the Credit Enhancer, including (without limitation) entering into such
agreements and settlements as the Credit Enhancer shall direct, in its sole
discretion, without the consent of any Noteholder.
(c) The Indenture Trustee hereby agrees to provide to the Credit
Enhancer prompt written notice of any action, proceeding or investigation of
which a Responsible Officer has received notice or has actual knowledge that
names the Issuer or the Indenture Trustee as a party or that could adversely
affect the Issuer, the Collateral, the Trust Estate or the rights or
obligations of the Credit Enhancer hereunder or under the Credit Enhancement
Instrument or the Basic Documents, including (without limitation) any
insolvency or bankruptcy proceeding in respect of the Servicer, the Seller,
the Depositor, the Trust or any affiliate thereof.
(d) Notwithstanding anything contained herein or in any of the other
Basic Documents to the contrary, the Indenture Trustee shall not, without the
Credit Enhancer's prior written consent or unless directed by the Credit
Enhancer, undertake or join any litigation or agree to any settlement of any
action, proceeding or investigation affecting the Issuer, the Collateral, the
Trust Estate or the rights or obligations of the Credit Enhancer hereunder or
under the Credit Enhancement Instrument or the Basic Documents.
(e) Each Noteholder, by acceptance of its Note, and the Indenture
Trustee agree that the Credit Enhancer shall have such rights as set forth in
this Section 3.30, which are
18
in addition to any rights of the Credit Enhancer pursuant to the other
provisions of the Basic Documents, that the rights set forth in this Section
may be exercised by the Credit Enhancer, in its sole discretion, without the
need for the consent or approval of any Noteholder or the Indenture Trustee,
notwithstanding any other provision contained herein or in any of the other
Basic Documents, and that nothing contained in this Section shall be deemed to
be an obligation of the Credit Enhancer to exercise any of the rights provided
for herein.
Section 3.31. Effect of Payments by the Credit Enhancer: Subrogation.
The Indenture Trustee shall receive as attorney-in-fact of each Noteholder any
Insured Amounts or Preference Amounts from the Credit Enhancer pursuant to the
Credit Enhancement Instrument. Any and all Insured Amounts and Preference
Amounts disbursed by the Indenture Trustee from claims made under the Credit
Enhancement Instrument shall not be considered payment by the Issuer, and
shall not discharge the obligations of the Issuer with respect thereto. The
Credit Enhancer shall, to the extent it makes any payment with respect to the
Notes, become subrogated to the rights of the recipient of such payments to
the extent of such payments. Subject to and conditioned upon any payment with
respect to the Notes by or on behalf of the Credit Enhancer, the Indenture
Trustee shall assign to the Credit Enhancer all rights to the payment of
interest or principal with respect to the Notes which are then due for payment
to the extent of all payments made by the Credit Enhancer.
Section 3.32. Protection of Trust Estate. At the request of the
Credit Enhancer (so long as no Credit Enhancer Default exists), the Indenture
Trustee and 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 as may be necessary or advisable
to:
(i) Grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the Lien of this Indenture or
carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity
of any Grant made or to be made by this Indenture;
(iv) enforce any of the Related Documents;
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, and of Noteholders in the
Related Documents and the other property held as part of the
Trust Estate against the claims of all Persons and parties; or
pay all taxes or assessments levied or assessed upon the Trust
Estate when due.
Section 3.33. Preference Claims.
(a) In the event that the Indenture Trustee has received a certified
copy of an order of the appropriate court that any payment of principal and
interest on a Note has been avoided in whole or in part as a preference
payment under applicable bankruptcy law, the Indenture Trustee shall so notify
the Credit Enhancer, shall comply with the provisions of the Credit
Enhancement Instrument to obtain payment by the Credit Enhancer of such
avoided
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payment, and shall, at the time it provides notice to the Credit Enhancer,
notify Holders of the Notes by mail that, in the event that any Noteholder's
payment is so recoverable, such Noteholder will be entitled to payment
pursuant to the terms of the Credit Enhancement Instrument. The Indenture
Trustee shall furnish to the Credit Enhancer at its written request, the
requested records it holds in its possession evidencing the payments of
principal of and interest on Notes, if any, which have been made by the
Indenture Trustee and subsequently recovered from Noteholders and the dates on
which such payments were made. Pursuant to the terms of the Credit Enhancement
Instrument, the Credit Enhancer will make such payment on behalf of the
related Noteholder to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the final order of the court exercising
jurisdiction on behalf of the Noteholders and not to the Indenture Trustee,
any Noteholder directly (unless such Noteholder has returned principal or
interest paid on the Notes to such receiver or trustee in bankruptcy, in which
case the Credit Enhancer shall make such payment to the Indenture Trustee for
payment to such Noteholder in accordance with the terms of the Credit
Enhancement Instrument).
(b) The Indenture Trustee shall promptly notify the Credit Enhancer
of any proceeding or the institution of any action (of which the Indenture
Trustee has actual knowledge) seeking the avoidance as a preferential transfer
under applicable bankruptcy, insolvency, receivership, rehabilitation or
similar law (a "Preference Claim") of any distribution made with respect to
the Notes. Each Holder, by its purchase of Notes, and the Indenture Trustee
hereby agree that so long as the Credit Enhancer is not in default, the Credit
Enhancer may at any time during the continuation of any proceeding relating to
a Preference Claim direct all matters relating to such Preference Claim,
including, without limitation, (i) the direction of any appeal of any order
relating to any Preference Claim and (ii) the posting of any surety,
supersedes or performance bond pending any such appeal at the expense of the
Credit Enhancer, but subject to reimbursement as provided in the Insurance and
Indemnity Agreement. In addition, and without limitation of the foregoing, as
set forth in Section 3.31, the Credit Enhancer shall be subrogated to, and
each Noteholder and the Indenture Trustee hereby delegate and assign, to the
fullest extent permitted by law, the rights of the Indenture Trustee and each
Noteholder in the conduct of any proceeding with respect to a Preference
Claim, including, without limitation, all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with
any such Preference Claim. All actions taken under this Section 3.33 by the
Indenture Trustee shall be taken in accordance with the terms of the Credit
Enhancement Instrument.
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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 through the book-entry facilities of the Depository in minimum
initial Security Balances of $1,000 and integral multiples of $1 in excess
thereof, except for one Note, evidencing the sum of an authorized denomination
thereof and the remainder of the aggregate Security Balance of the Notes.
The Indenture Trustee and the Credit Enhancer 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 definitive 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. The Issuer hereby
appoints the Indenture Trustee as Note Registrar to keep at its Corporate
Trust Office a Note Register in which, subject to such reasonable regulations
as it may prescribe, the Note Registrar shall provide for the registration of
Notes and of transfers and exchanges thereof pursuant to this Section 4.02.
The Indenture Trustee hereby accepts such appointment.
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
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Note Registrar shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes in authorized initial
Security Balances evidencing the same aggregate Percentage Interests.
Subject to the foregoing, at the option of the Noteholders,
Notes may be exchanged for other Notes of like tenor, in each case in
authorized initial Security 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.
Any Noteholder using the assets of (i) an employee benefit
plan (as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) that is subject to the provisions of Title
I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Internal
Revenue Code of 1986, as amended, or (iii) any entity whose underlying assets
include plan assets by reason of a plan's investment in the entity to purchase
the Notes, or to whom the Notes are transferred, will be deemed to have
represented that the acquisition and continued holding of the Notes do 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, and the Indenture Trustee shall be
entitled to conclusively rely upon such representation without any independent
investigation.
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 Certificates and of transfers and
exchanges thereof pursuant to Section 3.05 of the Trust Agreement. The
Indenture Trustee hereby accepts such appointment.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft 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
22
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute, and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note of the same
class; provided, however, that if any such destroyed, lost or stolen Note, but
not a mutilated Note, shall have become or within seven days shall be due and
payable, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement
Note (or such payment) from the Person to whom it was delivered or any Person
taking such replacement Note from such Person to whom such replacement Note
was delivered or any assignee of such Person, except a bona fide purchaser,
and shall be entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expense incurred by the
Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section
4.03, the Issuer may require the payment by the 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 Credit Enhancer, the
Indenture Trustee, the Note Registrar 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 Credit Enhancer, 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
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Section 4.05, except as expressly permitted by this Indenture. All cancelled
Notes may be held or disposed of by the Indenture Trustee in accordance with
its standard retention or disposal policy as in effect at the time unless the
Issuer shall direct by an Issuer Request that they be destroyed or returned to
it; provided however, that such Issuer Request is timely and the Notes have
not been previously disposed of by the Indenture Trustee.
Section 4.06. Book-Entry Notes. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial
Depository, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Depository, and no Beneficial Owner will receive a Definitive Note
representing such Beneficial Owner's interest in such Note, except as provided
in Section 4.08. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Beneficial Owners pursuant to Section
4.08:
(i) the provisions of this Section 4.06 shall be in full force
and effect;
(ii) the Note Registrar, the Indenture Trustee and the Credit
Enhancer 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
(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 Security Balances 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 Depositor notifies
the Indenture Trustee of its intent to terminate the book entry system through
the
24
Depository and, upon receipt of notice of such intent from the Depository,
the Beneficial Owners of the Book-Entry Notes agree to initiate such
termination or (iii) after the occurrence of an Event of Default, Owners of
Notes representing beneficial interests aggregating at least a majority of the
Security Balances 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 Depository,
accompanied by registration instructions, the Issuer shall execute and the
Note Registrar 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.
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 6.08 and the obligations of the Indenture
Trustee under Section 4.11) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and
that have been replaced or paid as provided in Section 4.03 and
(ii) Notes for payment of which money has theretofore been
deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.03) have been delivered to
the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
a. have become due and payable,
25
b. will become due and payable at the Scheduled Final
Payment Date 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 non-callable direct obligations of or obligations
guaranteed by the United States of America (which will mature prior
to the date such amounts are payable), in trust for such purpose, in
an amount sufficient to pay and discharge the entire indebtedness on
such Notes and Certificates then outstanding not theretofore
delivered to the Indenture Trustee for cancellation when due on the
Scheduled Final Payment Date and all amounts due and owing the
Credit Enhancer and Indenture Trustee;
(B) the Issuer has paid or caused to be paid all other sums
payable or to become payable hereunder, including, without
limitation, all expenses incurred by the Indenture Trustee in
connection with the defeasance described in the immediately
preceding paragraph and all amounts due and owing to the Credit
Enhancer under the Insurance and Indemnity Agreement; and
(C) the Issuer has delivered to the Indenture Trustee and the
Credit Enhancer an Officer's Certificate and an Opinion of
Counsel, each meeting the applicable requirements of Section
10.01 and each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with and, if the Opinion of
Counsel relates to a deposit made in connection with Section
4.10(A)(2)b. above, such opinion shall further be to the effect
that such deposit will not have any material adverse tax
consequences to the Issuer, any Noteholders or any
Certificateholders.
Section 4.11. Application of Trust Money. All monies deposited with
the Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the
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.
Section 4.13. Repayment of Monies Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all monies then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.05 and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.
Section 4.14. Temporary Notes. Pending the preparation of any
Definitive Notes, the Issuer may execute and upon its written direction, the
Indenture Trustee may authenticate and
26
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 Note Registrar 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 and the Credit Enhancer, within five 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 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 described in clauses (i), (ii) or (iii) of the definition
thereof should occur, then and in every such case (i) the Indenture Trustee
with the prior consent of the Credit Enhancer or the Holders of Notes
representing not less than a majority of the Security Balances of all Notes
with the prior written consent of the Credit Enhancer, or (ii) the Credit
Enhancer 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
or the Credit Enhancer and to the Credit Enhancer if given by the Indenture
Trustee or the Noteholders), and upon any such declaration the unpaid
principal amount of such class of Notes, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately
due and payable. If an Event of Default described in clause (iv) or (v) of the
definition thereof shall occur, the Notes shall automatically be declared due
and payable hereunder.
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 Security Balance of all Notes,
by written notice to the Issuer and the Indenture Trustee with the written
consent of the Credit Enhancer, or the Credit Enhancer, 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.
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Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that upon 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.
(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 with the
consent of the Credit Enhancer, and if the Credit Enhancer so directs, shall
institute a Proceeding for the collection of the sums so due and unpaid, and
may with the consent of the Credit Enhancer, and if the Credit Enhancer so
directs, shall prosecute such Proceeding to judgment or final decree, and may
with the consent of the Credit Enhancer, and if the Credit Enhancer so
directs, shall 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, with the consent of
the Credit Enhancer, and if the Credit Enhancer so directs, shall proceed to
protect and enforce its rights and the rights of the Noteholders, by such
appropriate Proceedings as the Indenture Trustee or the Credit Enhancer, as
applicable, 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
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any claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred, and
all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence, willful misconduct or bad faith)
and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the 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 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 the Credit Enhancer, and it
shall not be necessary to make any Noteholder or the Credit Enhancer a party
to any such Proceedings.
