EXHIBIT 4.4
FORM OF INDENTURE
HOME LOAN TRUST 200[_]-[___]
ISSUER
AND
[______________________]
INDENTURE TRUSTEE
INDENTURE
DATED AS OF [__________________ ___], 20[___]
__________________________________________
HOME LOAN-BACKED NOTES, SERIES 200[_]-[___]
_____________
ARTICLE I Definitions............................................ 2
Section 1.01. Definitions......................................... 2
Section 1.02. Incorporation by Reference of Trust
Indenture Act....................................... 2
Section 1.03. Rules of Construction............................... 2
ARTICLE II Original Issuance of Notes............................. 3
Section 2.01. Form................................................ 3
Section 2.02. Execution, Authentication and Delivery.............. 3
ARTICLE III Covenants.............................................. 4
Section 3.01. Collection of Payments with respect to the
Home Loans.......................................... 4
Section 3.02. Maintenance of Office or Agency..................... 4
Section 3.03. Money for Payments To Be Held in Trust;
Paying Agent........................................ 4
Section 3.04. Existence........................................... 5
Section 3.05. Payment of Principal and Interest; Defaulted
Interest........................................... 6
Section 3.06. Protection of Trust Estate.......................... 8
Section 3.07. Opinions as to Trust Estate......................... 8
Section 3.08. Performance of Obligations; Servicing Agreement..... 9
Section 3.09. Negative Covenants.................................. 9
Section 3.10. Annual Statement as to Compliance................... 10
Section 3.11. Recording of Assignments............................ 10
Section 3.12. Representations and Warranties Concerning
the Home Loans.......................................10
Section 3.13. Assignee of Record of the Home Loans................ 10
Section 3.14. Master Servicer as Agent and Bailee of the
Indenture Trustee................................... 11
Section 3.15. Investment Company Act.............................. 11
Section 3.16. Issuer May Consolidate, etc......................... 11
Section 3.17. Successor or Transferee............................. 13
Section 3.18. No Other Business................................... 13
Section 3.19. No Borrowing........................................ 13
Section 3.20. Guarantees, Loans, Advances and Other
Liabilities......................................... 13
Section 3.21. Capital Expenditures................................ 13
Section 3.22. Owner Trustee Not Liable for the Certificate
or Related Documents................................ 13
Section 3.23. Restricted Payments................................. 14
Section 3.24. Notice of Events of Default......................... 14
Section 3.25. Further Instruments and Acts........................ 14
Section 3.26. Statements to Noteholders........................... 14
Section 3.27. Payments under the Credit Enhancement
Instrument.......................................... 14
Section 3.28. Reserved............................................ 15
Section 3.29. Determination of Class A-1 Note Rate................ 15
Section 3.30. Liquidation on Final Insured Payment Date........... 15
Section 3.31. No Recourse......................................... 15
Section 3.32. Additional UCC Representations and Warranties....... 15
ARTICLE IV The Notes; Satisfaction and Discharge of
Indenture.............................................. 16
Section 4.01. The Notes........................................... 16
Section 4.02. Registration of and Limitations on Transfer and
Exchange of Notes; Appointment of Certificate
Registrar........................................... 16
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes.......... 18
Section 4.04. Persons Deemed Owners............................... 18
Section 4.05. Cancellation........................................ 18
Section 4.06. Book Entry Notes.................................... 19
Section 4.07. Notices to Depository............................... 20
Section 4.08. Definitive Notes.................................... 20
Section 4.09. Tax Treatment....................................... 20
Section 4.10. Satisfaction and Discharge of Indenture............. 20
Section 4.11. Application of Trust Money.......................... 22
Section 4.12. Subrogation and Cooperation......................... 22
Section 4.13. Repayment of Monies Held by Paying Agent............ 22
Section 4.14. Temporary Notes..................................... 23
ARTICLE V Default and Remedies................................... 23
Section 5.01. Events of Default................................... 23
Section 5.02. Acceleration of Maturity; Rescission
and Annulment....................................... 23
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee........ ........... 24
Section 5.04. Remedies; Priorities................................ 26
Section 5.05. Optional Preservation of the Trust Estate........... 28
Section 5.06. Limitation of Suits................................. 28
Section 5.07. Rights of Noteholders to Receive Principal
and Interest........................................ 29
Section 5.08. Restoration of Rights and Remedies.................. 29
Section 5.09. Rights and Remedies Cumulative...................... 29
Section 5.10. Delay or Omission Not a Waiver...................... 29
Section 5.11. Control by the Credit Enhancer or the
Noteholders......................................... 29
Section 5.12. Waiver of Past Defaults............................. 30
Section 5.13. Undertaking for Costs............................... 30
Section 5.14. Waiver of Stay or Extension Laws.................... 31
Section 5.15. Sale of Trust Estate................................ 31
Section 5.16. Action on Notes..................................... 33
Section 5.17. Performance and Enforcement of Certain
Obligations......................................... 33
ARTICLE VI The Indenture Trustee.................................. 34
Section 6.01. Duties of Indenture Trustee......................... 34
Section 6.02. Rights of Indenture Trustee......................... 35
Section 6.03. Individual Rights of Indenture Trustee.............. 35
Section 6.04. Indenture Trustee's Disclaimer...................... 35
Section 6.05. Notice of Event of Default.......................... 35
Section 6.06. Reports by Indenture Trustee to Holders............. 36
Section 6.07. Compensation and Indemnity.......................... 36
Section 6.08. Replacement of Indenture Trustee.................... 36
Section 6.09. Successor Indenture Trustee by Xxxxxx............... 37
Section 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee................................... 37
Section 6.11. Eligibility; Disqualification....................... 38
Section 6.12. Preferential Collection of Claims Against Issuer.... 39
Section 6.13. Representations and Warranties...................... 39
Section 6.14. Directions to Indenture Trustee..................... 40
Section 6.15. Indenture Trustee May Own Securities................ 40
ARTICLE VII Noteholders' Lists and Reports......................... 40
Section 7.01. Issuer to Furnish Indenture Trustee Names and
Addresses of Noteholders............................ 40
Section 7.02. Preservation of Information; Communications
to Noteholders...................................... 41
Section 7.03. Reports by Issuer................................... 41
Section 7.04. Reports by Indenture Trustee........................ 41
Section 7.05. Exchange Act Reporting.............................. 41
ARTICLE VIII Accounts, Disbursements and Releases................... 42
Section 8.01. Collection of Money................................. 42
Section 8.02. Trust Accounts...................................... 42
Section 8.03. Officer's Certificate............................... 43
Section 8.04. Termination Upon Payment to Noteholders............. 43
Section 8.05. Release of Trust Estate............................. 43
Section 8.06. Surrender of Notes Upon Final Payment............... 43
ARTICLE IX Supplemental Indentures................................ 44
Section 9.01. Supplemental Indentures Without Consent
of Noteholders...................................... 44
Section 9.02. Supplemental Indentures With Consent
of Noteholders...................................... 45
Section 9.03. Execution of Supplemental Indentures................ 47
Section 9.04. Effect of Supplemental Indenture.................... 47
Section 9.05. Conformity with Trust Indenture Act................. 47
Section 9.06. Reference in Notes to Supplemental Indentures....... 48
ARTICLE X Miscellaneous.......................................... 48
Section 10.01. Compliance Certificates and Opinions, etc........... 48
Section 10.02. Form of Documents Delivered to Indenture
Trustee............................................. 50
Section 10.03. Acts of Noteholders................................. 50
Section 10.04. Notices, etc., to Indenture Trustee, Issuer,
Credit Enhancer and Rating Agencies................. 51
Section 10.05. Notices to Noteholders; Waiver...................... 51
Section 10.06. Alternate Payment and Notice Provisions............. 52
Section 10.07. Conflict with Trust Indenture Act................... 52
Section 10.08. Effect of Headings.................................. 52
Section 10.09. Successors and Assigns.............................. 52
Section 10.10. Separability........................................ 53
Section 10.11. Benefits of Indenture............................... 53
Section 10.12. Legal Holidays...................................... 53
Section 10.13. GOVERNING LAW....................................... 53
Section 10.14. Counterparts........................................ 53
Section 10.15. Recording of Indenture.............................. 53
Section 10.16. Issuer Obligation................................... 53
Section 10.17. No Petition......................................... 54
Section 10.18. Inspection.......................................... 54
Exhibit A Form of Notes
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS*
Trust Indenture
Act Section Indenture Section
--------------- -----------------
310(a)(1)....................................... 6.11
(a)(2)....................................... 6.11
(a)(3)....................................... 6.10
(a)(4)....................................... Not Applicable
(a)(5)....................................... 6.11
(b).......................................... 6.08, 6.11
(c).......................................... Not Applicable
311(a).......................................... 6.12
(b).......................................... 6.12
(c).......................................... Not Applicable
312(a).......................................... 7.01, 7.02(a)
(b).......................................... 7.02(b)
(c).......................................... 7.02(c)
313(a).......................................... 7.04
(b).......................................... 7.04
(c).......................................... 7.03(a)(iii), 7.04
(d).......................................... 7.04
314(a).......................................... 3.10, 7.03(a)
(b)......................................... 3.07
(c)(1)....................................... 8.05(c), 10.01(a)
(c)(2)....................................... 8.05(c), 10.01(a)
(c)(3)....................................... Not Applicable
(d)(1)....................................... 8.05(c), 10.01(b)
(d)(2)....................................... 8.05(c), 10.01(b)
(d)(3)....................................... 8.05(c), 10.01(b)
(e).......................................... 10.01(a)
315(a).......................................... 6.01(b)
(b).......................................... 6.05
(c).......................................... 6.01(a)
(d).......................................... 6.01(c)
(d)(1)....................................... 6.01(c)
(d)(2)....................................... 6.01(c)
(d)(3)....................................... 6.01(c)
(e).......................................... 5.13
316(a)(1)(A).................................... 5.11
316(a)(1)(B).................................... 5.12
316(a)(2)....................................... Not Applicable
316(b).......................................... 5.07
317(a)(1)....................................... 5.04
317(a)(2)....................................... 5.03(d)
317(b).......................................... 3.03(a)
318(a).......................................... 10.07
----------
* This reconciliation and tie shall not, for any purpose, be deemed to be
part of the within indenture.
This is the Indenture, dated as of [__________________ ___], 20[___],
between HOME LOAN TRUST 200[_]-[___], a Delaware statutory trust, as Issuer (the
"Issuer"), and [______________________], as Indenture Trustee (the "Indenture
Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Issuer's Series
200[_]-[___] Home Loan-Backed Notes (the "Notes").
GRANTING CLAUSE
The Issuer and the Owner Trustee hereby Grant to the Indenture Trustee at
the Closing Date, as trustee for the benefit of the Holders of the Notes, all of
the Issuer's and the Owner Trustee's right, title and interest in and to whether
now existing or hereafter created (a) the Home Loans; (b) all funds on deposit
from time to time in the Payment Account and in all proceeds thereof; (c) all
property securing the payment or performance of the Home Loans and all
supporting obligations for the Home Loans; and (d) all present and future
claims, demands, causes and choses in action in respect of any or all of the
foregoing and all payments on or under, and all proceeds of every kind and
nature whatsoever in respect of, any or all of the foregoing and all payments on
or under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Notes, equally
and ratably without prejudice, priority or distinction, and to secure compliance
with the provisions of this Indenture, all as provided in this Indenture.
The foregoing Grant shall inure to the benefit of the Credit Enhancer in
respect of draws made on the Credit Enhancement Instrument and amounts owing
from time to time pursuant to the Insurance Agreement (regardless of whether
such amounts relate to the Notes or the Certificates), and such Grant shall
continue in full force and effect for the benefit of the 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:
(i) acknowledges such Grant, (ii) accepts the trust under this Indenture in
accordance with the provisions hereof, (iii) agrees to perform its duties as
Indenture Trustee as required herein and (iv) acknowledges receipt of the Credit
Enhancement Instrument and shall hold such Credit Enhancement Instrument in
accordance with the terms of this Indenture for the benefit of the Holders of
the Notes.
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" 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
2
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
ORIGINAL ISSUANCE OF NOTES
Section 2.01. Form. The 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
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
$[_____________] with respect to the Class A-1 Notes, $[_____________] with
respect to the Class A-2 Notes, $[_____________] with respect to the Class A-3
Notes and $[_____________] with respect to the Class A-4 Notes.
The Notes shall be dated the date of their authentication. The Notes shall
be issuable as registered Notes. The Notes shall be issuable in the minimum
initial Note Balances of $100,000 and in integral multiples of $1 in excess
thereof.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
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ARTICLE III
COVENANTS
Section 3.01. Collection of Payments with respect to the Home Loans. The
Indenture Trustee shall establish and maintain with itself the Payment Account
in which the Indenture Trustee shall, subject to the terms of this paragraph,
deposit, on the same day as it is received from the Master Servicer, each
remittance received by the Indenture Trustee with respect to the Home Loans. The
Payment Account shall be a segregated account and an Eligible Account. The
Indenture Trustee shall make all payments of principal of and interest on the
Notes, subject to Section 3.03, as provided in Section 3.05 herein from monies
on deposit in the Payment Account.
Section 3.02. Maintenance of Office or Agency. The Issuer will maintain in
the City of New York, New York or St. Xxxx, Minnesota, an office or agency
where, subject to satisfaction of conditions set forth herein, Notes may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may be
served. The Issuer hereby initially appoints the Indenture Trustee to serve as
its agent for the foregoing purposes. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Indenture
Trustee with the address thereof, such surrenders, notices and demands may be
made or served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
Section 3.03. Money for Payments To Be Held in Trust; Paying Agent. (a) As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture
Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment
Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03. The Issuer will cause each Paying Agent other
than the Indenture Trustee to execute and deliver to the Indenture Trustee an
instrument in which such Paying Agent shall agree with the Indenture Trustee
(and if the Indenture Trustee acts as Paying Agent it hereby so agrees), subject
to the provisions of this Section 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with respect
to the Notes in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as herein provided
and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee 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, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture Trustee
all sums so held in trust by such Paying Agent;
4
(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 Master Servicer pursuant to
Section 4.01 of the Servicing Agreement.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Request
direct any Paying Agent to pay to the Indenture Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Indenture Trustee upon the
same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee may also adopt and employ,
at the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
Section 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Home Loans and each other
instrument or agreement included in the Trust Estate.
5
Section 3.05. Payment of Principal and Interest; Defaulted Interest. (a)
On each Payment Date from amounts on deposit in the Payment Account, the Paying
Agent shall pay to the Noteholders, the Certificate Paying Agent on behalf of
the Certificateholder and to other Persons the amounts to which they are
entitled, as set forth in the statements delivered to the Indenture Trustee
pursuant to Section 4.01 of the Servicing Agreement, as set forth below in the
following order of priority:
(i) to the Credit Enhancer, the Premium for the Credit Enhancement
Instrument, plus any unpaid Premium from any prior Payment Date (with
interest thereon as provided in the Insurance Agreement);
(ii) to the Noteholders, Accrued Note Interest for such Payment
Date, on a pro rata basis, based on the amount of Accrued Note Interest
for such Payment Date, plus any Accrued Note Interest remaining unpaid
from any prior Payment Date, less any Prepayment Interest Shortfalls and
Relief Act Shortfalls allocated thereto as provided in Section 3.05(d)
below;
(iii) to the Noteholders as principal on the Notes, the Principal
Collection Payment Amount for such Payment Date, in the order described in
Section 3.05(f) below, until the Note Balances thereof have been reduced
to zero;
(iv) to the Noteholders as principal on the Notes, the Liquidation
Loss Payment Amount for such Payment Date, in the order described in
Section 3.05(f) below, until the Note Balances thereof have been reduced
to zero;
(v) to the Credit Enhancer, to reimburse it for prior draws made on
the Credit Enhancement Instrument (with interest thereon as provided in
the Insurance Agreement);
(vi) to the Noteholders as principal on the Notes, the Reserve
Increase Amount for such Payment Date, in the order described in Section
3.05(f) below, until the Note Balances thereof have been reduced to zero;
(vii) to the Credit Enhancer, any other amounts owed to the Credit
Enhancer pursuant to the Insurance Agreement; and
(viii) any remaining amount to the Certificate Paying Agent, on
behalf of the holders of the Certificates;
provided, however, in the event that on a Payment Date a Credit Enhancer Default
shall have occurred and be continuing, (a) no payments will be made to the
Credit Enhancer pursuant to clause (v) above until all Insured Payments that are
due and required to be paid by the Credit Enhancer on the Notes on such Payment
Date or were due and required to be paid by the Credit Enhancer on any prior
Payment Date have been paid in full and (b) any amounts payable to the Credit
Enhancer pursuant to clause (v) shall instead be paid pursuant to clause (vii).
