EXHIBIT 4.1
-----------
XXXXX HOME EQUITY LOAN TRUST 1999-2,
as Issuer,
and
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Indenture Trustee
-----------------------------
INDENTURE
Dated as of April 30, 1999
-----------------------------
HOME EQUITY LOAN-BACKED NOTES
CLASS A-1, CLASS A-2, CLASS A-3 AND CLASS A-4
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................2
Section 1.01 Definitions.....................................................2
Section 1.02 Incorporation by Reference of Trust Indenture Act...............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 Mortgage 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.....................................9
Section 3.08 Performance of Obligations; Sale and Servicing Agreement.......10
Section 3.09 Negative Covenants.............................................10
Section 3.10 Annual Statement as to Compliance..............................11
Section 3.11 Recordation of Assignments.....................................11
Section 3.12 Representations and Warranties Concerning the Mortgage Loans...11
Section 3.13 Assignee of Record of the Mortgage Loans.......................12
Section 3.14 Servicer as Agent and Bailee of the Indenture Trustee..........12
Section 3.15 Investment Company Act.........................................12
Section 3.16 Issuer May Not Consolidate, etc................................12
Section 3.17 Successor or Transferee........................................14
Section 3.18 No Other Business..............................................14
Section 3.19 No Borrowing...................................................15
Section 3.20 Guarantees.....................................................15
Section 3.21 Capital Expenditures...........................................15
Section 3.22 Indenture Trustee Not Liable for Notes or Related Documents....15
Section 3.23 Notice of Events of Default....................................15
Section 3.24 Further Instruments and Acts...................................15
Section 3.25 Statements to Noteholders......................................15
Section 3.26 Payments under the Policy......................................15
Section 3.27 Replacement Enhancemen.........................................16
ARTICLE IV THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE ..............17
Section 4.01 The Notes......................................................17
Section 4.02 Registration of and Limitations on Transfer and
Exchange of Notes; Appointment of Certificate Registrar........17
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes.....................18
Section 4.04 Persons Deemed Owners..........................................19
Section 4.05 Cancellation...................................................19
Section 4.06 Book-Entry Notes...............................................20
Section 4.07 Notices to Depositor...........................................20
Section 4.08 Definitive Notes...............................................21
Section 4.09 Tax Treatment..................................................21
Section 4.10 Satisfaction and Discharge of Indenture........................21
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.......................23
Section 4.14 Temporary Notes................................................23
Article V DEFAULT AND REMEDIES...............................................25
Section 5.01 Events of Default..............................................25
Section 5.02 Acceleration of Maturity; Rescission and Annulment.............25
Section 5.03 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee...............................26
Section 5.04 Remedies; Priorities...........................................28
Section 5.05 Optional Preservation of the Trust Estate......................30
Section 5.06 Limitation of Suits............................................30
Section 5.07 Unconditional Right of Noteholders To
Receive Principal and Interest.................................30
Section 5.08 Restoration of Rights and Remedies.............................31
Section 5.09 Rights and Remedies Cumulative.................................31
Section 5.10 Delay or Omission Not a Waiver.................................31
Section 5.11 Control by Noteholders.........................................31
Section 5.12 Waiver of Past Defaults........................................32
Section 5.13 Undertaking for Costs..........................................32
Section 5.14 Waiver of Stay or Extension Laws...............................32
Section 5.15 Sale of Trust Estate...........................................33
Section 5.16 Action on Notes................................................34
Section 5.17 Performance and Enforcement of Certain Obligations.............35
ARTICLE VI THE INDENTURE TRUSTEE............................................36
Section 6.01 Duties of Indenture Trustee....................................36
Section 6.02 Rights of Indenture Trustee....................................37
Section 6.03 Individual Rights of Indenture Trustee.........................37
Section 6.04 Indenture Trustee's Disclaimer.................................38
Section 6.05 Notice of Event of Default.....................................38
Section 6.06 Reports by Indenture Trustee to Noteholders....................38
Section 6.07 Compensation...................................................38
Section 6.08 Replacement of Indenture Trustee...............................38
Section 6.09 Successor Indenture Trustee by Merger..........................39
Section 6.10 Appointment of Co-Indenture Trustee or
Separate Indenture Trustee.....................................40
Section 6.11 Eligibility; Disqualification..................................41
Section 6.12 Preferential Collection of Claims Against Issuer...............41
Section 6.13 Representations and Warranties.................................41
Section 6.14 Directions to Indenture Trustee................................42
Section 6.15 Indenture Trustee May Own Securities...........................42
ARTICLE VII NOTEHOLDERS'LISTS AND REPORTS...................................43
Section 7.01 Issuer To Furnish Indenture Trustee
Names and Addresses of Noteholders.............................43
Section 7.02 Preservation of Information; Communications to Noteholders.....43
Section 7.03 Reports by Issuer..............................................43
Section 7.04 Reports by Indenture Trustee...................................44
ACCOUNTS, DISBURSEMENTS AND RELEASES.........................................45
Section 8.01 Collection of Money............................................45
Section 8.02 Trust Accounts.................................................45
Section 8.03 Officer's Certificate..........................................45
Section 8.04 Termination Upon Distribution to Noteholders...................45
Section 8.05 Release of Trust Estate........................................46
Section 8.06 Surrender of Notes Upon Final Payment..........................46
SUPPLEMENTAL INDENTURES......................................................47
Section 9.01 Supplemental Indentures Without Consent of Noteholders.........47
Section 9.02 Supplemental Indentures With Consent of Noteholders............48
Section 9.03 Execution of Supplemental Indentures...........................49
Section 9.04 Effect of Supplemental Indenture...............................49
Section 9.05 Conformity with Trust Indenture Act............................50
Section 9.06 Reference in Notes to Supplemental Indentures..................50
MISCELLANEOUS................................................................51
Section 10.01 Compliance Certificates and Opinions, etc.....................51
Section 10.02 Form of Documents Delivered to Indenture Trustee..............52
Section 10.03 Acts of Noteholders...........................................53
Section 10.04 Notices.......................................................54
Section 10.05 Notices to Noteholders; Waiver................................54
Section 10.06 Conflict with Trust Indenture Act............................55
Section 10.07 Effect of Headings............................................55
Section 10.08 Successors and Assigns........................................55
Section 10.09 Severability of Provisions....................................55
Section 10.10 Benefits of Indenture.........................................55
Section 10.11 Legal Holidays................................................55
Section 10.12 Governing Law.................................................55
Section 10.13 Counterparts..................................................55
Section 10.14 Recording of Indenture........................................56
Section 10.15 Issuer Obligation.............................................56
Section 10.16 No Petition...................................................56
Section 10.17 Inspection.....................................................56
This Indenture, dated as of April 30, 1999, is between Xxxxx Home Equity
Loan Trust 1999-2, a Delaware business trust, as issuer (the "Issuer"), and
Norwest Bank Minnesota, National Association, as trustee (the "Indenture
Trustee").
WITNESSETH:
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 Home
Equity Loan-Backed Notes, Series 1999-2 (the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
trustee for the benefit of the Noteholders and the Enhancer, all of the
Issuer's right, title and interest, whether now existing or hereafter created,
in and to (i) the Mortgage Loans, (ii) all funds on deposit from time to time
in the Note Payment Account, the Certificate Distribution Account, the
Pre-Funding Account, the Collection Account, the Trustee Collection Account
and the Capitalized Interest Account (in each case as defined in Appendix A
hereto) and all proceeds thereof, (iii) the Policy and (iv) all present and
future claims, demands, causes and chooses in action in respect of any or all
of the foregoing and all payments on or under, and all proceeds of every kind
and nature whatsoever in respect of, any or all of the foregoing and all
payments on or under, and all proceeds of every kind and nature whatsoever in
the conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, checks, deposit accounts, rights to payment of any and every
kind, and other forms of obligations and receivables, instruments and other
property that 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 herein.
The foregoing Grant shall inure to the benefit of the Enhancer in respect
of draws made on the Policy and amounts owing from time to time under the
Insurance Agreement, and such Grant shall continue in full force and effect
for the benefit of the Enhancer until all such amounts owing to it have been
repaid in full.
The Indenture Trustee, as trustee on behalf of the Noteholders,
acknowledges such Grant, accepts the trust under this Indenture in accordance
with the provisions hereof and agrees to perform its duties as Indenture
Trustee as required herein.
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in Appendix A attached hereto, which is incorporated
by reference herein.
Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the Trust Indenture Act of 1940, as
amended (the "TIA"), such provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this Indenture have
the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meanings 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" includes "and/or"; (iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural include
the singular; (vi) the term "proceeds" has the meaning ascribed thereto in the
UCC; (vii) any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means
such agreement, instrument or statute as from time to time amended, modified
or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
and (viii) references to a Person are also to such Person's 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 forms 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 thereof.
Any portion of the text of a Note may be set forth on the reverse thereof,
with an appropriate reference thereto on the face thereof.
The Notes shall be typewritten, printed, lithographed or engraved, or
produced by any combination of such methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing the same, as
evidenced by their execution thereof.
The terms of the Notes set forth in Exhibits 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 shall 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 issuance in an aggregate initial principal amount of
$53,500,000 in the case of Class A-1 Notes, $85,100,000 in the case of Class
A-2 Notes, $17,400,000 in the case of Class A-3 Notes and $22,200,000 in the
case of Class A-4 Notes.
Each Note shall be dated the date of its authentication. The Notes shall
be issuable as registered Notes in minimum initial Note Balances of $1,000 and
in integral multiples of $1,000 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.
ARTICLE III
COVENANTS
Section 3.01. Collection of Payments with Respect to the Mortgage Loans.
The Indenture Trustee shall establish and maintain the Note Payment Account,
into which the Indenture Trustee shall deposit, on each Payment Date, the
amounts required to be deposited therein pursuant to Section 3.05. 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 from monies on
deposit in the Note Payment Account.
Section 3.02. Maintenance of Office or Agency. The Issuer shall maintain
an office or agency where, subject to the 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 of the
Indenture Trustee, 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. 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 Note Payment
Account pursuant to Section 3.05 shall be made on behalf of the Issuer by the
Indenture Trustee or the Paying Agent, and no amounts so withdrawn from the
Note Payment Account for payments in respect of the Notes shall be paid to the
Issuer except as provided in this Section. The Indenture Trustee shall
initially be the Paying Agent.
The Issuer shall 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 as Paying
Agent, the Indenture Trustee hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(a) 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;
(b) give the Indenture Trustee written notice of any default by the
Issuer of which it has actual knowledge in the making of any payment required
to be made with respect to the Notes;
(c) 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;
(d) immediately resign as Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for payments in respect of the 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;
(e) 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
(f) deliver to the Indenture Trustee a copy of the statement to
Noteholders prepared with respect to each Payment Date pursuant to Section
4.01 of the Sale and 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 such 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 mailing notice
of such repayment to Holders the Notes of which have been called but have not
been surrendered for redemption or the right of which to or interest in monies
due and payable but not claimed is determinable from the records of the
Indenture Trustee or any Paying Agent, at the last address of record for each
such Holder).
Section 3.04. Existence. The Issuer shall keep in full force and effect
its existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States
of America, in which case the Issuer shall keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.
Section 3.05. Payment of Principal and Interest; Defaulted Interest.