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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 with
the prior written consent of the Credit Enhancer, or shall at the written
direction of the Credit Enhancer do one or more of the following (subject to
Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes or
under this Indenture with respect thereto, whether by declaration or
otherwise, and all amounts payable under the Insurance and Indemnity
Agreement, enforce any judgment obtained, and collect from the Issuer and any
other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time 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; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and conducted
in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee is directed to do so by the Credit Enhancer, (B) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Security Balance of the Notes and the Credit Enhancer, (C) the proceeds of
such sale or liquidation distributable to Holders are sufficient to discharge
in full all amounts then due and unpaid upon the Notes for principal and
interest and to reimburse the Credit Enhancer for any amounts drawn under the
Credit Enhancement Instrument and any other amounts due the Credit Enhancer
under the Insurance and Indemnity Agreement and to reimburse the Indenture
Trustee for any unreimbursed expenses, advances or liabilities incurred
hereunder or (D) the Indenture Trustee determines that the Home Equity 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 Credit Enhancer, and of the Holders of 66 2/3% of the aggregate
Security Balances of the Notes. In determining such sufficiency or
insufficiency with respect to clause (C) and (D), the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation (which opinion shall not be
an expense of the Indenture Trustee) 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 Equity Loans by the 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 order
described in Section 3.05 hereof, except that payments pursuant to clause
(viii) shall be made without regard to the Accelerated Principal Payment
Amount but rather shall be made until the Security Balance of the Notes is
reduced to zero.
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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 (with the prior written consent of the
Credit Enhancer), but need not, (but shall at the written direction of the
Credit Enhancer) elect to take and maintain possession of the Trust Estate. It
is the desire of the parties hereto and the Noteholders that there be at all
times sufficient funds for the payment of principal of and interest on the
Notes and other obligations of the Issuer including payment to the Credit
Enhancer, and the Indenture Trustee shall take such desire into account when
determining whether or not to take and maintain possession of the Trust
Estate. In determining whether to take and maintain possession of the Trust
Estate, the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation (which opinion shall not be an expense of the Indenture Trustee) 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, the Credit Enhancer consents and:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Security Balances
of the Notes have made written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the Holders
of a majority of the Security Balances of the Notes or by the Credit Enhancer.
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 themselves 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 Security Balances of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this
Indenture.
Section 5.07. Unconditional Rights of Noteholders to Receive
Principal and Interest. Notwithstanding any other provisions in this
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note
or in this Indenture and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee, the Credit
Enhancer or to the Noteholders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law or in equity or otherwise. The assertion
or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right
or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee, the Credit Enhancer 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, the Credit Enhancer or to the Noteholders may
be exercised from time to time, and as often as may be deemed expedient, by
the Indenture Trustee, the Credit Enhancer or by the Noteholders, as the case
may be.
Section 5.11. Control by Credit Enhancer or Noteholders. The Holders
of a majority of the Security Balance of Notes with the prior written consent
of the Credit Enhancer, or the Credit Enhancer (so long as no Credit Enhancer
Default exists) 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 Security
Balances of Notes with the consent of the Credit Enhancer, or the Credit
Enhancer (so long as no Credit Enhancer Default exists);
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant
to such Section, then any direction to the Indenture Trustee by Holders of
Notes representing less than 100% of the Security Balances of Notes to sell or
liquidate the Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject
to Section 6.01, the Indenture Trustee need not take any action that it
determines in its discretion 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 Security Balance of the
Notes with the prior written consent of the Credit Enhancer, or the Credit
Enhancer (so long as no Credit Enhancer Default exists) 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, the Credit Enhancer and the Holders
of the Notes shall be restored to their respective former positions and rights
hereunder; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom
shall be deemed to have been cured and not to have occurred, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereto.
Section 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Xxxxxx's acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Security 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.
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Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it shall not hinder, delay or impede the execution of any power herein granted
to the Indenture Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 5.15. Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a "Sale") of
any portion of the Trust Estate pursuant to Section 5.04 is expressly subject
to the provisions of Section 5.05 and this Section 5.15. The power to effect
any such Sale shall not be exhausted by any one or more Sales as to any
portion of the Trust Estate remaining unsold, but shall continue unimpaired
until the entire Trust Estate shall have been sold or all amounts payable on
the Notes and under this Indenture and under the Insurance and Indemnity
Agreement shall have been paid. The Indenture Trustee may from time to time
postpone any public Sale by public announcement made at the time and place of
such Sale. The Indenture Trustee hereby expressly waives its right to any
amount fixed by law as compensation for any Sale.
(b) Other than pursuant to Section 5.15(e) below, the Indenture
Trustee shall not in any private Sale sell the Trust Estate, or any portion
thereof, unless:
(1) the Holders of all Notes (with the prior written consent
of the Credit Enhancer) or the Credit Enhancer consent to, or direct the
Indenture Trustee to make or the Indenture Trustee may make (with the consent
of the Credit Enhancer and all Holders of the Notes), such Sale, or
(2) the proceeds of such Sale would be not less than the
entire amount which would be payable to the Noteholders under the Notes, the
Certificateholders under the Certificates and the Credit Enhancer in respect
of amounts drawn under the Credit Enhancement Instrument and any other amounts
due the Credit Enhancer under the Insurance and Indemnity Agreement, in full
payment thereof in accordance with Section 5.02, on the Payment Date next
succeeding the date of such Sale, or
(3) the Indenture Trustee determines, in its sole discretion,
that the conditions for retention of the Trust Estate set forth in Section
5.05 cannot be satisfied (in making any such determination, the Indenture
Trustee may rely upon an opinion of an Independent investment banking firm
obtained and delivered as provided in Section 5.05), and the Credit Enhancer
consents in writing to such Sale, and the Holders representing at least
66-2/3% of the Security 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 and the Credit Enhancer have otherwise
consented or directed the Indenture Trustee, at any public Sale (other than
pursuant to Section 5.15(e) below) of all or any portion of the Trust Estate
at which a minimum bid equal to or greater than the
35
amount described in paragraph (2) of subsection (b) of this Section 5.15 has
not been established by the Indenture Trustee and no Person bids an amount
equal to or greater than such amount, the Indenture Trustee shall bid an
amount at least $1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(1) any Holder or Holders of Notes may bid for and with the
consent of the Credit Enhancer purchase the property offered for sale, and
upon compliance with the terms of sale may hold, retain, 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;
(2) the Indenture Trustee may bid for and acquire the property
offered for Sale in connection with any Sale thereof, and, subject to any
requirements of, and to the extent permitted by, applicable law in connection
therewith, may purchase all or any portion of the Trust Estate in a private
sale, and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting the gross Sale price against the sum of (A) the
amount which would be distributable to the Holders of the Notes and Holders of
Certificates and amounts owing to the Credit Enhancer as a result of such Sale
in accordance with Section 5.04(b) on the Payment Date next succeeding the
date of such Sale and (B) the expenses of the Sale and of any Proceedings in
connection therewith which are reimbursable to it, without being required to
produce the Notes in order to complete any such Sale or in order for the net
Sale price to be credited against such Notes, and any property so acquired by
the Indenture Trustee shall be held and dealt with by it in accordance with
the provisions of this Indenture;
(3) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any portion
of the Trust Estate in connection with a Sale thereof;
(4) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Issuer to transfer and convey its interest
in any portion of the Trust Estate in connection with a Sale thereof, and to
take 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.
(e) On the fifth Business Day prior to the Auction Payment Date, the
Auction Administrator shall effectuate the auction contemplated by Section
8.04(a) of this Indenture.
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
36
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 direction from (a) the Credit
Enhancer or (b) the Indenture Trustee with the written consent of the Credit
Enhancer, the Issuer, in its capacity as holder of the Home Equity Loans,
shall take all such lawful action as the Credit Enhancer or the Indenture
Trustee may request to cause the Issuer to compel or secure the performance
and observance by the Seller and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Home Equity 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 Equity Loan Purchase Agreement and the
Servicing Agreement to the extent and in the manner directed by the Indenture
Trustee, as pledgee of the Home Equity Loans, including the transmission of
notices of default on the part of the Seller or the Servicer thereunder and
the institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller or the Servicer of each of their obligations
under the Home Equity Loan Purchase Agreement and the Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee, as pledgee of the Home Equity Loans, subject to the rights
of the Credit Enhancer under the Servicing Agreement may, and at the direction
(which direction shall be in writing or by telephone (confirmed in writing
promptly thereafter)) of the Holders of 66-2/3% of the Security Balances of
the Notes, with the consent of the Credit Enhancer shall exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller or
the Servicer under or in connection with the Home Equity 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
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 Equity 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 Equity 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, reports or
opinions furnished to the Indenture Trustee and conforming to the requirements
of this Indenture; however, the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance with a
direction received by it (A) pursuant to Section 5.11 or (B) from the Credit
Enhancer, which it is entitled to give under any of the Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms
of this Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to
38
believe that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
Section 6.02. Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee approved by the Credit Enhancer,
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,
the Trust Estate 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. If an Event of Default
occurs and is continuing and if it is actually known to a Responsible Officer
of the Indenture Trustee, the Indenture
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Trustee shall give notice thereof to the Credit Enhancer. The Indenture
Trustee shall mail to each Noteholder notice of the Event of Default within 90
days after it occurs.
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 in the
possession of the Indenture Trustee to enable the Issuer to perform its
federal and state income tax reporting obligations.
Section 6.07. Tax. The Indenture Trustee shall prepare and deliver
the income tax returns, tax elections, financial statements, and such annual
or other reports of the Trust pursuant to Section 2.06 of the Trust Agreement;
provided, however, that the Indenture Trustee shall not be required to compute
the Trust's gross income except to the extent it can do so without
unreasonable effort or expense based upon income statements furnished to it;
and provided, further, that the Indenture Trustee shall not be required to
prepare and file partnership tax returns on behalf of the Trust unless it
receives an Opinion of Counsel (which shall not be at the Indenture Trustee's
expense, but shall be at the expense of the Seller or other party furnishing
such opinion) as to the necessity of such filings. The Indenture Trustee shall
be paid additional reasonable compensation by the Seller for the preparation
of partnership tax returns on behalf of the Trust.
Section 6.08. Compensation and Indemnity. The Indenture Trustee and
the Custodian shall be compensated and indemnified by the Servicer in
accordance with Section 6.06 of the Servicing Agreement and Section 3.2 of the
Custodial Agreement, respectively, and all amounts owing to the Indenture
Trustee and the Custodian, hereunder and the Custodian under the Custodial
Agreement in excess of such compensation and indemnification payable by the
Servicer whether payable by the Issuer pursuant to this Section 6.08 or upon
the failure or inability of the Servicer to pay the amounts specified in
Section 6.06(b) of the Servicing Agreement shall be paid solely as provided in
Section 3.05(a)(i) and (a)(xi) 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 Transition Costs, 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 or the exercise
of its rights hereunder and under any other Basic Document pursuant to Section
6.17. 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 6.08 shall survive the discharge of this Indenture or
the termination of any Basic Document.
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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 6.09. 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 by the Credit Enhancer and
the successor Indenture Trustee of appointment pursuant to this Section 6.09.
The Indenture Trustee may resign at any time by so notifying the Issuer and
the Credit Enhancer. The Holders of a majority of Security Balances of the
Notes or the Credit Enhancer may remove the Indenture Trustee by so notifying
the Indenture Trustee and the Credit Enhancer and may appoint a successor
Indenture Trustee. The Issuer shall (with the consent of the Credit Enhancer)
remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.12;
(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
fulfilling its duties under the Basic Documents.
If the Indenture Trustee resigns or is removed or if a
vacancy exists in the office of the Indenture Trustee for any reason (the
Indenture Trustee in such event being referred to herein as the retiring
Indenture Trustee), the Credit Enhancer may (and if the Credit Enhancer shall
fail to do so, the Issuer shall promptly with the prior written consent of the
Credit Enhancer which consent will not be unreasonably withheld) appoint a
successor Indenture Trustee. In addition, the Indenture Trustee will resign to
avoid being directly or indirectly controlled by the Issuer.
A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Issuer. Thereupon, the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall have
all the rights, powers and duties of the Indenture Trustee under this
Indenture. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
If a successor Indenture Trustee does not take office within
60 days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the Issuer or the Holders of a majority of
Security Balances of the Notes (with the consent of the Credit Enhancer) may
petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.12,
any Noteholder (with the consent of the Credit Enhancer) may petition any
court of competent jurisdiction for the removal of the Indenture Trustee and
the appointment of a successor Indenture Trustee.
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Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section, the Issuer's obligations under Section 6.08 shall
continue for the benefit of the retiring Indenture Trustee.
Section 6.10. 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 6.12. 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 each
such certificate shall have the full force which is provided in the Notes and
in this Indenture that any properly authenticated certificate of the Indenture
Trustee shall have.
Section 6.11. 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 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 6.12 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.09 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Indenture Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee
or co-trustee, but solely at the direction of the Indenture Trustee;
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(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
Section 6.12. 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 unsecured debt rating of A or better by
Xxxxx'x. The Indenture Trustee shall comply with TIA ss. 310(b), including the
optional provision permitted by the second sentence of TIA ss. 310(b)(9);
provided, however, that there shall be excluded from the operation of TIA ss.
310(b)(1) any indenture or indentures under which other securities of the
Issuer are outstanding if the requirements for such exclusion set forth in TIA
ss. 310(b)(1) are met.
Section 6.13. 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 6.14. Representations and Warranties. The Indenture Trustee
hereby represents that:
(i) The Indenture Trustee is duly organized, validly existing
and in good standing under the laws of the United States of America 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.
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(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 actual notice of any
material adverse claim with respect to the Home Equity Loans and does not have
actual knowledge that its security interest therein, for the benefit of the
Noteholders, violates the rights of any other secured party.
Section 6.15. Directions to Indenture Trustee. The Indenture Trustee
is hereby directed:
(a) to accept the pledge of the Home Equity Loans and hold the assets
of the Trust in trust for the Noteholders and the Credit Enhancer;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibit A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
Section 6.16. Indenture Trustee May Own Securities. The Indenture
Trustee, in its individual or any other capacity may become the owner or
pledgee of Securities with the same rights it would have if it were not
Indenture Trustee.