In addition, on the Final Insured Payment Date or other final Payment Date
(including the Payment Date following any purchase by the Master Servicer of the
Home Loans pursuant to Section 8.08 of the Servicing Agreement), the amount to
be paid pursuant to clause (ii) above shall be equal to the aggregate Note
Balance of the Notes immediately prior to such Payment Date.
6
(b) On each Payment Date, the Certificate Paying Agent shall deposit in
the Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of distributing such funds to the
Certificateholder.
(c) The amounts paid to Noteholders shall be paid to the Notes in
accordance with the applicable percentage as set forth in the definition of Note
Rate. Interest will accrue on the Notes (other than the Class A-1 Notes) on the
basis of a 360-day year consisting of twelve 30-day months. Interest will accrue
on the Class A-1 Notes on the basis of a 360-day year and the actual number of
days in the related Interest Accrual Period.
(d) To the extent the amount available for interest distributions on the
Notes is less than the aggregate amount of Accrued Note Interest on the Notes, a
draw on the Credit Enhancement Instrument will be made; provided, however, that
to the extent such shortfall is a result of Prepayment Interest Shortfalls or
Relief Act Shortfalls, whether related to the current Collection Period or a
prior Collection Period, the shortfall will not be covered by the Credit
Enhancement Instrument, and the shortfall will be allocated to the amount of
Accrued Note Interest on the Notes on a pro rata basis.
(e) Any installment of interest or principal, if any, payable on any Note
that is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall, if such Holder holds Notes of an aggregate initial Note
Balance of at least $1,000,000, be paid to each Holder of record on the
preceding Record Date, by wire transfer to an account specified in writing by
such Holder reasonably satisfactory to the Indenture Trustee as of the preceding
Record Date or in all other cases or if no such instructions have been delivered
to the Indenture Trustee, by check or money order to such Noteholder mailed to
such Holder's address as it appears in the Note Register the amount required to
be paid 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.
(f) Any payments to the Notes pursuant to clauses 3.05(a)(iii), (iv) and
(vi) above plus amounts drawn on the Credit Enhancement Instrument in respect of
principal shall be distributed to the Class A-1, Class A-2, Class A-3 and Class
A-4 Notes, in that order, in each case until the outstanding Note Balance
thereof has been reduced to zero.
(g) The Note Balance of each Note shall be due and payable in full on the
Final Insured Payment Date as provided in the form of Note set forth in Exhibit
A. All principal payments on the Notes shall be made to the Noteholders entitled
thereto in accordance with the Percentage Interests represented by such Notes.
Upon written notice to the Indenture Trustee by the Issuer (or by the Master
Servicer on behalf of the Issuer, pursuant to Section 8.08(c) of the Servicing
Agreement) of the Final Insured Payment Date for the Notes or other final
Payment Date, the Indenture Trustee shall notify the related Noteholders of
record of the Final Insured Payment Date or other final Payment Date, by mail or
facsimile, no later than five Business Days prior to the Final Insured Payment
Date or other final Payment Date and shall specify:
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(i) that the Record Date otherwise applicable to such Payment Date
is not applicable;
(ii) that payment of the principal amount and any interest due with
respect to such Note at the Final Insured Payment Date or other final
Payment Date will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for such final payment; and
(iii) the amount of any such final payment, if known.
Section 3.06. Protection of Trust Estate. (a) The Issuer will from time to
time execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable
to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) cause the Trust to enforce any of the Home Loans; and
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture Trustee
shall not remove any portion of the Trust Estate that consists of money or is
evidenced by an instrument, certificate or other writing from the jurisdiction
in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant to Section 3.07 (or from the jurisdiction in which it was held as
described in the Opinion of Counsel delivered at the Closing Date pursuant to
Section 3.07(a), if no Opinion of Counsel has yet been delivered pursuant to
Section 3.07(b)) unless the Trustee shall have first received an Opinion of
Counsel to the effect that the lien and security interest created by this
Indenture with respect to such property will continue to be maintained after
giving effect to such action or actions. The Issuer hereby designates the
Indenture Trustee its agent and attorney in fact to execute any financing
statement, continuation statement or other instrument required to be executed
pursuant to this Section 3.06.
Section 3.07. Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel at the expense of the Issuer either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to perfect
and make effective the lien and security interest in the Home Loans and reciting
the details of such action, or stating that, in the opinion of such counsel, no
such action is necessary to make such lien and security interest effective.
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(b) On or before December 31st in each calendar year, beginning in 2007,
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, rerecording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements as
is necessary to maintain the lien and security interest in the Home Loans and
reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien and security interest.
Such Opinion of Counsel shall also describe the recording, filing, re recording
and refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Home Loans until December 31
in the following calendar year.
Section 3.08. Performance of Obligations; Servicing Agreement. (a) The
Issuer will punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Basic Documents and in the instruments and
agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer.
(c) The Issuer will not take any action or permit any action to be taken
by others which would release any Person from any of such Person's covenants or
obligations under any of the documents relating to the Home Loans or under any
instrument included in the Trust Estate, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the documents relating to the Home Loans or
any such instrument, except such actions as the Master Servicer is expressly
permitted to take in the Servicing Agreement.
(d) The Issuer may retain an administrator and may enter into contracts
with other Persons for the performance of the Issuer's obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.
Section 3.09. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, sell, transfer,
exchange or otherwise dispose of the Trust Estate, unless directed to do
so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against
any present or former Noteholder by reason of the payment of the taxes
levied or assessed upon any part of the Trust Estate;
(iii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated
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or discharged, or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except as may
be expressly permitted hereby, permit any lien, charge, excise, claim,
security interest, mortgage or other encumbrance (other than the lien of
this Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein or the
proceeds thereof or (B) permit the lien of this Indenture not to
constitute a valid first priority security interest in the Trust Estate;
or
(iv) waive or impair, or fail to assert rights under the Home Loans,
or impair or cause to be impaired the Home Loans or the Issuer's interest
in the Home Loans, the Home Loan Purchase Agreement or in any Basic
Document, if any such action would materially and adversely affect the
interests of the Noteholders.
Section 3.10. Annual Statement as to Compliance. The Issuer will deliver
to the Indenture Trustee and the Credit Enhancer, within 120 days after the end
of each fiscal year of the Issuer (commencing with the fiscal year 2007), an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and of
its performance under this Indenture and the Trust Agreement has been made
under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture and the provisions of the Trust Agreement throughout
such year, or, if there has been a default in its compliance with any such
condition or covenant, specifying each such default known to such
Authorized Officer and the nature and status thereof.
Section 3.11. Recording of Assignments. The Issuer shall enforce the
obligation of the Seller under the Home Loan Purchase Agreement to submit or
cause to be submitted for recording all Assignments of Mortgages within 60 days
of receipt of recording information by the Master Servicer.
Section 3.12. Representations and Warranties Concerning the Home Loans.
The Indenture Trustee, as pledgee of the Home Loans, has the benefit of the
representations and warranties made by the Seller in Section 3.1(a) and Section
3.1(b) of the Home Loan Purchase Agreement concerning the Home Loans and the
right to enforce the remedies against the Seller provided in such Section 3.1(a)
or Section 3.1(b) to the same extent as though such representations and
warranties were made directly to the Indenture Trustee.
Section 3.13. Assignee of Record of the Home Loans. The Issuer hereby
directs and authorizes the Indenture Trustee to hold record title to the Home
Loans by being named as payee in the endorsements of the Mortgage Notes and
assignee in the Assignments of Mortgage to be recorded under Section 2.1 of the
Home Loan Purchase Agreement. Except as expressly provided in the Home Loan
Purchase Agreement or in the Servicing Agreement with respect to any specific
Home Loan, the Indenture Trustee shall not execute any endorsement or assignment
or otherwise release or transfer such record title to any of the Home Loans
until such time as the
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remaining Trust Estate may be released pursuant to Section 8.05(b). The
Indenture Trustee's holding of such record title shall in all respects be
subject to its fiduciary obligations to the Noteholders hereunder.
Section 3.14. Master Servicer as Agent and Bailee of the Indenture
Trustee. Solely for purposes of perfection under Section 9-305 of the Uniform
Commercial Code or other similar applicable law, rule or regulation of the state
in which such property is held by the Master Servicer, the Issuer and the
Indenture Trustee hereby acknowledge that the Master Servicer is acting as agent
and bailee of the Indenture Trustee in holding amounts on deposit in the
Custodial Account pursuant to Section 3.02 of the Servicing Agreement that are
allocable to the Home Loans, as well as its agent and bailee in holding any
Related Documents released to the Master Servicer pursuant to Section 3.06(c) of
the Servicing Agreement, and any other items constituting a part of the Trust
Estate which from time to time come into the possession of the Master Servicer.
It is intended that, by the Master Servicer's acceptance of such agency pursuant
to Section 3.02 of the Servicing Agreement, the Indenture Trustee, as a pledgee
of the Home Loans, will be deemed to have possession of such Related Documents,
such monies and such other items for purposes of Section 9-305 of the Uniform
Commercial Code of the state in which such property is held by the Master
Servicer.
Section 3.15. Investment Company Act. The Issuer shall not become an
"investment company" or "controlled by" an investment company as such terms are
defined in the Investment Company Act of 1940, as amended (or any successor or
amendatory statute), and the rules and regulations thereunder (taking into
account not only the general definition of the term "investment company" but
also any available exceptions to such general definition); provided, however,
that the Issuer shall be in compliance with this Section 3.15 if it shall have
obtained an order exempting it from regulation as an "investment company" so
long as it is in compliance with the conditions imposed in such order.
Section 3.16. Issuer May Consolidate, etc. (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any state or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in
form reasonably satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes and to the
Certificate Paying Agent, on behalf of the Certificateholder and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction, no Event
of Default shall have occurred and be continuing;
(iii) the Issuer receives consent of the Credit Enhancer (so long as
no Credit Enhancer Default exists) and the Rating Agencies shall have
notified the Issuer (with a copy to the Indenture Trustee) that such
transaction shall not cause the rating of the
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Notes, without regard to the Credit Enhancement Instrument, 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) to the effect that such transaction will not have any material
adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any state, (B) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of
and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agree by
means of such supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the rights of
Holders of the Notes, (D) unless otherwise provided in such supplemental
indenture, expressly agree to indemnify, defend and hold harmless the
Issuer against and from any loss, liability or expense arising under or
related to this Indenture and the Notes and (E) expressly agree by means
of such supplemental indenture that such Person (or if a group of Persons,
then one specified Person) shall make all filings with the Commission (and
any other appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Issuer receives consent of the Credit Enhancer (so long as
no Credit Enhancer Default exists) and the Rating Agencies shall have
notified the Issuer (with a copy to the Indenture Trustee) that such
transaction shall not cause the rating of the Notes, without regard to the
Credit Enhancement Instrument, to be reduced, suspended or withdrawn;
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(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee and the Credit
Enhancer) to the effect that such transaction will not have any material
adverse tax consequence to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
Section 3.17. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.16(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.16(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.
Section 3.18. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Home Loans and the issuance of the Notes and the Certificate in the manner
contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.
Section 3.19. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.20. Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by this Indenture or the Basic Documents, the Issuer shall not make
any loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
Section 3.21. Capital Expenditures. The Issuer shall not make any
expenditure (by long term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.22. Owner Trustee Not Liable for the Certificate or Related
Documents. The recitals contained herein shall be taken as the statements of the
Depositor, and the Owner Trustee
13
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations as to the validity or sufficiency of this Indenture, of any
Basic Document or of the Certificate (other than the signatures of the Owner
Trustee on the Certificate) or the Notes, or of any Related Documents, or of
MERS or the MERS(R) System. The Owner Trustee shall at no time have any
responsibility or liability with respect to the sufficiency of the Trust Estate
or its ability to generate the payments to be distributed to the
Certificateholder under the Trust Agreement or the Noteholders under this
Indenture, including, the compliance by the Depositor or the Seller with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Certificate Paying Agent, the Certificate Registrar or the Indenture
Trustee taken in the name of the Owner Trustee.
Section 3.23. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any payment (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) payments to the Owner Trustee and the
Certificateholder as contemplated by, and to the extent funds are available for
such purpose under the Trust Agreement, and (y) payments to the Master Servicer
pursuant to the terms of the Servicing Agreement. The Issuer will not, directly
or indirectly, make payments to or payments from the Custodial Account except in
accordance with this Indenture and the Basic Documents.
Section 3.24. Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Credit Enhancer and the Rating Agencies prompt written
notice of each Event of Default hereunder and any default under the Trust
Agreement.
Section 3.25. Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
Section 3.26. Statements to Noteholders. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall forward by mail or make
available on its website initially located at "www.[_______________].com" to the
Credit Enhancer and each Noteholder and Certificateholder, respectively, the
statement delivered to it, on the Business Day following the related
Determination Date pursuant to Section 4.01 of the Servicing Agreement.
Section 3.27. Payments under the Credit Enhancement Instrument. (a) On or
prior to 12:00 noon New York City time on the second Business Day before any
Payment Date, including the Final Insured Payment Date, the Indenture Trustee
shall make a draw on the Credit Enhancement Instrument in an amount, if any,
equal to the Insured Payment.
(b) The Indenture Trustee shall submit, if an Insured Payment is specified
in any Servicing Certificate prepared by the Master Servicer pursuant to Section
4.01 of the Servicing Agreement, the notice (in the form attached as Exhibit A
to the Credit Enhancement Instrument)
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in the amount of the Insured Payment to the Credit Enhancer no later than 12:00
noon New York City time, on the second Business Day prior to the applicable
Payment Date. Upon receipt of such Insured Payment in accordance with the terms
of the Credit Enhancement Instrument, the Indenture Trustee shall deposit such
Insured Payment in the Payment Account for distribution to Noteholders pursuant
to Section 3.05.
Section 3.28. Reserved.
Section 3.29. Determination of Class A-1 Note Rate. On the second LIBOR
Business Day immediately preceding (i) the Closing Date in the case of the first
Interest Accrual Period and (ii) the first day of each succeeding Interest
Accrual Period, the Indenture Trustee shall determine LIBOR and the Note Rate
for the Class A-1 Notes for such Interest Accrual Period and shall inform the
Issuer, the Master Servicer, the Credit Enhancer and the Depositor at their
respective facsimile numbers given to the Indenture Trustee in writing. All
determinations of LIBOR by the Indenture Trustee shall, in the absence of
manifest error, be conclusive for all purposes, and each holder of a Class A-1
Note, by accepting its Class A-1 Note, agrees to be bound by such determination.
Section 3.30. Liquidation on Final Insured Payment Date. On the Final
Insured Payment Date, if the Notes are not paid in full on or prior to the Final
Insured Payment Date, the Indenture Trustee shall take full account of the
assets and liabilities of the Trust, shall liquidate the assets, in a
commercially reasonable manner and on commercially reasonable terms, as promptly
as is consistent with obtaining the fair value thereof and in accordance with
Section 5.15, and shall apply and distribute the proceeds therefrom in the order
of priority described in Section 3.05(c).
Section 3.31. No Recourse. Upon the occurrence of an Event of Default
under the Notes, this Indenture or the other Basic Documents, Holders of the
Notes shall have recourse only to the Collateral and all proceeds thereof, as
and to the extent provided herein, and no recourse shall be had by such Holders
against the Issuer or its other assets or properties.
Section 3.32. Additional UCC Representations and Warranties. The Issuer
hereby represents and warrants that:
(i) this Agreement creates a valid and continuing security interest
(as defined in the applicable UCC) in the Trust Estate in favor of the
Indenture Trustee on behalf of the Holders of the Notes, which security
interest is prior to all other liens, and is enforceable as such as
against creditors of the Issuer.
(ii) the Issuer owns and has good and marketable title to the Trust
Estate free and clear of any lien, claim or encumbrance of any Person.
(iii) the Issuer will cause the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions
under applicable law within 10 days of the Closing Date in order to
perfect the security interest in the Trust Estate granted to the Indenture
Trustee on behalf of the Holders of the Notes.
(iv) other than the security interest granted to the Indenture
Trustee on behalf of the Holders of the Notes pursuant to the Basic
Documents, the Issuer has not pledged,
15
assigned, sold, granted a security interest in, or otherwise conveyed any
of the Trust Estate. The Issuer is not aware of any judgment or tax lien
filings against it. The Issuer has not authorized the filing of and is not
aware of any financing statements against the Issuer that include a
description of collateral covering the Trust Estate other than any
financing statement (i) relating to the security interest granted to
Indenture Trustee on behalf of the Holders of the Notes hereunder or (ii)
that has been terminated.