(a) On each Payment Date, from amounts on deposit in the Trustee
Collection Account (including any draw on the Policy deposited therein for
such Payment Date), the Indenture Trustee shall apply the following amounts in
the following order of priority, in accordance with the Servicing Certificate:
(i) any prepayment penalties collected during the immediately prior
Due Period to the Certificate Distribution Account for distribution to
the Certificateholders by the Certificate Paying Agent;
(ii) to the Enhancer, the amount of the Premium for the Policy, with
interest thereon as provided in the Insurance Agreement and to the
Indenture Trustee, the Indenture Trustee Fee payable thereto in respect
of such Collection Period (to the extent sufficient funds remain
available from Interest Collections and Principal Collections from
Mortgage Loans assigned to Group I and Group II individually such payment
shall be allocated among Group I and Group II in proportion to the sum of
the Class A-1 Note Balance and the Class A-2 Note Balance and the sum of
the Class A-3 Note Balance and the Class A-4 Note Balance, respectively);
(iii) interest for the related Interest Period at the related Note
Rate on the related Note Balances of the Notes immediately prior to such
Payment Date, after giving effect to any Policy Draw Amount deposited
into the Note Payment Account pursuant to Section 3.26(a), excluding any
Interest Carry-Forward Amounts to the Note Payment Account, for payment,
pro rata, to the Holders of the Notes by the Paying Agent on such Payment
Date;
(iv) the Base Principal Distribution Amount for Group I after giving
effect to any Policy Draw Amount deposited into the Note Payment Account
pursuant to Section 3.26(a) to the Note Payment Account, for payment by
the Paying Agent on such Payment Date, pro rata, first to the Holders of
the Class A-1 Notes until the principal balance thereof has been reduced
to zero and then to the Holders of the Class A-2 Notes until the
principal balance thereof has been reduced to zero; and the Base
Principal Distribution Amount for Group II after giving effect to any
Policy Draw Amount deposited into the Note Payment Account pursuant to
Section 3.26(a) to the Note Payment Account, for payment by the Paying
Agent on such Payment Date, pro rata, first to the Holders of the Class
A-3 Notes until the principal balance thereof has been reduced to zero
and then to the Holders of the Class A-4 Notes until the principal
balance thereof has been reduced to zero;
(v) to the Enhancer, to reimburse it for prior draws made on the
Policy, with interest thereon as provided in the Insurance Agreement
(such payment shall be allocated first to Interest Collections and
Principal Collections from Mortgage Loans assigned to Group I if the draw
in question was made for the benefit of the Class A-1 Notes or the Class
A-2 Notes or first to Interest Collections and Principal Collections from
Mortgage Loans assigned to Group II if the draw in question was made for
the benefit of the Class A-3 Notes or the Class A-4 Notes);
(vi) to the extent of Group I Excess Spread any
Overcollateralization Deficiency Amount for Group I to the Note Payment
Account, for payment by the Paying Agent on such Payment Date, pro rata,
first to the Holders of the Class A-1 Notes until the Principal Balance
thereof has been reduced to zero and then to the Holders of the Class A-2
Notes until the Principal Balance thereof has been reduced to zero; and
to the extent of Group II Excess Spread any Overcollateralization
Deficiency Amount for Group II to the Note Payment Account, for payment
by the Paying Agent on such Payment Date, pro rata, first to the Holders
of the Class A-3 Notes until the Principal Balance thereof has been
reduced to zero and then to the Holders of the Class A-4 Notes until the
Principal Balance thereof has been reduced to zero;
(vii) to the extent of any remaining Group I Excess Spread, the
Additional Principal Distribution Amount for Group II to the Note Payment
Account, for payment by the Paying Agent on such Payment Date, pro rata,
first to the Holders of the Class A-3 Notes until the Principal Balance
thereof has been reduced to zero and then to the Holders of the Class A-4
Notes until the Principal Balance thereof has been reduced to zero; and
to the extent of any remaining Group II Excess Spread, any remaining
Additional Principal Distribution Amount for Group I to the Note Payment
Account, for payment by the Paying Agent on such Payment Date, pro rata,
first to the Holders of the Class A-1 Notes until the Principal Balance
thereof has been reduced to zero and then to the Holders of the Class A-2
Notes until the Principal Balance thereof has been reduced to zero;
(viii) to the Enhancer, any other amounts owed to the Enhancer
pursuant to the Insurance Agreement;
(ix) to the Indenture Trustee, any amounts owing to the Indenture
Trustee pursuant to Section 6.07 to the extent remaining unpaid;
(x) to the Note Payment Account, for payment, pro rata, to the Class
A-1 Noteholders and the Class A-3 Noteholders by the Paying Agent on such
Payment Date, any Interest Carry-Forward Amounts not previously paid,
together with interest thereon at the related Note Rate (as adjusted from
time to time), based on the amount remaining unpaid with respect thereto;
and
(xi) any remaining amount, to the Certificate Distribution Account,
for distribution to the Certificateholders by the Certificate Paying
Agent;
Notwithstanding the foregoing (x) on the Final Insured Payment Date, the
aggregate of amounts to be paid pursuant to clauses (iv), (vi) and (vii) above
shall be equal to the aggregate of the Note Balances immediately prior to such
Payment Date and (y) any payments under the Policy shall be applied only to
the payment of amounts to be paid pursuant to clauses (iii), (iv), (vi) and
(vii) above.
For purposes of the foregoing, payments of principal of the Notes on each
Payment Date will be reduced by the pro rata portion allocable to the related
Notes of all Subordination Deficits for such Payment Date, to the extent such
Subordination Deficits are not otherwise covered by Excess Spread or a draw on
the Policy.
Amounts paid to Noteholders shall be paid in accordance with the
applicable percentage as set forth in paragraph (b) below. Any installment of
interest or principal payable on any Note that is punctually paid or duly
provided for by the Issuer on the applicable Payment Date shall be paid to the
Holder of record thereof on the immediately preceding Record Date by wire
transfer to an account specified in writing by such Holder reasonably
satisfactory to the Indenture Trustee, the amount required to be distributed
to such Holder on such Payment Date pursuant to such Holder's Notes; provided,
that the Indenture Trustee shall not pay to any such Holder any amounts
required to be withheld from a payment to such Holder by the Code.
(b) Principal of each Note shall be due and payable in full on the Final
Insured Payment Date as provided in the applicable form of Note set forth in
Exhibit A. All principal payments on the Notes shall be made pro rata to the
Noteholders entitled thereto in accordance with the related Percentage
Interests represented thereby. Upon written notice to the Indenture Trustee by
the Issuer, the Indenture Trustee shall notify the Person in the name of which
a Note is registered at the close of business on the Record Date preceding the
Final Insured Payment Date or other Final Insured Payment Date, as applicable.
Such notice shall be mailed no later than five Business Days prior to the
Final Insured Payment Date or such other Final Insured Payment Date and shall
specify that payment of the principal amount and any interest due with respect
to such Note at the Final Insured Payment Date or such other Final Insured
Payment Date will be payable only upon presentation and surrender of such
Note, and shall specify the place where such Note may be presented and
surrendered for such final payment.
Section 3.06. Protection of Trust Estate.
(a) The Issuer shall 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 shall 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 Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders therein 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
that 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 shall have yet been
delivered pursuant to Section 3.07(b)), unless the Indenture Trustee shall
have first received an Opinion of Counsel to the effect that the Lien and
security interest created by this Indenture with respect to such property will
continue to be maintained after giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section.
Section 3.07. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee, the Owner Trustee and the Enhancer an Opinion of Counsel, at the
expense of the Issuer, stating that (i) 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 Mortgage Loans and reciting
the details of such action, or (ii) in the opinion of such counsel, no such
action is necessary to make such Lien and security interest effective.
(b) On or before December 31st of each calendar year, commencing in 2000,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer stating that (i) in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
re-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 is necessary to maintain
the Lien and security interest in the Mortgage Loans and reciting the details
of such action or (ii) 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 re-filing 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 Mortgage Loans until
December 31 of the following calendar year.
Section 3.08. Performance of Obligations; Sale and Servicing Agreement.
(a) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and 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 shall not take any action or permit any action to be taken
by others that would release any Person from any of such Person's covenants or
obligations under any document relating to the Mortgage Loans (including the
Mortgage Documents and the Related Documents) or under any instrument included
in the Trust Estate, or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such document or any such instrument, except such
actions as the Master Servicer is expressly permitted to take in the Sale and
Servicing Agreement.
(d) The Issuer 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:
(a) 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;
(b) 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;
(c) permit the validity or effectiveness of this Indenture to be
impaired, or permit the Lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture, except as may be expressly permitted hereby, permit any Lien (other
than the Lien of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Trust Estate, any part thereof, any interest therein
or any proceeds thereof or permit the Lien of this Indenture not to constitute
a valid first priority security interest in the Trust Estate; or
(d) impair or cause to be impaired the Issuer's interest in the Mortgage
Loans, the Mortgage Loan Sale Agreement or in any other 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 shall deliver
to the Indenture Trustee, within 120 days after the end of each fiscal year of
the Issuer (commencing with 2000), an Officer's Certificate stating, as to the
Authorized Officer signing such Officer's Certificate, that:
(a) 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
(b) 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 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.
In the event such firm requires the Indenture Trustee to agree to the
procedures performed by such firm, the Master Servicer shall direct the
Indenture Trustee in writing to so agree; it being understood and agreed that
the Indenture Trustee shall deliver such letter of agreement in conclusive
reliance upon the direction of the Master Servicer, and the Indenture Trustee
need not make any independent inquiry or investigation as to, and shall have
no obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.
Section 3.11. Recordation of Assignments. The Issuer shall enforce the
obligation of the Transferor under Section 3.15 of the Sale and Servicing
Agreement to submit or cause to be submitted for recording Assignments of
Mortgages in accordance with such Section.
Section 3.12. Representations and Warranties Concerning the Mortgage
Loans. The Indenture Trustee, as pledgee of the Mortgage Loans, and the
Enhancer shall have the benefit of the representations, warranties and limited
guaranty of the Transferor in Sections 3.1 and 3.2 of the Purchase Agreement
and as incorporated by reference in Section 2.08 of the Sale and Servicing
Agreement concerning the Mortgage Loans and the right to enforce the remedies
against the Transferor provided in such Sections to the same extent as though
such representations, warranties and guaranty were made directly to the
Indenture Trustee.
Section 3.13. Assignee of Record of the Mortgage Loans. As pledgee of the
Mortgage Loans, the Indenture Trustee shall hold record title to the Mortgage
Loans by being named as payee in the endorsements of the Mortgage Notes and
assignee in the Assignments of Mortgage recorded to the extent required by
Section 3.13 of the Sale and Servicing Agreement. Except as expressly provided
in the Mortgage Loan Sale Agreement, Purchase and Sale Agreement or the Sale
and Servicing Agreement with respect to any Mortgage Loan, the Indenture
Trustee shall not execute any endorsement or assignment or otherwise release
or transfer record title to such Mortgage Loan until such time as the
remaining Trust Estate, or any portion thereof, may be released pursuant to
Section 8.05.
Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee.