Section 6.17. Other Capacities of Indenture Trustee. Any protection
or right afforded the Indenture Trustee pursuant to this Indenture, including
but not limited to Section 6.01(d) through (f), Section 6.02 and Section 6.08
shall apply to the Indenture Trustee acting in other capacities under the
Basic Documents, including but not limited to the capacity of Note Registrar,
Paying Agent and Auction Administrator hereunder, Certificate Paying Agent and
Certificate Registrar under the Trust Agreement, Indenture Trustee under the
Servicing Agreement and Custodian under the Custodial Agreement.
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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 and the Credit Enhancer may request in
writing, within 30 days after receipt by the Issuer of any such request, a
list of similar form and content as of a date not more than 10 days prior to
the time such list is furnished; provided, however, that so long as the
Indenture Trustee is the Note Registrar, no such list shall be required to be
furnished to the Indenture Trustee.
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.
(i) Noteholders may communicate pursuant to TIA ss. 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(b) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss. 312(c).
Section 7.03. Reports to the Securities and Exchange Commission.
(a) The Indenture Trustee shall reasonably cooperate with the Issuer
in connection with the Trust's satisfying the reporting requirements under the
Securities Exchange Act of 1934, as amended. The Indenture Trustee shall
prepare and deliver to the Issuer any Forms 8-K and 10-K customary for similar
securities as required by the Exchange Act and the Rules and Regulations of
the Securities and Exchange Commission thereunder. The Servicer pursuant to
Section 6.07 of the Servicing Agreement shall sign, and the Indenture Trustee
shall file (via the Securities and Exchange Commission's Electronic Data
Gathering and Retrieval System), any Form 10-K, and the Indenture Trustee
shall sign and file (via the Securities and Exchange Commission's Electronic
Data Gathering and Retrieval System) any Form 8-K.
(b) Each Form 8-K shall be filed by the Indenture Trustee within 15
days after each Distribution Date, including a copy of the Statement for such
Payment Date as an exhibit thereto. Prior to March 30th of 2006, and each year
thereafter (or such earlier date as may be required by the Exchange Act and
the Rules and Regulations of the Securities and Exchange Commission), the
Indenture Trustee shall prepare and file and the Servicer shall execute a Form
10-K, in substance as required by applicable law or applicable Securities and
Exchange Commission staff's interpretations. Such Form 10-K shall include as
exhibits thereto the Servicer's annual statement of compliance described under
Section 3.10 of the Servicing
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Agreement and the accountant's report described under Section 3.11 of the
Servicing Agreement, in each case to the extent they have been timely
delivered to the Indenture Trustee. If they are not so timely delivered, the
Indenture Trustee (with the cooperation of the Servicer and the Depositor)
shall prepare and file a Form 12b-25 or an amended Form 10-K in accordance
with the Rules and Regulations of the Securities Exchange Commission including
such documents as exhibits. The Indenture Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Indenture Trustee's inability or failure to
obtain any information not resulting from its own negligence, willful
misconduct or bad faith. The Form 10-K shall also include a certification in
the form attached hereto as Exhibit B (the "Certification"), which shall,
except as described below, be signed by the senior officer of the Servicer in
charge of the servicing function of the Servicer. On or before the fifth
Business Day prior to March 30th, 2006, and each year thereafter for which a
Form 10-K is filed under this paragraph, the Indenture Trustee shall deliver
to the Servicer a certification in the form attached hereto as Exhibit C (the
"Indenture Trustee Certification").
(c) In the event that prior to the filing date of the Form 10-K in
March of each year, the Indenture Trustee or the Servicer has actual knowledge
of information material to the Certification, that party shall promptly notify
the other party. In addition, (i) the Indenture Trustee shall indemnify and
hold harmless the Servicer and its officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any breach of the Indenture Trustee's obligations
under this Section 7.03 or the Indenture Trustee's negligence, bad faith or
willful misconduct in connection therewith, and (ii) the Servicer shall, with
its own funds, indemnify and hold harmless the Indenture Trustee and its
officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon any
breach of the Servicer's obligations under this Section 7.03 or the Servicer's
negligence, bad faith or willful misconduct in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the indemnified party, then (i) the Indenture Trustee agrees in
connection with a breach of the Indenture Trustee's obligations under this
Section 7.03 or the Indenture Trustee's negligence, bad faith or willful
misconduct in connection therewith that it shall contribute to the amount paid
or payable by the Servicer as a result of the losses, claims, damages or
liabilities of the Servicer in such proportion as is appropriate to reflect
the relative fault of the Servicer on the one hand and the Indenture Trustee
on the other and (ii) the Servicer agrees in connection with a breach of the
Servicer's obligations under this Section 7.03 or the Servicer's negligence,
bad faith or willful misconduct in connection therewith that it shall
contribute to the amount paid or payable by the Indenture Trustee as a result
of the losses, claims, damages or liabilities of the Indenture Trustee in such
proportion as is appropriate to reflect the relative fault of the Indenture
Trustee on the one hand and the Servicer on the other.
(d) Upon any filing with the Securities and Exchange Commission, the
Indenture Trustee shall promptly deliver to the Depositor a copy of any such
executed report, statement or information.
(e) Prior to January 30 of the first year in which the Indenture
Trustee is able to do so under applicable law, the Indenture Trustee shall
file a Form 15 Suspension Notification with respect to the Trust Estate.
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Section 7.04. Reports by Issuer.
(a) The Issuer shall:
(i) 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
(ii) 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 7.04(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 7.05. Reports by Indenture Trustee. If required by TIA ss.
313(a), within 60 days after each May 1 beginning with May 1, 2006, the
Indenture Trustee shall mail to each Noteholder as required by TIA ss. 313(c)
and to the Credit Enhancer a brief report dated as of such date that complies
with TIA ss. 313(a). The Indenture Trustee also shall comply with TIA ss.
313(b).
A copy of each report at the time of its mailing to
Noteholders shall be filed by the Indenture Trustee with the Commission, if
required, 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.
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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, with the consent of the Credit Enhancer, and if directed to do so
by the Credit Enhancer, shall take such action as may be appropriate to
enforce such payment or performance, including the institution and prosecution
of appropriate Proceedings. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture and any
right to proceed thereafter as provided in Article V.
Section 8.02. Trust Accounts.
(a) On or prior to the Closing Date, the Indenture Trustee shall
establish and maintain, in the name of the Indenture Trustee, for the benefit
of the Noteholders and the Certificate Paying Agent, on behalf of the
Certificateholders and the Credit Enhancer, the Payment Account as provided in
Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Payment Account
pursuant to the Servicing Agreement and all deposits therein pursuant to this
Indenture are for the benefit of the Noteholders, the Credit Enhancer and the
Certificate Paying Agent, on behalf of the Certificateholders and all
investments made with such monies including all income or other gain from such
investments for the period beginning on and including the Determination Date
to but excluding the third Business Day prior to the Payment Date are for the
benefit of the Servicer.
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 Certificateholders in
the order of priority set forth in Section 3.05 (except as otherwise provided
in Section 5.04(b)).
For the period beginning on and including the Determination
Date and ending on but excluding the third Business Day prior to the Payment
Date the Indenture Trustee shall invest any funds in the Payment Account at
the direction of the Servicer, but only in Permitted Investments, as provided
in Section 5.01 of the Servicing Agreement. Thereafter, the Indenture Trustee
may invest any funds in the Payment Account for its own benefit and at its own
direction, but only in Permitted Investments.
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
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complete the same, and concluding that all conditions precedent to the taking
of such action have been complied with.
Section 8.04. Mandatory Auction; Termination Upon Distribution to
Noteholders.
(a) On the fifth Business Day before the Payment Date in January
2017, the Auction Administrator will conduct an auction, using commercially
reasonable standards and procedures, and sell the Home Equity Loans remaining
in the Trust to third party bidders. The Auction Administrator may hire an
agent to conduct the auction or to advise it with respect to the
administration of the auction. If (x) a bid equal to at least the Minimum
Auction Price is received from a third party bidder or (y) upon its agreement
to pay amounts specified in clause (iii) the Credit Enhancer directs the
Auction Administrator to accept the highest bid received from a third party
bidder, the Auction Administrator shall (i) instruct the Trust to transfer the
Home Equity Loans to such highest bidder, (ii) deliver to the Indenture
Trustee the proceeds of the auction for deposit into the Payment Account, and
(iii) if the remaining Home Equity Loans are sold pursuant to clause (y)
above, cause the Credit Enhancer to deliver the amount of the shortfall
between the highest bid received and the Minimum Auction Price to the
Indenture Trustee for deposit into the Payment Account. If the remaining Home
Equity Loans are sold in accordance with the preceding sentence the Indenture
Trustee will pay to Noteholders the Security Balance on the Payment Date
related to the month of the auction pursuant to Section 3.05(a) hereof. If a
bid equal to at least the Minimum Auction Price is not received and the Credit
Enhancer does not direct the Auction Administrator to accept a lower bid
pursuant to clause (y) of the second preceding sentence, the Auction
Administrator will terminate the auction and the Credit Enhancer will have the
option to (i) purchase the remaining Home Equity Loans at the Minimum Auction
Price or (ii) direct the Auction Administrator to conduct another auction no
later than the fifth Business Day before any Payment Date occurring prior to
the Scheduled Final Payment Date. Thereafter, if the Credit Enhancer exercises
its purchase option described in the preceding sentence or if the Auction
Administrator receives the Minimum Auction Price at a subsequent auction held
pursuant to clause (ii) of the preceding sentence, the Indenture Trustee will
pay to Noteholders pursuant to Section 3.05(a) hereof the Security Balance on
the Payment Date immediately following the sale of the remaining Home Equity
Loans in accordance with the preceding sentence.
If the Home Equity Loans are not sold at auction to a third
party bidder and the Credit Enhancer does not exercise its option to purchase
the Home Equity Loans prior to the Scheduled Final Payment Date, the Credit
Enhancer will be required, in accordance with the terms of the Credit
Enhancement Instrument, to pay the outstanding Security Balance of the Notes
on the Scheduled Final Payment Date and following such Payment by the Credit
Enhancer, the Credit Enhancer will be the Owner of the Home Equity Loans free
and clear of the Lien of the Indenture, and the Indenture Trustee and the
Issuer will take all responsible steps to transfer all of the Home Equity
Loans to the Credit Enhancer.
The Issuer hereby appoints the Indenture Trustee as Auction
Administrator to conduct and administer the mandatory auction described in
this Section 8.04(a). The Indenture Trustee hereby accepts such appointment.
(b) This Indenture and the respective obligations and
responsibilities of the Issuer and the Indenture Trustee created hereby shall
terminate upon the distribution to the Noteholders, the Certificate Paying
Agent (on behalf of the Certificateholders), the Credit Enhancer and the
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Indenture Trustee of all amounts required to be distributed pursuant to
Article III; provided, however, that in no event shall the trust created
hereby continue beyond the expiration of 21 years from the death of the
survivor of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the
United States to the Court of St. James's, living on the date hereof.
Section 8.05. Release of Trust Estate.
(a) Subject to the payment of its fees 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, (ii) all sums due the Indenture Trustee pursuant to this
Indenture have been paid, and (iii) all sums due the Credit Enhancer have been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the Lien of this Indenture.
(c) The Indenture Trustee shall release property from the Lien of
this Indenture pursuant to this Section 8.05 only upon receipt of a request
from the Issuer accompanied by an Officers' Certificate and a letter from the
Credit Enhancer, stating that the Credit Enhancer has no objection to such
request from the Issuer.
(d) The Indenture Trustee shall, at the request of the Issuer or the
Depositor, surrender the Credit Enhancement Instrument to the Credit Enhancer
for cancellation, upon final payment of principal and interest on the Notes.
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.
Section 8.07. Reserved.
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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 and with the prior written consent of the Credit
Enhancer, the Issuer and the Indenture Trustee, when authorized by an Issuer
Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the Lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required to be
subjected to the Lien of this Indenture, or to subject to the Lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein and in
the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes or the Credit Enhancer, or to surrender any right or
power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be inconsistent
with any other provision herein or in any supplemental indenture;
(vi) to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental indenture;
provided, that such action shall not materially and adversely affect the
interests of the Holders of the Notes;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes and to
add to or change any of the provisions of this Indenture as shall be necessary
to facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI;
(viii) [Reserved] or
(ix) 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;
51
provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee and the Credit Enhancer shall have received an
Opinion of Counsel that entering into such indenture supplement will not have
any material adverse tax consequences to the Issuer or Noteholders.
The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any further
appropriate agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Request, may, also without the consent of any of the Holders of the
Notes but with prior notice to the Rating Agencies and the consent of the
Credit Enhancer, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel,
(i) adversely affect in any material respect the interests of any Noteholder
or the Credit Enhancer or (ii) cause the Issuer to be subject to an entity
level tax.