The foregoing representations may not be waived and shall survive the
issuance of the Notes.
ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01. The Notes. The Notes shall be registered in the name of a
nominee designated by the Depository. Beneficial Owners will hold interests in
the Notes as set forth in Section 4.06 herein. The minimum initial Note Balances
with respect to the Notes shall be $100,000 and integral multiples of $1 in
excess thereof.
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Notes for the
purposes of exercising the rights of Holders of Notes hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive certificates for the Notes
as to which they are the Beneficial Owners. Requests and directions from, and
votes of, the Depository as Holder of the Notes shall not be deemed inconsistent
if they are made with respect to different Beneficial Owners. The Indenture
Trustee may establish a reasonable record date in connection with solicitations
of consents from or voting by Noteholders and give notice to the Depository of
such record date. Without the consent of the Issuer and the Indenture Trustee,
no Note may be transferred by the Depository except to a successor Depository
that agrees to hold such Note for the account of the Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Notes it
beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer by
the Owner Trustee, not in its individual capacity but solely as Owner Trustee,
authenticated by the Note Registrar and delivered by the Indenture Trustee to or
upon the order of the Issuer.
Section 4.02. Registration of and Limitations on Transfer and Exchange of
Notes; Appointment of Certificate Registrar. The Issuer shall cause to be kept
at the Indenture Trustee's Corporate Trust Office a Note Register in which,
subject to such reasonable regulations as it may
16
prescribe, the Note Registrar shall provide for the registration of Notes and of
transfers and exchanges of Notes as herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office, the Issuer shall execute and the Note Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes in authorized initial Note Balances evidencing the same aggregate
Percentage Interests.
Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged for other Notes of like tenor, in authorized initial Note Balances
evidencing the same aggregate Percentage Interests upon surrender of the Notes
to be exchanged at the Corporate Trust Office of the Note Registrar. Whenever
any Notes are so surrendered for exchange, the Issuer shall execute and the Note
Registrar shall authenticate and deliver the Notes which the Noteholder making
the exchange is entitled to receive. Each Note presented or surrendered for
registration of transfer or exchange shall (if so required by the Note
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed by,
the Holder thereof or his attorney duly authorized in writing with such
signature guaranteed by a commercial bank or trust company located or having a
correspondent located in the city of New York. Notes delivered upon any such
transfer or exchange will evidence the same obligations, and will be entitled to
the same rights and privileges, as the Notes surrendered.
No service charge shall be imposed for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall be
cancelled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate Registrar
to keep at its Corporate Trust Office a Certificate Register pursuant to Section
3.09 of the Trust Agreement in which, subject to such reasonable regulations as
it may prescribe, the Certificate Registrar shall provide for the registration
of the Certificate and of transfers and exchanges thereof pursuant to Section
3.05 of the Trust Agreement. The Indenture Trustee hereby accepts such
appointment.
Each purchaser and transferee of a Note, by its acceptance of the Note,
shall be deemed to have represented and warranted that either (i) it is not
acquiring the Note with the assets of an "employee benefit plan" as defined in
Section 3(3) of ERISA, which is subject to the provisions of Title I of ERISA, a
"plan" described in Section 4975(e)(1) of the Code, an entity whose underlying
assets include "plan assets" by reason of an employee benefit plan's or other
plan's investment in such entity or any other plan that is subject to a law that
is similar to Title I of ERISA or Section 4975 of the Code or (ii) the
acquisition and holding of the Note will not give rise to a non-exempt
prohibited transaction under Section 406 of ERISA, Section 4975 of the Code or
any similar applicable law.
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Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; provided, however, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder. The
provisions of this Section 4.03 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes.
Section 4.04. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Credit Enhancer, the
Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat
the Person in whose name any Note is registered (as of the day of determination)
as the owner of such Note for the purpose of receiving payments of principal of
and interest, if any, on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and none of the Issuer, the 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
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authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section 4.05, except as expressly
permitted by this Indenture. All cancelled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Request that they be destroyed or returned to it; provided, however, that such
Issuer Request is timely and the Notes have not been previously disposed of by
the Indenture Trustee.
Section 4.06. Book Entry Notes. Each Class of Notes shall initially be
issued as one or more Notes held by the Book Entry Custodian or, if appointed to
hold such Notes as provided below, the Depository Trust Company, the initial
Depository, and registered in the name of its nominee Cede & Co. Except as
provided below, registration of such Notes may not be transferred by the
Indenture Trustee except to another Depository that agrees to hold such Notes
for the respective Beneficial Owners. The Indenture Trustee is hereby initially
appointed as the Book Entry Custodian and xxxxxx agrees to act as such in
accordance herewith and in accordance with the agreement that it has with the
Depository authorizing it to act as such. The Book Entry Custodian may, and, if
it is no longer qualified to act as such, the Book Entry Custodian shall,
appoint, by a written instrument delivered to the Depositor, the Master Servicer
and, if the Indenture Trustee is not the Book Entry Custodian, the Indenture
Trustee, any other transfer agent (including the Depository or any successor
Depository) to act as Book Entry Custodian under such conditions as the
predecessor Book Entry Custodian and the Depository or any successor Depository
may prescribe, provided that the predecessor Book Entry Custodian shall not be
relieved of any of its duties or responsibilities by reason of any new
appointment, except if the Depository is the successor to the Book Entry
Custodian. If the Indenture Trustee resigns or is removed in accordance with the
terms hereof, the successor trustee or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any Notes
held as Book Entry Notes by the Book Entry Custodian. No Beneficial Owner will
receive a Definitive Note representing such Beneficial Owner's interest in such
Note, except as provided in Section 4.08. Unless and until definitive, fully
registered Notes (the "Definitive Notes") have been issued to Beneficial Owners
pursuant to Section 4.08:
(i) the provisions of this Section 4.06 shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Depository for all purposes of this Indenture (including
the payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole holder of the Notes, and
shall have no obligation to the Owners of Notes;
(iii) to the extent that the provisions of this Section 4.06
conflict with any other provisions of this Indenture, the provisions of
this Section 4.06 shall control;
(iv) the rights of Beneficial Owners shall be exercised only through
the Depository and shall be limited to those established by law and
agreements between such Owners of Notes and the Depository and/or the
Depository Participants. Unless and until Definitive Notes are issued
pursuant to Section 4.08, the initial Depository will make
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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 aggregate Note Balance of the Notes, the
Depository shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Beneficial Owners
and/or Depository Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has
delivered such instructions to the Indenture Trustee.
Section 4.07. Notices to Depository. Whenever a notice or other
communication to the Note Holders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Beneficial Owners pursuant to
Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08. Definitive Notes. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Owners of Notes representing beneficial interests aggregating
at least a majority of the aggregate Note Balance of the Notes advise the
Depository in writing that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Beneficial Owners, then the
Depository shall notify all Beneficial Owners and the Indenture Trustee of the
occurrence of any such event and of the availability of Definitive Notes to
Beneficial Owners requesting the same. Upon surrender to the Indenture Trustee
of the typewritten Notes representing the Book Entry Notes by the Book Entry
Custodian or the Depository, as applicable, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Depository. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
Section 4.09. Tax Treatment. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness of the Issuer. The Issuer, by entering into this Indenture, and
each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its
acceptance of an interest in the applicable Book Entry Note), agree to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Section 4.10. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
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3.16, 3.17, 3.18, 3.19 and 3.20, (v) the rights, obligations and immunities of
the Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.07 and the obligations of the Indenture Trustee under Section
4.11) and (vi) the rights of Noteholders as beneficiaries hereof with respect to
the property so deposited with the Indenture Trustee payable to all or any of
them, and the Indenture Trustee, on demand of and at the expense of the Issuer,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to the Notes, when
(A) either
(1) the Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 4.03 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation; or
(2) the Notes not theretofore delivered to the Indenture Trustee for
cancellation
a. have become due and payable,
b. will become due and payable at the Final Insured 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
direct obligations of or obligations guaranteed by the United States of
America (which will mature prior to the date such amounts are payable), in
trust for such purpose, in an amount sufficient to pay and discharge the
entire indebtedness on such Notes then outstanding not theretofore
delivered to the Indenture Trustee for cancellation when due on the Final
Insured Payment Date;
(B) the Issuer has paid or caused to be paid all other sums payable
hereunder and under the Insurance Agreement by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee and the Credit
Enhancer an Officer's Certificate and an Opinion of Counsel, each meeting the
applicable requirements of Section 10.01 and each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with and, if the Opinion of Counsel relates to a
deposit made in connection with Section 4.10(A)(2)b. above, such opinion shall
further be to the effect that such deposit will not have any material adverse
tax consequences to the Issuer, any Noteholders or any Certificateholder.
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Section 4.11. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the Holders
of Securities, of all sums due and to become due thereon for principal and
interest; but such monies need not be segregated from other funds except to the
extent required herein or required by law.
Section 4.12. Subrogation and Cooperation. The Issuer and the Indenture
Trustee acknowledge that (i) to the extent the Credit Enhancer makes payments
under the Credit Enhancement Instrument on account of principal of or interest
on the Home Loans, the Credit Enhancer will be fully subrogated to the rights of
the Noteholders to receive such principal and interest from the Home Loans, and
(ii) the Credit Enhancer shall be paid such principal and interest but only from
the sources and in the manner provided herein and in the Insurance Agreement for
the payment of such principal and interest.
The Indenture Trustee shall cooperate in all respects with any reasonable
request by the Credit Enhancer for action to preserve or enforce the Credit
Enhancer's rights or interest under this Indenture or the Insurance Agreement,
consistent with this Indenture and without limiting the rights of the
Noteholders as otherwise set forth in the Indenture, including, without
limitation, upon the occurrence and continuance of a default under the Insurance
Agreement, a request to take any one or more of the following actions:
(i) institute Proceedings for the collection of all amounts then
payable on the Notes, or under this Indenture in respect to the Notes and
all amounts payable under the Insurance Agreement and to enforce any
judgment obtained and collect from the Issuer monies adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private Sales (as defined in
Section 5.15 hereof) called and conducted in any manner permitted by law;
(iii) file or record all assignments that have not previously been
recorded;
(iv) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and
enforce the rights and remedies of the Credit Enhancer hereunder.
Following the payment in full of the Notes, the Credit Enhancer shall
continue to have all rights and privileges provided to it under this Section and
in all other provisions of this Indenture, until all amounts owing to the Credit
Enhancer have been paid in full.
Section 4.13. Repayment of Monies Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to
22
such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to
be held and applied according to Section 3.05 and thereupon such Paying Agent
shall be released from all further liability with respect to such monies.
Section 4.14. Temporary Notes. Pending the preparation of any Definitive
Notes, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Notes that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to
be prepared without unreasonable delay. After the preparation of the Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Indenture
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Issuer shall execute and the Indenture Trustee
shall authenticate and make available for delivery, in exchange therefor,
Definitive Notes of authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
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 calendar days after learning of the
occurrence of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (iii) of the definition of "Event
of Default" written notice in the form of an Officer's Certificate of its status
and what action the Issuer is taking or proposes to take with respect thereto.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Holders of Notes representing not less than a majority
of the aggregate Note Balance of all Notes with the written consent of the
Credit Enhancer (so long as no Credit Enhancer Default exists), or the Credit
Enhancer (so long as no Credit Enhancer Default exists) may declare the Notes to
be immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
unpaid principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Holders of Notes representing a
majority of the aggregate Note Balance of all Notes, by written notice to the
Issuer and the Indenture Trustee with the written consent of the Credit Enhancer
(so long as no Credit
23
Enhancer Default exists), or the Credit Enhancer (so long as no Credit Enhancer
Default exists) 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 sums due and payable to the Credit Enhancer; and
(B) 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
(C) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel;
and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) Subject to Section 3.31, the Issuer covenants that if
default in the payment of (i) any interest on any Note when the same becomes due
and payable, and such default continues for a period of five days, or (ii) the
principal of or any installment of the principal of any Note when the same
becomes due and payable, the Issuer shall, upon demand of the Indenture Trustee,
pay to it, for the benefit of the Holders of Notes, the whole amount then due
and payable on the Notes for principal and interest, with interest upon the
overdue principal, and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.17 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor upon the Notes, wherever
situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee
subject to the provisions of Section 10.17 hereof may, as more particularly
provided in Section 5.04, in its discretion, proceed to protect and enforce its
rights and the rights of the Noteholders, by such appropriate Proceedings as the
Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other
24
proper remedy or legal or equitable right vested in the Indenture Trustee by
this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence, willful misconduct or bad
faith) and of the Noteholders allowed in such Proceedings;
(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.
25
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
Section 5.04. Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing, the Indenture Trustee subject to the provisions of
Section 10.17 hereof may with the written consent of the Credit Enhancer (so
long as no Credit Enhancer Default exists), or shall at the written direction of
the Credit Enhancer (so long as no Credit Enhancer Default exists), do one or
more of the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
or under this Indenture with respect thereto, whether by declaration or
otherwise, and all amounts payable under the Insurance Agreement enforce
any judgment obtained, and collect from the Issuer and any other obligor
upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Holders of the Notes;
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; provided, however, that the
Indenture Trustee may not sell or otherwise liquidate the Trust Estate
following an Event of Default, unless (A) the Indenture Trustee obtains
the consent of the Credit Enhancer, or if a Credit Enhancer Default has
occurred and is continuing, the consent of the Holders of 100% of the
aggregate Note Balance of the Notes, (B) the proceeds of such Sale
distributable to Holders are sufficient to discharge in
26
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 Agreement or (C) the Indenture Trustee
determines that the Home Loans will not continue to provide sufficient
funds for the payment of principal of and interest on the Notes as they
would have become due if the Notes had not been declared due and payable,
and the Indenture Trustee obtains the consent of the Credit Enhancer (so
long as no Credit Enhancer Default exists), which consent will not be
unreasonably withheld; provided further that the Indenture Trustee shall
not sell or otherwise liquidate the Trust Estate if the proceeds of such
sale or liquidation will not be 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 Agreement unless the Indenture Trustee obtains the consent
of the Holders of 66 2/3% of the aggregate Note Balance of the Notes with
the consent of the Credit Enhancer (so long as no Credit Enhancer Default
exists), or the Credit Enhancer (so long as no Credit Enhancer Default
exists). In determining such sufficiency or insufficiency with respect to
clauses (B) and (C), the Indenture Trustee may, but need not, obtain and
rely upon an opinion of an Independent investment banking or accounting
firm of national reputation as to the feasibility of such proposed action
and as to the sufficiency of the Trust Estate for such purpose.
Notwithstanding the foregoing, so long as a Servicing Default has not
occurred, any Sale of the Trust Estate shall be made subject to the
continued servicing of the Home Loans by the Master Servicer as provided
in the Servicing Agreement.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for all amounts due under Section 6.07
herein;
SECOND: to the Holders of the Notes for amounts due and unpaid on the
Notes for interest, according to the order and priority set forth in
Section 3.05(a)(ii) from amounts available in the Trust Estate for such
Noteholders;
THIRD: on a pro rata basis, to Holders of the Notes for amounts due and
unpaid on the Notes for principal, from amounts available in the Trust
Estate for such Noteholders, according to the amounts due and payable on
the Notes for principal, until the related Note Balances of the Notes are
reduced to zero;
FOURTH: [reserved];
FIFTH: to the payment of all amounts due and owing to the Credit Enhancer
under the Insurance Agreement;
SIXTH: to the Certificate Paying Agent for amounts due under Article VIII
of the Trust Agreement; and
SEVENTH: to the payment of the remainder, if any, to the Issuer or any
other person legally entitled thereto.
27
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05. Optional Preservation of the Trust Estate. If the Notes have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not (but shall at the written
direction of the Credit Enhancer, so long as no Credit Enhancer Default exists)
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 (at the expense of the Issuer) and rely upon
an opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
Section 5.06. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 10.17 hereof:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the aggregate Note Balance
of the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own
name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60 day period by the Holders of
a majority of the aggregate Note Balance of the Notes 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 of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
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In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the aggregate Note Balance of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07. Rights of Noteholders to Receive Principal and Interest.
Notwithstanding any other provisions in this Indenture, but subject to Section
3.31, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture Trustee
or any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their respective former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee and
the Noteholders shall continue as though no such Proceeding had been instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, 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 or to the Noteholders may be exercised from time to time, and
as often as may be deemed expedient, by the Indenture Trustee or by the
Noteholders, as the case may be.