Solely for purposes of perfection under Section 9-305 of the UCC or other
similar applicable law, rule or regulation of the State in which such property
is held by the Master Servicer, the Indenture Trustee hereby acknowledges that
the Master Servicer is acting as agent and bailee of the Indenture Trustee in
holding amounts on deposit in the Collection Account pursuant to Section 3.03
of the Sale and Servicing Agreement that are allocable to the Mortgage Loans,
as well as the agent and bailee of the Indenture Trustee in holding any
Related Documents released to the Master Servicer pursuant to Section 3.09(c)
of the Sale and Servicing Agreement, and any other items constituting a part
of the Trust Estate that 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 3.01 of the Sale and Servicing Agreement, the
Indenture Trustee, as pledgee of the Mortgage Loans, will be deemed to have
possession of such Related Documents, such monies and such other items for
purposes of Section 9-305 of the UCC of the State in which such property is
held by the Master Servicer.
Section 3.15. Investment Company Act. The Issuer shall not become an
"investment company" or under the "control" of an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended, 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, that the Issuer shall be in compliance
with this Section 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 Not 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, 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 the Notes, and to the Certificate Paying Agent, on behalf
of the Certificateholders, and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Event
of Default shall have occurred and be continuing;
(iii) no Rating Agency, after prior written notice thereto, shall
have notified the Issuer that such transaction will result in a Rating
Event, determined without regard to the Policy;
(iv) the Issuer and the Enhancer shall have received an Opinion of
Counsel (and shall have delivered a copy thereof to the Indenture
Trustee) to the effect that such transaction will not have any material
adverse tax consequence to the Issuer, the Enhancer, 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 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 the Noteholders and the Enhancer, (D) unless otherwise provided in
such supplemental indenture, expressly agree to indemnify, defend and
hold harmless the Issuer from and against any loss, liability or expense
arising under or relating to this Indenture or 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) no Rating Agency, after prior written notice thereto, shall
have notified the Issuer that such transaction will cause a Rating Event,
determined without regard to the Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect
that such transaction will not have any material adverse tax consequence
to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the Lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article 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
Mortgage Loans, the issuance of the Notes and the Certificates in the manner
contemplated by this Indenture and the other 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. Except as contemplated by this Indenture or the
other 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 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. Indenture Trustee Not Liable for Notes or Related
Documents. The recitals contained herein shall be taken as the statements of
the Depositor, and the Indenture Trustee assumes no responsibility for the
correctness thereof. The Indenture Trustee makes no representations as to the
validity or sufficiency of this Indenture, of any other Basic Document or of
the Notes (other than the signatures of the Indenture Trustee on the
authentication of the Notes) or of any other documents relating thereto. The
Indenture 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 Noteholders under this Indenture, including
the compliance by the Depositor or the Transferor with any representation or
warranty made under any Basic Document or in any related document or the
accuracy of any such representation or warranty, or any action of the Paying
Agent or the Note Registrar or the Indenture Trustee taken in the name of the
Owner Trustee.
Section 3.23. Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Enhancer and each Rating Agency prompt written notice
of each Event of Default hereunder.
Section 3.24. Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer shall 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 3.25. Statements to Noteholders. On each Payment Date, the
Indenture Trustee shall forward by mail to each Noteholder, the Depositor and
the Enhancer the statement delivered to it pursuant to Section 4.01 of the
Sale and Servicing Agreement.
Section 3.26. Payments under the Policy.
(a) On any Payment Date, the Indenture Trustee shall make a draw on the
Policy in an amount, if any, equal to the Policy Draw Amount. The Indenture
Trustee shall deposit or cause to be deposited such Policy Draw Amount into
the Note Payment Account on such Payment Date.
(b) The Indenture Trustee shall submit, if a Policy Draw Amount is
specified in any statement to Securityholders prepared pursuant to Section
4.01 of the Sale and Servicing Agreement, the Notice of Nonpayment and Demand
for Payment of Insured Amounts (in the form attached as Exhibit A to the
Policy) to the Enhancer no later than 3:00 p.m., New York City time, on the
second Business Day prior to the applicable Payment Date (the "Notice and
Demand Date").
Section 3.27. Replacement Enhancement. The Issuer (or the Master Servicer
on its behalf) may, at its expense, in accordance with and upon satisfaction
of the conditions set forth herein, but shall not be required to, obtain a
surety bond, letter of credit, guaranty or reserve account as a Permitted
Investment for amounts on deposit in the Capitalized Interest Account, as the
case may be, or may arrange for any other form of additional credit
enhancement; provided, that after prior notice thereto, no Rating Agency shall
have informed the Issuer that a Rating Event would occur as a result thereof,
and provided that the timing and mechanism for drawing on such additional
enhancement shall be reasonably acceptable to the Indenture Trustee and the
Enhancer. It shall be a condition to procurement of any such additional credit
enhancement that there be delivered to the Indenture Trustee and the Enhancer
(a) an Opinion of Counsel, acceptable in form to the Indenture Trustee and the
Enhancer, from counsel to the provider of such additional credit enhancement
with respect to the enforceability thereof and such other matters as the
Indenture Trustee or the Enhancer may require and (b) an Opinion of Counsel to
the effect that the procurement of such additional enhancement would not (i)
adversely affect in any material respect the tax status of the Notes or the
Certificates or (ii) cause the Issuer to be taxable as an association (or a
publicly traded partnership) for federal income tax purposes or to be
classified as a taxable mortgage pool. within the meaning of Section 7701(i)
of the Code.
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 shall hold interests in the Notes through the
book-entry facilities of the Depository in minimum initial Note Balances of
$1,000 and integral multiples of $1,000 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 Noteholders hereunder. Except as provided
in the next succeeding paragraph, 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, the Depository may not
transfer any Note except to a successor Depository that agrees to hold such
Note for the account of the Beneficial Owners.
In the event that 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 after the effective date of the predecessor 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 Owner Trustee (not in its individual capacity but solely as Owner
Trustee), shall, on original issue, execute the Notes on behalf of the Issuer,
and the Indenture Trustee shall authenticate and deliver the Notes 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 Corporate Trust Office of the Indenture Trustee a Note Register in
which, subject to such reasonable regulations as it may prescribe, the Note
Registrar shall provide for the registration of Notes and of transfers and
exchanges of Notes as herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office of the Indenture Trustee, 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.
At the option of the related Noteholders, Notes may be exchanged for
other Notes of like tenor and Class, 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 Indenture Trustee, as
Note Registrar. Whenever any Notes are so surrendered for exchange, the
Indenture Trustee shall execute, and the Note Registrar shall authenticate and
deliver, the Notes that the Noteholder making such 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
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. Notes delivered upon any such transfer or
exchange shall evidence the same obligations, and shall be entitled to the
same rights and privileges, as the Notes surrendered.
No service charge shall be made for any registration of transfer or
exchange of any Notes, but the Note Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any such registration of transfer or exchange. 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 3.08 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for
the registration of Certificates and of transfers and exchanges thereof
pursuant to Section 3.04 of the Trust Agreement. The Indenture Trustee hereby
accepts such appointment.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
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, that
if any such destroyed, lost or stolen Note, but not a mutilated Note, shall
be, 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 a
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 which it was
delivered or any Person taking such replacement Note from the 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 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, the Issuer
may require the payment by the related Noteholder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith and any other reasonable related expenses (including the fees and
expenses of the Indenture Trustee).
Each replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not such
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone each such replacement Note 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 are exclusive and shall preclude, to the
extent lawful, all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in the
name of which such Note is registered as of the date of determination as the
owner of such Note for the purpose of receiving payments of principal and
interest, if any, on such Note and for all other purposes whatsoever, whether
or not such Note shall be overdue; and neither the Issuer, the Indenture
Trustee nor any agent of the Issuer or the Indenture Trustee shall be affected
by notice to the contrary.
Section 4.05. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture
Trustee, and shall be promptly cancelled by the Indenture Trustee. The Issuer
may at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder that 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,
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 of cancellation thereof,
unless the Issuer directs by Issuer Request that the same be destroyed or
returned to it; provided, that such Issuer Request shall be timely and such
Notes have not been previously disposed of by the Indenture Trustee.
Section 4.06. Book-Entry Notes. The Notes, upon original issuance, will
be issued in the form of typewritten notes representing Book-Entry Notes, to
be delivered to The Depository Trust Company, the initial Depository, by or on
behalf of the Issuer. The Notes shall initially be registered on the Note
Register in the name of Cede & Co., the nominee of the initial Depository, and
no Beneficial Owner shall receive a Definitive Note representing such
Beneficial Owner's interest in the related 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:
(a) the provisions of this Section shall be in full force and effect;
(b) 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 Beneficial Owners;
(c) to the extent that the provisions of this Section conflict with any
other provisions of this Indenture, the provisions of this Section shall
control;
(d) the rights of Beneficial Owners shall be exercised only through the
Depository, and shall be limited to those established by law and agreements
between the related Beneficial Owners and the Depository or the Depository
Participants. Unless and until Definitive Notes are issued pursuant to Section
4.08, the initial Depository shall make book-entry transfers among the
Depository Participants and receive and transmit payments of principal of and
interest on the Notes to such Depository Participants; and
(e) whenever this Indenture requires or permits actions to be taken based
upon instructions or directions of Holders of Notes representing a specified
percentage of the aggregate Note Balance, the Depository shall be deemed to
represent such percentage only to the extent that it has received instructions
to such effect from Beneficial Owners or Depository Participants owning or
representing, respectively, such required percentage, and has delivered such
instructions to the Indenture Trustee.
Section 4.07. Notices to Depositor. Whenever a notice or other
communication to the Noteholders 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 Noteholders to the Depository,
and shall have no obligation to any Beneficial Owner.
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, Beneficial Owners representing at least a
majority of the aggregate Note Balance 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 such
event and of the availability of Definitive Notes to Beneficial Owners
requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Depository,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate 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 such Definitive Notes as Noteholders.
Section 4.09. Tax Treatment. The Issuer has entered into this Indenture,
and the Notes shall 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 a 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 (a)
rights of registration of transfer and exchange, (b) substitution of
mutilated, destroyed, lost or stolen Notes, (c) rights of Noteholders to
receive payments of principal thereof and interest thereon, (d) Sections 3.03,
3.04, 3.06, 3.09, 3.16, 3.18 and 3.19, (e) 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 (f) 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. The Indenture Trustee, upon the demand and at
the expense of the Issuer, shall execute proper instruments acknowledging the
satisfaction and discharge of this Indenture with respect to the Notes, when:
(i) either
(A) all Notes theretofore authenticated and delivered (other
than (1) Notes that have been destroyed, lost or stolen and that
have been replaced or paid as provided in Section 4.03 and (2) Notes
for the payment of which money has theretofore been deposited in
trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided in
Section 3.03) have been delivered to the Indenture Trustee for
cancellation; or
(B) all Notes not theretofore delivered to the Indenture
Trustee for cancellation (I) have become due and payable; (II) will
become due and payable at the Final Insured Payment Date within one
year (III) or have been declared immediately due and payable
pursuant to Section 5.02;
and the Issuer, in the case of (I) or (II) 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 that 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 the Notes then outstanding and
not theretofore delivered to the Indenture Trustee for cancellation when
due on the Final Insured Payment Date;
(ii) the Issuer has paid or caused to be paid all other sums payable
hereunder and under the Insurance Agreement by the Issuer;
(iii) the Policy has been returned to the Enhancer; and
(iv) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel, each meeting the applicable
requirements of Section 10.01 and stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with. If such Opinion of Counsel relates to
a deposit made in connection with clause (i)(A)(2) above, such opinion
shall further be to the effect that such deposit will not have any
material adverse tax consequences to the Issuer, the Noteholders or the
Certificateholders.