Section 9.02. Supplemental Indentures With Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Request,
also may, with prior notice to the Rating Agencies and with the consent of the
Holders of not less than a majority of the Security Balances of the Notes
affected thereby and the prior written consent of the Credit Enhancer, by Act
of such Holders delivered to the Issuer and the Indenture Trustee, enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Note affected
thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof or the
interest rate thereon, change the provisions of this Indenture relating to the
application of collections on, or the proceeds of the sale of, the Trust
Estate to payment of principal of or interest on the Notes, or change any
place of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the application of
funds available therefor, as provided in Article V, to the payment of any such
amount due on the Notes on or after the respective due dates thereof;
(ii) reduce the percentage of the Security Balances of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is required for
any waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception in the
definition of the term "Holder";
(iv) reduce the percentage of the Security Balances of the
Notes required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
52
(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 addressed to the Indenture Trustee and the Credit Enhancer, cause
the Issuer to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine
whether or not any Notes would be affected by any supplemental indenture and
any such determination shall be conclusive upon the Holders of all Notes,
whether theretofore or thereafter authenticated and delivered hereunder. The
Indenture Trustee shall not be liable for any such determination made in good
faith.
It shall not be necessary for any Act of Noteholders (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 to which such
amendment or supplemental indenture relates a notice setting forth in general
terms the substance of such supplemental indenture. Any failure of the
Indenture Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon,
an Opinion of Counsel (any such opinion not to be an expense of the Indenture
Trustee) stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties, liabilities or immunities
under this Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and
53
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.
54
ARTICLE X.
Miscellaneous
Section 10.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee and to the Credit Enhancer (i) an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and (ii) an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that, in
the case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with
a condition or covenant provided for in 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".
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
55
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.
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.
56
Section 10.04. Notices, etc., to Indenture Trustee, Issuer, Credit
Enhancer and Rating Agencies. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or Act of Noteholders is to
be made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee at 0000 Xxx Xxxxxxxxx Xxxx,
Xxxxxxxx, XX 00000, Attention: Corporate Trust Services - MSDWCC 2005-1 with a
copy to the Indenture Trustee's 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: MSDWCC HELOC Trust
2005-1, 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, or
(iii) the Credit Enhancer by the Issuer, the Indenture Trustee
or by any Noteholders shall be sufficient for every purpose hereunder if in
writing and mailed, first-class postage pre-paid, or personally delivered or
telecopied to: Ambac Assurance Corporation, One State Street, New York, New
York 10004, Attention: Consumer Asset-Backed Securities Re: MSDWCC HELOC Trust
2005-1, Asset-Backed Notes, Series 2005-1, Confirmation: 000-000-0000,
Telecopy No.: 000-000-0000. The Credit Enhancer shall promptly transmit any
notice received by it from the Issuer, the Indenture Trustee or the
Noteholders to the Issuer or Indenture Trustee, as the case may be.
Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered or mailed by certified mail, return receipt requested, to
(i) in the case of Moody's, at the following address: Xxxxx'x Investors
Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and (ii) in the case of Standard & Poor's, at the following address:
Standard & Poor's Ratings Services, 00 Xxxxx Xxxxxx, 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.
57
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the
Indenture Trustee but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute
an Event of Default.
Section 10.06. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any 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, the Credit
Enhancer, and any other party secured hereunder, and any other
58
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.
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 each 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 each 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 each 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
59
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 or
the Credit Enhancer, 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 or the Credit Enhancer shall
and shall cause its representatives to hold in confidence all such information
except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the
extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
Section 10.19. Rights of the Credit Enhancer to Exercise Rights of
Noteholder. By accepting its Note, each Noteholder agrees that unless a Credit
Enhancer Default exists, the Credit Enhancer shall have the right to exercise
all rights of the Noteholders under this Agreement without any further consent
of the Noteholders. So long as no Credit Enhancer Default exists, the
Noteholders may only exercise such rights with the consent of the Credit
Enhancer.
Section 10.20. Third-Party Beneficiary. The Credit Enhancer shall be
a third-party beneficiary of this Indenture entitled to enforce the provisions
hereof as if a party hereto.
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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.
MSDWCC HELOC TRUST 2005-1,
as Issuer
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ Xxx Xxxxx
---------------------------------------
Name: Xxx Xxxxx
Title: Vice President
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, xxxxxx accepts
the appointment as Paying
Agent pursuant to Section
3.03 hereof, as Note
Registrar pursuant to
Section 4.02 hereof and as
Auction Administrator pursuant
to Section 8.04 hereof.
By: /s/ Xxx Xxxxx
------------------------
Name: Xxx Xxxxx
Title: Vice President
61
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this 27th day of January, 2005, before me personally
appeared Xxxxx X. Xxxxxx, to me known, who being by me duly sworn, did depose
and say, that [s]he resides at Wilmington Trust Company, that [s]he is the
Assistant Vice President of the Owner Trustee, one of the corporations
described in and which executed the above instrument; that [s]he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation; and that [s]he signed his name thereto by like order.
Notary Public
/s/ Xxx Xxxxxxx
62
STATE OF MARYLAND )
) SS:
COUNTY OF XXXXXX )
On the 27th day of January, 2005, before me, a notary public an and for
said State, personally appeared Xxx Xxxxx, known to me to be a Vice President
of Xxxxx Fargo Bank, N.A., one of the corporations that executed the within
instrument, and also know to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx X. Xxxxxx
--------------------------------
Notary Public
63
Exhibit A
FORM OF 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 AND IN THE INDENTURE. 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 SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
MSDWCC HELOC TRUST 2005-1
HELOC Asset -Backed Note
Registered Principal Amount: $[o]
No. _ Note Rate: Floating
CUSIP NO. [o]
MSDWCC HELOC Trust 2005-1, 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 $[o], 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 Notes pursuant to Section 3.05 of the Indenture dated as of January 1,
2005 (the "Indenture") between the Issuer, as Issuer, and Xxxxx Fargo Bank,
National Association, 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 July 2017, 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 Notes will be paid monthly on each Payment
Date at the Note Rate for the related Interest Period subject to limitations
which may result in Interest Shortfalls (as
A-1
further described in the Indenture). The Note Rate for each Interest Period
will be a floating rate equal to the lesser of (i) LIBOR plus 0.19% per annum
(or 0.38% on or after the Optional Redemption Date) and (ii) the Maximum Net
Loan Rate. LIBOR for each applicable Interest Period will be determined on the
second LIBOR Business Day immediately preceding (i) the Closing Date in the
case of the first Interest Period and (ii) the first day of each succeeding
Interest Period 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 Note,
by accepting this Note, agrees to be bound by such determination. Interest on
this 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 Period and
a year assumed to consist of 360 days. Principal of and interest on this Note
shall be paid in the manner specified on the reverse hereof.
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.
Unless the certificate of authentication hereon has been
executed by the Note Registrar 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 HELOC Asset-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 secured by the collateral pledged
as security therefor as provided in the Indenture.
This Note is entitled to the benefits of an irrevocable and
unconditional financial guaranty insurance policy issued by Ambac Assurance
Corporation.
Principal of and interest on this Note will be payable on
each Payment Date, commencing on February 25, 2005, as described in the
Indenture. "Payment Date" means the 25th 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 July 2017 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 Security Balances of all Notes with the
consent of the Credit Enhancer, or the Credit Enhancer 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 made pro rata to
the holders of Notes entitled thereto.
A-2
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the
extent not in full payment of this Note, shall be made by wire transfer or
check mailed to the Person whose name appears as the Registered Holder of this
Note (or one or more Predecessor Notes) on the Note Register as of the close
of business on each Record Date, except that with respect to Notes registered
on the Record Date in the name of the nominee of the Depository Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this Note (or any one or
more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding 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 noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee,
in the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final
payment.
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 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
A-3
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.
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 Security Balances of all Notes at the time Outstanding and the
Credit Enhancer and with prior notice to the Rating Agencies. The Indenture
also contains provisions permitting the holders of Notes representing
specified percentages of the Security Balances 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 and the Credit Enhancer.
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.
A-4
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, Xxxxx Fargo Bank, National Association, 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.
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 Servicer, or the Issuer, or join in any
institution against the Depositor, the Seller, the 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.
A-5
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.
MSDWCC HELOC TRUST 2005-1
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee
Dated:
By
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within mentioned Indenture.
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Note Registrar
Dated:
By
Authorized Signatory
A-6
EXHIBIT B
FORM OF CERTIFICATION TO BE
PROVIDED BY SERVICER WITH FORM 10-K
Re: The Servicing Agreement dated as of January 1, 2005, among
Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation, as Servicer, MSDWCC
HELOC Trust 2005-1, as Issuer, and Xxxxx Fargo Bank, National
Association, as Indenture Trustee
-------------------------------------------------------------------
I, [identify the certifying individual by name, title and
institution], certify that:
(1) I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution date reports filed in
respect of periods included in the year covered by this annual report,
of the Trust;
(2) Based on my knowledge, the information in these reports, taken
as a whole, does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were
made, not misleading as of the last day of the period covered by this
annual report;
(3) Based on my knowledge, the servicing information required to
be provided to the Indenture Trustee by the servicer under the
servicing agreement for inclusion in these reports is included in
these reports;
(4) Based upon my knowledge and upon the annual compliance
statement included in the report and delivered to the Indenture
Trustee in accordance with the terms of the servicing agreement, and
except as disclosed in the reports, the servicer has fulfilled its
obligations under the agreement; and
(5) The reports disclose all significant deficiencies relating to
the servicer's compliance with the minimum servicing standards based
upon the report provided by an independent public accountant, after
conducting a review in compliance with the Uniform Single Attestation
Program for Mortgage Bankers that is included in these reports.
Date:
--------------------------------
--------------------------------------
[Signature]
[Name of Institution and Title]
B-1
EXHIBIT C
FORM OF CERTIFICATION TO BE
PROVIDED TO SERVICER BY INDENTURE TRUSTEE
Re:
-------------------------------------------------------------
I, [identify the certifying individual by name and title], certify to
Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation (the "Servicer") and its
officers, directors and affiliates, and with the knowledge and intent that
they will rely upon this certification, that:
(1) I have reviewed the annual report on Form 10-K for the fiscal
year [___], and all reports on Form 8-K containing Statements filed
in respect of periods included in the year covered by that annual
report, of the Trust;
(2) Based upon my knowledge, the information in these Statements,
taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period
covered by that annual report;
(3) Based upon my knowledge, the payment information required to
be provided by the Indenture Trustee under the Indenture for
inclusion in these reports is included in these reports;
Date:
-------------------------------
XXXXX FARGO BANK, NATIONAL ASSOCIATION
-------------------------------
[Signature]
[Name of Institution and Title]
C-1
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.
C-2
EXECUTION COPY
APPENDIX A
DEFINITIONS
Accelerated Principal Payment Amount: With respect to any Payment
Date, payment to Noteholders pursuant to Section 3.05(a)(viii) of the
Indenture in an amount equal to the Overcollateralization Deficit.
Act: As defined in Section 10.03 of the Indenture.
Additional Balance: With respect to any Revolving Credit Loan, any
future Draw made by the related Mortgagor pursuant to the related Loan
Agreement after the Cut-off Date.
Additional Balance Contributed Amount: As to any Payment Date, the
difference, if any, between (a) (1) during the Managed Amortization Period,
the aggregate excess, if any, for all prior Payment Dates of (i) the aggregate
principal amount of all Additional Balances created during the Collection
Period relating to each such Payment Date over (ii) Principal Collections
relating to such Payment Date with respect to the Revolving Credit Loans, and
(2) during the Rapid Amortization Period, the aggregate principal amount of
all Additional Balances created during the Collection Period relating to each
such Payment Date, and (b) the aggregate Additional Balance Contributed
Amounts paid to the Holders of the Class L Certificates on all prior Payment
Dates pursuant to Section 3.05(a) of the Indenture.
Adjustable-Rate Mortgage Loan: Any Mortgage Loan with an adjustable
Loan Rate.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of
a Person, directly or indirectly, whether through ownership of voting
securities, by contract or otherwise and "controlling" and "controlled" shall
have meanings correlative to the foregoing.
Aggregate Security Balance: With respect to any date of
determination, the aggregate of the Security Balances of all Securities as of
such date.
Appraised Value: With respect to any Mortgaged Property, the
appraised value of the related Mortgaged Property determined in the appraisal
or automated property valuation used in the origination of such Home Equity
Loan.
Assignment of Mortgage: With respect to any Mortgage, an assignment,
notice of transfer or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction in which the related Mortgaged Property is
located to reflect the conveyance of the Mortgage, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering the Home Equity Loans secured by Mortgaged Properties
located in the same jurisdiction.
Auction Administrator: The Indenture Trustee, in its capacity as
Auction Administrator, appointed pursuant to Section 8.04 of the Indenture.
Auction Payment Date: The Payment Date following any auction held
pursuant to Section 8.04 of the Indenture.
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
Servicer or 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 (11 U.S.C. xx.xx. 101 et
seq.), as amended.
Basic Documents: The Trust Agreement, the Indenture, the Home Equity
Loan Purchase Agreement, the Insurance and Indemnity Agreement,
Indemnification Agreement, the Credit Enhancement Instrument, the Servicing
Agreement (including any Transfer Document related thereto), 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).
Billing Cycle: With respect to any Revolving Credit Loan and Due
Date, the period from the preceding Due Date through the day immediately prior
to such Due Date.
Book-Entry Notes: Beneficial interests in the Notes, ownership and
transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the States of New York, Maryland,
Minnesota, South Dakota or Delaware are required or authorized by law to be
closed.
Calculated Loan Balance: With respect to the Revolving Credit Loans
and a Collection Period, the sum of the product of (a) 12 times the actual
interest collected with respect to each Revolving Credit Loan during such
Collection Period and (b) the ratio of one over the applicable Loan Rate on
the last day of such Collection Period for each Revolving Credit Loan for such
Collection Period.
Certificate Distribution Account: The account or accounts created and
maintained by the Certificate Paying Agent pursuant to Section 3.09(c) of the
Trust Agreement. The Certificate Paying Agent will make all distributions on
the Certificates from money on deposit in the Certificate Distribution
Account.