Section 5.11. Control by the Credit Enhancer or the Noteholders. The
Holders of a majority of the aggregate Note Balance of Notes with the consent of
the Credit Enhancer (so long as no Credit Enhancer Default exists), 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 aggregate Note
Balance of Notes with the consent of the Credit Enhancer (so long as no
Credit Enhancer Default exists), 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 aggregate Note Balance
of Notes to sell or liquidate the Trust Estate shall be of no force and
effect; and
(iv) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines
might involve it in liability or might materially adversely affect the rights of
any Noteholders not consenting to such action unless the Indenture Trustee has
received satisfactory indemnity from the Credit Enhancer or the Noteholders.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the aggregate Note Balance of
the Notes with the consent of the Credit Enhancer (so long as no Credit Enhancer
Default exists), 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 and the Holders of the
Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Event
of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Section 5.13. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such Xxxxxx's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate
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more than 10% of the aggregate Note Balance of the Notes or (c) any suit
instituted by any Noteholder for the enforcement of the payment of principal of
or interest on any Note on or after the respective due dates expressed in such
Note and in this Indenture.
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
Section 5.15. Sale of Trust Estate. (a) The power to effect any sale,
liquidation or other disposition (a "Sale") of any portion of the Trust Estate
pursuant to Section 5.04 is expressly subject to the provisions of Section 5.05
and this Section 5.15. The power to effect any such Sale shall not be exhausted
by any one or more Sales as to any portion of the Trust Estate remaining unsold,
but shall continue unimpaired until the entire Trust Estate shall have been sold
or all amounts payable on the Notes and under this Indenture and under the
Insurance Agreement shall have been paid. The Indenture Trustee may from time to
time postpone any public Sale by public announcement made at the time and place
of such Sale. The Indenture Trustee hereby expressly waives its right to any
amount fixed by law as compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless:
(1) the Holders of all Notes with the consent of the Credit Enhancer
(so long as no Credit Enhancer Default exists), or the Credit Enhancer (so
long as no Credit Enhancer Default exists) consent to, or direct the
Indenture Trustee to make, such Sale, or
(2) the proceeds of such Sale would not be less than the entire
amount which would be payable to the Noteholders under the Notes, the
Certificateholder under the Certificate and the Credit Enhancer in respect
of amounts drawn under the Credit Enhancement Instrument and any other
amounts due the Indenture Trustee in connection with expenses incurred by
reason of such sale and any other amounts due the Credit Enhancer under
the Insurance Agreement, in full payment thereof in accordance with
Section 5.02, on the Payment Date next succeeding the date of such Sale,
or
(3) the Indenture Trustee determines, in its sole discretion, that
the conditions for retention of the Trust Estate set forth in 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 (so long as no Credit Enhancer Default exists), or the Holders
representing at least 66-2/3% of the aggregate Note Balance of the Notes
with the consent of the Credit Enhancer (so long as no Credit Enhancer
Default exists), consent to such Sale.
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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 with the consent of the Credit Enhancer (so long as
no Credit Enhancer Default exists), or the Credit Enhancer (so long as no Credit
Enhancer Default exists) have otherwise consented or directed the Indenture
Trustee, at any public Sale of all or any portion of the Trust Estate at which a
minimum bid equal to or greater than the amount described in paragraph (2) of
subsection (b) of this Section 5.15 has not been established by the Indenture
Trustee and no Person bids an amount equal to or greater than such amount, the
Indenture Trustee shall bid an amount at least $1.00 more than the highest other
bid.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(1) any Holder or Holders of Notes may bid for and with the consent
of the Credit Enhancer (so long as no Credit Enhancer Default exists)
purchase the property offered for sale, and upon compliance with the terms
of sale may hold, retain and possess and dispose of such property, without
further accountability, and may, in paying the purchase money therefor,
deliver any Notes or claims for interest thereon in lieu of cash up to the
amount which shall, upon payment 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 the Holder of the Certificate 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
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(5) no purchaser or transferee at such a Sale shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any monies.
Section 5.16. Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b).
Section 5.17. Performance and Enforcement of Certain Obligations. (a)
Promptly following a written request from the Credit Enhancer or the Indenture
Trustee with the written consent of the Credit Enhancer to do so (so long as no
Credit Enhancer Default exists), the Issuer, in its capacity as holder of the
Home Loans, shall, with the written consent of the Credit Enhancer (so long as
no Credit Enhancer Default exists), take all such lawful action as the Indenture
Trustee may request to cause the Issuer to compel or secure the performance and
observance by the Seller and the Master Servicer, as applicable, of each of
their obligations to the Issuer under or in connection with the Home Loan
Purchase Agreement and the Servicing Agreement, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Home Loan Purchase Agreement and the Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee, as
pledgee of the Home Loans, including the transmission of notices of default on
the part of the Seller or the Master Servicer thereunder and the institution of
legal or administrative actions or proceedings to compel or secure performance
by the Seller or the Master Servicer of each of their obligations under the Home
Loan Purchase Agreement and the Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee, as pledgee of the Home 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 Credit Enhancer (or if a Credit Enhancer Default has
occurred and is continuing, Holders of 66-2/3% of the aggregate Note Balance of
the Notes) shall, exercise all rights, remedies, powers, privileges and claims
of the Issuer against the Seller or the Master Servicer under or in connection
with the Home Loan Purchase Agreement and the Servicing Agreement, including the
right or power to take any action to compel or secure performance or observance
by the Seller or the Master Servicer, as the case may be, of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Home Loan Purchase Agreement
and the Servicing Agreement, as the case may be, and any right of the Issuer to
take such action shall not be suspended. In connection therewith, as determined
by the Indenture Trustee, the Issuer shall take all actions necessary to effect
the transfer of the Home Loans to the Indenture Trustee.
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ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it (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 believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
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(g) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
Section 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any 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 known to a Responsible Officer of the Indenture
Trustee, the Indenture 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. Except in the case of an Event of
Default in payment of principal of or interest on any Note, the Indenture
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that
35
withholding the notice is in the interests of Noteholders. The Indenture Trustee
shall not be deemed to have knowledge of any Event of Default unless a
Responsible Officer has written notice or actual knowledge thereof.
Section 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns. In
addition, upon the Issuer's written request, the Indenture Trustee shall
promptly furnish information reasonably requested by the Issuer that is
reasonably available to the Indenture Trustee to enable the Issuer to perform
its federal and state income tax reporting obligations.
Section 6.07. Compensation and Indemnity. The Indenture Trustee shall be
compensated and indemnified by the Master Servicer in accordance with Section
6.06 of the Servicing Agreement. The Indenture Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust.
Section 6.08. Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may
resign at any time by so notifying the Issuer and the Credit Enhancer. The
Holders of a majority of the aggregate Note Balance of the Notes or the Credit
Enhancer (so long as no Credit Enhancer Default exists) 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 remove the Indenture
Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of the Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee with the consent of the
Credit Enhancer (so long as no Credit Enhancer Default exists), which consent
will not be unreasonably withheld. 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.
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If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority of the aggregate Note Balance
of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.09. Successor Indenture Trustee by Xxxxxx. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies written notice of any such transaction occurring after the Closing
Date.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part thereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Indenture Trustee may consider necessary or desirable.
No co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
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(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney in fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification. The Indenture Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long term debt rating of A or better by Xxxxx'x. The Indenture
Trustee shall 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.
Within 90 days after ascertaining the occurrence of an Event of Default
which shall not have been cured or waived, unless authorized by the Securities
and Exchange Commission, the
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Indenture Trustee shall resign with respect to one or more Classes of Notes in
accordance with Section 6.08 of this Indenture, and the Issuer shall appoint a
successor Indenture Trustee for such Classes. In the event the Indenture Trustee
fails to comply with the terms of the preceding sentence, the Indenture Trustee
shall comply with clause (ii) of TIA ss. 310(b).
In the case of the appointment hereunder of a successor Indenture Trustee
with respect to any Class of Notes pursuant to this Section 6.11, the Issuer,
the retiring Indenture Trustee and the successor Indenture Trustee with respect
to such Class of Notes shall execute and deliver an indenture supplemental
hereto wherein each successor Indenture Trustee shall accept such appointment
and which (i) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, the successor Indenture Trustee all
the rights, powers, trusts and duties of the retiring Indenture Trustee with
respect to the Notes of the Class to which the appointment of such successor
Indenture Trustee relates, (ii) if the retiring Indenture Trustee is not
retiring with respect to all Classes of Notes, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Indenture Trustee with respect to the Notes of
each Class as to which the retiring Indenture Trustee is not retiring shall
continue to be vested in the Indenture Trustee, and (iii) shall add to or change
any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Indenture
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Indenture Trustees co-trustees of the same trust
and that each such Indenture Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Indenture Trustee; and upon the removal of the retiring Indenture
Trustee shall become effective to the extent provided therein.
Section 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13. Representations and Warranties. The Indenture Trustee hereby
represents that:
(i) The Indenture Trustee is a banking association duly organized,
validly existing and in good standing under the laws of the United States
with power and authority to own its properties and to conduct its business
as such properties are currently owned and such business is presently
conducted.
(ii) The Indenture Trustee has the power and authority to execute
and deliver this Indenture and to carry out its terms; and the execution,
delivery and performance of this Indenture have been duly authorized by
the Indenture Trustee by all necessary corporate action.
(iii) The consummation of the transactions contemplated by this
Indenture and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default
39
under, the articles of organization or bylaws of the Indenture Trustee or
any agreement or other instrument to which the Indenture Trustee is a
party or by which it is bound.
(iv) To the Indenture Trustee's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Indenture Trustee or its
properties: (A) asserting the invalidity of this Indenture (B) seeking to
prevent the consummation of any of the transactions contemplated by this
Indenture or (C) seeking any determination or ruling that might materially
and adversely affect the performance by the Indenture Trustee of its
obligations under, or the validity or enforceability of, this Indenture.
(v) The Indenture Trustee does not have notice of any adverse claim
(as such terms are used in Delaware UCC Section 8-302) with respect to the
Home Loans.
Section 6.14. Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Home Loans and hold the assets of
the Trust in trust for the Noteholders and the Credit Enhancer;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibits A-1 and A-2 in accordance with the terms of this
Indenture;
(c) on the Closing Date, to enter into the Credit Enhancement
Instrument for the benefit of the Noteholders with the Credit Enhancer;
(d) to execute the other Basic Documents to which it is a party; and
(e) to take all other actions as shall be required to be taken by
the terms of this Indenture.
Section 6.15. Indenture Trustee May Own Securities. The Indenture Trustee,
in its individual or any other capacity may become the owner or pledgee of
Securities with the same rights it would have if it were not Indenture Trustee.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer 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.
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Section 7.02. Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.01
and the names and addresses of Holders of Notes received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA ss. 312(c).
Section 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) that the Issuer may be required
to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee, and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA ss. 313(c))
such summaries of any information, documents and reports required to be
filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) and by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.
Section 7.04. Reports by Indenture Trustee. If required by TIA ss. 313(a),
within 60 days after each January 1 beginning with January 1, 2007, the
Indenture Trustee shall mail to each Noteholder as required by TIA ss. 313(c)
and to the Credit Enhancer a brief report dated as of such date that complies
with TIA ss. 313(a). The Indenture Trustee also shall comply with TIA ss.
313(b). A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange, if
any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
Section 7.05. Exchange Act Reporting. In connection with the preparation
and filing of periodic reports by the Master Servicer pursuant to Section 4.04
of the Servicing Agreement, the
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Indenture Trustee shall timely provide to the Master Servicer (I) a list of
Holders as shown on the Note Register or Certificate Register as of the end of
each calendar year, (II) copies of all pleadings, other legal process and any
other documents relating to any claims, charges or complaints involving the
Indenture Trustee, as indenture trustee hereunder, or the Trust Estate that are
received by the Indenture Trustee, (III) notice of all matters that, to the
actual knowledge of a Responsible Officer of the Indenture Trustee, have been
submitted to a vote of the Holders, other than those matters that have been
submitted to a vote of the Holders at the request of the Depositor or the Master
Servicer, and (IV) notice of any failure of the Indenture Trustee to make any
payment to the Holders as required pursuant to this Indenture. Neither the
Master Servicer nor the Indenture Trustee shall have any liability with respect
to the Master Servicer's failure to properly prepare or file such periodic
reports resulting from or relating to the Master Servicer's inability or failure
to obtain any information not resulting from the Master Servicer's own
negligence or willful misconduct.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02. Trust Accounts. (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Noteholders and the Certificate
Paying Agent, on behalf of the Certificateholder and the Credit Enhancer, the
Payment Account as provided in Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Payment Account pursuant
to the Servicing Agreement and all deposits therein pursuant to this Indenture
are for the benefit of the Noteholders and the Certificate Paying Agent, on
behalf of the Certificateholder and all investments made with such monies
including all income or other gain from such investments are for the benefit of
the Master Servicer as provided by the Servicing Agreement.
On each Payment Date, the Indenture Trustee shall distribute all amounts
on deposit in the Payment Account to Noteholders in respect of the Notes and in
its capacity as Certificate Paying Agent to the Certificateholder in the order
of priority set forth in Section 3.05 (except as otherwise provided in Section
5.04(b)).
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The Master Servicer shall direct the Indenture Trustee in writing to
invest any funds in the Payment Account in Permitted Investments maturing no
later than the Business Day preceding each Payment Date and shall not be sold or
disposed of prior to the maturity.
Section 8.03. Officer's Certificate. The Indenture Trustee shall receive
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.05(a), accompanied by copies of any instruments to be
executed, and the Indenture Trustee shall also require, as a condition to such
action, an Officer's Certificate, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with.
Section 8.04. Termination Upon Payment to Noteholders. This Indenture and
the respective obligations and responsibilities of the Issuer and the Indenture
Trustee created hereby shall terminate upon the payment to the Noteholders, the
Certificate Paying Agent (on behalf of the Certificateholder), the Credit
Enhancer and the Indenture Trustee of all amounts required to be paid pursuant
to Article III; provided, however, that in no event shall the trust created
hereby continue beyond the expiration of 21 years from the death of the survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof.
Section 8.05. Release of Trust Estate. (a) Subject to the payment of its
fees and expenses, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture. No party relying upon an instrument executed by
the Indenture Trustee as provided in Article VIII hereunder shall be bound to
ascertain the Indenture Trustee's 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
and other Basic Documents 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 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.
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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 the written consent of the Credit Enhancer (which consent
shall not be unreasonably withheld), unless a Credit Enhancer Default has
occurred and is continuing, 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 any error, or to correct or
supplement any provision herein or in any supplemental indenture that may
be inconsistent with any other provision herein, in any supplemental
indenture or in the Prospectus Supplement;
(vi) to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental indenture;
provided, that such action shall not materially and adversely affect the
interests of the Holders of the Notes or the Credit Enhancer;
(vii) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(viii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as
may be expressly required by the TIA;
44
provided, however, that no such indenture supplements shall be entered
into unless the Indenture Trustee shall have received an Opinion of
Counsel that entering into such indenture supplement will not have any
material adverse tax consequences to the Noteholders. The Indenture
Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The 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 with the consent of the Credit
Enhancer (so long as no Credit Enhancer Default exists), 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 (a copy of which shall be delivered to the
Credit Enhancer), (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.
(c) The Issuer and the Indenture Trustee shall, as directed by the Holders
of Certificates which represent not less than 100% of the Certificate Percentage
Interests thereof, enter into an indenture or indentures supplemental hereto for
the purpose of providing for the issuance of one or more additional classes of
Notes entitled to payments derived solely from all or a portion of the payments
to which the Certificate issued on the Closing Date pursuant to the Trust
Agreement are entitled; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel (a copy of which shall be delivered to the
Credit Enhancer), (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. Each such class of Notes shall be a non-recourse obligation
of the Issuer and shall be entitled to interest and principal in such amounts,
and to such security for the repayment thereof, as shall be specified in such
amendment or amendments. Promptly after the execution by the Issuer and the
Indenture Trustee of any amendments pursuant to this Section or the creation of
a new indenture and the issuance of the related class or classes of Notes, the
Issuer shall require the Indenture Trustee to give notice to the Holders of the
Notes and the Rating Agencies setting forth in general terms the substance of
the provisions of such amendment. Any failure of the Indenture Trustee to
provide such notice as is required under this paragraph, or any defect therein,
shall not, however, in any way impair or affect the validity of such amendment
or any class of Notes issued pursuant thereto. Unless the Credit Enhancer agrees
in writing, (i) any classes of Notes issued pursuant to a supplemental indenture
shall not be entitled to the insurance provided by the Credit Enhancement
Instrument and (ii) the Holders of any such classes of Notes shall be entitled
only to such distributions or a portion of such distributions as the Holders
would have received as Holder of Certificate.