Section 4.11. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 shall be held in trust and applied
by the Indenture Trustee in accordance with the provisions of the Notes and
this Indenture to the payment, either directly or through the Paying Agent or
the Certificate Paying Agent, as the Indenture Trustee may determine, to the
Securityholders of all sums due and to become due thereon for principal and
interest; provided, that 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 (a) to the extent the Enhancer makes payments under
the Policy, the rights of the Enhancer will be fully subrogated to the rights
of the Noteholders to receive principal and interest from the Mortgage Loans,
and (b) the Enhancer will be paid only from the sources and in the manner
provided herein and in the Insurance Agreement.
Subject to the provisions of Article VI, the Indenture Trustee shall
cooperate in all respects with any reasonable request by the Enhancer for any
action to preserve or enforce the Enhancer's rights or interests under this
Indenture or the Insurance Agreement, consistent with this Indenture and
without limiting the rights of the Noteholders as otherwise set forth in this
Indenture, including, upon the occurrence and continuance of a default under
the Insurance Agreement, a request to take any one or more of the following
actions:
(a) institute Proceedings for the collection of all amounts then payable
on the Notes or under this Indenture in respect of the Notes, and all amounts
payable under the Insurance Agreement, and to enforce any judgment obtained
and collect from the Issuer monies adjudged due;
(b) 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;
(c) file or record all assignments that have not previously been
recorded;
(d) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture; and
(e) 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
Enhancer hereunder.
Following the payment in full of the Notes, the 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 Enhancer
have been paid in full and the Policy has been returned to the Enhancer.
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 the 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 the Paying Agent shall be released
from all further liability with respect to such monies.
Section 4.14. Temporary Notes. Pending the preparation of 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 shall 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 such temporary Notes at the office or agency of the
Indenture Trustee, without charge to the related Noteholder. 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 Enhancer, within five days after learning of the
occurrence any event that with the giving of notice and the lapse of time
would become an Event of Default under paragraph (c) of the definition of
"Event of Default", written notice in the form of an Officer's Certificate of
the status thereof 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 shall occur and be continuing or if the Transferor shall
purchase all of the Group I Mortgage Loans pursuant to Section 8.08 of the
Sale and Servicing Agreement, then in every such case the Indenture Trustee or
the Holders of Notes representing not less than a majority of the aggregate
Note Balance of the Class A-1 Notes and Class A-2 Notes (in each case with the
consent of the Enhancer), may declare such Notes to be immediately due and
payable, by a notice in writing to the Issuer (and to the Indenture Trustee if
given by the Noteholders); and upon any such declaration, the unpaid Note
Balance of such Notes, together with accrued and unpaid interest thereon
through the date of acceleration, shall become immediately due and payable.
If an Event of Default shall occur and be continuing or if the Transferor
shall purchase all of the Group II Mortgage Loans pursuant to Section 8.08 of
the Sale and Servicing Agreement, then in every such case the Indenture
Trustee or the Holders of Notes representing not less than a majority of the
aggregate Note Balance of the Class A-3 Notes and Class A-4 Notes (in each
case with the consent of the Enhancer), may declare such Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by the Noteholders); and upon any such declaration,
the unpaid Note Balance 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 a 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 provided in this Article, the Holders of Notes representing not
less than a majority of the aggregate Note Balance of the related Classes, by
written notice to the Issuer and the Indenture Trustee, may with the consent
of the Enhancer, in writing waive such Event of Default and rescind and annul
such declaration and its consequences if the Issuer has paid or deposited with
the Indenture Trustee a sum sufficient to pay:
(a) all payments of principal of and interest on such Notes and all other
amounts that would then be due hereunder or upon such Notes if the Event of
Default giving rise to such acceleration had not occurred;
(b) all sums paid or advanced by the Indenture Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel; and
(c) all Events of Default, other than the nonpayment of principal of such
Notes that has become due solely by such acceleration, have been cured or
waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if a default occurs in the payment of (i)
interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) principal of any Note when the
same becomes due and payable; then, in each case the Issuer shall, upon demand
of the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Noteholders, the entire amount then due and payable on the Notes for principal
and interest, with interest on the overdue principal at the applicable Note
Rate. In addition thereto, the foregoing shall include 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 10.16, may, and at the direction
of the Enhancer, shall, institute Proceedings for the collection of the sums
so due and unpaid, and may prosecute such Proceedings to judgment or final
decree, and may enforce the same against the Issuer or other obligor on the
Notes and collect in the manner provided by law out of the property of the
Issuer or such other obligor on the Notes, wherever situated, the monies
adjudged or decreed to be payable.
(c) If an Event of Default shall occur and be continuing, the Indenture
Trustee, subject to the provisions of Section 10.16, may, as more particularly
provided in Section 5.04, in its discretion proceed to protect and enforce its
rights and the rights of the Noteholders by such appropriate Proceedings as
the Indenture Trustee shall deem most effective to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relating to the Issuer, any other
obligor on 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 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 Proceedings relating to the Issuer
or such other obligor, 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 expressed in such Notes or by
declaration or otherwise, and irrespective of whether the Indenture Trustee
shall have made any demand pursuant to this Section, shall be entitled and
empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim for the entire 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, 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 such predecessor Indenture Trustee, except as
a result of negligence, willful misconduct or bad faith) and the
Noteholders allowed in the related Proceeding;
(ii) unless prohibited by applicable law or regulation, to vote on
behalf of the Noteholders in any election of a trustee, standby trustee
or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable or
deliverable in respect of the claims of the Noteholders and the Indenture
Trustee and to distribute all amounts received with respect to any such
claims 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 Noteholders allowed in any judicial Proceeding
relating to the Issuer, its creditors or its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by the Noteholders to make payments
to the Indenture Trustee and, in the event the Indenture Trustee shall consent
to the making of payments directly to the Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation
of 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
such predecessor Indenture Trustee, except as a result of negligence, willful
misconduct or bad faith.
(e) Nothing contained herein shall be deemed to permit 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 Noteholder, or to
authorize the Indenture Trustee to vote in respect of any claim of a
Noteholder in any such Proceeding, except to vote for the election of a
trustee in bankruptcy or similar Person as provided above.
(f) All rights of action and of asserting claims under this Indenture or
in respect of the Notes may be enforced by the Indenture Trustee without the
possession of any Notes or the production thereof in any Proceeding relating
thereto. Any such Proceeding 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
Noteholders.
(g) In any Proceeding brought by the Indenture Trustee (including any
Proceeding 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 Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceeding.
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 10.16 and Section
5.05, may do one or more of the following:
(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 thereby obtained and collect from the Issuer or any other
obligor on the Notes any monies thereby 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 Noteholders; and
(iv) sell the Trust Estate or any portion thereof or any right or
interest therein at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Holders of Notes representing
100% of the aggregate Note Balance, (B) the proceeds of such sale or
liquidation distributable to the Noteholders are sufficient to discharge in
full all amounts then due and unpaid on the Notes for principal and interest
and to pay any amounts due the Enhancer under the Insurance Agreement, without
a draw on the Policy, or (C) the Indenture Trustee determines that the
Mortgage Loans will not continue to provide sufficient funds for the payment
of principal of and interest on the Notes as the same would have become due if
the Notes had not been declared due and payable, and the Indenture Trustee
obtains the consent of the Holders of Notes representing not less than 66 2/3%
of the aggregate Note Balance. In determining such sufficiency or
insufficiency with respect to clauses (B) and (C) above, 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, for so long as a
Servicing Default shall not have occurred, any Sale of the Trust Estate shall
be made subject to the continued servicing of the Mortgage Loans by the Master
Servicer as provided in the Sale and Servicing Agreement.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article, it shall pay out such money or property in the following order:
(i) to the Indenture Trustee, for amounts due under Section 6.07;
(ii) to the Noteholders, for amounts due and unpaid on the related
Notes in respect of interest, ratably, without preference or priority of
any kind, according to the amounts then due and payable;
(iii) to the Noteholders, for amounts due and unpaid on the related
Notes in respect of principal, ratably, without preference or priority of
any kind, according to the amounts then due and payable, until the
respective Note Balances of the Notes have been reduced to zero;
(iv) to the payment of all amounts then due and owing to the
Enhancer under the Insurance Agreement;
(v) to the Certificate Paying Agent for amounts then due under
Article VII of the Trust Agreement; and
(vi) to the Issuer or any other Person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any payment
to Noteholders pursuant to this Section. At least 15 days before such record
date, the Indenture Trustee shall mail to each Noteholder a notice that states
such record date, and payment date and the amount to be paid.
Section 5.05. Optional Preservation of the Trust Estate. If the Notes
have been declared due and payable under Section 5.02 following an Event of
Default, and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to take and maintain
possession of the Trust Estate. In determining whether to take and maintain
possession of the Trust Estate, the Indenture Trustee may, but need not,
obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.
Section 5.06. Limitation of Suits. No Noteholder shall have any right to
institute any Proceeding with respect to this Indenture, for the appointment
of a receiver or trustee or for any other remedy hereunder, unless (subject to
the provisions of Section 10.16):
(a) such Noteholder shall have previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(b) the Holders of Notes representing not less than 25% of the aggregate
Note Balance shall 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;
(c) such Noteholders shall have offered the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities that may be incurred by
it in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute such
Proceedings; and
(e) no direction inconsistent with such written request shall have been
given to the Indenture Trustee during such 60-day period by the Enhancer or
the Holders of Notes representing not less than a majority of the aggregate
Note Balance.
No Noteholder shall have any right in any manner whatsoever by virtue of
or by availing itself of any provision of this Indenture to affect, disturb or
prejudice the rights of any other Noteholder, to obtain or to seek to obtain
priority or preference over any other Noteholder or to enforce any right under
this Indenture, in each case except in the manner herein provided.
In the event that the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders,
each representing less than a majority of the aggregate Note Balance, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provision of this Indenture.
Section 5.07. Unconditional Right of Noteholders To Receive Principal and
Interest. Notwithstanding any other provision of this Indenture, each
Noteholder shall have the right, which is absolute and unconditional, to
receive payment of the interest and principal, if any, due on such
Noteholder's Notes on or after the due date expressed in such Notes or in this
Indenture and to institute suit for the enforcement of any such payment. Such
right shall not be impaired without the consent of the related Noteholder.
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 in every such case the Issuer, the
Indenture Trustee, the Noteholders and the Enhancer shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of
the Indenture Trustee, the Noteholders and the Enhancer 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 Enhancer or 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 Enhancer or any Noteholder to exercise any right or
remedy accruing upon an 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 or by law to the
Indenture Trustee, the Enhancer or the Noteholders may be exercised from time
to time, and as often as may be deemed expedient, by the Indenture Trustee,
the Enhancer or the Noteholders, as the case may be.