2
Certificate Distribution Amount: For any Payment Date, the amount
remaining in the Payment Account following distributions pursuant to clauses
(i) through (xi) of Section 3.05(a) of the Indenture.
Certificate Paying Agent: The meaning specified in Section 3.09(a) of
the Trust Agreement.
Certificate Percentage Interest: With respect to any Payment Date,
the Certificate Percentage Interest as stated on the face of such Certificate,
which percentage may be recalculated in accordance with Section 3.03 of the
Trust Agreement.
Certificate Register: The register maintained by the Certificate
Registrar in which the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates.
Certificate Registrar: Initially, the Indenture Trustee, in its
capacity as Certificate Registrar.
Certificate of Trust: The Certificate of Trust filed for the Trust
pursuant to Section 3810(a) of the Delaware Trust Statute.
Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register except that, any Certificate registered
in the name of the Issuer, the Owner Trustee or the Indenture Trustee or any
Affiliate of any of them shall be deemed not to be outstanding and the
registered holder will not be considered a Certificateholder or a holder for
purposes of giving any request, demand, authorization, direction, notice,
consent or waiver under the Indenture or the Trust Agreement provided that, in
determining whether the Indenture Trustee or the Owner Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that the Indenture Trustee or the
Owner Trustee knows to be so owned shall be so disregarded. Owners of
Certificates that have been pledged in good faith may be regarded as Holders
if the pledgee establishes to the satisfaction of the Indenture Trustee or the
Owner Trustee, as the case may be, the pledgee's right so to act with respect
to such Certificates and that the pledgee is not the Issuer, any other obligor
upon the Certificates or any Affiliate of any of the foregoing Persons.
Certificates: The Class O Certificates or Class L Certificates, as
applicable.
Change of Ownership: Any consolidation or merger of, or any sale or
transfer of all or substantially all of the property or assets of any direct
owner, any indirect owner, any successor direct owner or any successor
indirect owner of the Servicer where such consolidation, merger, sale or
transfer, results in a successor and surviving entity thereof having (i) a
Controlling Interest in the Servicer and (ii) a long-term, unsecured debt
rating below "BBB-" from S&P and "Baa2" from Xxxxx'x.
Class L Certificates: The Class L Certificates in substantially the
form set forth in Exhibit A-1 to the Trust Agreement.
3
Class O Certificates: The Class O Certificates in substantially the
form set forth in Exhibit A-2 to the Trust Agreement.
Class Principal Balance: With respect to the Class L Certificates and
any Payment Date, the Additional Balance Contributed Amount less the sum of
(i) aggregate Realized Loss Allocated Amount for all prior Payment Dates and
(ii) distributions to Class L Certificates pursuant to Section 5.01 of the
Trust Agreement representing principal payments on the Revolving Credit Loans.
With respect to the Class O Certificates and any Payment Date, an
amount equal to the excess of the Pool Balance on the last day of the related
Collection Period (after taking into account all Principal Collections for
such Payment Date) over the sum of (a) the aggregate Security Balance of the
Notes on such Payment Date (after taking into account any reductions to such
aggregate Security Balance resulting from payments made pursuant to clauses
(iv) and (vii) of Section 3.05(a) of the Indenture on such Payment Date) and
(b) the Class Principal Balance of the Class L Certificates immediately prior
to such Payment Date.
Closing Date: January 27, 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 Account: The account or accounts created and maintained by
the Servicer pursuant to Section 3.02(b) of the Servicing Agreement, in which
the Servicer shall deposit or cause to be deposited certain amounts in respect
of the Home Equity Loans.
Collection Period: With respect to any Home Equity Loan and any
Payment Date the calendar month preceding any such Payment Date.
Combined Loan-to-Value Ratio or CLTV: With respect to each first Lien
Home Equity Loan, the ratio, expressed as a percentage, of (A) the Credit
Limit, in the case of the Revolving Credit Loans and the Loan Balance at
origination, in the case of the Mortgage Loans, to (B) (i) with respect to
those first lien Home Equity Loans for which the proceeds were used to
purchase the related mortgaged property, the lesser of the Appraised Value and
the purchase price and (ii) with respect to all other first lien Home Equity
Loans, the Appraised Value. With respect to each second Lien Home Equity Loan,
the Combined Loan-to-Value Ratio or CLTV generally will be the ratio,
expressed as a percentage, of (A) the sum of (i) the Credit Limit, in the case
of the Revolving Credit Loans and the Loan Balance at origination, in the case
of the Mortgage Loans, and (ii) any outstanding principal balance, at the time
of origination of such Home Equity Loan, of all other mortgage loans, if any,
secured by senior Liens on the related Mortgaged Property, to (B) (i) with
respect to those second Lien Home Equity Loans for which the proceeds were
used to purchase the related Mortgaged Property, the lesser of the Appraised
Value and the purchase price, and (ii) with respect to all other second Lien
Home Equity Loans, the Appraised Value.
4
Controlling Interest: The ability to control in any manner the
election of a majority of the directors of the Servicer or the ability to
directly or indirectly exercise controlling influence over the management or
policies of the Servicer by ownership of voting securities, by contract or
otherwise.
Corporate Trust Office: With respect to the Indenture Trustee, Note
Registrar, Certificate Registrar, Certificate Paying Agent, Paying Agent and
Auction Administrator, the principal corporate trust office 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 for Note and
Certificate transfer purposes at Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Services-MSDWCC
2005-1, and for all other purposes at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust Services-MSDWCC 2005-1. 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 Enhancement Draw Amount: With respect to any Payment Date, an
amount, if any, equal to the sum of (x) the amount by which accrued and unpaid
interest on the Notes, at the Note Rate on such Payment Date (exclusive of any
Interest Shortfalls or any shortfalls caused by prepayments of Mortgage Loans
and application of the Relief Act) exceeds the amount on deposit in the
Payment Account available for interest distributions on such Payment Date and,
(y) the Guaranteed Principal Distribution Amount.
Credit Enhancement Instrument: The Financial Guaranty Insurance
Policy number AB0855BE, dated as of the Closing Date, issued by the Credit
Enhancer to the Indenture Trustee on behalf of and for the benefit of the
Noteholders.
Credit Enhancer: Ambac Assurance Corporation, a Wisconsin-domiciled
stock insurance corporation, and any successor thereto.
Credit Enhancer Default: If the Credit Enhancer fails to make a
payment required under the Credit Enhancement Instrument in accordance with
its terms.
Credit Enhancer Premium Rate: The rate at which the Premium is
calculated as set forth in the Premium Letter.
Credit Limit: With respect to any Revolving Credit Loan, the maximum
Loan Balance permitted under the terms of the related Loan Agreement.
Credit Limit Utilization Rate: With respect to any Revolving Credit
Loan and date of determination, the fraction expressed as a percentage, the
numerator of which is the Loan Balance of such Revolving Credit Loan on that
date and the denominator of which is the Credit Limit for such Revolving
Credit Loan.
5
Credit Line Agreement or Mortgage Note: With respect to a Home Equity
Loan, the Loan Agreement pursuant to which the related Xxxxxxxxx agrees to pay
the indebtedness evidenced thereby and secured by the related Mortgage as
modified or amended.
Credit Score: With respect to any Home Equity Loan, the numerical
designation obtained from credit reports provided by any credit reporting
organization used to assess a borrower's credit-worthiness and the relative
degree of risk a borrower represents to a lender.
Custodial Agreement: The Custodial Agreement dated as of January 1,
2005 among the Custodian, the Indenture Trustee and the Servicer relating to
the custody of the Home Equity Loans and the Related Documents.
Custodian: Xxxxx Fargo Bank, National Association, a national banking
association, and its successors and assigns.
Cut-off Date: January 1, 2005.
Cut-off Date Loan Balance: With respect to any Home Equity Loan, the
unpaid principal balance thereof as of the close of business on the last day
immediately prior to the Cut-off Date.
Cut-off Date Pool Balance: The aggregate Cut-off Date Loan Balance of
the Home Equity Loans which on the Closing Date is $753,650,055.02.
Default: Any occurrence which is or with notice or the lapse of time
or both would become an Event of Default.
Deficiency Amount: The meaning ascribed to such term in the Credit
Enhancement Instrument.
Delaware 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.
Deleted Loan: A Home Equity Loan replaced or to be replaced with an
Eligible Substitute Loan.
Definitive Notes: The meaning specified in Section 4.08 of the
Indenture.
Depositor: Xxxxxx Xxxxxxx ABS Capital I 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.
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Determination Date: With respect to any Payment Date, the 18th day of
the month in which such Payment Date occurs or if such day is not a Business
Day, the next preceding Business Day.
Draw: With respect to any Revolving Credit Loan, a borrowing by the
Mortgagor under the related Loan Agreement.
Draw Period: With respect to each Revolving Credit Loan, the period
consisting of nine years and eleven months after the date of origination of
such Revolving Credit Loan, during which the related Mortgagor is permitted to
make Draws.
Due Date: With respect to the Home Equity Loans, the date on which
payments thereunder are due, as specified in the related Credit Line Agreement
or 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, the
Credit Enhancer and each Rating Agency) the Indenture Trustee have a claim
with respect to the funds in such account or a perfected first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account
is maintained, or (iii) in the case of the Collection Account, either (A) a
trust account or accounts maintained at the corporate trust department of the
Indenture Trustee or (B) an account or accounts maintained at a depository
institution for which the 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 Collection Account, the Certificate
Distribution 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 and the Credit Enhancer (as evidenced in writing by each Rating Agency
that use of any such account as the Collection Account or the Payment Account
will not reduce the rating assigned to any of the Securities by such Rating
Agency (if determined without regard to the Credit Enhancement Instrument)
below the lower of the then-current rating or the rating assigned to such
Securities (if determined without regard to the Credit Enhancement Instrument)
as of the Closing Date by such Rating Agency).
Eligible Substitute Loan: A Home Equity Loan substituted by the
Seller for a Deleted Loan which must, on the date of such substitution, as
confirmed in an Officer's Certificate delivered to the Indenture Trustee, (i)
have an outstanding Loan 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 Equity Loan for a Deleted Loan, an
aggregate outstanding Loan Balance, after such deduction), not in excess of
the outstanding Loan Balance of the Deleted Loan (the amount of any shortfall
to be deposited by the Seller in the Collection
7
Account in the month of substitution); (i) comply with each representation and
warranty set forth in clauses (ii) through (xxxviii) of Section 3.1(b) of the
Home Equity Loan Purchase Agreement other than clauses (viii)(A), (xiii),
(xiv), (xxiv)(B), (xxv)(B), (xxvi) and (xxvii) as of the date of substitution;
(iii) have a Loan Rate, Net Loan Rate and Gross Margin no lower than and not
more than 1% per annum higher than the Loan Rate, Net Loan Rate and Gross
Margin, respectively, of the Deleted Loan as of the date of substitution; (iv)
have a 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 a remaining
term to stated maturity not greater than (and not more than one year less
than) that of the Deleted Loan, (vi) not be 30 days or more delinquent, (vii)
have the same lien status as the Deleted Loan, (viii) have a Credit Score no
more than 10 points lower than the Credit Score of the Deleted Loan and (ix)
if the Deleted Loan is a Revolving Credit Loan, shall also be a revolving
credit loan and if the Deleted Loan is a Mortgage Loan, shall also be a closed
end Mortgage Loan and, if such Deleted Loan is a Adjustable-Rate Mortgage
Loan, have the same Index as the Deleted Loan.
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 as of the time
when the same shall have been made which has a material adverse
effect on Securityholders or the Credit Enhancer, and such default
shall continue or not be cured, or the circumstance or condition in
respect of which such representation or warranty was incorrect shall
not have been eliminated or otherwise cured, for a period of 30 days
after there shall have been given, by registered or certified mail,
to the Issuer by the Indenture Trustee or the Credit Enhancer or to
the Issuer and the Indenture Trustee by the Holders of at least 25%
of the outstanding Security Balance of the Notes or the Credit
Enhancer, 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,
8
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 Liquidation: Following the occurrence of an Event of Default
under the Indenture, the determination by the Indenture Trustee, as evidenced
by a written notice provided to the Owner Trustee, the Depositor and the
Credit Enhancer, that all conditions precedent to the sale or other
liquidation of the Trust Estate pursuant to Section 5.04 of the Indenture have
been satisfied.
Event of Servicer Termination: With respect to the Servicing
Agreement, a Servicing Default as defined in Section 7.01 of the Servicing
Agreement.
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 July 2017.
Fiscal Agent: The meaning specified for such term in the Credit
Enhancement Instrument.
FNMA: The Federal National Mortgage Association, or any successor
thereto.
Foreclosure Profit: With respect to a Liquidated Home Equity Loan,
the amount, if any, by which (i) the aggregate of Liquidation Proceeds net of
Liquidation Expenses and other unreimbursed advances and expenses exceeds (ii)
the related Loan Balance (plus accrued and unpaid interest thereon at the
applicable Loan Rate from the date interest was last paid through the date of
receipt of the final Liquidation Proceeds) of such Liquidated Home Equity Loan
immediately prior to the final recovery of its Liquidation Proceeds.
9
Xxxxx: Pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, and xxxxx x xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of such collateral or other agreement or
instrument and all other moneys payable thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to
exercise all rights and options, to bring proceedings in the name of the
granting party or otherwise, and generally to do and receive anything that the
granting party is or may be entitled to do or receive thereunder or with
respect thereto.