Section 9.02. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and with the consent of the
Holders of not less than a majority of the aggregate Note Balance of the Notes
affected thereby and the Credit Enhancer (so long as no Credit Enhancer Default
exists), by Act (as defined in Section 10.03 hereof) of such Holders delivered
to the Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto
45
for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Note affected thereby:
(i) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof or the
interest rate thereon, change the provisions of this Indenture relating to
the application of collections on, or the proceeds of the Sale of, the
Trust Estate to payment of principal of or interest on the Notes, or
change any place of payment where, or the coin or currency in which, any
Note or the interest thereon is payable, or impair the right to institute
suit for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to the
payment of any such amount due on the Notes on or after the respective due
dates thereof;
(ii) reduce the percentage of the related Note Balance of any Class
of Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception in
the definition of the term "Holder";
(iv) reduce the percentage of the aggregate Note Balance of the
Notes required to direct the Indenture Trustee to direct the Issuer to
sell or liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section 9.02 except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified or
waived without the consent of the Holder of each Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation
of any of the individual components of such calculation); or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture;
provided, that such action shall not, as evidenced by an Opinion of Counsel,
cause the Issuer to be subject to an entity level tax and provided, further,
that no such indenture supplements shall be entered into unless the Indenture
Trustee shall have received an Opinion of Counsel that entering into such
indenture supplement will not adversely affect in any material respect the
46
interests of the Certificateholder or shall have received the express written
consent of the Certificateholder to the indenture supplement.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes and the Custodian to which such amendment
or supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Notwithstanding anything to the contrary herein, so long as there does not
exist a failure by the Credit Enhancer to make a required payment under the
Credit Enhancement Instrument, the Credit Enhancer shall have the right to
exercise all rights of the Holders of the Notes under this Indenture and the
Servicing Agreement without any consent of such Holders, and such Holders may
exercise such rights only with the prior written consent of the Credit Enhancer.
Section 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and conforms to the requirements of
the Trust Indenture Act. The Indenture Trustee may, but shall not be obligated
to, enter into any such supplemental indenture that affects the Indenture
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.05. Conformity with Trust Indenture Act. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the
47
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.
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".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities
48
subject to the lien of this Indenture, the Issuer shall, in addition to any
obligation imposed in Section 10.01(a) or elsewhere in this Indenture, furnish
to the Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value (within 90
days of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture Trustee
an Officer's Certificate certifying or stating the opinion of any signer thereof
as to the matters described in clause (i) above, the Issuer shall also deliver
to the Indenture Trustee an Independent Certificate as to the same matters, if
the fair value to the Issuer of the securities to be so deposited and of all
other such securities made the basis of any such withdrawal or release since the
commencement of the then current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause (ii), is 10%
or more of the aggregate Note Balance of the Notes, but such a certificate need
not be furnished with respect to any securities so deposited, if the fair value
thereof to the Issuer as set forth in the related Officer's Certificate is less
than $25,000 or less than one percent of the aggregate Note Balance of the
Notes.
(iii) Whenever any property or securities are to be released from the lien
of this Indenture, the Issuer shall also furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (within 90 days of such release) of the
property or securities proposed to be released and stating that in the opinion
of such person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture Trustee
an Officer's Certificate certifying or stating the opinion of any signer thereof
as to the matters described in clause (iii) above, the Issuer shall also furnish
to the Indenture Trustee an Independent Certificate as to the same matters if
the fair value of the property or securities and of all other property, other
than property as contemplated by clause (v) below or securities released from
the lien of this Indenture since the commencement of the then current calendar
year, as set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the aggregate Note Balance of the Notes, but
such certificate need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the then aggregate
Note Balance of the Notes.
(v) Notwithstanding any provision of this Indenture, the Issuer may,
without compliance with the requirements of the other provisions of this Section
10.01, (A) collect, sell or otherwise dispose of the Home Loans as and to the
extent permitted or required by the Basic Documents or (B) make cash payments
out of the Payment Account as and to the extent permitted or required by the
Basic Documents, so long as the Issuer shall deliver to the Indenture Trustee
every six months, commencing six months after the closing date, an Officer's
Certificate of the Issuer stating that all the dispositions of Collateral
described in clauses (A) or (B) above that occurred during the preceding six
calendar months were in the ordinary course of the Issuer's business and that
the proceeds thereof were applied in accordance with the Basic Documents.
49
Section 10.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Seller or the
Issuer, stating that the information with respect to such factual matters is in
the possession of the Seller or the Issuer, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
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.
50
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
Section 10.04. Notices, etc., to Indenture Trustee, Issuer, Credit
Enhancer and Rating Agencies. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or Act of Noteholders is to be
made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee at the Corporate Trust
Office. The Indenture Trustee shall promptly transmit any notice received
by it from the Noteholders to the Issuer,
(ii) the Issuer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed first
class, postage prepaid to the Issuer addressed to: Home Loan Trust
200[_]-[___], in care of [_____________], 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 to in
writing and mailed, first class postage pre-paid, or personally delivered
or telecopied to: [_____________], telecopier number [_____________],
confirmation number [_____________]. 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, a
Division of the McGraw Hill Companies, Inc., 00 Xxxxx Xxxxxx], 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention of Asset Backed Surveillance Department; or as
to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
Section 10.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first class, postage prepaid to each Noteholder
51
affected by such event, at such Person's address as it appears on the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given regardless of whether such notice is in fact actually
received.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of Default.
Section 10.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any 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.
52
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 Person with an ownership
interest in any part of the Trust Estate, any benefit or any legal or equitable
right, remedy or claim under this Indenture. The Credit Enhancer is a
third-party beneficiary of this Indenture.
Section 10.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 10.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW), 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
(reasonably acceptable to the Indenture Trustee and the Credit Enhancer) to the
effect that such recording is necessary either for the protection of the
Noteholders or any other Person secured hereunder or for the enforcement of any
right or remedy granted to the Indenture Trustee under this Indenture.
Section 10.16. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their respective individual capacities) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock,
53
unpaid capital contribution or failure to pay any installment or call owing to
such entity. For all purposes of this Indenture, in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
Section 10.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by its acceptance of a Note, hereby covenant and
agree that they will not at any time institute against the Depositor or the
Issuer, or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Basic Documents.
Section 10.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
[SIGNATURE PAGE FOLLOWS]
54
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
HOME LOAN TRUST 200[_]-[___]
as Issuer
By: [_____________________________] not
in its individual capacity but
solely as Owner Trustee
By:
Name: ______________________________________
Title:
[______________________],
as Indenture Trustee
By:
Name: ______________________________________
Title:
[______________________]
hereby accepts the appointment as Paying Agent
pursuant to Section 3.03 hereof and as
Note Registrar pursuant to Section 4.02 hereof.
By: ____________________________________________
Name:
Title:
STATE OF [___________])
) ss.:
COUNTY OF[___________])
On this ____ day of [________________], 20[__], before me personally
appeared [_____________________], to me known, who being by me duly sworn, did
depose and say that she is the Vice President of the Indenture Trustee, a
national banking association described in and which executed the above
instrument; and that she signed her name thereto by like order.
_______________________
Notary Public
2
STATE OF [____________])
) ss.:
COUNTY OF [___________])
On this ____ day of [_____________], 20[__], before me, the undersigned
Notary Public of said State, personally appeared ___________________________,
personally known to me to be a duly authorized officer of
[______________________] that executed the within instrument, and personally
known to me to be the person who executed the within instrument on behalf of
[______________________] therein named, and acknowledged to me such
[______________________] executed the within instrument pursuant to its by-laws.
_______________________
Notary Public
3
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this ____ day of [________________], 20[__], before me personally
appeared ___________________, to me known, who being by me duly sworn, did
depose and say that he/she resides at Wilmington, Delaware, that he/she is the
___________________ of [_____________________], as Owner Trustee, a Delaware
banking corporation described in and which executed the above instrument; and
that he/she signed his/her name thereto by like order.
_______________________
Notary Public
4
EXHIBIT A
FORM OF NOTES
CLASS A __ NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER,
THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE
INDENTURE OR THE BASIC DOCUMENTS.
EACH PURCHASER AND TRANSFEREE OF THIS NOTE, BY ITS ACCEPTANCE OF THIS
NOTE, SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) IT IS
NOT ACQUIRING THIS NOTE WITH THE ASSETS OF AN "EMPLOYEE BENEFIT PLAN" AS DEFINED
IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), WHICH IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, A
"PLAN" DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF AN EMPLOYEE BENEFIT PLAN'S OR OTHER PLAN'S INVESTMENT IN SUCH ENTITY
OR ANY OTHER PLAN THAT IS SUBJECT TO A LAW THAT IS SIMILAR TO TITLE I OF ERISA
OR SECTION 4975 OF THE CODE OR (II) THE ACQUISITION AND HOLDING OF THIS NOTE
WILL NOT GIVE RISE TO A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR APPLICABLE LAW.
A-1
HOME LOAN TRUST 200[_]-[___]
HOME LOAN-BACKED NOTE
Registered Principal Amount: $___________
Class A __
No. __ Percentage Interest: _____%
CUSIP No. ___________ Note Rate: [___%][Adjustable Rate]
Home Loan Trust 200[_]-[___], a statutory trust duly organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of $___________, payable on each Payment
Date in an amount equal to the Percentage Interest specified above of the
aggregate amount, if any, payable from the Payment Account in respect of
principal on the Class A-__ Notes pursuant to Section 3.05 of the Indenture
dated as of [__________________ ___], 20[___] (the "Indenture") between the
Issuer, as Issuer, and [______________________], 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 [_______________]
20[___], to the extent not previously paid on a prior Payment Date. Capitalized
terms used but not defined herein are defined in Appendix A of the Indenture.
[Interest on the Class A-__ Notes will be paid monthly on each Payment
Date at the Note Rate. The Note Rate for the Class A-__ Notes will be _____% per
annum. Interest will be computed on the basis of a 30 day month and a 360 day
year. Principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof. On the Step Up Date, the Note Rate on the Class
A-__ Notes will increase by [0.50]% per annum.]
[Interest on the Class A-1 Notes will be paid monthly on each Payment Date
at the Note Rate for the related Interest Accrual Period. The Note Rate for each
Interest Accrual Period will be equal to the lesser of (i) LIBOR plus___% per
annum and (ii) ___% per annum. LIBOR for each applicable Interest Accrual Period
will be determined on the second LIBOR Business Day immediately preceding (i)
the Closing Date in the case of the first Interest Accrual Period and (ii) the
first day of each succeeding Interest Accrual Period by the Indenture Trustee as
set forth in the Indenture. All determinations of LIBOR by the Indenture Trustee
shall, in the absence of manifest error, be conclusive for all purposes, and
each holder of this Class A-1 Note, by accepting this Class A-1 Note, agrees to
be bound by such determination. Interest on this Class A-1 Note will accrue for
each Payment Date from the most recent Payment Date on which interest has been
paid (in the case of the first Payment Date, from the Closing Date) to but
excluding such Payment Date. Interest will be computed on the basis of the
actual number of days in each Interest Accrual Period and a year assumed to
consist of 360 days. Principal of and interest on this Class A-1 Note shall be
paid in the manner specified in the Indenture.]
Principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
A-2
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Home Loan-Backed Notes (herein called the "Notes"), all issued
under the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the Collateral
pledged as security therefor as provided in the Indenture.
This Note is entitled to the benefits of an irrevocable and unconditional
financial guaranty insurance policy issued by [___________________].
Principal of and interest on this Note will be payable on each Payment
Date, commencing on [_____________ ___], 20[__], as described in the Indenture.
"Payment Date" means the twenty fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due and payable
in full on the Payment Date in __________, pursuant to the Indenture, to the
extent not previously paid on a prior Payment Date. Notwithstanding the
foregoing, if an Event of Default shall have occurred and be continuing, then
the Indenture Trustee or the holders of Notes representing not less than a
majority of the aggregate Note Balance of all Notes 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 paid in the manner and priority set
forth in Section 3.05 of the Indenture.
Any installment of interest or principal, if any, payable on any Note that
is punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall, if such Holder holds Notes of an aggregate initial Note Balance of
at least $1,000,000, be paid to each Holder of record on the preceding Record
Date, by wire transfer to an account specified in writing by such Holder
reasonably satisfactory to the Indenture Trustee as of the preceding Record Date
or in all other cases or if no such instructions have been delivered to the
Indenture Trustee, by check or money order to such Noteholder mailed to such
Holder's address as it appears in the Note Register the amount required to be
paid to such Holder on such Payment Date pursuant to such Holder's Securities;
provided, however, that the Indenture Trustee shall not pay to such Holders any
amount required to be withheld from a payment to such Holder by the Code.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the Corporate Trust
Office, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee duly executed by, the
A-3
holder hereof or such holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes in authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the Note Registrar shall require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any registration of
transfer or exchange of this Note.
Each holder or Beneficial Owner of a Note, by acceptance of a Note, or, in
the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees that no recourse may be taken, directly or indirectly, with
respect to the obligations of the Issuer, the Owner Trustee, the Seller, the
Master Servicer, the Depositor or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a Note or, in
the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees by accepting the benefits of the Indenture that such holder
or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Master Servicer or the Issuer, or join in any
institution against the Depositor, the Seller, the Master Servicer or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer.
Each holder of a Note, by acceptance of a Note (and each Beneficial Owner of a
Note by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered (as of the
day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note
A-4
be overdue, and none of the Issuer, the Indenture Trustee or any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the holders of the Notes
under the Indenture at any time by the Issuer and the Indenture Trustee with the
consent of the holders of Notes representing a majority of the aggregate Note
Balance of all Notes at the time Outstanding and the Credit Enhancer with prior
notice to the Rating Agencies. The Indenture also contains provisions permitting
the holders of Notes representing specified percentages of the aggregate Note
Balance of all Notes, on behalf of the holders of all the Notes with the consent
of the Credit Enhancer, or the Credit Enhancer (so long as no Credit Enhancer
Default exists), 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 Credit Enhancer and 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 with the consent of 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.
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 [_____________________] in its
individual capacity, [______________________], 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,
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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.
A-6
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not in
its individual capacity, has caused this Note to be duly executed.
HOME LOAN TRUST 200[_]-[___]
By [_________________________], not in
its individual capacity but solely
as Owner Trustee
Dated: [__________________], 20[___]
By ___________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-__ Notes referred to in the within mentioned
Indenture.
[______________________], not in its
individual capacity but solely as
Indenture Trustee
Dated: [__________________], 20[___]
By ___________________________________
Authorized Signatory
A-7
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.
A-8
APPENDIX TO EXHIBIT 4.4
APPENDIX A
DEFINITIONS
Accrued Note Interest: With respect to any class of Notes and any Payment
Date, an amount equal to interest accrued for the related Interest Accrual
Period on the related Note Balance immediately prior to that Payment Date at the
related Note Rate for that Payment Date. Accrued Note Interest for the Class A
Notes (other than the Class A-1 Notes) will be calculated on the basis of a
30-day month in the related Interest Accrual Period and a 360-day year. Accrued
Note Interest for the Class A-1 Notes will be calculated on the basis of the
actual number of days in the related Interest Accrual Period and a 360-day year.
Administrative Fees: The Servicing Fees and the fees payable to the Owner
Trustee and the Indenture Trustee.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
Appraised Value: For any Home Loan the value of the related Mortgaged
Property determined by the appraisal, sales price for such Mortgaged Property or
alternative valuation method used in the origination of such Home Loan (which
may have been obtained at an earlier time); provided that if such Home Loan was
originated simultaneously with or not more than 12 months after a senior lien on
the related Mortgaged Property which was originated in a purchase or cash-out
refinance transaction, the appraised value shall be the lesser of the appraised
value at the origination of the senior lien and the sales price for such
Mortgaged Property.
Assignment of Mortgage: With respect to any Mortgage, an assignment,
notice of transfer or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction in which the related Mortgaged Property is
located to reflect the sale of the Mortgage, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same jurisdiction.
Authorized Newspaper: A newspaper of general circulation in the Borough of
Manhattan, The City of New York, printed in the English language and customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays.
Authorized Officer: With respect to the Issuer, any officer of the Owner
Trustee who is authorized to act for the Owner Trustee in matters relating to
the Issuer and who is identified on the list of Authorized Officers delivered by
the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basic Documents: The Trust Agreement, the Indenture, the Home Loan
Purchase Agreement, the Servicing Agreement, the Insurance Agreement, the Credit
Enhancement Instrument, the Custodial Agreement and the other documents and
certificates delivered in connection with any of the above.
Beneficial Owner: With respect to any Note, the Person who is the
beneficial owner of such Note as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).
Book-Entry Custodian: The custodian appointed pursuant to Section 4.06 of
the Indenture.