Section 5.11. Control by Noteholders. The Holders of Notes representing
not less than a majority of the aggregate Note Balance 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:
(a) such direction shall not conflict with any rule of law or with this
Indenture;
(b) subject to Section 5.04, any direction to the Indenture Trustee to
sell or liquidate the Trust Estate shall be given by Holders of Notes
representing 100% of the aggregate Note Balance;
(c) 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 to sell or liquidate
the Trust Estate shall be of no force or effect; and
(d) 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 the Noteholders as set forth in this Section,
and subject to Section 6.01, the Indenture Trustee need not take any action
that it determines might subject it to liability or might materially and
adversely affect the rights of any Noteholders not consenting thereto.
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
Enhancer or the Holders of Notes representing not less than a majority of the
aggregate Note Balance with the consent of the Enhancer 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 the Notes or (b) in respect
of a covenant or provision hereof that cannot be modified or amended without
the consent of all Noteholders or each Noteholder affected thereby. In the
case of any such waiver, the Issuer, the Indenture Trustee, the Enhancer and
the Noteholders shall be restored to their respective former positions and
rights hereunder; provided, that 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; provided, that 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. The parties hereto agree, and each
Noteholder, by such Noteholder's acceptance of a Note, shall be deemed to have
agreed, that any court may in its discretion require, in any Proceeding for
the enforcement of any right or remedy under this Indenture, or in any
Proceeding against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
Proceeding of an undertaking to pay the costs of such Proceeding, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such Proceeding, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; provided, that the provisions of this Section shall not apply
to any Proceeding instituted by (i) the Indenture Trustee, (ii) any Noteholder
or group of Noteholders, in each case holding Notes representing in the
aggregate more than 10% of the aggregate Note Balance or (iii) any Noteholder
for the enforcement of the payment of principal of or interest on any Note on
or after the due date 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, 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 will not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of each such power
as though no such law had been enacted.
Section 5.15. Sale of Trust Estate.
(a) The power to effect any sale or other disposition (each, 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. 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. The power to effect any such Sale shall
continue unimpaired until the entire Trust Estate has been sold or all amounts
payable on the Notes, under this Indenture and under the Insurance Agreement
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:
(i) all Noteholders and the Enhancer consent to or direct the
Indenture Trustee to make such Sale;
(ii) the proceeds of such Sale would be not less than the entire
amount that would be payable to the Securityholders and the Enhancer in
respect of amounts drawn under the Policy and any other amounts due the
Enhancer under the Insurance Agreement, in full payment thereof in
accordance with Section 5.02, on the Payment Date next succeeding the
date of such Sale; or
(iii) the Indenture Trustee determines, in its sole discretion, that
the conditions for retention of the Trust Estate set forth in Section
5.05 cannot be satisfied (and 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
Holders of Notes representing not less than 66 2/3% of the aggregate Note
Balance consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust
Estate at a private Sale shall not be deemed a Sale or other disposition
thereof for purposes of this paragraph.
(c) Unless the Noteholders and the Enhancer have otherwise consented or
directed the Indenture Trustee, at any public Sale of all or any portion of
the Trust Estate at which a minimum bid equal to or greater than the amount
described in clause (ii) of paragraph (b) of this Section 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 greater than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(i) any Noteholder may bid for and purchase the property offered for
sale and, upon compliance with the terms of sale, may hold, retain,
possess and dispose of such property without further accountability; and
may, in paying the purchase price therefor, deliver any Notes or claims
for interest thereon in lieu of cash up to the amount, upon distribution
of the net proceeds of such Sale, payable thereon. Such Notes, in case
the amounts so payable thereon shall be less than the amount due thereon,
shall be returned to the Holders thereof after being appropriately
stamped to show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the property
offered for Sale, may, subject to any requirements of and to the extent
permitted by applicable law in connection therewith, purchase all or any
portion of the Trust Estate in a private Sale, and may, in lieu of paying
cash therefor, make settlement for the purchase price by crediting the
gross sale price against the sum of (A) the amount that would be
distributable to the Securityholders and amounts owing to the 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 such
Sale and of any Proceeding in connection therewith that 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;
(iii) the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the
Trust Estate in connection with a Sale thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the agent
and attorney in-fact of the 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
(v) no purchaser or transferee at any such 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, the Enhancer 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 any other assets of the Issuer. Any money or property
collected by the Indenture Trustee shall be applied in accordance with Section
5.04(b).
Section 5.17. Performance and Enforcement of Certain Obligations.
(a) Promptly following a written request from the Indenture Trustee to do
so, the Issuer, in its capacity as owner of the Mortgage Loans, shall take all
such lawful action as the Indenture Trustee may request to cause the Issuer to
compel or secure the performance and observance by the Transferor and the
Master Servicer, as applicable, of each of their obligations to the Issuer
under or in connection with the Mortgage Loan Sale Agreement and the Sale and
Servicing Agreement, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the
Mortgage Loan Sale Agreement and the Sale and Servicing Agreement, to the
extent and in the manner directed by the Indenture Trustee, as pledgee of the
Mortgage Loans, including the transmission of notices of default on the part
of the Transferor or the Master Servicer thereunder and the institution of
Proceedings to compel or secure performance by the Transferor or the Master
Servicer of each of their obligations under the Mortgage Loan Sale Agreement
and the Sale and Servicing Agreement.
(b) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee, as pledgee of the Mortgage Loans, may, and at the direction
(which direction shall be in writing or by telephone confirmed in writing
promptly thereafter) of the Holders of Notes representing not less than 66
2/3% of the aggregate Note Balance, shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Transferor or the
Master Servicer under or in connection with the Mortgage Loan Sale Agreement
or the Sale and Servicing Agreement, including the right or power to take any
action to compel or secure performance or observance by the Transferor the
Master Servicer, as the case may be, of each of their respective obligations
to the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Mortgage Loan Sale Agreement or the
Sale and 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 execute all documents
provided to it by the Indenture Trustee necessary to effect the transfer of
the Mortgage Loans to the Indenture Trustee.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee.
(a) If an Event of Default shall have occurred and be 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 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 that conform to the
requirements of this Indenture; provided, that the Indenture Trustee
shall examine such 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;
(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
Enhancer, pursuant to any of the Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
Section 6.02. Rights of Indenture Trustee.
(a) The Indenture Trustee may rely upon 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 such
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 any such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers or
perform any duties hereunder either directly or by or through agents,
attorneys, a custodian or a 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 that it believes to be authorized or within its
rights or powers, provided 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 Securities and may otherwise deal with the Issuer and its
Affiliates with the same rights that 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. Notwithstanding the foregoing, 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 (a) responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, (b) accountable for the Issuer's use
of the proceeds from the sale of the Notes or (c) responsible for any
statement of the Issuer in the Indenture, in any document issued in connection
with the sale of the Notes or in the Notes, other than the Indenture Trustee's
certificate of authentication.
Section 6.05. Notice of Event of Default. The Indenture Trustee shall
mail to each Noteholder notice of any Event of Default within 90 days and to
the Enhancer immediately after such Event of Default occurs. Except in the
case of an Event of Default relating to the payment of principal of or
interest on any Note, the Indenture Trustee may withhold such notice to the
Noteholders only if and for so long as a committee of its Responsible Officers
in good faith determines that withholding such notice is in the interests of
the Noteholders.
Section 6.06. Reports by Indenture Trustee to Noteholders. The Indenture
Trustee shall deliver to each Noteholder such information in the possession of
the Indenture Trustee as may be required to enable such Noteholder to prepare
its federal and state income tax returns. In addition, upon Issuer Request,
the Indenture Trustee shall promptly furnish information in the possession of
the Indenture Trustee 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. The Issuer shall pay to the Indenture Trustee
on each Payment Date reasonable compensation for its services. The Indenture
Trustee shall be compensated and indemnified by the Master Servicer in
accordance with Section 6.06 of the Sale and Servicing Agreement, and all
amounts owing to the Indenture Trustee hereunder and not paid pursuant to
Section 6.06 of the Sale and Servicing Agreement shall be paid solely as
provided in Section 3.05 (subject to the priorities set forth therein). The
Indenture Trustee's compensation shall not be limited by any law relating to
compensation of a trustee of an express trust. The Issuer shall reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made
by the Indenture Trustee in addition to the compensation for its services.
Such expenses shall include costs of collection and reasonable compensation
and expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of an Event of Default specified
in paragraph (d) or (e) of the definition thereof with respect to the Issuer,
such expenses are intended to constitute expenses of administration under
Title 11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section. The Indenture Trustee may resign
at any time by so notifying the Issuer. The Holders of Notes representing not
less than a majority of the aggregate Note Balance may remove the Indenture
Trustee by so notifying the Indenture Trustee, and may appoint a successor
Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(d) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee. In addition, the
Indenture Trustee shall 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 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 the Noteholders.
The retiring Indenture Trustee shall promptly transfer all property held by it
as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of Notes representing not less
than a majority of the aggregate Note Balance 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 a court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Section 6.09. Successor Indenture Trustee by Merger. 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
without any further act shall be the successor Indenture Trustee hereunder;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
each Rating Agency and the Enhancer with written notice of any such
transaction after the Closing Date.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture, any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor Indenture Trustee, and
deliver such Notes so authenticated. In case at such time any of the Notes
shall not have been authenticated, any successor Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor Indenture Trustee; and in all such cases, such
certificates shall have the full force that 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 provision 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 such 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, 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.
(b) Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then-separate trustees and
co-trustees, as effectively as if given to each of them. Each instrument
appointing a separate trustee or co-trustee shall refer to this Indenture and
to the conditions of this Article. 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
provisions of this Indenture, including each provision relating to the conduct
of, affecting the liability of or affording protection to the Indenture
Trustee. Each 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 Indenture 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, that there
shall be excluded from the operation of TIA ss.310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA ss.310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss.311 (a), excluding any creditor
relationship listed in TIA ss.311 (b). Any Indenture Trustee that has resigned
or been removed shall be subject to TIA ss.311 (a) to the extent indicated
therein.
Section 6.13. Representations and Warranties. The Indenture Trustee
hereby represents and warrants that:
(a) the Indenture Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States, with full power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is presently
conducted;
(b) 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 action;
(c) the consummation of the transactions contemplated by this Indenture
and the fulfillment of the terms hereof do not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the charter or bylaws of the
Indenture Trustee or any agreement or other instrument to which the Indenture
Trustee is a party or by which it may be bound;
(d) to the Indenture Trustee's 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 any of its properties: (i)
asserting the invalidity of this Indenture, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Indenture or
(iii) 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; and
(e) the Indenture Trustee does not have notice of any adverse claim (as
such terms are used in UCC Section 8-302) with respect to the Mortgage Loans.
Section 6.14. Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the Trust Estate
in trust for the benefit of the Noteholders;
(b) to authenticate and deliver the Notes substantially in the form of
Exhibit A hereto in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer shall furnish or cause to be furnished to the
Indenture Trustee (i) 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 Noteholders as of such Record Date, and (ii) at such other
times as the Indenture Trustee may request in writing, within 30 days after
receipt by the Issuer of any such request, a list in similar form and of
similar content as of a date not more than 10 days prior to the time such list
is furnished; provided, that for so long as the Indenture Trustee is the Note
Registrar, no such list need be furnished.