Gross Margin: With respect to any Revolving Credit Loan or any
Adjustable-Rate Mortgage Loan, the percentage set forth as the "Margin" for
such Home Equity Loan on the Home Equity Loan Schedule.
Guaranteed Principal Distribution Amount: With respect to any Payment
Date (other than the Payment Date in July 2017), the amount, if any, by which
the Security Balance of the Notes (after giving effect to all other amounts
paid and allocated to principal on the Notes) exceeds the Investor Amount as
of such Payment Date (after giving effect to all other amounts paid and
allocated as principal on the Notes). With respect to the Payment Date in July
2017 (after giving effect to all other amounts paid and allocated as principal
on the Notes), any amount necessary to pay in full the outstanding Security
Balance of the Notes on such Payment Date.
Holder: Any of the Noteholders or Certificateholders.
Home Equity Loan: Either a Revolving Credit Loan or a Mortgage Loan.
Home Equity Loan Purchase Agreement: The Home Equity Loan Purchase
Agreement, dated as of January 1, 2005, between the Seller, as seller, and the
Depositor, as purchaser, with respect to the Home Equity Loans.
Home Equity Loan Schedule: The initial schedule of Home Equity Loans
as of the Cut-off Date set forth in Exhibit A of the Servicing Agreement,
which schedule sets forth as to each Home Equity Loan (i) the Cut-off Date
Loan Balance ("Loan Balance"), (ii) with respect to any Revolving Credit Loan,
the Credit Limit, (iii) with respect to any Revolving Credit Loan and any
Adjustable-Rate Mortgage Loan, the Gross Margin ("Margin"), (iv) the name of
the Mortgagor, (v) with respect to any Revolving Credit Loan and any
Adjustable-Rate Mortgage Loan, the Maximum Rate ("Ceiling"), if any, (vi) the
loan number, (vii) the lien position of the related Mortgage, (viii) the CLTV,
(ix) the remaining term to maturity, (x) maturity date, (xi) with respect to
any Revolving Credit Loan, the Credit Limit Utilization Rate, (xii) the Junior
Ratio, and (xiii) whether such Home Equity Loan has an original policy of
title insurance or an ownership report in its Mortgage File.
Indemnified Party: The meaning specified in Section 7.02 of the Trust
Agreement.
10
Indenture: The indenture dated as of January 1, 2005 between the
Issuer, as debtor, and the Indenture Trustee, as indenture trustee.
Indenture Trustee: Xxxxx Fargo Bank, National Association, and its
successors and assigns or any successor indenture trustee appointed pursuant
to the terms of the Indenture.
Independent: When used with respect to any specified Person, the
Person (i) is in fact independent of the Issuer, any other obligor on the
Notes, the Seller, the Depositor and any Affiliate of any of the foregoing
Persons, (ii) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller,
the 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
Depositor or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
made by an Independent appraiser or other expert appointed by an Issuer Order
and approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
Index: With respect to any Revolving Credit Loan, the prime rate from
time to time for the adjustment of the Loan Rate set forth as such on the
related Credit Line Agreement. With respect to any Adjustable-Rate Mortgage
Loan, either One-Month LIBOR or Six-Month LIBOR as specified in the related
Mortgage Note from time to time for the adjustment of the Loan Rate.
Initial Security Balance: With respect to the Certificates, $0.00 and
the Notes, $753,650,000.
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
11
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 and Indemnity Agreement: The Insurance and Indemnity
Agreement dated as of January 1, 2005 among the Servicer, the Seller, the
Depositor, the Issuer, the Indenture Trustee and the Credit Enhancer,
including any amendments and supplements thereto.
Insurance Proceeds: Proceeds paid by any insurer (other than the
Credit Enhancer) pursuant to any insurance policy covering a Home Equity Loan
which are required to be remitted to the Servicer, or amounts required to be
paid by the Servicer pursuant to the next to last sentence of Section 3.04 of
the Servicing Agreement, net of any component thereof (i) covering any
expenses incurred by or on behalf of the Servicer in connection with obtaining
such proceeds, (ii) that is applied to the restoration or repair of the
related Mortgaged Property, (iii) released to the Mortgagor in accordance with
the Servicer's normal servicing procedures or (iv) required to be paid to any
holder of a mortgage senior to such Home Equity Loan.
Insured Amount: The meaning ascribed to such term in the Credit
Enhancement Instrument.
Insured Payments: The meaning ascribed to such term in the Credit
Enhancement Instrument.
Interest Collections: With respect to any Payment Date, the sum of
all payments by or on behalf of Mortgagors and any other amounts constituting
interest (including without limitation such portion of Insurance Proceeds, Net
Liquidation Proceeds and Repurchase Prices as is allocable to interest on the
applicable Home Equity Loan) as is paid by the Seller or the Servicer or is
collected by the Servicer under the Home Equity Loans, reduced by the
Servicing Fees for the related Collection Period and by any fees (including
annual fees) or late charges or similar administrative fees paid by Mortgagors
during the related Collection Period. The terms of the related Loan Agreement
shall determine the portion of each payment in respect of such Home Equity
Loan that constitutes principal or interest.
Interest Period: With respect to any Payment Date other than the
first Payment Date, the period beginning on the preceding Payment Date and
ending on the day preceding such Payment Date, and in the case of the first
Payment Date, the period beginning on the Closing Date and ending on the day
preceding the first Payment Date.
Interest Rate Adjustment Date: With respect to each Revolving Credit
Loan and each Adjustable-Rate Mortgage, the date or dates on which the Loan
Rate is adjusted in accordance with the related Credit Line Agreement.
Interest Shortfall: With respect to the Notes, on any Payment Date an
amount by which interest that would have accrued on the Notes during the
related Interest Period without regard to clause (ii) of the definition of
Note Rate exceeds an amount equal to the product of (A) the ratio of the
actual number of days in the related Interest Period to 360, multiplied by (B)
the product of (a) the Security Balance of the Notes for that Payment Date
(before taking into account payments to be made on such Payment Date)
multiplied by (b) the Net Loan Rate Cap. Interest Shortfalls will not be
included as interest payments on the Notes for such Payment Date
12
and such amount will accrue interest at the Note Rate (as adjusted from time
to time) and will be paid on future Payment Dates only to the extent funds are
available therefor as set forth in Section 3.05(a) of the Indenture.
Investor Amount: With respect to any Payment Date, the amount equal
to the Original Investor Amount minus (i) the amount of Principal Collections
previously paid to the Noteholders and minus (ii) an amount equal to the
product of the Investor Floating Allocation Percentage and all Liquidation
Loss Amounts for the Home Equity Loans prior to such Payment Date.
Investor Floating Allocation Percentage: With respect to any Payment
Date, the percentage equivalent of a fraction, the numerator of which is the
Investor Revolving Amount as of the end of the immediately preceding Payment
Date and the denominator of which is the sum of the aggregate Principal
Balance of the Revolving Credit Loans at the beginning of the related
Collection Period.
Investor Liquidation Loss Amounts: With respect to any Payment Date,
the sum of (1) the product of the Investor Floating Allocation Percentage and
the aggregate of Liquidation Loss Amounts for the Revolving Credit Loans and
(2) the aggregate of Liquidation Loss Amounts for the Mortgage Loans for the
related Collection Period.
Investor P&I Collections: With respect to (i) any Payment Date during
the Managed Amortization Period, the sum of (a) the product of the Investor
Floating Allocation Percentage and Interest Collections on the Revolving
Credit Loans, each for such Payment Date, and (b) the Interest Collections on
the Mortgage Loans for such Payment Date, (c) the product of the Investor
Floating Allocation Percentage and Net Principal Collections on the Revolving
Credit Loans, each for such Payment Date and (d) the Principal Collections on
the Mortgage Loans, each for such Payment Date and (ii) any Payment Date
during the Rapid Amortization Period, the sum of (a) the product of the
Investor Floating Allocation Percentage and Interest Collections for the
Revolving Credit Loans, each for such Payment Date, (b) the Interest
Collections on the Mortgage Loans for such Payment Date and (c) Principal
Collections for such Payment Date.
Investor Revolving Amount: With respect to any Payment Date following
the Closing Date, an amount equal to the Original Investor Revolving Amount
minus the excess of (A) the sum of (i) the aggregate Principal Collection
Distribution Amount for all prior Payment Dates and (ii) any Investor
Liquidation Loss Amounts for all prior Payment Dates over (B) the sum of (i)
the aggregate Principal Collections on the Mortgage Loans for all prior
Payment Dates and (ii) the aggregate Liquidation Loss Amounts for the Mortgage
Loans for all prior Payment Dates.
Issuer or Trust: The MSDWCC HELOC Trust 2005-1, 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.
13
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 or New
York City are required or authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory
or other), preference, priority right or interest or other security agreement
or preferential arrangement of any kind or nature whatsoever, including,
without limitation, any conditional sale or other title retention agreement,
any financing lease having substantially the same economic effect as any of
the foregoing and the filing of any financing statement under the UCC (other
than any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 6.02 of the Servicing
Agreement shall not be deemed to constitute a Lien.
Liquidated Home Equity Loan: With respect to any Payment Date, any
Home Equity Loan in respect of which the Servicer has determined, in
accordance with the servicing procedures specified in the Servicing Agreement,
as of the end of the related Collection Period that all Liquidation Proceeds
which it reasonably expects to recover, if any, with respect to the
disposition of the related REO have been recovered.
Liquidation Expenses: Out-of-pocket expenses (exclusive of overhead)
which are incurred by or on behalf of the Servicer in connection with the
liquidation of any Home Equity Loan and not recovered under any insurance
policy, such expenses including, without limitation, legal fees and expenses,
any unreimbursed amount expended (including, without limitation, amounts
advanced to correct defaults on any mortgage loan which is senior to such Home
Equity Loan and amounts advanced to keep current or pay off a mortgage loan
that is senior to such Home Equity Loan) respecting the related Home Equity
Loan and any related and unreimbursed expenditures for real estate property
taxes or for property restoration, preservation or insurance against casualty
loss or damage.
Liquidation Loss Amounts: With respect to any Payment Date and any
Home Equity Loan that became a Liquidated Home Equity 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 in reduction of the Loan Balance.
Liquidation Loss Distribution Amount: With respect to any Payment
Date, the aggregate of (A) 100% of the Investor Liquidation Loss Amounts on
such Payment Date, plus (B) any such Investor Liquidation Loss Amounts
remaining undistributed from any preceding Payment Date not paid pursuant to
the Credit Enhancement Instrument.
Liquidation Proceeds: Proceeds (including Insurance Proceeds but not
including amounts drawn under the Credit Enhancement Instrument) if any
received in connection with the liquidation of any Home Equity Loan or related
REO, whether through trustee's sale, foreclosure sale or otherwise.
Loan Agreement: With respect to any Revolving Credit Loan, the credit
line account agreement executed by the related Mortgagor and any amendment or
modification
14
thereof. With respect to any Mortgage Loan, the mortgage executed by the
related Mortgagor and any amendment or modification thereof.
Loan Balance: With respect to any Home Equity Loan, other than a
Liquidated Home Equity Loan, and as of any day, the related Cut-off Date Loan
Balance, plus (i) in the case of each Revolving Credit Loan any Additional
Balances in respect of such Revolving Credit Loan conveyed to the Trust, minus
(ii) all collections credited as principal in respect of any such Home Equity
Loan in accordance with the related Loan Agreement and applied in reduction of
the Loan Balance thereof. For purposes of this definition, a Liquidated Home
Equity Loan shall be deemed to have a Loan Balance equal to the Loan Balance
of the related Home Equity Loan immediately prior to the final recovery of
substantially all related Liquidation Proceeds and a Loan Balance of zero
thereafter.
Loan Rate: With respect to any Revolving Credit Loan or
Adjustable-Rate Mortgage Loan and any day, the per annum rate of interest
applicable under the related Loan Agreement.
Lost Note Affidavit: With respect to any Home Equity Loan as to which
the original Credit Line Agreement has been permanently lost or destroyed and
has not been replaced, an affidavit from the Seller certifying that the
original Credit Line Agreement or Mortgage Note has been lost, misplaced or
destroyed (together with a copy of the related Credit Line Agreement or
Mortgage Note).
Managed Amortization Period: The period commencing on the Closing
Date and ending on the earlier of (i) the Payment Date in January 2010 and
(ii) the occurrence of a Rapid Amortization Event.
Maximum Rate: With respect to each Revolving Credit Loan or
Adjustable-Rate Mortgage Loan with respect to which the related Credit Line
Agreement or Mortgage Note provides for a lifetime rate cap, the maximum Loan
Rate permitted over the life of such Revolving Credit Loan or Adjustable-Rate
Mortgage Loan under the terms of such Credit Line Agreement or Mortgage Note
as set forth on the Home Equity Loan Schedule and initially as set forth on
Exhibit A to the Servicing Agreement.
Minimum Auction Price: An amount equal to the sum of (i) the
outstanding Security Balance of the Notes plus accrued and unpaid interest on
the Notes, and (ii) any amounts owed to the Credit Enhancer, Auction
Administrator, Indenture Trustee and the Credit Enhancer under the Insurance
Agreement.
Minimum Class O Certificateholder Interest: With respect to any
Transfer Date, an amount equal to the lesser of (a) 5% of the Pool Balance on
such date and (b) 2% of the Cut-off Date Pool Balance.
Minimum Monthly Payment: With respect to any Revolving Credit Loan
and any month, the minimum amount required to be paid by the related Mortgagor
in that month.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in
interest.