Book-Entry Notes: Beneficial interests in the Notes, ownership and
transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the States of New York, California, Texas,
Minnesota, Pennsylvania, Illinois or Delaware are required or authorized by law
to be closed.
Calendar Quarter: A Calendar Quarter shall consist of one of the following
time periods in any given year: January 1 through March 31, April 1 through June
30, July 1 though September 30, and October 1 through December 31.
Certificate: The certificate issued in the form of Exhibit A to the Trust
Agreement and outstanding pursuant to the terms of the Trust Agreement,
evidencing a beneficial ownership interest in the Trust.
Certificate Distribution Account: The account or accounts created and
maintained by the Certificate Paying Agent pursuant to Section 3.10(c) of the
Trust Agreement. The Certificate Paying Agent will make all distributions on the
Certificate from money on deposit in the Certificate Distribution Account. The
Certificate Distribution Account shall be an Eligible Account.
Certificate Distribution Amount: The amount payable to the Certificate
Paying Agent under Section 3.05 of the Indenture for payment to the holders of
the Certificate under the Trust Agreement.
Certificate Paying Agent: The meaning specified in Section 3.10 of the
Trust Agreement.
Certificate Percentage Interest: With respect to the Certificate and any
date of determination, the percentage interest as stated on the face of the
Certificate, which percentage may be recalculated in accordance with Section
3.03 of the Trust Agreement.
Certificate Principal Balance: As of any Payment Date, with respect to the
Certificate, an amount equal to the then applicable Certificate Percentage
Interest of such Certificate, multiplied by the Outstanding Reserve Amount
immediately prior to such Payment Date.
2
Certificate Register: The register maintained by the Certificate Registrar
in which the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of the Certificates.
Certificate Registrar: Initially, the Indenture Trustee, in its capacity
as Certificate Registrar, or any successor to the Indenture Trustee in such
capacity.
Certificate of Trust: The Certificate of Trust filed for the Trust
pursuant to Section 3810(a) of the Statutory Trust Statute, including all
amendments and restatements.
Certificateholder: The Person in whose name a Certificate is registered in
the Certificate Register except that, any Certificate registered in the name of
the Issuer, the Owner Trustee or the Indenture Trustee or any Affiliate of any
of them shall be deemed not to be outstanding and the registered holder will not
be considered a Certificateholder or a holder for purposes of giving any
request, demand, authorization, direction, notice, consent or waiver under the
Indenture or the Trust Agreement provided that, in determining whether the
Indenture Trustee or the Owner Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Certificates that the Indenture Trustee or the Owner Trustee knows to be so
owned shall be so disregarded. Owners of the Certificates that have been pledged
in good faith may be regarded as Holders if the pledgee establishes to the
satisfaction of the Indenture Trustee or the Owner Trustee, as the case may be,
the pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Issuer, any other obligor upon the Certificates or any
Affiliate of any of the foregoing Persons.
Class: Collectively, all of the Notes bearing the same designation.
Closing Date: [_____ __], 20[__].
Code: The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
Collateral: The meaning specified in the Granting Clause of the Indenture.
Collection Period: As to any Payment Date, the calendar month preceding
the month of that Payment Date.
Combined Loan-to-Value Ratio: With respect to each Home Loan, the ratio,
expressed as a percentage, of (i) the sum of (A) the original principal balance
of such Home Loan, and (B) any outstanding principal balance, at origination of
such Home Loan, of all other mortgage loans, if any, secured by senior or
subordinate liens on the related Mortgaged Property, to (ii) the Appraised
Value, or, if permitted by the Program Guide, the purchase price of the
Mortgaged Property, a statistical valuation or the Stated Value.
Commission: The Securities and Exchange Commission.
Corporate Trust Office: With respect to the Indenture Trustee, Certificate
Registrar, Certificate Paying Agent and Paying Agent, the corporate trust office
of the Indenture Trustee and Note Registrar from which at any particular time
the Indenture shall be administered, which
3
office at the date of the execution of this instrument is located at [Mail Code
EP-MN-WS3D, 00 Xxxxxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000-0000], Attention:
Structured Finance/RFMSII Home Loan Trust 20[__]-[___]. 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 Instrument: The [_____________________], Number
[_________], dated as of the Closing Date, issued by the Credit Enhancer to the
Indenture Trustee.
Credit Enhancer: [__________________________________], a [__________]
stock insurance corporation or 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 Repository: Equifax, Transunion and Experian, or their successors
in interest.
Credit Scores: The figure assigned to a Home Loan that is designed to
assess the Mortgagor's credit history which is obtained from credit reports
provided by various credit reporting organizations and obtained by many lenders
in connection with Home Loan applications to help assess a Xxxxxxxxx's
creditworthiness.
Custodial Account: The account or accounts created and maintained by the
Master Servicer pursuant to Section 3.02(b) of the Servicing Agreement, in which
the Master Servicer shall deposit or cause to be deposited certain amounts in
respect of the Home Loans.
Custodial Agreement: Any Custodial Agreement among the Custodian, the
Indenture Trustee and the Master Servicer relating to the custody of the Home
Loans and the Related Documents.
Custodial File: Any mortgage loan document in the Mortgage File that is
required to be delivered to the Custodian pursuant to Section 2.1(c) of the Home
Loan Purchase Agreement.
Custodian: [Xxxxx Fargo Bank, N.A., a national association], and its
successors and assigns.
Cut-off Date: [_____________ ___], 20[___].
Cut-off Date Loan Balance: With respect to any Home Loan, the unpaid
principal balance thereof as of the close of business on the Business Day
immediately prior to the Cut-off Date.
Default: Any occurrence which is or with notice or the lapse of time or
both would become an Event of Default.
4
Deficiency Amount: With respect to any class of Notes and any Payment
Date, the sum of (i) the excess, if any, of (A) (1) the aggregate amount of
Accrued Note Interest on such Payment Date less (2) an amount equal to any
Prepayment Interest Shortfalls and Relief Act Shortfalls on the Home Loans
during the related Collection Period, over (B) the amount available for interest
distributions on the Notes on that Payment Date pursuant to the Indenture, (ii)
any Liquidation Loss Amount, to the extent not distributed as part of the
Liquidation Loss Payment Amount or covered by a reduction of the Outstanding
Reserve Amount and (iii) the aggregate Note Balance on the Notes on the Final
Insured Payment Date, if outstanding after giving effect to all other payments
of principal on such Notes on such Payment Date from all sources other than the
Credit Enhancement Instrument.
Deficient Valuation: With respect to any Home Loan, a valuation by a court
of competent jurisdiction of the Mortgaged Property in an amount less than the
then outstanding indebtedness under the Home Loan, or any reduction in the
amount of principal to be paid in connection with any scheduled payment that
constitutes a permanent forgiveness of principal, which valuation or reduction
results from a proceeding under the Bankruptcy Code.
Definitive Notes: The meaning specified in Section 4.06 of the Indenture.
Deleted Loan: A Home Loan replaced or to be replaced with an Eligible
Substitute Loan.
Delinquent: As used herein, a Home Loan is considered to be "30 to 59
days" or "30 or more days" delinquent when a payment due on any due date remains
unpaid as of the close of business on the next following monthly due date. Since
the determination as to whether a Home Loan falls into these categories is made
as of the close of business on the last business day of each month, a Home Loan
with a payment due on July 1 that remained unpaid as of the close of business on
July 31 would still be considered current as of July 31. If that payment
remained unpaid as of the close of business on August 31, the Home Loan would
then be considered 30-59 days delinquent. Delinquency information as of the
Cut-off Date is determined and prepared as of the close of business on the last
business day immediately prior to the Cut-off Date.
Depositor: Residential Funding Mortgage Securities II, Inc., a Delaware
corporation, or its successor in interest.
Depository or Depository Agency: The Depository Trust Company or a
successor appointed by the Indenture Trustee with the approval of the Depositor.
Any successor to the Depository shall be an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act and the
regulations of the Securities and Exchange Commission thereunder.
Depository Participant: A Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.
Derivative Contract: Any ISDA Master Agreement, together with the related
schedule and confirmation, entered into by the Owner Trustee and a Derivative
Counterparty in accordance with Section 5.06 of the Trust Agreement.
Derivative Counterparty: Any counterparty to a Derivative Contract as
provided in Section 5.06 of the Trust Agreement.
5
Determination Date: With respect to any Payment Date, the 20th day of the
month in which such Payment Date occurs or if such day is not a Business Day,
the next succeeding Business Day.
Due Date: The date on which the Monthly Payment on the related Home Loan
is due in accordance with the terms of the related Mortgage Note.
Eligible Account: An account that is any of the following: (i) maintained
with a depository institution the short-term debt obligations of which have been
rated by each Rating Agency in its highest rating category available, or (ii) an
account or accounts in a depository institution in which such accounts are fully
insured to the limits established by the FDIC, provided that any deposits not so
insured shall, to the extent acceptable to each Rating Agency, as evidenced in
writing, be maintained such that (as evidenced by an Opinion of Counsel
delivered to the Indenture Trustee and each Rating Agency) the Indenture Trustee
has a claim with respect to the funds in such account or a perfected first
security interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (iii) in the case of the Custodial Account, either (A) a trust
account or accounts maintained at the corporate trust department of the
Indenture Trustee or (B) an account or accounts maintained at the corporate
trust department of the Indenture Trustee, as long as its short term debt
obligations are rated P-1 by Xxxxx'x and A-1+ by Standard & Poor's (or the
equivalent) or better by each Rating Agency and its long term debt obligations
are rated A2 by Xxxxx'x and AA- by Standard & Poor's (or the equivalent) or
better, by each Rating Agency, or (iv) in the case of the Custodial Account and
the Payment Account, a trust account or accounts maintained in the corporate
trust division of the Indenture Trustee, or (v) an account or accounts of a
depository institution acceptable to each Rating Agency (as evidenced in writing
by each Rating Agency that use of any such account as the Custodial Account or
the Payment Account will not reduce the rating assigned to any of the Securities
by such Rating Agency (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 Loan substituted by the Seller for a
Deleted Loan which must, on the date of such substitution, as confirmed in an
Officers' Certificate delivered to the Indenture Trustee, (i) have an
outstanding principal balance, after deduction of the principal portion of the
monthly payment due in the month of substitution (or in the case of a
substitution of more than one Home Loan for a Deleted Loan, an aggregate
outstanding principal balance, after such deduction), not in excess of the
outstanding principal balance of the Deleted Loan (the amount of any shortfall
to be deposited by the Seller in the Custodial Account in the month of
substitution); (ii) comply with each representation and warranty (other than a
statistical representation or warranty) set forth in Section 3.1(b) of the Home
Loan Purchase Agreement as of the date of substitution; (iii) have a Loan Rate
no lower than and not more than 1% in excess of the Loan Rate of such Deleted
Loan; (iv) have a Combined Loan-to-Value Ratio at the time of substitution no
higher than that of the Deleted Loan at the time of substitution; (v) have, at
the time of substitution, a remaining term to stated maturity not greater than
(and not more than one year less than) that of the Deleted Loan; (vi) be
ineligible for inclusion in a real estate mortgage investment conduit ("REMIC")
(a "REMIC Ineligible Loan") if the Deleted Loan was a REMIC
6
Ineligible Loan (because (a) the value of the real property securing the Deleted
Loan was not at least equal to eighty percent of the adjusted issue price of
such loan at the time of origination, calculated by subtracting the amount of
any liens that are senior to such Home Loan and a proportionate amount of any
lien of equal priority from the value of such property when the Deleted Loan was
originated and (b) substantially all of the proceeds of the Deleted Loan were
not used to acquire, improve or protect an interest in the real property
securing such loan and such real property was the only security for such Deleted
Loan); and (vii) not be 30 or more days delinquent.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: With respect to the Indenture, any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) a default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of five
days; or
(ii) a default in the payment of the principal of or any installment of
the principal of any Note when the same becomes due and payable other than as a
result of Prepayment Interest Shortfalls or Relief Act Shortfalls, and such
default shall continue for a period of five days; or
(iii) there occurs a default in the observance or performance of any
covenant or agreement of the Issuer made in the Indenture, or any representation
or warranty of the Issuer made in the Indenture or in any certificate or other
writing delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have been
made which has a material adverse effect on Securityholders 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 to the Issuer and the Indenture Trustee by the Holders
of at least 25% of the outstanding Note 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, 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,
7
or the consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Issuer or for any substantial
part of the assets of the Trust Estate, or the making by the Issuer of any
general assignment for the benefit of creditors, or the failure by the Issuer
generally to pay its debts as such debts become due, or the taking of any action
by the Issuer in furtherance of any of the foregoing.
Event of Servicer Termination: With respect to the Servicing Agreement, a
Servicing Default as defined in Section 7.01 of the Servicing Agreement.
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 Insured Payment Date: The Payment Date in [______] 20[__].
FNMA: The Federal National Mortgage Association, or any successor thereto.
Foreclosure Profit: With respect to a Liquidated Home Loan, the excess, if
any, of (x) Net Liquidation Proceeds over (y) the sum of (a) the Loan Balance of
the related Home Loan immediately prior to the date it became a Liquidated Home
Loan, less any Net Liquidation Proceeds previously received with respect to such
Home Loan and applied as a recovery of principal, and (b) accrued and unpaid
interest on the related Home Loan at the Net Loan Rate through the date of
receipt of the proceeds.
Form 10-K Certification: As defined in Section 4.04(b) of the Servicing
Agreement.
Xxxxx: Pledge, bargain, sell, warrant, alienate, remise, release, convey,
assign, transfer, create, and xxxxx x xxxx upon and a security interest in and
right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
Holder: Any of the Noteholders or Certificateholders.
Homeownership Act: The Home Ownership Protection Act of 1994.
8
Home Loans: At any time, the Home Loans that have been sold by the Seller
under the Home Loan Purchase Agreement, together with the Related Documents, and
that remain subject to the terms thereof.
Home Loan Purchase Agreement: The Home Loan Purchase Agreement, between
the Seller, as seller, and the Depositor, as purchaser, with respect to the Home
Loans, dated as of the Cut-off Date.
Home Loan Schedule: The initial schedule of Home Loans as of the Cut-off
Date set forth in Exhibit A of the Servicing Agreement, which schedule sets
forth as to each Home Loan, among other things:
(i) the Home Loan identifying number ("RFC LOAN #");
(ii) the state, city and zip code of the Mortgaged Property;
(iii) the maturity of the Mortgage Note ("MATURITY DATE");
(iv) the Loan Rate ("CUR RATE");
(v) the Principal Balance at origination ("ORG AMT");
(vi) the type of property securing the Mortgage Note ("PROPERTY TYPE");
(vii) the appraised value ("APPRSL");
(viii) the initial scheduled monthly payment of principal, if any, and
interest ("ORIGINAL P & I");
(ix) the Cut-off Date Loan Balance ("CUT-OFF BAL");
(x) the Combined Loan-to-Value Ratio at origination ("CLTV");
(xi) the date of the Mortgage Note ("NOTE DATE");
(xii) the original term to maturity of the Home Loan ("ORIGINAL TERM");
(xiii) under the column "OCCP CODE," a code indicating whether the Home
Loan is secured by a non-owner occupied residence;
(xiv) the Principal Balance of any Home Loan senior thereto ("SR BAL");
(xv) the Credit Score ("CR SCORE");
(xvi) the debt to income ratio ("DTI");
(xvii) product code ("PRODUCT CODE");
(xviii) loan purpose ("PURPOSE");
9
(xix) the lien position of the related Mortgage ("LIEN");
(xx) the Subservicer loan number (SERVICER LOAN #); and
(xxi) the remaining term of the Home Loan (REMAINING TERM).
Such schedule may consist of multiple reports that collectively set forth
all of the information required.
Indemnified Party: The meaning specified in Section 7.02 of the Trust
Agreement.
Indenture: The indenture dated as of the Closing Date between the Issuer,
as debtor, and the Indenture Trustee, as indenture trustee.
Indenture Trustee: [_______________________], and its successors and
assigns or any successor indenture trustee appointed pursuant to the terms of
the Indenture.
Indenture Trustee Information: As specified in Section 9.05(a)(i)(A) of
the Servicing Agreement.
Independent: When used with respect to any specified Person, the Person
(i) is in fact independent of the Issuer, any other obligor on the Notes, the
Seller, the Issuer, the Depositor and any Affiliate of any of the foregoing
Persons, (ii) does not have any direct financial or any material indirect
financial interest in the Issuer, any such other obligor, the Seller, the
Issuer, the Depositor or any Affiliate of any of the foregoing Persons and (iii)
is not connected with the Issuer, any such other obligor, the Seller, the
Issuer, the Depositor or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 10.01 of the Indenture, made by an
Independent appraiser or other expert appointed by an Issuer Request and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
Initial Certificate: The Home Loan-Backed Certificates, Series
20[__]-[___], issued on the Closing Date, each evidencing undivided beneficial
interests in the Issuer and executed by the Owner Trustee.