Section 7.02. Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained
in the most recent list furnished to the Indenture Trustee as provided in
Section 7.01, and the names and addresses of the Noteholders 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 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 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 the 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 paragraph
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, commencing with January 1, 2000, the
Indenture Trustee shall mail to each Noteholder as required by TIA ss.313(c) a
brief report dated as of such date that complies with TIA ss.313(a). The
Indenture Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to the 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.
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, the Note Payment Account as provided in
Section 3.01.
(b) All monies deposited from time to time into the Note Payment Account
are for the benefit of the Noteholders, and all investments made with such
monies, including all net income or other gain from such investments, shall be
deposited therein or credited thereto.
(c) On each Payment Date, the Paying Agent shall distribute all amounts
on deposit in the Note Payment Account to the Noteholders in the order of
priority set forth in Section 3.05 (except as otherwise provided in Section
5.04(b)).
Section 8.03. Officer's Certificate. The Indenture Trustee and the
Enhancer shall receive at least seven days prior written 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
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 satisfied.
Section 8.04. Termination Upon Distribution to Noteholders. This
Indenture and the respective obligations and responsibilities of the Issuer
and the Indenture Trustee created hereby shall terminate upon the distribution
to Noteholders, the Enhancer and the Indenture Trustee of all amounts required
to be distributed pursuant to Article III or Article V.
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 shall be bound to ascertain the Indenture Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding, (ii) all sums due the Indenture Trustee pursuant to this
Indenture have been paid and (iii) all sums due the 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 only upon receipt of an Issuer Request.
(d) The Indenture Trustee shall surrender the Policy to the Enhancer for
cancellation upon final payment of principal of and interest on the Notes.
Section 8.06. Surrender of Notes Upon Final Payment. By acceptance of any
Note, the Holder thereof agrees to surrender such Note to the Indenture
Trustee promptly, prior to such Noteholder's receipt of the final payment
thereon.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
Without the consent of the Holders of any Notes, but with prior written notice
to each Rating Agency and the Enhancer, the Issuer and the Indenture Trustee,
when authorized by an Issuer Request, at any time and from time to time, may
enter into one or more indentures supplemental hereto (which shall conform to
the provisions of the Trust Indenture Act as in force at the date of the
execution thereof), in form satisfactory to the Indenture Trustee, for any of
the following purposes:
(a) 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;
(b) 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;
(c) to add to the covenants of the Issuer for the benefit of the
Noteholders, or to surrender any right or power herein conferred upon the
Issuer;
(d) to convey, transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee;
(e) to cure any ambiguity, to correct or supplement any provision herein
or in any supplemental indenture that may be inconsistent with any other
provision herein or in any supplemental indenture;
(f) 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
Noteholders and the Enhancer;
(g) 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
(h) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter enacted
and to add to this Indenture such other provisions as may be expressly
required by the TIA;
provided, however, that no such supplemental indentures shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel to the
effect that entering into such supplemental indenture will not have any
material adverse tax consequence 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.
Section 9.02. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, may,
with prior written notice to each Rating Agency and with the consent of the
Enhancer and the Holders of Notes representing not less than a majority of the
aggregate Note Balance, by Act of such Noteholders delivered to the Issuer and
the Indenture Trustee, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provision 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 Noteholders under this Indenture; provided, that no
such supplemental indenture may, without the consent of the Holder of each
Note affected thereby:
(a) change the date of payment of any installment of principal of or
interest on any Note, 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, 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;
(b) reduce the percentage of the Note Balances of the Notes, the consent
of the Holders of which is required for any such supplemental indenture or for
any waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(c) 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";
(d) reduce the percentage of the aggregate Note Balance with respect to
which the consent of the Holders of Notes representing such Note Balance is
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
(e) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional provisions
of this Indenture or the other Basic Documents cannot be modified or waived
without the consent of the Holder of each Note affected thereby;
(f) modify any provision of this Indenture in such a 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
(g) permit the creation of any Lien ranking prior to or on a parity with
the Lien of this Indenture with respect to any part of the Trust Estate or,
except as otherwise permitted or contemplated herein, terminate the Lien of
this Indenture on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the Lien of this Indenture; and
provided further, that such action shall not, as evidenced by an Opinion of
Counsel, cause the Issuer to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture, and any such
determination shall be conclusive upon the all Noteholders, 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
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, the Indenture Trustee
shall mail to the Noteholders to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of
such supplemental indenture. Notwithstanding the foregoing, any failure of the
Indenture Trustee to mail such notice or any defect therein shall not in any
way impair or affect the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing or
permitting the additional trusts created by any supplemental indenture
permitted by this Article or the modification thereby of the trusts created by
this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Indenture Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Indenture Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby; and the respective rights, limitations
of rights, obligations, duties, liabilities and immunities under this
Indenture of the Indenture Trustee, the Issuer and the Noteholders shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all 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. Each amendment of this
Indenture and every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect
for 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 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 (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:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with;
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with; and
(v) if the signer of such certificate or opinion is required to be
Independent, the statement required by the definition of the term
"Independent".
(b) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the Lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 10.01(a) or
elsewhere in this Indenture, famish 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.
(c) 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 paragraph (b) 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
paragraph (b) above and this paragraph, is 10% or more of the aggregate Note
Balance, 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.
(d) 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.
(e) 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 paragraph (d) 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 paragraph (f) 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
paragraph (d) above and this paragraph equals 10% or more of the aggregate
Note Balance, 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 aggregate Note Balance.
(f) Notwithstanding any provision of this Indenture, the Issuer may,
without compliance with the requirements of the other provisions of this
Section, (i) collect, sell or otherwise dispose of the Mortgage Loans as and
to the extent permitted or required by the Basic Documents or (ii) make cash
payments out of the Note 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 December 31, 1999, an Officer's
Certificate of the Issuer stating that all the dispositions of Collateral
described in clauses (i) or (ii) above that occurred during the preceding six
calendar months were in the ordinary course of the Issuer's business and that
the proceeds thereof were applied in accordance with the Basic Documents.
Section 10.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Transferor, the Depositor or the Issuer, stating that the
information with respect to such factual matters is in the possession of the
Transferor, the Depositor 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 the
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 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,
shall be conclusive in favor of the Indenture Trustee and the Issuer, if made
in the manner provided in this Section.
(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 any Noteholder 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. Notices required to be given hereunder shall be
given in the manner set forth in Section 8.03 of the Sale and Servicing
Agreement.
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'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 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 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 each Rating Agency, 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. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with any other 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 ss.ss.310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded hereby) are a part of and govern this Indenture, whether or
not physically contained herein.
Section 10.07. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 10.08. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes of the Issuer shall bind its successors and
assigns, whether or not so expressed. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
Section 10.09. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Indenture shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Indenture, and shall in no way affect the validity
or enforceability of the other provisions of this Indenture or of the Notes or
the rights of the Noteholders.
Section 10.10. 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 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.
Section 10.11. 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 10.12. Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 10.13. 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 10.14. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders, the Enhancer or any
other Person secured hereunder or for the enforcement of any right or remedy
granted to the Indenture Trustee under this Indenture.
Section 10.15. 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, 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 V, VI and VII of the Trust Agreement.
Section 10.16. 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 federal or state bankruptcy or
similar law in connection with any obligation relating to the Notes, this
Indenture or any of the other Basic Documents.
Section 10.17. Inspection. The Issuer agrees that, on reasonable prior
written notice, it will 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 applicable law (and all reasonable applications for
confidential treatment are unavailing), and except to the extent the Indenture
Trustee may reasonably determine that such disclosure is consistent with its
obligations hereunder.
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.
XXXXX HOME EQUITY LOAN TRUST 1999-2,
as Issuer
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ Xxx Xxxx
----------------------------------------
Name: Xxx Xxxx
Title: Assistant Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION hereby
accepts the appointment as Paying Agent
pursuant to Section 3.03 hereof and as Note
Registrar pursuant to Section 4.02 hereof.
By: /s/ Xxx Xxxx
----------------------------------------
Name: Xxx Xxxx
Title: Assistant Vice President
STATE OF )
) SS.:
COUNTY OF )
On this day of May, 1999, before me personally appeared Xxx Xxxx, to
me known, who being by me duly sworn, did depose and say, that she resides at
Pasadena, Maryland, that she is the A.V.P. of Norwest Bank Minnesota,
National Association, as Indenture Trustee, one of the parties described in and
that executed the above instrument; that she knows the seal of said party; that
the seal affixed to said instrument is the seal of such party; that it was so
affixed by order of said party; and that she signed his name thereto by like
order.
Sworn to and subscribed before me this 27th day of May, 1999, by
_________________.
/s/ Xxxxxx X. Xxxxx
--------------------------------------
Notary Public
Name: Xxxxxx X. Xxxxx
---------------------------------
[Notarial Seal] My Commission Expires: 10/19/2000
----------------
EXHIBIT A-1
FORM OF CLASS A-[_] NOTE
UNLESS THIS CLASS A-[_] 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 CLASS
A-[_] 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 CLASS A-[_] NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-[_] NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CLASS A-[_] NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE TRANSFEROR, 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 OTHER BASIC DOCUMENTS.
XXXXX HOME EQUITY LOAN TRUST 1999-2
HOME EQUITY LOAN-BACKED NOTE, SERIES 1999-2
Registered
No. A-[_]-1
Percentage Interest: 100%
Note Balance: $[____________]
Note Rate: As set forth herein. CUSIP NO. _________
First Payment Date: June 15, 1999
Final Insured Payment Date: August 15, 2030
Xxxxx Home Equity Loan Trust 1999-2, a business trust duly organized and
existing under the laws of the State of Delaware (the "Issuer"), for value
received, hereby promises to pay to Cede & Co. or its registered assigns, the
principal sum of [__________________________ ($__________)], payable on each
Payment Date in an amount equal to the Percentage Interest specified above of
the aggregate amount, if any, payable from the Note Payment Account in respect
of principal of the Class A-[_] Notes pursuant to Section 3.05 of the
Indenture dated as of April 30, 1999 (the "Indenture"), between the Issuer and
Norwest Bank Minnesota, National Association, as indenture trustee (the
"Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Class A-[_] Note shall be due and payable on the August 15,
2030 Payment Date to the extent not previously paid on a prior Payment Date.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in Appendix A to the Indenture.
Interest on the Class A-[_] Notes will be paid monthly on each Payment
Date at the Note Rate for the related Interest Period, subject to limitations
that may result in Interest Carry-Forward Amounts (as further described in the
Indenture). Interest on this Class A-[_] Note will accrue at the Note Rate 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. The "Note Rate" for each Interest Period will be
[a floating rate equal to the least of (i) LIBOR plus 0.10% per annum, (ii)
the weighted average net Mortgage Interest Rate of the Mortgage Loans in Group
[_] and (iii) 14.50% per annum.] [[_____% per annum] (or, on any Payment Date
on which the aggregate Note Balance is less than 10% of the Initial Note
Balance, [_____%]per annum).] Interest will be computed on the basis of the
actual number of days in each Interest Period and a 360-day year. Principal of
and interest on this Class A-[_] Note shall be paid in the manner specified on
the reverse hereof. "Payment Date" means the 15th day of each month or, if any
such day is not a Business Day, the immediately succeeding Business Day.
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 may declare the Notes to be immediately
due and payable in the manner provided in Section 5.02 of the Indenture.