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Mortgage: The mortgage, deed of trust or other instrument creating a
first or subordinate lien on an estate in fee simple interest in real property
securing a Home Equity Loan.
Mortgage File: The file containing the Related Documents pertaining
to a particular Home Equity Loan and any additional documents required to be
added to the Mortgage File pursuant to the Home Equity Loan Purchase Agreement
or the Servicing Agreement.
Mortgage Loans: At any time, all Mortgage Loans that are closed-end
and that have been sold to the Depositor under the Home Equity Loan Purchase
Agreement and conveyed to the Trust, together with the Related Documents, and
that remain subject to the terms thereof.
Mortgaged Property: The underlying property, including real property
and improvements thereon, securing a Home Equity Loan.
Mortgagor: The obligor or obligors under a Loan Agreement.
Net Liquidation Proceeds: With respect to any Liquidated Home Equity
Loan, Liquidation Proceeds net of Liquidation Expenses (but not including the
portion, if any, of such amount that exceeds the Loan Balance of the Home
Equity Loan at the end of the Collection Period immediately preceding the
Collection Period in which such Home Equity Loan became a Liquidated Home
Equity Loan plus accrued and unpaid interest and unreimbursed advances and
expenses). Net Liquidation proceeds will not be an amount less than zero.
Net Loan Rate: With respect to any Home Equity Loan and any day, the
related Loan Rate less the sum of the Servicing Fee Rate, the Credit Enhancer
Premium Rate, the per annum rate at which the fee payable to the Owner
Trustee, if any, is calculated and, commencing with the Payment Date in August
2005, 0.25%.
Net Loan Rate Cap: With respect to any Payment Date, the Weighted
Average Net Loan Rate, adjusted to an effective rate reflecting interest
calculated on the basis of the actual number of days in the related Interest
Period and a year assumed to consist of 360 days.
Net Principal Collections: With respect to any Payment Date (1) prior
to the Rapid Amortixation Period, the excess, if any, of Principal Collections
for such Payment Date with respect to the Revolving Credit Loans over the
aggregate amount of Additional Balances created during the related Collection
Period and conveyed to the Trust, or (2) during the Rapid Amortization Period,
the Principal Collections with respect to the Revolving Credit Loans for such
Payment Date.
Note Owner: The Beneficial Owner of a Note.
Note Rate: With respect to any Interest Period, a per annum rate
determined by the Indenture Trustee equal to the lesser of (i) One-Month LIBOR
for such Interest Period plus 0.19% (or 0.38% after any Optional Redemption
Date) and (ii) the Net Loan Rate Cap for such Interest Period.
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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: The Notes issued and outstanding at any time pursuant to the
Indenture.
Officer's Certificate: With respect to the Servicer, a certificate
signed by the President, Managing Director, a Director, a Vice President or an
Assistant Vice President, of the Servicer and delivered to the Indenture
Trustee. With respect to the Issuer, a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
One-Month LIBOR: For any Interest Period other than the first
Interest Period, the rate for United States dollar deposits for one month
which appears on the Telerate Screen Page 3750 as of 11:00 A.M., London,
England time, on the second LIBOR Business Day prior to the first day of such
Interest Period. With respect to the first Interest Period, the rate for
United States dollar deposits for one month which appears on the Telerate
Screen Page 3750 as of 11:00 A.M., London, England time, two LIBOR Business
Days prior to the Closing Date. If such rate does not appear on such page (or
such other page as may replace that page on that service, or if such service
is no longer offered, such other service for displaying One-Month LIBOR or
comparable rates as may be reasonably selected by the Indenture Trustee after
consultation with the Servicer and the Credit Enhancer), the rate will be the
Reference Bank Rate. If no such quotations can be obtained and no Reference
Bank Rate is available, One-Month LIBOR will be One-Month LIBOR applicable to
the preceding Payment Date.
Opinion of Counsel: A written opinion of counsel of a law firm
acceptable to the recipients thereof. Any Opinion of Counsel for the Servicer
may be provided by in-house counsel for the Servicer if reasonably acceptable
to the Indenture Trustee, the Credit Enhancer and the Rating Agencies or
counsel for the Depositor, as the case may be.
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Optional Redemption Date: The first Payment Date on which the
outstanding Security Balance of the Notes is reduced to an amount equal to or
less than 10% of the Security Balance of the Notes on the Closing Date.
Original Investor Amount: As of the Closing Date, $753,650,055.02,
which represents the sum of 100% of the Cut-off Date Pool Balance.
Original Investor Revolving Amount: An amount equal to the excess of
(i) the Original Investor Amount over (ii) the Cut-off Date Balance of the
Mortgage Loans.
Outstanding: With respect to the Notes, as of the date of
determination, all Notes theretofore executed, authenticated and delivered
under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes have
been executed, authenticated and delivered pursuant to the Indenture
unless proof satisfactory to the Indenture Trustee is presented that
any such Notes are held by a holder in due course;
provided, however, that for purposes of effectuating the Credit Enhancer's
right of subrogation as set forth in the Indenture only, all Notes that have
been paid with funds provided under the Credit Enhancement Instrument shall be
deemed to be Outstanding until the Credit Enhancer has been reimbursed with
respect thereto.
Overcollateralization Amount: With respect to any date of
determination, the amount, if any, by which the Investor Amount exceeds the
Security Balance of the Notes.
Overcollateralization Deficit: With respect to any Payment Date, the
amount, if any, by which the Security Balance of the Notes (after giving
effect to all other amounts paid and allocated to principal on the Notes)
exceeds the Investor Amount as of such Payment Date (after giving effect to
all other amounts paid and allocated as principal of the Notes).
Overcollateralization Shortfall: With respect to any Payment Date,
the amount by which (i) the Required Overcollateralization Amount exceeds (ii)
the Overcollateralization Amount for such Payment Date.
Owner Trust : The MSDWCC HELOC Trust 2005-1 to be created pursuant to
the Trust Agreement.
Owner Trust Estate: The corpus of the Issuer created by the Trust
Agreement which consists of the Home Equity Loans and the Credit Enhancement
Instrument.
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.
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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 beginning in February 2005,
or if such day is not a Business Day, then the next Business Day.
Percentage Interest: With respect to any Note, the percentage
obtained by dividing the Security Balance of such Note by the aggregate of the
Security Balances of all Notes prior to such Payment Date. With respect to any
Certificate, the percentage obtained by dividing the Security Balance on any
such Certificate by the aggregate of the Security Balances of all Certificates
prior to any Payment Date.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest
by the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause
(i) 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 (a) rated by Moody's in its
highest short-term rating category available and (b) "AA" by Standard &
Poor's with respect to its long-term unsecured debt or "A-1+" with
respect to its short-term obligations;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than 365
days or a remaining maturity of more than 30 days) denominated in United
States dollars of any U.S. depository institution or trust company
incorporated under the laws of the United States or any state thereof or
of any domestic branch of a foreign depository institution or trust
company; provided that the debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard &
Poor's, in the case of the principal depository institution in a
depository institution holding company, debt obligations of the
depository institution holding company) at the date of acquisition
thereof have been rated by each Rating Agency in its highest short-term
rating 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
19
rating of such institution shall be "A-1+" in the case of Standard &
Poor's if Standard & Poor's is the Rating Agency;
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by each Rating Agency in its highest short-term rating
category available; provided that such commercial paper shall have a
remaining maturity of not more than 30 days;
(v) money market funds having ratings in the highest long-term
available rating category of Moody's and having a rating of at least AAAm
or AAm-G by Standard & Poor's at the time of such investment (any such
money market funds which provide for demand withdrawals being
conclusively deemed to satisfy any maturity requirements for Permitted
Investments set forth in the Servicing Agreement) including money market
funds of the Indenture Trustee and any such funds that are managed by the
Indenture Trustee or its Affiliates or for which the Indenture Trustee or
any Affiliate acts as advisor, as long as such money market funds satisfy
the criteria of this subparagraph; and
(vi) 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, and which are
acceptable to the Credit Enhancer, as evidenced in writing, provided
that if the Servicer or any other Person controlled by the 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 Equity 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 Moody's, 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 Moody's.
Person: Any legal individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Pool Balance: With respect to any date, the aggregate of the Loan
Balances of all Home Equity 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
20
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.
Preference Amounts: The meaning ascribed to such term in the Credit
Enhancement Instrument.
Premium: As defined in the Insurance Agreement.
Premium Letter: The Commitment to Issue a Financial Guaranty
Insurance Policy dated January 27, 2005.
Principal Collection Distribution Amount: For any Payment Date (i)
the sum of (a) the Investor Floating Allocation Percentage of the Net
Principal Collections for the Revolving Credit loans, each for such Payment
Date and (b) Principal Collections for the Mortgage Loans for such Payment
Date, if such Payment Date is during the Managed Amortization Period, or (ii)
Principal Collections for such Payment Date if such Payment Date is after the
end of the Managed Amortization Period.
Principal Collections: With respect to any Payment Date and any Home
Equity Loan, the aggregate of the following amounts:
(i) the total amount of payments made by or on behalf of the
Mortgagor, received and applied as payments of principal on the Home
Equity Loan during the related Collection Period, as reported by the
Servicer;
(ii) any Net Liquidation Proceeds, allocable as a recovery of
principal, received in connection with the Home Equity Loan during the
related Collection Period;
(iii) if the Home Equity Loan was purchased by the Servicer pursuant
to Section 3.15 or 8.08 of the Servicing Agreement, or was repurchased by
the Seller pursuant to the Home Equity Loan Purchase Agreement, during
the related Collection Period, 100% of the Loan Balance of the Home
Equity Loan as of the date of such purchase or repurchase and any
Substitution Adjustment Amounts received for such Collection Period;
(iv) any other amounts received as payments on or proceeds of the
Home Equity Loan during the Collection Period to the extent applied in
reduction of the principal amount thereof; and
(v) any amounts received pursuant to the Mandatory Auction provision
in Section 8.04 of the Indenture.
provided, that Principal Collections shall not include any Foreclosure
Profits, and shall be reduced by any amounts withdrawn from the Collection
Account pursuant to clauses (iii), (vi) and (vii) of Section 3.03 of the
Servicing Agreement.
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Principal Reduction Amount: With respect to any Payment Date, the
lesser of (a) the Principal Collection Distribution Amount and (b) the greater
of (i) the excess, if any, of the Overcollateralization Amount over the
Required Overcollateralization Amount, each for such Payment Date and (ii)
zero.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Purchase Price: The meaning specified in Section 2.2(a) of the Home
Equity Loan Purchase Agreement.
Purchaser: Xxxxxx Xxxxxxx ABS Corporation I, Inc., a Delaware
corporation, and its successors and assigns.
Rapid Amortization Event: Any one of the following events:
(a) the failure on the part of the Seller (i) to make any payment or
deposit required to be made under the Home Equity Loan Purchase Agreement
within five Business Days after the date such payment or deposit is
required to be made; or (ii) to observe or perform in any material
respect any other covenants or agreements of the Seller set forth in the
Home Equity Loan Purchase Agreement, which failure continues unremedied
for a period of 60 days after written notice and such failure materially
and adversely affects the interests of the Securityholders or the Credit
Enhancer;
(b) if any representation or warranty made by the Seller in the Home
Equity Loan Purchase Agreement proves to have been incorrect in any
material respect when made and which continues to be incorrect in any
material respect for a period of 60 days with respect to any
representation or warranty of the Seller made in Section 3.1(a) of the
Home Equity Loan Purchase Agreement or 90 days with respect to any
representation or warranty made in Section 3.1(b) of the Home Equity Loan
Purchase Agreement after written notice and as a result of which the
interests of the Securityholders or the Credit Enhancer are materially
and adversely affected; provided, however, that a Rapid Amortization
Event shall not be deemed to occur if the Seller has repurchased or
caused to be repurchased or substituted for the related Home Equity Loans
or all Home Equity Loans, if applicable, during such period (or within an
additional 60 days with the consent of the Indenture Trustee and the
Credit Enhancer) in accordance with the provisions of the Indenture;
(c) the entry against the Seller or the Issuer of a decree or order
by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership, readjustment
of debt, marshalling of assets and liabilities or similar proceedings, or
for the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60
consecutive days;
(d) the Seller or the Issuer shall voluntarily go into liquidation,
consent to the appointment of a conservator, receiver, liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or
22
relating to the Seller or the Issuer or of or relating to all or
substantially all of its property, or a decree or order of a court,
agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver, liquidator or similar person
in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the Seller or the Issuer
and such decree or order shall have remained in force undischarged,
unbonded or unstayed for a period of 60 days; or the Seller or the Issuer
shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit
of its creditors or voluntarily suspend payment of its obligations;
(e) the Issuer becomes subject to regulation by the Commission as an
investment company within the meaning of the Investment Company Act of
1940, as amended;
(f) a Servicing Default relating to the Servicer occurs under the
Servicing Agreement;
(g) any draw on the Credit Enhancement Instrument;
(h) the Issuer is determined to be an association taxable as a
corporation for federal income tax purposes; or
(i) an Event of Default under the Indenture has occurred and is
continuing
In the case of any event described in (a), (b) or (f), a Rapid
Amortization Event will be deemed to have occurred only if, after any
applicable grace period described in such clauses, the Credit Enhancer or,
with the consent of the Credit Enhancer, Securityholders evidencing not less
than 51% of the Security Balance of each of the Notes and the Certificates, by
written notice to the Seller, the Servicer, the Indenture Trustee, the
Depositor and the Owner Trustee, declare that a Rapid Amortization Event has
occurred as of the date of such notice. In the case of any event described in
clauses (c), (d), (e), (g), (h) or (i), an Rapid Amortization Event will be
deemed to have occurred without any notice or other action on the part of the
Noteholders or the Credit Enhancer immediately upon the occurrence of such
event; provided, that any Rapid Amortization Event may be waived and deemed of
no effect with the written consent of the Credit Enhancer and each Rating
Agency, subject to the satisfaction of any conditions to such waiver.