Initial Note Balance: With respect to the Class A-1 Notes,
$[_________________], with respect to the Class A-2 Notes, $[_________________],
with respect to the Class A-3 Notes, $[_________________] and with respect to
the Class A-4 Notes, $[_________________].
Insolvency Event: With respect to a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator,
10
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 written notice) of its inability to pay its debts
generally, or the adoption by the Board of Directors or managing member of such
Person of a resolution which authorizes action by such Person in furtherance of
any of the foregoing.
Insurance Agreement: The Insurance and Indemnity Agreement dated as of
[________________ ___], 20[___], among the Master Servicer, the Depositor, the
Issuer, the Indenture Trustee and the Credit Enhancer, including any amendments
and supplements thereto.
Insured Payment: With respect to (a) any Payment Date, the sum of (i) any
Deficiency Amount and (ii) any Preference Amount and (b) any other date, any
Preference Amount.
Insurance Proceeds: Proceeds paid by any insurer (other than the Credit
Enhancer) pursuant to any insurance policy covering a Home Loan which are
required to be remitted to the Master Servicer, or amounts required to be paid
by the Master Servicer pursuant to the next to last sentence of Section 3.04 of
the Servicing Agreement, net of any component thereof (i) covering any expenses
incurred by or on behalf of the Master Servicer in connection with obtaining
such proceeds, (ii) that is applied to the restoration or repair of the related
Mortgaged Property, (iii) released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures or (iv) required to be paid to any
holder of a mortgage senior to such Home Loan.
Interest Accrual Period: With respect to (i) the Class A-1 Notes (a) as to
the Payment Date in [________________], 20[___], the period commencing on the
Closing Date and ending on the day preceding the Payment Date in
[________________], 20[___], and (b) as to any Payment Date after the Payment
Date in [________________], 20[___], the period commencing on the Payment Date
in the month immediately preceding the month in which that Payment Date occurs
and ending on the day preceding that Payment Date and (ii) each class of Notes,
other than the Class A-1 Notes, and any Payment Date, the calendar month
preceding the month in which the related Payment Date occurs.
Interest Collections: With respect to any Payment Date, the sum of (i) the
portion allocable to interest of all scheduled monthly payments on the Home
Loans received during the related Collection Period reduced by the
Administrative Fees for such Collection Period, (ii) the portion allocable to
interest of all Net Liquidation Proceeds and proceeds from repurchases of, and
some amounts received in connection with any substitutions for, the related Home
Loans, received or deemed received during the related Collection Period, reduced
by any related Administrative Fees for that Collection Period, (iii) the
interest portion of the cash purchase price
11
paid in connection with any optional purchase of the Home Loans by the Master
Servicer and (iv) any proceeds and recoveries received during the related
Collection Period on a Home Loan after it becomes a Liquidated Home Loan
allocated to Interest Collections in accordance with the last paragraph of
Section 3.07 of the Servicing Agreement, reduced by the Administrative Fees for
such Collection Period.
Issuer or Trust: The Home Loan Trust 20[__]-[___], a Delaware statutory
trust, or its successor in interest.
Issuer Request: A written order or request signed in the name of the
Issuer by any one of its Authorized Officers and delivered to the Indenture
Trustee.
LIBOR: For any Interest Accrual Period other than the first Interest
Accrual Period, the rate for United States dollar deposits for one month which
appears on the Dow Xxxxx Telerate Screen Page 3750 as of 11:00 A.M., London,
England time, on the second LIBOR Business Day prior to the first day of such
Interest Accrual Period. With respect to the first Interest Accrual Period, the
rate for United States dollar deposits for one month which appears on the Dow
Xxxxx Telerate Screen Page 3750 as of 11:00 A.M., London, England time, two
LIBOR Business Days prior to the Closing Date. If such rate does not appear on
such page (or such other page as may replace that page on that service, or if
such service is no longer offered, such other service for displaying LIBOR or
comparable rates as may be reasonably selected by the Indenture Trustee after
consultation with the Master Servicer 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, LIBOR will be LIBOR applicable to the preceding Payment
Date.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or (ii)
a day on which banking institutions in the city of London, England are required
or authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.
Limited Repurchase Right Holder: The Master Servicer.
Liquidated Home Loan: As to any Payment Date, any Home Loan which the
Master Servicer has determined, based on the servicing procedures specified in
the Servicing Agreement, as of the end of the preceding Collection Period, that
all Liquidation Proceeds which it expects to recover in connection with the
disposition of the related Mortgaged Property have been recovered. In addition,
the Master Servicer will treat any Home Loan that is 180 days or more delinquent
as having been finally liquidated.
12
Liquidation Expenses: Out-of-pocket expenses (exclusive of overhead) which
are incurred by or on behalf of the Master Servicer in connection with the
liquidation of any Home Loan and not recovered under any insurance policy, such
expenses including, without limitation, legal fees and expenses, any
unreimbursed amount expended (including, without limitation, amounts advanced to
correct defaults on any loan which is senior to such Home Loan and amounts
advanced to keep current or pay off a loan that is senior to such Home Loan)
respecting the related Home Loan and any related and unreimbursed expenditures
for real estate property taxes or for property acquisition, restoration,
preservation or disposition, or insurance against casualty loss or damage.
Liquidation Loss Amount: With respect to any Payment Date and any Home
Loan that became a Liquidated Home Loan during the related Collection Period,
the unrecovered portion of the related Loan Balance thereof at the end of such
Collection Period, after giving effect to the Net Liquidation Proceeds applied
to reduce the related Loan Balance. In addition, as to any Home Loan for which
the principal balance has been reduced in connection with bankruptcy
proceedings, the amount of the reduction will be treated as a Liquidation Loss
Amount.
Liquidation Loss Payment Amount: As to any Payment Date, an amount equal
to the lesser of (i) the amount available for payment of the Liquidation Loss
Payment Amount for that Payment Date, as provided in clause (iv) of Section
3.05(a) of the Indenture and (ii) the sum of (a) 100% of the Liquidation Loss
Amounts incurred on the related Home Loans during the related Collection Period
and (b) any Liquidation Loss Amounts remaining unpaid from any preceding
Collection Period, to the extent not reflected on such preceding Payment Date by
a reduction of the Outstanding Reserve Amount.
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 Loan or related REO, whether
through trustee's sale, foreclosure sale, the exercise of the power of eminent
domain or condemnation or otherwise.
Loan Balance: With respect to any Home Loan, other than a Liquidated Home
Loan, and as of any day, the related Cut-off Date Loan Balance, minus all
collections in respect of principal in accordance with the related Mortgage Note
and applied in reduction of the Loan Balance thereof. For purposes of this
definition, a Liquidated Home Loan shall be deemed to have a Loan Balance equal
to zero.
Loan Rate or Mortgage Rate: With respect to any Home Loan and any day, the
per annum rate of interest set forth in the related Mortgage Note.
Lost Note Affidavit: With respect to any Home Loan as to which the
original Mortgage Note has been permanently lost or destroyed and has not been
replaced, an affidavit from the Seller certifying that the original Mortgage
Note has been lost, misplaced or destroyed (together with a copy of the related
Mortgage Note).
Master Servicer: Residential Funding Company, LLC, a Delaware limited
liability company, and its successors and assigns.
13
Master Servicer Extension Notice: The meaning specified in Section 7.04(d)
of the Servicing Agreement.
Master Servicing Fee: With respect to any Home Loan and any Collection
Period, the product of (i) the Master Servicing Fee Rate divided by 12 and (ii)
the Loan Balance of such Home Loan as of the first day of such Collection
Period.
Master Servicing Fee Rate: With respect to any Home Loan, 0.08% per annum.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Home Loans registered with
MERS on the MERS(R) System.
MOM Loan: With respect to any Home Loan, MERS acting as the mortgagee of
such Home Loan, solely as nominee for the originator of such Home Loan and its
successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Home Loan (including any REO
Property) and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization schedule at the time applicable thereto (after
adjustment, if any, for partial prepayments and for Deficient Valuations
occurring prior to such Due Date but before any adjustment to such amortization
schedule by reason of any bankruptcy, other than a Deficient Valuation, or
similar proceeding or any moratorium or similar waiver or grace period).
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a first
or second lien on an estate in fee simple or leasehold interest in real property
securing a Home Loan.
Mortgage File: The file containing the Related Documents pertaining to a
particular Home Loan and any additional documents required to be added to the
Mortgage File pursuant to the Home Loan Purchase Agreement or the Servicing
Agreement.
Mortgage Note: With respect to a Home Loan, the mortgage note pursuant to
which the related mortgagor agrees to pay the indebtedness evidenced thereby and
secured by the related Mortgage as modified or amended.
Mortgaged Property: The underlying property, including real property and
improvements thereon, securing a Home Loan.
Mortgagor: The obligor or obligors under a Mortgage Note.
14
Net Liquidation Proceeds: As to any Liquidated Home Loan, the proceeds,
including Insurance Proceeds but excluding amounts drawn on the Credit
Enhancement Instrument, received in connection with the liquidation of the Home
Loan, whether through trustee's sale, foreclosure sale or otherwise, reduced by
related expenses, but not including the portion, if any, of the proceeds that
exceed the principal balance of the Home Loan at the end of the Collection
Period immediately preceding the Collection Period in which the Home Loan became
a Liquidated Home Loan.
Net Loan Rate: With respect to any Home Loan and any date of
determination, a per annum rate of interest equal to the then applicable Loan
Rate for such Home Loan minus the Servicing Fee Rate and the Premium Percentage.
Note Balance: With respect to any Payment Date and any Class of Notes, the
Initial Note Balance thereof reduced by all payments of the Principal Payment
Amount thereon prior to and as of such Payment Date.
Note Owner: The Beneficial Owner of a Note.
Note Rate: With respect to (i) the Class A-1 Notes, will be the lesser of
(a) LIBOR plus [____]% per annum and (b) [____]% per annum; and (ii) the Class
A-2 Notes, Class A-3 Notes, and Class A-4 Notes and any Interest Accrual Period,
[____]%,[____]% and [____]% per annum, respectively; provided, that on the
Step-Up Date, the Note Rate on the Class A-4 Notes shall increase by [____]% per
annum.
Note Register: The register maintained by the Note Registrar in which the
Note Registrar shall provide for the registration of Notes and of transfers and
exchanges of Notes.
Note Registrar: The Indenture Trustee, in its capacity as Note Registrar.
Noteholder: The Person in whose name a Note is registered in the Note
Register, except that, any Note registered in the name of the Depositor, the
Issuer or the Indenture Trustee or any Affiliate of any of them shall be deemed
not to be outstanding and the registered holder will not be considered a
Noteholder or holder for purposes of giving any request, demand, authorization,
direction, notice, consent or waiver under the Indenture or the Trust Agreement
provided that, in determining whether the Indenture Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Notes that the Indenture Trustee or the Owner Trustee
knows to be so owned shall be so disregarded. Owners of Notes that have been
pledged in good faith may be regarded as Holders if the pledgee establishes to
the satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes or any Affiliate of any of the
foregoing Persons. Any Notes on which payments are made under the Credit
Enhancement Instrument shall be deemed Outstanding until the Credit Enhancer has
been reimbursed with respect thereto and the Credit Enhancer shall be deemed the
Noteholder thereof to the extent of such unreimbursed payment.
Notes: Any one of the Class A-1, Class A-2, Class A-3 or Class A-4 Notes
issued and outstanding at any time pursuant to the Indenture.
15
Officer's Certificate: With respect to the Master Servicer, a certificate
signed by the President, Managing Director, a Director, a Vice President or an
Assistant Vice President, of the Master Servicer and delivered to the Indenture
Trustee. With respect to the Issuer, a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.
Opinion of Counsel: A written opinion of counsel. Any Opinion of Counsel
for the Master Servicer may be provided by in-house counsel for the Master
Servicer if reasonably acceptable to the Indenture Trustee, the Credit Enhancer
and the Rating Agencies or counsel for the Depositor, as the case may be.
Optional Redemption: The right of the Master Servicer to purchase the Home
Loans on any Payment Date on which the aggregate Principal Balance of the Home
Loans as of the end of the related Collection Period is less than 10% of the
Cut-off Date Balance, pursuant to Section 8.08 of the Servicing Agreement.
Original Trust Agreement: The Trust Agreement, dated as of [_____________
___], 20[__], between the Owner Trustee and the Depositor.
Outstanding: With respect to the Notes, as of the date of determination,
all Notes theretofore executed, authenticated and delivered under this Indenture
except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to the
Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes have been
executed, authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are held
by a holder in due course;
provided, however, that for purposes of effectuating the Credit Enhancer's right
of subrogation as set forth in Section 4.12 of the Indenture only, all Notes
that have been paid with funds provided under the Credit Enhancement Instrument
shall be deemed to be Outstanding until the Credit Enhancer has been reimbursed
with respect thereto.
Outstanding Reserve Amount: With respect to any Payment Date, the amount,
if any, by which the Pool Balance after applying payments received in the
related Collection Period exceeds the aggregate Note Balance of the Notes on
such Payment Date, after application of Principal Collections and the
Liquidation Loss Payment Amounts for that Payment Date. The Outstanding Reserve
Amount will be increased by distributions of Reserve Increase Amount, if any, to
the Notes. As of the Closing Date, the Outstanding Reserve Amount will be equal
to approximately [____]% of the aggregate unpaid principal balance of the Home
Loans on the Business Day prior to the Cut-off Date.
Owner Trust Estate: The meaning specified in Section 2.05 of the Trust
Agreement.
16
Owner Trustee: [__________________] 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.
Owner Trustee Information: As specified in Section 11.04(a)(i)(A) of the
Trust Agreement.
Paying Agent: Any paying agent or co-paying agent appointed pursuant to
Section 3.03 of the Indenture, which initially shall be the Indenture Trustee.
Payment Account: The account established by the Indenture Trustee pursuant
to Section 8.02 of the Indenture and Section 5.01 of the Servicing Agreement.
Amounts deposited in the Payment Account will be paid by the Indenture Trustee
in accordance with Section 3.05 of the Indenture.
Payment Date: The 25th day of each month, or if such day is not a Business
Day, then the next Business Day.
Percentage Interest: With respect to any Note and any date of
determination, the percentage obtained by dividing the Note Balance of such
Note, by the aggregate of the Note Balances of all Notes of the same Class.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the
United States or any agency or instrumentality thereof when such obligations are
backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i) maturing
not more than one month from the date of acquisition thereof, provided that the
unsecured obligations of the party agreeing to repurchase such obligations are
at the time rated by each Rating Agency in its highest short-term rating
category available;
(iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original maturity of
not more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining maturity of
more than 30 days) denominated in United States dollars of any U.S. depository
institution or trust company incorporated under the laws of the United States or
any state thereof or of any domestic branch of a foreign depository institution
or trust company; provided that the 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
17
institution or trust company shall exceed 30 days, the short-term rating of such
institution shall be A-1+ in the case of Standard & Poor's if Standard & Poor's
is the Rating Agency;
(iv) commercial paper (having original maturities of not more than 365
days) of any corporation incorporated under the laws of the United States or any
state thereof which on the date of acquisition has been rated by each Rating
Agency in its highest short-term rating category available; provided that such
commercial paper shall have a remaining maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by each
Rating Agency in its highest long-term rating category available; 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 Master Servicer or any other Person
controlled by the Master Servicer is the issuer or the obligor of any obligation
or security described in this clause (vi) such obligation or security must have
an interest rate or yield that is fixed or is variable based on an objective
index that is not affected by the rate or amount of losses on the Home Loans;
provided, however, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations References herein to the highest rating available on unsecured
long-term debt shall mean AAA in the case of Standard & Poor's and Aaa in the
case of Xxxxx'x, and references herein to the highest rating available on
unsecured commercial paper and short-term debt obligations shall mean A-1+ in
the case of Standard & Poor's and P-1 in the case of Xxxxx'x. Any Permitted
Investment may be held by or through the Indenture Trustee and its Affiliates.
Person: Any legal individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pool Balance: With respect to any date, the aggregate of the Loan Balances
of all Home Loans as of such date.
Predecessor Note: With respect to any particular Note, every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note authenticated
and delivered under Section 4.03 of the Indenture in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
Preference Amount: Any amount previously paid to a Noteholder that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy court pursuant to the
18
United States Bankruptcy Code (11 U.S.C.), as amended from time to time, in
accordance with a final non-appealable order of a court exercising proper
jurisdiction in an insolvency proceeding.