Principal of and interest on this Class A-[_] Note will be 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 Class A-[_] Note will generally be
applied first to interest due and payable on this Class A-[_] Note as provided
above and then to the unpaid principal of this Class A-[_] Note.
Reference is made to the further provisions of this Class A-[_] Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Class A-[_] Note.
Unless the Indenture Trustee has executed the certificate of
authentication hereon by manual signature, this Class A-[_] Note shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.
[REVERSE OF CLASS A-[_] NOTE]
This Class A-[_] Note is one of a duly authorized issue of Class A-[_]
Notes of the Issuer, designated as its Home Equity Loan-Backed Notes, Series
1999-2 (the "Class A-[_] 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 Noteholders. The Class A-[_] Notes are subject
to all of the terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes (collectively, the "Notes") are and will be equally and
ratably secured by the collateral pledged as security therefor as provided in
the Indenture.
This Class A-[_] Note is entitled to the benefits of an irrevocable and
unconditional financial guaranty insurance policy issued by Ambac Assurance
Corporation.
This Class A-[_] Note may be transferred by a written instrument of transfer
in form satisfactory to the Indenture Trustee duly executed by the Holder
hereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended, and thereupon one or
more new Class A-[_] 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 Class A-[_] Note, but the Note Registrar may
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 Class A-[_] Note.
Each Holder or Beneficial Owner of a Class A-[_] Note, by its acceptance of a
Class A-[_] Note (or, in the case of a Beneficial Owner of a Class A-[_] Note,
a beneficial interest in such Class 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 Transferor, the Master Servicer, the
Depositor or the Indenture Trustee on the Class A-[_] 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 their
respective individual capacities, (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 any successor or assign of the Indenture Trustee
or the Owner Trustee in their respective individual capacities, except as any
such Person may have expressly agreed, and provided 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 Beneficial Owner or Class A-[_] Noteholder, by its acceptance of a Class
A-[_] Note (or, in the case of a Beneficial Owner of a Class A-[_] Note, a
beneficial interest in such Class A-[_] Note) covenants and agrees by
accepting the benefits of the Indenture that such Class A-[_] Noteholder or
Beneficial Owner will not at any time institute against the Depositor, the
Transferor, the Master Servicer or the Issuer, or join in any institution
against the Depositor, the Transferor, the Master Servicer or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any federal or state bankruptcy or similar law in connection
with any obligation relating to the Class A-[_] Notes, the Indenture or the
other Basic Documents.
The Issuer has entered into the Indenture, and this Class A-[_] Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Class A-[_] Notes will qualify as indebtedness
of the Issuer. Each Class A-[_] Noteholder, by its acceptance of a Class A-[_]
Note (and each Beneficial Owner of a Class A-[_] Note by its acceptance of a
beneficial interest in such Class A-[_] Note), agrees to treat the Class A-[_]
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 Class A-[_]
Note, the Issuer, the Indenture Trustee and any agent thereof may treat the
Person in the name of which this Class A-[_] Note is registered (as of the
date 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 Class
A-[_] Note shall 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 Class A-[_] Noteholders
under the Indenture at any time by the Issuer and the Indenture Trustee with
prior written notice to each Rating Agency and with the consent of the
Enhancer and the Holders of Notes representing not less than a majority of the
aggregate Note Balance. The Indenture also contains provisions permitting the
Holders of Notes representing a specified percentage of the aggregate Note
Balance, on behalf of all Noteholders, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Class A-[_] Note (or any one or more Predecessor Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class A-[_] Note and of any Class A-[_] 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 hereon. 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 the Noteholders,
but with prior written notice to each Rating Agency and the Enhancer.
The term "Issuer" as used in this Class A-[_] Note includes any successor
to 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
Noteholders 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 Class A-[_] Note and the Indenture shall be construed in accordance
with the laws of the State of New York, 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 Class A-[_]
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 Class A-[_] Note at the times, place and rate and in the coin or currency
herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company or Norwest
Bank Minnesota, National Association in their respective individual
capacities, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on this Class
A-[_] Note or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Holder of this
Class A-[_] 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, such 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 Class A-[_] Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not in its
individual capacity, has caused this Class A-[_] Note to be duly executed.
XXXXX HOME EQUITY LOAN TRUST 1999-2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Owner Trustee
By:__________________________________________
Authorized Signatory
Dated: May 27, 1999
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-[_] Notes referred to in the within-mentioned
Indenture.
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Indenture Trustee
By:__________________________________________
Authorized Signatory
Dated: May 27, 1999
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:_______________________ ______________________*/
______________________*/
________________________
* 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.
APPENDIX A
DEFINITIONS
"Additional Principal Distribution Amount" means for any Payment Date and
(i) Group I, the lesser of (a) the Group II Excess Spread remaining after
payment of amounts referenced in clause (vi) of Section 3.05 and (b) any
Overcollateralization Deficiency Amount for such Group remaining after payment
of amounts referenced in clauses (v) and (vi) of Section 3.05 for such Payment
Date and (ii) Group II, the lesser of (a) the Group I Excess Spread remaining
after payment of amounts referenced in clauses (vi) of Section 3.05 and (b)
any Overcollateralization Deficiency Amount for such Group remaining after
payment of amounts referenced in clauses (v) and (vi) of Section 3.05 for such
Payment Date.
"Administration Agreement" means the administration agreement dated as of
April 30, 1999, by and among the Issuer, the Indenture Trustee and the Master
Servicer.
"Affiliate" means, 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" means, with respect to any Mortgaged Property, the
value thereof as generally set forth in an appraisal or other property
valuation method of such Mortgaged Property used to establish compliance with
the underwriting criteria applicable to the origination of the related
Mortgage Loan.
"Assignment of Mortgage" means, with respect to any Mortgage Loan, an
assignment, notice of transfer or equivalent instrument, in recordable form,
sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to reflect the conveyance of the Mortgage Loan, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering the Mortgage Loans secured by
Mortgaged Properties located in the same jurisdiction.
"Authorized Newspaper" means 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" means, 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).
"Base Principal Distribution Amount" means for any Payment Date and
Group, the greater of (i) Principal Collections plus any Liquidation Loss
Amounts for Mortgage Loans assigned to such Group less any
Overcollateralization Release Amount for such Group and Payment Date and (ii)
the Subordination Deficit for such Group and the immediately preceding Payment
Date.
"Basic Documents" means the Trust Agreement, the Indenture, the Mortgage
Loan Sale Agreement, the Insurance Agreement, the Policy, the Sale and
Servicing Agreement, the Indemnification Agreement, the Administration
Agreement and any documents or certificates required by the terms of any of
the foregoing to be delivered in connection therewith.
"Beneficial Owner" means, with respect to any Note, the Person that 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 Notes" means 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" means any day other than (a) a Saturday or a Sunday or (b)
a day on which banking institutions in the States of New York, Delaware,
California, Minnesota, Maryland or Indiana are required or authorized by law
to be closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. ss. 3801 et seq., as amended.
"Capitalized Interest Account" has the meaning set forth in Section 5.01
of the Sale and Servicing Agreement.
"Capitalized Interest Requirement" means, with respect to each Payment
Date during the Pre-Funding Period, the excess, if any of (a) the amount of
interest accrued on the amount on deposit in the Pre-Funding Account as of the
preceding Payment Date (or as of the Closing Date, in the case of the first
Payment Date) at the weighted average of the Note Rates plus the sum of the
rates at which the Trustee's Fee accrues and the Premium Percentage over (b)
the amount of reinvestment earnings on funds on deposit in the Pre-Funding
Account.
"Certificate" means any of the Home Equity Loan-Backed Certificates,
Series 1999-2, in substantially the form set forth in Exhibit A to the Trust
Agreement.
"Certificate Balance" means, with respect to any Payment Date and any
Certificate, the product of (i) the Percentage Interest of such Certificate
and (ii) the sum of the Overcollateralization Amounts for Group I and Group
II.
"Certificate Distribution Account" means the account or accounts created
and maintained by the Certificate Paying Agent pursuant to Section 3.09(c) of
the Trust Agreement.
"Certificate of Trust" means the certificate of trust filed for the Trust
pursuant to Section 3810(a) of the Business Trust Statute.
"Certificate Paying Agent" means any paying agent or co-paying agent
appointed pursuant to the Trust Agreement, which initially shall be the
Indenture Trustee.
"Certificate Register" means the register maintained by the Certificate
Registrar in which the Certificate Registrar shall provide for the
registration and transfers and exchanges of Certificates.
"Certificate Registrar" means, initially, the Indenture Trustee, in its
capacity as Certificate Registrar.
"Certificateholder" means 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 thereof shall be deemed not to be outstanding, and the registered
holder will not be considered a Certificateholder or a Holder for purposes of
giving any request, demand, authorization, direction, notice, consent or
waiver under the Indenture or the Trust Agreement; provided that, in
determining whether the Indenture Trustee or the Owner Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that the Indenture Trustee or the
Owner Trustee knows to be so owned shall be so disregarded. Owners of
Certificates that have been pledged in good faith may be regarded as Holders
if the pledgee thereof 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.
"Civil Relief Act" shall mean the Soldiers' and Sailors' Civil Relief Act
of 1940, as amended.
"Class" means with respect to any Note, all Notes that bear the same
class designation, (i.e., the Class A-1 Notes as a group, the Class A-2 Notes
as a group, the Class A-3 Notes as a group or the Class A-4 Notes as a group).
"Class A-1 Note Balance" means with respect to any Payment Date and the
Class A-1 Notes, the Initial Class A-1 Note Balance reduced by all payments of
principal on the Class A-1 Notes prior to such Payment Date.
"Class A-2 Note Balance" means with respect to any Payment Date and the
Class A-2 Notes, the Initial Class A-2 Note Balance reduced by all payments of
principal on the Class A-2 Notes prior to such Payment Date.
"Class A-3 Note Balance" means with respect to any Payment Date and the
Class A-3 Notes, the Initial Class A-3 Note Balance reduced by all payments of
principal on the Class A-3 Notes prior to such Payment Date.
"Class A-4 Note Balance" means with respect to any Payment Date and the
Class A-4 Notes, the Initial Class A-4 Note Balance reduced by all payments of
principal on the Class A-4 Notes prior to such Payment Date.
"Class A-1 Notes" means the Class A-1 Home Equity Loan-Backed Notes,
Series 1999-2, in substantially the form set forth in Exhibit A to the
Indenture.
"Class A-2 Notes" means the Class A-2 Home Equity Loan-Backed Notes,
Series 1999-2, in substantially the form set forth in Exhibit A to the
Indenture.
"Class A-3 Notes" means the Class A-3 Home Equity Loan-Backed Notes,
Series 1999-2, in substantially the form set forth in Exhibit A to the
Indenture.
"Class A-4 Notes" means the Class A-4 Home Equity Loan-Backed Notes,
Series 1999-2, in substantially the form set forth in Exhibit A to the
Indenture.
"Closing Date" means May 27, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Collateral" has the meaning set forth in the Granting Clause of the
Indenture.
"Collection Account" has the meaning set forth in Section 5.01 of the
Sale and Servicing Agreement.
"Collection Period" means, with respect to any Mortgage Loan and Payment
Date, the calendar month preceding any such Payment Date.
"Collections" means, with respect to any Collection Period and Group, all
Interest Collections and Principal Collections for such Group during such
Collection Period.