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.
Initially, Xxxxx'x or Standard & Poor's. If such organization or a successor
is no longer in existence, "Rating Agency" shall be such nationally recognized
statistical rating organization, or other comparable Person, designated by the
Depositor, notice of which designation shall be given to the Indenture
Trustee. References herein to the highest short term unsecured rating category
of a Rating Agency shall mean "A-1+" or better in the case of Standard &
Poor's and "P-1" or better in the case of Xxxxx'x and in the case of any other
Rating Agency shall mean such equivalent ratings. References herein to the
highest long-term rating
23
category of a Rating Agency shall mean "AAA" in the case of Standard & Poor's
and "Aaa" in the case of Xxxxx'x and in the case of any other Rating Agency,
such equivalent rating.
Realized Loss Allocated Amount: With respect to any Payment Date, an
amount equal to Realized Losses on the Revolving Credit Loans incurred during
the prior Collection Period multiplied by a fraction the numerator of which is
the Class Principal Balance of the Class L Certificates immediately prior to
such Payment Date and the denominator of which is the aggregate Loan Balances
of the Revolving Credit Loans at the end of the related Collection Period.
Realized Losses: For any Payment Date the positive difference between
(i) the Principal Balances of all Home Equity Loans that were liquidated
during the related Collection Period and (ii) the principal portion of Net
Liquidation Proceeds of such Home Equity Loans.
Record Date: With respect to the Notes and any Payment Date, the
Business Day next preceding such Payment Date and with respect to 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 One-Month LIBOR and any Interest
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 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 Security Balance of the Notes and the Certificates; 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 Servicer and the Credit
Enhancer, as of 11:00 a.m., New York time, on such date for loans in U.S.
Dollars to leading European Banks for a period of one month, in amounts
approximately equal to the aggregate Security Balance of the Notes. If no such
quotations can be obtained, the Reference Bank Rate shall be the Reference
Bank Rate applicable to the preceding Interest Period.
Reference Banks: Barclays Bank PLC, National Westminster Bank and
Deutsche Bank, AG, or any successor in interest thereto.
Registered Holder: The Person in whose name a Note is registered in
the Note Register on the applicable Record Date.
Reimbursement Amount: The meaning ascribed to such term in the Credit
Enhancement Instrument.
Related Documents: With respect to each Home Equity Loan, the
documents specified in Section 2.1(c) of the Home Equity Loan Purchase
Agreement and any documents required to be added to such documents pursuant to
the Home Equity Loan Purchase Agreement, the Trust Agreement or the Servicing
Agreement.
Relief Act: The Servicemembers Civil Relief Act, as amended.
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REO: A Mortgaged Property that is acquired by the Trust in
foreclosure or by deed in lieu of foreclosure.
Repurchase Event: With respect to any Home Equity Loan, either (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 Equity 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
title exceptions permissible by mortgage lenders generally 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 Equity Loan as to which
the Seller delivers an affidavit certifying that the original Credit Line
Agreement has been lost or destroyed, a subsequent default on such Home Equity
Loan if the enforcement thereof or of the related Mortgage is materially and
adversely affected by the absence of such original Credit Line Agreement.
Repurchase Price: With respect to any Home Equity Loan required to be
repurchased on any date pursuant to the Home Equity Loan Purchase Agreement or
purchased by the Servicer 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), (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 and (iii) and any costs and damages incurred by the Trust
resulting from any violation of any predatory or abusive lending law in
connection with such Home Equity Loan.
Required Overcollateralization Amount: As defined in the Insurance
Agreement.
Responsible Officer: With respect to the Indenture Trustee, any
officer of the Indenture Trustee with direct responsibility for the
administration of the Indenture and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
Revolving Credit Loans: At any time, all Revolving Credit Loans,
including Additional Balances, if any, that have been sold to the Depositor
under the Home Equity Loan Purchase Agreement and conveyed to the Trust,
together with the Related Documents, and that remain subject to the terms
thereof.
Scheduled Final Payment Date: The Payment Date in July 2017.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
Security: Any of the Certificates or Notes.
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Security Balance: With respect to any Payment Date and the Notes, the
Initial Security Balance thereof prior to such Payment Date reduced by all
payments of principal thereon prior to such Payment Date. With respect to any
Payment Date and any Class of Certificates, the Class Principal Balance
thereof.
Security Collections: With respect to any Payment Date, the sum of
the following amounts:
(i) the aggregate of all Security Interest Collections received
during the related Collection Period;
(ii) the aggregate of all Security Principal Collections received
during the related Collection Period; and
(iii) all Substitution Adjustment Amounts to be deposited to the
Payment Account for such Payment Date.
Securityholder or Holder: Any Noteholder or a Certificateholder.
Security Interest Collections: With respect to any Payment Date,
Interest Collections during the related Collection Period.
Security Percentage: With respect to any Payment Date and Security,
the percentage equivalent of a fraction the numerator of which is the Security
Balance of such Security immediately prior to such Payment Date and the
denominator of which is the aggregate of the Security Balances of all
Securities as of such date.
Security Principal Collections: With respect to any Payment Date,
Principal Collections during the related Collection Period.
Seller: Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation, a Delaware
corporation, and its successors and assigns.
Seller P&I Collections: With respect to any Payment Date, the excess
of Security Collections over the Investor P&I Collections for such Payment
Date.
Servicer: Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation, a Delaware
corporation, and its successors and assigns.
Servicer Performance Test: With respect to the Servicer, the Servicer
Performance Test shall be satisfied so long as (i) the ratio, expressed as a
percentage, of the cumulative Liquidation Loss Amounts over the Cut-Off Date
Pool Balance, is less than the following percentages during the following
calendar months after the Cut-Off Date: (a) 1.00% during months 31 to 48,
inclusive, (b) 1.50% during months 49 to 60, inclusive, and (c) 2.00% on and
after month 61, (ii) the most recent servicer ranking of the Servicer is
"average" or better from S&P and (iii) the 60+ Delinquency Percentage (Rolling
Six Month), is less than 3.00%.
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Servicer Test: With respect to the Servicer, the Servicer Test shall
be satisfied so long as (i) the ratio, expressed as a percentage, of the
cumulative Liquidation Loss Amounts over the Cut-Off Date Pool Balance is less
than the following percentage rates during the following calendar months after
the Cut-Off Date: (a) 1.00% during months 31 to 48, inclusive, (b) 1.50%
during months 49 to 60, inclusive, and (c) 2.00% on and after month 61, (ii)
the Tangible Net Worth is at least $500,000,000 or such other amount as the
parties agree that the Servicer will maintain, (iii) the most recent servicer
ranking of the Servicer is "average" or better from S&P and (iv) the 60+
Delinquency Percentage (Rolling Six Month), is less than 3.00%; provided,
however, with respect to clause (ii) above, as a substitute for equity
capital, the Servicer shall have the right to provide a letter of credit or
letters of credit, with each letter of credit being in form and substance
acceptable to the Credit Enhancer and its outside counsel and from a letter of
credit provider or providers, each of which is acceptable to the Credit
Enhancer and its outside counsel.
Servicing Advance: Those costs and expenses advanced for the
preservation or restoration of any Mortgaged Property, including advances, if
any, to pay delinquent real estate taxes and insurance that the Servicer is
required to advance in accordance with the terms of the Servicing Agreement.
Servicing Agreement: The Servicing Agreement dated as of January 1,
2005 between the Indenture Trustee, the Issuer and the Servicer, as servicer.
Servicing Default: The meaning specified in Section 7.01 of the
Servicing Agreement.
Servicing Fee: With respect to any Home Equity Loan except Liquidated
Home Equity Loans and any Collection Period, the product of (i) the Servicing
Fee Rate divided by 12 and (ii) (A) the Calculated Loan Balance, in the case
of Revolving Credit Loans, and (B) the Loan Balance, in the case of Mortgage
Loans.
Servicing Fee Rate: With respect to any Home Equity Loan except
Liquidated Home Equity Loans, 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Home Equity Loans
whose name and specimen signature appear on a list of Servicing Officers
furnished to the Indenture Trustee (with a copy to the Credit Enhancer) by the
Servicer, as such list may be amended from time to time.
Servicing Report: The monthly report delivered to the Indenture
Trustee by the Servicer pursuant to Section 4.01 of the Servicing Agreement.
Single Certificate: A Certificate in the denomination of $1,000.
Single Note: A Note in the amount of $1,000.
Six-Month LIBOR: With respect to any Adjustable-Rate Mortgage Loan
for which Six-Month LIBOR is the related Index, the rate for United States
dollar deposits for six months which appears on the Telerate Screen Page 3750
as of 11:00 A.M., London, England
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time, on the second LIBOR Business Day prior to the first day of such
Collection Period or such other date specified in the related Mortgage Note.
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 Six-Month LIBOR or comparable rates as may be
reasonably selected by the Servicer after consultation with the Credit
Enhancer), in accordance with the terms of the related Mortgage Note.
60+ Delinquency Percentage (Rolling Six Month): means, as of any
Payment Date, the ratio expressed as a percentage, of the six-month rolling
average of all Home Equity Loans sixty days or more delinquent as of such
Payment Date in the payment of all or any portion of scheduled principal or
interest (including all Home Equity Loans that are REO or the subject of a
foreclosure proceeding) over the Pool Balance.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc., or its successor in interest.
Statement: The monthly statement prepared by the Indenture Trustee
pursuant to Section 3.26 of the Indenture and made available to the parties
described therein.
Subservicer: Any Person with whom the Servicer has entered into a
Subservicing Agreement as a Subservicer by the 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 Servicer and
any Subservicer relating to servicing and administration of certain Home
Equity Loans as provided in Section 3.01 of the Servicing Agreement.
Substitution Adjustment Amounts: With respect to any Eligible
Substitute Loan and any Deleted Loan, the amount, if any, as determined by the
Servicer, by which the aggregate principal balance of all such Eligible
Substitute Loans as of the date of substitution is less than the aggregate
principal balance of all such Deleted Loans (after application of the
principal portion of the monthly payments due in the month of substitution
that are to be distributed to the Payment Account in the month of
substitution).
Tangible Net Worth: The excess of (a) the tangible assets of the
Servicer and any Affiliates calculated in accordance with GAAP, as reduced by
adequate reserves in each case where reserves are proper over (b) all
indebtedness (including subordinated debt) of the Servicer and its Affiliates;
provided, however, that (i) in no event shall there be included in the above
calculation any intangible assets such as patents, trademarks, trade names,
copyrights, licenses, goodwill, organizational costs, advances or loans to, or
receivables from, directors, officers, employees or affiliates, prepaid
assets, amounts relating to covenants not to compete, pension assets, deferred
charges or treasury stock or any securities of the Servicer or any other
securities unless the same are readily marketable in the United States of
America or entitled to be used as a credit against federal income tax
liabilities, (ii) securities included in such intangible assets shall be taken
into account at their current market price or cost, whichever is lower, and
(iii) any write-up in the book value of the assets shall not be taken into
account.
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Teaser Loan: Any Revolving Credit Loan or any Adjustable-Rate
Mortgage Loan, which provides for an initial period during which the Loan Rate
is less than the sum of the current Index plus the applicable Gross Margin.
Telerate Screen Page 3750: The display designated as page 3750 on the
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks).
If such rate does not appear on such page (or such other page as may replace
that page on that service, or if such service is no longer offered, such other
service for displaying One-Month LIBOR or comparable rates as may be selected
by the Issuer after consultation with the Indenture Trustee and the Credit
Enhancer), the rate will be the related Reference Bank Rate.
Transfer Date: Any Payment Date on which the Seller removes Revolving
Credit Loans from the Trust pursuant to Section 2.3 of the Home Equity Loan
Purchase Agreement.
Transfer Document: A document substantially in the form of Exhibit D
to the Servicing Agreement.
Transition Costs: Any documented fees, expenses and allocated costs
reasonably incurred by the Indenture Trustee (or a successor Servicer or the
Credit Enhancer) in connection with a transfer of servicing from the Servicer
to the Indenture Trustee (or a successor Servicer), including, without
limitation, any costs or expenses associated with the complete transfer of all
servicing data and the completion, correction or manipulation of such
servicing data as may be required by the Indenture Trustee (or a successor
Servicer) to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Indenture Trustee (or a successor Servicer) to service
the Home Equity Loans properly and effectively.
Treasury Regulations: Regulations, including proposed or temporary
Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Trust: As defined in Section 2.01 of the Trust Agreement.
Trust Agreement: The Trust Agreement, dated as of January 1, 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 in effect from time to time in
the applicable jurisdiction.
Underwriter: Xxxxxx Xxxxxxx & Co. Incorporated.
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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.
Weighted Average Net Loan Rate: With respect to the Home Equity Loans
in the aggregate, and any Payment Date, the average of the Net Loan Rate for
each Home Equity Loan as of the last day of the Billing Cycle for the Due Date
that occurs in the Collection Period immediately prior to such Payment Date
weighted on the basis of the related Loan Balances outstanding as of the last
day of such Billing Cycle for each Home Equity Loan as determined by the
Servicer in accordance with the Servicer's normal servicing procedures.
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