Premium: The amount of premium due to the Credit Enhancer in accordance
with the terms of the Insurance Agreement.
Premium Percentage: As set forth in the Insurance Agreement.
Prepayment Assumption: A 100% Prepayment Assumption used solely for
determining the accrual of original issue discount, market discount and premium,
if any, on the Notes for federal income tax purposes. A 100% Prepayment
Assumption assumes a constant prepayment rate of 5% per annum for the first
month, increasing each month by an additional 20%/14 until the fifteenth month.
Beginning in the fifteenth month and in each month thereafter during the life of
the Home Loans, a 100% Prepayment Assumption assumes a constant prepayment rate
of 25% per annum each month.
Prepayment Interest Shortfall: With respect to any Payment Date, the
aggregate shortfall, if any, in collections of interest, adjusted to the related
Net Loan Rate, resulting from borrower prepayments during the related Collection
Period. These shortfalls will not be covered by the Master Servicer, the Credit
Enhancer or any other person.
Principal Collection Payment Amount: As to any Payment Date, the total
Principal Collections (reduced by any portion used to pay interest on the Notes)
for such Payment Date; provided, however, on any Payment Date as to which the
Outstanding Reserve Amount that would result without regard to this proviso
exceeds the Reserve Amount Target, the Principal Collection Payment Amount will
be reduced by the amount not less than zero by the amount of the excess until
the Outstanding Reserve Amount equals the Reserve Amount Target.
Principal Collections: As to any Payment Date, an amount equal to the sum
of:
(i) the principal portion of all scheduled Monthly Payments on the related
Home Loans received during the related Collection Period;
(ii) the principal portion of all proceeds of the repurchase of any Home
Loans (or, in the case of a substitution, any Substitution Adjustment Amounts)
as required by the Servicing Agreement received during the related Collection
Period and the principal portion of the cash purchase price paid in connection
with any optional purchase of the Home Loans by the Master Servicer; and
(iii) the principal portion of all other unscheduled collections received
on the Home Loans during the related Collection Period (or deemed to be received
during the related Collection Period) (including, without limitation, full and
partial Principal Prepayments made by the respective Mortgagors, Insurance
Proceeds and Net Liquidation Proceeds), to the extent not previously paid;
provided, however, that Principal Collections shall be reduced by any amounts
withdrawn from the Custodial Account pursuant to Section 3.03(ii), (v), (vi) and
(vii) of the Servicing Agreement.
19
Principal Prepayment: Any payment of principal made by the Mortgagor on a
Home Loan which is received in advance of its scheduled Due Date and which is
not accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Program Guide: Together, the Seller's Seller Guide and Servicing Guide, as
in effect from time to time.
Prospectus Supplement: The prospectus supplement, dated [_______________
___], 20[___], relating to the issuance of the Home Loan-Backed Notes, Series
20[__]-[___].
Purchase Price: The meaning specified in Section 2.2(a) of the Home Loan
Purchase Agreement.
Purchaser: Residential Funding Mortgage Securities II, Inc., a Delaware
corporation, and its successors and assigns.
Qualified Insurer: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as an insurer
by the Master Servicer and as a FNMA-approved mortgage insurer.
Rating Agency: Any nationally recognized statistical rating organization,
or its successor, that rated the Securities at the request of the Depositor at
the time of the initial issuance of the Securities, which initially shall be
Xxxxx'x or Standard & Poor's. If such organization or a successor is no longer
in existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, designated by the Depositor,
notice of which designation shall be given to the Indenture Trustee. References
herein to the highest short term unsecured rating category of a Rating Agency
shall mean A-1 or better in the case of Standard & Poor's and P-1 or better in
the case of Xxxxx'x and in the case of any other Rating Agency shall mean such
equivalent ratings. References herein to the highest long-term rating category
of a Rating Agency shall mean "AAA" in the case of Standard & Poor's and "Aaa"
in the case of Xxxxx'x and in the case of any other Rating Agency, such
equivalent rating.
Record Date: With respect to the Class A-1 Notes and any Payment Date, the
Business Day next preceding such Payment Date and with respect to the Notes
(other than the Class A-1 Notes) and the Certificates and any Payment Date, the
last Business Day of the month preceding the month of such Payment Date.
Reference Bank Rate: With respect to any Interest Accrual Period, as
follows: the arithmetic mean (rounded upwards, if necessary, to the nearest one
sixteenth of a percent) of the offered rates for United States dollar deposits
for one month which are offered by the Reference
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Xxxxx as of 11:00 A.M., London, England time, on the second LIBOR Business Day
prior to the first day of such Interest Accrual Period to prime banks in the
London interbank market for a period of one month in amounts approximately equal
to the sum of the outstanding Note Balance of the Class A-1 Notes; provided that
at least two such Reference Banks provide such rate. If fewer than two offered
rates appear, the Reference Bank Rate will be the arithmetic mean of the rates
quoted by one or more major banks in New York City, selected by the Indenture
Trustee after consultation with the Master Servicer 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 Note Balance of the Class A-1 Notes. If no such quotations can be
obtained, the Reference Bank Rate shall be LIBOR applicable to the preceding
Payment Date; provided however, that if, under the priorities indicated above,
LIBOR for a Payment Date would be based on LIBOR for the previous Payment Date
for the third consecutive Payment Date, the Indenture Trustee shall select an
alternative comparable index over which the Indenture Trustee has no control,
used for determining one-month Eurodollar lending rates that is calculated and
published or otherwise made available by an independent party.
Reference Banks: Barclays Bank PLC, Credit Suisse and Abbey National PLC.
Registered Holder: The Person in whose name a Note is registered in the
Note Register on the applicable Record Date.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
Related Documents: With respect to each Home Loan, the documents specified
in Section 2.1(c) of the Home Loan Purchase Agreement and any documents required
to be added to such documents pursuant to the Home Loan Purchase Agreement, the
Trust Agreement or the Servicing Agreement.
Release Agreement: A Release Agreement as defined in Section 3.05 of the
Servicing Agreement.
Relief Act Shortfall: With respect to any Payment Date, the aggregate
shortfall, if any, in collections of interest, as a result of the application of
the Servicemembers Civil Relief Act or similar legislation or regulations. These
shortfalls will reduce the amount of Interest Collections on the Home Loans and
will not be amounts paid by the Master Servicer, the Credit Enhancer or any
other person.
REO: A Mortgaged Property that is acquired by the Issuer in foreclosure or
by deed in lieu of foreclosure.
Repurchase Event: With respect to any Home Loan, one of the following: (i)
a discovery that, as of the Closing Date, the related Mortgage was not a valid
lien on the related
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Mortgaged Property subject only to (A) the lien of any prior mortgage indicated
on the Home Loan Schedule, (B) the lien of real property taxes and assessments
not yet due and payable, (C) covenants, conditions, and restrictions, rights of
way, easements and other matters of public record as of the date of recording of
such Mortgage and such other permissible title exceptions as are listed in the
Program Guide and (D) other matters to which like properties are commonly
subject which do not materially adversely affect the value, use, enjoyment or
marketability of the related Mortgaged Property, or (ii) with respect to any
Home Loan as to which the Seller delivers a Lost Note Affidavit, a subsequent
default on such Home Loan if the enforcement thereof or of the related Mortgage
is materially and adversely affected by the absence of the original Mortgage
Note.
Repurchase Price: With respect to any Home Loan required to be repurchased
on any date pursuant to the Home Loan Purchase Agreement or purchased by the
Master Servicer or the Limited Repurchase Right Holder pursuant to the Servicing
Agreement, an amount equal to the sum of (i) 100% of the Loan Balance thereof
(without reduction for any amounts charged off) and (ii) unpaid accrued interest
at the Loan Rate (or with respect to the last day of the month in the month of
repurchase, the Loan Rate will be the Loan Rate in effect as to the second to
last day in such month) on the outstanding principal balance thereof from the
Due Date to which interest was last paid by the Mortgagor to the first day of
the month following the month of purchase.
Request for Release: The form attached as Exhibit 4 to the Custodial
Agreement or an electronic request in a form acceptable to the Custodian.
Reserve Amount Floor: An amount equal to [____]% of the Pool Balance as of
the Cut-off Date.
Reserve Amount Target: As to any Payment Date prior to the Stepdown Date,
an amount equal to [____]% of the Cut-off Date Pool Balance. On or after the
Stepdown Date, the Reserve Amount Target will be equal to the lesser of:
(a) [____]% of the Pool Balance after applying payments received in the
related Collection Period; and
(b) the Reserve Amount Target as of the Cut-off Date;
provided, however, that the Reserve Amount Target shall not be less than the
Reserve Amount Floor; provided further, that any scheduled reduction to the
Reserve Amount Target on or after the Stepdown Date as described above shall not
be made on any Payment Date unless:
(i) either (a) the aggregate cumulative Liquidation Loss Amount on
the Home Loans from the Cut-off Date through the end of the Collection
Period immediately prior to such Payment Date is less than:
(A) [____]% of the Pool Balance as of the Cut-off Date, if
such Payment Date is the 31st through 36th Payment Dates,
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(B) [____]% of the Pool Balance as of the Cut-off Date, if
such Payment Date is the 37th through 48th Payment Dates, or
(C) [____]% of the Pool Balance as of the Cut-off Date, if
such Payment Date is the 49th through 60th Payment Dates, or
(D) [____]% of the Pool Balance as of the Cut-off Date, if
such Payment Date is the 61st through 72nd Payment Dates, or
(E) [____]% of the Pool Balance as of the Cut-off Date, if
such Payment Date is the 73rd Payment Date (or any Payment Date
thereafter) or
(b) the average of the aggregate Liquidation Loss Amount on
the Home Loans that became Liquidated Home Loans during the related
Collection Period, as determined for the current and five previous
Payment Dates, is less than 50% of the average of the amount
remaining in the Payment Account on such Payment Date following
distributions pursuant to clauses (i)-(v) of Section 3.05(a) of the
Indenture (other than distributions made pursuant to clause (iii)
thereof), as determined for the current and five previous Payment
Dates and
(ii) there has been no draw on the Credit Enhancement Instrument on
such Payment Date that remains unreimbursed.
In addition, the Reserve Amount Target may be reduced with the prior
written consent of the Credit Enhancer (so long as no Credit Enhancer Default
exists) and notice to the Rating Agencies.
Reserve Increase Amount: As to the any Payment Date, an amount equal to
the lesser of (i) the amount available for payment of the Reserve Increase
Amount for that Payment Date, as provided in clause (vi) of Section 3.05(a) of
the Indenture and (ii) the excess, if any of (x) the Reserve Amount Target over
(y) the Outstanding Reserve Amount.
Responsible Officer: With respect to the Indenture Trustee, any officer of
the Indenture Trustee, in each case with direct responsibility for
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.
Sale: The meaning specified in Section 5.15 of the Indenture.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
Securitization Transaction: Any transaction involving a sale or other
transfer of mortgage loans directly or indirectly to an issuing entity in
connection with an issuance of publicly offered or privately placed, rated or
unrated mortgage-backed securities.
Security: Any of the Certificates or Notes.
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Securityholder or Holder: Any Noteholder or a Certificateholder.
Security Instrument: A written instrument creating a valid first lien on a
Mortgaged Property securing a Mortgage Note, which may be any applicable form of
mortgage, deed of trust, deed to secure debt or security deed, including any
riders or addenda thereto.
Seller: Residential Funding Company, LLC, a Delaware limited liability
company, and its successors and assigns.
Servicing Agreement: The Servicing Agreement dated as of the Closing Date
among the Indenture Trustee, the Issuer and the Master Servicer, as master
servicer.
Servicing Certificate: A certificate prepared by a Servicing Officer on
behalf of the Master Servicer in accordance with Section 4.01 of the Servicing
Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Default: The meaning specified in Section 7.01 of the Servicing
Agreement.
Servicing Fee: With respect to any Home Loan, the sum of the related
Master Servicing Fee and the related Subservicing Fee.
Servicing Fee Rate: With respect to any Home Loan, the sum of the related
Master Servicing Fee Rate and the related Subservicing Fee Rate.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Home Loans whose name
and specimen signature appear on a list of servicing officers furnished to the
Indenture Trustee by the Master Servicer, as such list may be amended from time
to time.
Servicing Trigger: As of any Payment Date, for purposes of Section 7.04 of
the Servicing Agreement, "Servicing Trigger; Removal of Master Servicer," the
aggregate cumulative Liquidation Loss Amount on the Home Loans from the Cut-off
Date through the end of the Collection Period immediately prior to such Payment
Date is greater than:
(A) [____]% of the Pool Balance as of the Cut-off Date, if such Payment
Date is the 31st through 36th Payment Dates,
(B) [____]% of the Pool Balance as of the Cut-off Date, if such Payment
Date is the 37th through 48th Payment Dates, or
(C) [____]% of the Pool Balance as of the Cut-off Date, if such Payment
Date is the 49th through 60th Payment Dates, or
(D) [____]% of the Pool Balance as of the Cut-off Date, if such Payment
Date is the 61st through 72nd Payment Dates, or
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(E) [____]% of the Pool Balance as of the Cut-off Date, if such Payment
Date is the 73rd Payment Date (or any Payment Date thereafter).
Standard & Poor's: Standard & Poor's, a Division of The XxXxxx-Xxxx
Companies, Inc. or its successor in interest.
Stated Value: The value of the Mortgaged Property as stated by the related
Mortgagor in his or her application.
Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss.ss.3801 et seq., as the same may be amended from time to time.
Step-Up Date: The second Payment Date immediately following the Payment
Date on which the Master Servicer can purchase all or some of the Home Loans
from the Trust pursuant to Section 8.08 of the Servicing Agreement.
Stepdown Date: The later of (a) the Payment Date in [_______] 20[__] and
(b) the first Payment Date on which the aggregate Pool Balance, after applying
payments received in the related Collection Period, is less than or equal to
50.00% of the aggregate Pool Balance as of the Cut-off Date.
Subservicer: Any Person with whom the Master Servicer has entered into a
Subservicing Agreement as a Subservicer by the Master Servicer.
Subservicing Account: An Eligible Account established or maintained by a
Subservicer as provided for in Section 3.02(c) of the Servicing Agreement.
Subservicing Agreement: The written contract between the Master Servicer
and any Subservicer relating to servicing and administration of certain Home
Loans as provided in Section 3.01 of the Servicing Agreement.
Subservicing Fee: With respect to any Collection Period, the fee retained
monthly by the Subservicer (or, in the case of a nonsubserviced Home Loan, by
the Master Servicer) equal to the product of (i) the Subservicing Fee Rate
divided by 12 and (ii) the Pool Balance as of the first day of such Collection
Period.
Subservicing Fee Rate: With respect to each Home Loan, the amount payable
to the related Subservicer, equal to 0.50% per annum.
Substitution Adjustment Amounts: With respect to any Eligible Substitute
Loan, the amount as defined in Section 3.1(b) of the Home Loan Purchase
Agreement and any Deleted Loan, the amount, if any, as determined by the Master
Servicer, by which the aggregate principal balance of all such Eligible
Substitute Loans as of the date of substitution is less than the aggregate
principal balance of all such Deleted Loans (after application of the principal
portion of the Monthly Payments due in the month of substitution that are to be
distributed to the Payment Account in the month of substitution).
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Termination Price: In the event that all of the Home Loans are purchased
by the Master Servicer, the Termination Price will be an amount equal to 100% of
the unpaid Loan Balance of each Home Loan so purchased, plus accrued and unpaid
interest thereon at the weighted average of the Loan Rates through the day
preceding the Payment Date on which such purchase occurs, plus any amounts owed
by the Seller pursuant to the second paragraph of Section 3.1(c) of the Home
Loan Purchase Agreement in respect of any liability, penalty or expense that
resulted from a breach of the representation and warranty set forth in clause
(x) of Section 3.1(b) of the Home Loan Purchase Agreement, that remain unpaid on
the date of such purchase.
Transaction Party: As specified in Section 9.02(a) of the Servicing
Agreement.
Treasury Regulations: Regulations, including proposed or temporary
Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Trust Agreement: The Amended and Restated Trust Agreement, dated as of the
Closing Date, between the Owner Trustee and the Depositor.
Trust Estate: The meaning specified in the Granting Clause of the
Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as amended
from time to time, as in effect on any relevant date.
UCC: The Uniform Commercial Code, as amended from time to time, as in
effect in any specified jurisdiction.
Underwriters: [Name of Underwriter] and [Residential Funding Securities,
LLC].
United States Person: A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
or an estate whose income is subject to United States federal income tax
regardless of its source, or a trust other than a "foreign trust" within the
meaning of Section 7701(a)(30) of the Code.
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