"Combined Loan-to-Value Ratio" or "CLTV" means, with respect to any
Mortgage Loan and any date, the ratio, expressed as a percentage, of the sum
of (a) with respect to any Mortgage Loan, the Cut-Off Date Principal Balance
thereof and (b) the outstanding principal balance at origination of such
Mortgage Loan of all other mortgage loans, if any, secured by senior liens on
the related Mortgaged Property, to the Appraised Value.
"Corporate Trust Office" means, with respect to the Indenture Trustee,
the principal corporate trust office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at Norwest
Center, Sixth and Marquette, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention:
Corporate Trust. The principal corporate trust office of the Owner Trustee is
the office at which at any particular time its corporate trust business shall
be administered, and is, at the date of the execution of the Trust Agreement,
located at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, Attention: Corporate Trust Administration.
"Custodian" initially means the Indenture Trustee.
"Cut-Off Date" means the Initial Cut-Off Date or a Subsequent Cut-Off
Date, as the context may require.
"Cut-Off Date Principal Balance" means, with respect to any Mortgage
Loan, the outstanding Principal Balance thereof as of the related Cut-Off
Date.
"Debt Service Reduction" shall mean, with respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction of the Monthly Payment due on
such Mortgage Loan in a proceeding under the Bankruptcy Code, except such a
reduction that constitutes a Deficient Valuation or a permanent forgiveness of
principal.
"Default" means any occurrence that is or with notice or the lapse of
time or both would constitute an Event of Default.
"Deficiency Amount" means, with respect to any Payment Date, an amount
equal to the Policy Draw Amount for such Payment Date.
"Deficient Valuation" shall mean, with respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent
jurisdiction in an amount less than the then outstanding principal balance of
the Mortgage Loan and a corresponding reduction in the amount payable pursuant
to the related Mortgage Note, which valuation and reduction result from a
proceeding initiated under the United States Bankruptcy Code.
"Definitive Notes" has the meaning set forth in Section 4.06 of the
Indenture.
"Deleted Loan" means a Mortgage Loan replaced or to be replaced with an
Eligible Substitute Mortgage Loan.
"Depositor" means Bear Steams Asset Backed Securities, Inc., a Delaware
corporation, and its successors.
"Depository" or "Depository Agency" means 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" means a Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited
with the Depository.
"Determination Date" means, with respect to any Payment Date, the 10th
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" means (a) in the case of Mortgage Loans secured by first
Mortgages and certain other Mortgage Loans that are Subsequent Mortgage Loans
or Eligible Substitute Mortgage Loans (as identified on the Mortgage Loan
Schedule), the first day of each calendar month and (b) in the case of all
other Mortgage Loans, the fifteenth day of each calendar month.
"Eligible Account" means (a) with respect to the Collection Account,
unless the Enhancer shall have given the Master Servicer notice to the
contrary, The Bank of the West, or (b) an account that is any of the
following: (i) maintained with a depository institution the debt obligations
of which have been rated by each Rating Agency in its highest rating
available, or (ii) an account or accounts in a depository institution in which
such accounts are fully insured to the limits established by the FDIC,
provided that any deposits not so insured shall, to the extent acceptable to
each Rating Agency, as evidenced in writing, be maintained such that (as
evidenced by an Opinion of Counsel delivered to the Indenture Trustee and the
Enhancer) the Indenture Trustee have a claim with respect to the funds in such
account or a perfected first security interest against any collateral (which
shall be limited to Permitted Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution with which such account is maintained, or (iii) in the case of the
Trustee Collection Account, either (A) a trust account or accounts maintained
at the corporate trust department of the Indenture Trustee or (B) an account
or accounts maintained at the corporate trust department of the Indenture
Trustee, as long as its short term debt obligations are rated P-1 by Moody's
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 Moody's and A by
Standard & Poor's (or the equivalent) or better, by each Rating Agency, or
(iv) in the case of the Note Payment Account and the Certificate Distribution
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 the Enhancer, and that will not result in
a Rating Event (determined without regard to the Policy).
"Eligible Substitute Mortgage Loan" means a Mortgage Loan that, on the
date of substitution, as confirmed in an Officers' Certificate delivered to
the Indenture Trustee, (a) has an outstanding Principal Balance, after
deduction of the principal portion of the Monthly Payment due in the month of
substitution (or in the case of a substitution of more than one Mortgage Loan
for a Deleted Mortgage Loan, an aggregate outstanding Principal Balance, after
such deduction), not in excess of the outstanding Principal Balance of the
related Deleted Loan (the amount of any shortfall to be deposited by the
Transferor into the Collection Account in the month of substitution); (b)
complies with each representation and warranty set forth in Section 3.2 of the
Mortgage Loan Sale Agreement (excluding subsections (n), (v), (w) and (x)
thereof) as of the date of substitution; (c) has a Mortgage Interest Rate
substantially the same as that of the Mortgage Interest Rate of the related
Deleted Loan as of the date of substitution; (d) has a Combined Loan-to-Value
Ratio at the time of substitution substantially the same as that of the
related Deleted Loan at the time of substitution; (e) has a remaining term to
stated maturity extending not later than the Final Insured Payment Date and
(f) is not more than 30 days delinquent.
"Enhancer" means Ambac Assurance Corporation, any successor thereto or
any replacement Enhancer substituted pursuant to Section 3.27 of the
Indenture.
"Enhancer Default" means the existence and continuance of any of the
following: (a) a failure by the Insurer to make a payment required under the
Policy in accordance with its terms; (b) the entry of a decree or order of a
court or agency having jurisdiction in respect of the Enhancer in an
involuntary case under any present or future federal or state bankruptcy,
insolvency or similar law appointing a conservator or receiver or liquidator
or other similar official of the Enhancer or of any substantial part of its
property, or the entering of an order for the winding up or liquidation of the
affairs of the Enhancer and the continuance of any such decree or order
undischarged or unstayed and in force for a period of 90 consecutive days; (c)
the Enhancer shall consent to the appointment of a conservator or receiver or
liquidator or other similar official in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings or of relating to
the Enhancer or of or relating to all or substantially all of its property; or
(d) the Enhancer shall admit in writing its liability to pay its debts
generally as they become due, file a petition to take advantage of or
otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Errors and Omissions Policy" has the meaning set forth in Section
3.06(a) of the Sale and Servicing Agreement.
"Event of Default" means, 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):
(a) 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;
(b) a default in the payment of the principal of or any installment of
the principal of any Note when the same becomes due and payable, and such
default shall continue for a period of five days;
(c) 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 the
Securityholders, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such representation or warranty
was incorrect shall not have been eliminated or otherwise cured, for a period
of 30 days after there shall have been given, by registered or certified mail,
to the Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the Holders of at least 25% of the outstanding Note Balance of the
Notes, a written notice specifying such default or incorrect representation or
warranty and requiring it to be remedied and stating that such notice is a
notice of default hereunder;
(d) 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;
(e) there occurs the commencement by the Issuer of a voluntary case under
any applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent by
the Issuer to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Issuer
or for any substantial part of the assets of the Trust Estate, or the making
by the Issuer of any general assignment for the benefit of creditors, or the
failure by the Issuer generally to pay its debts as such debts become due, or
the taking of any action by the Issuer in furtherance of any of the foregoing;
or
(f) there occurs an event of default under the Insurance Agreement.
"Excess Spread" means, with respect to Group I, the Group I Excess Spread
and, with respect to Group II, the Group II Excess Spread.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Expenses" has the meaning set forth in Section 7.02 of the Trust
Agreement.
"FDIC" means The Federal Deposit Insurance Corporation, or any successor
thereto.
"Fidelity Bond" has the meaning set forth in Section 3.06(a) of the Sale
and Servicing Agreement.
"Final Insured Payment Date" means the Payment Date occurring on August
15, 2030.
"Grant" means 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.
"Group" means each of Group I and Group II.
"Group I" means those Mortgage Loans identified on the Mortgage Loan
Schedule as being assigned to Group I, each of which Mortgage Loans shall
conform to certain requirements established by FHLMC.
"Group II" means those Mortgage Loans identified on the Mortgage Loan
Schedule as being assigned to Group II.
"Group I Excess Spread" means with respect to any Payment Date and
without taking into account any draw on the Policy for such Payment Date, the
excess, if any, of Interest Collections for Mortgage Loans assigned to Group I
and Principal Collections for Mortgage Loans assigned to Group I over the sum
of (i) prepayment penalties collected on Mortgage Loans assigned to Group I,
(ii) the portion of the Premium for the Policy and the Indenture Trustee Fee
allocable to Loan Group I, (iii) interest accrued on the outstanding Class A-1
Note Balance and Class A-2 Note Balance at the applicable Note Rate for the
related Interest Period, (iv) the Base Principal Distribution Amount for Group
I and (v) the portion of any reimbursement amount, together with any interest
thereon, payable to the Enhancer that is allocable to Group I.
"Group II Excess Spread" means with respect to any Payment Date and
without taking into account any draw on the Policy for such Payment Date, the
excess, if any, of Interest Collections for Mortgage Loans assigned to Group
II and Principal Collections for Mortgage Loans assigned to Group II over the
sum of (i) prepayment penalties collected on Mortgage Loans assigned to Group
II, (ii) the portion of the Premium for the Policy and the Indenture Trustee
Fee allocable to Loan Group II, (iii) interest accrued on the outstanding
Class A-3 Note Balance and Class A-4 Note Balance at the applicable Note Rate
for the related Interest Period, (iv) the Base Principal Distribution Amount
for Group II and (v) the portion of any reimbursement amount, together with
any interest thereon, payable to the Enhancer that is allocable to Group II.
"High LTV Mortgage Loans" means those Mortgage Loans identified on the
Mortgage Loan Schedule as High LTV Mortgage Loans, which Mortgage Loans shall
consist of each and every Mortgage Loan assigned to the Issuer that was
originated by the Seller (or one of its Affiliates) as a 125% LTV mortgage
loan.
"Holder" means a Noteholder or a Certificateholder, as the context may
require.
"Home Equity Mortgage Loans" means those Mortgage Loans identified on the
Mortgage Loan Schedule as being Home Equity Mortgage Loans, which Mortgage
Loans shall consist of each and every Mortgage Loan assigned to the Issuer
that was originated by the Seller (or one of its Affiliates) as a closed end,
fixed rate home equity loan and had a CLTV at origination less than or equal
to 100%.
"Indemnification Agreement" means that certain indemnification agreement,
dated as of April 30, 1999, among the Master Servicer, the Transferor, the
Depositor and the Underwriter.
"Indemnified Parties" has the meaning set forth in Section 7.02 of the
Trust Agreement.
"Indenture" means the indenture dated as of April 30, 1999, between the
Issuer and the Indenture Trustee.
"Indenture Trustee" means Norwest Bank Minnesota, National Association,
and its successors and assigns, or any successor indenture trustee appointed
pursuant to the terms of the Indenture.
"Indenture Trustee Fee" means, as to any Payment Date, one-twelfth of the
product of 0.005% and the aggregate of the Pool Balance for Group I and the
Pool Balance for Group II as of the beginning of the related Collection
Period.
"Independent" means, when used with respect to any specified Person, that
such Person (a) is in fact independent of the Issuer, any other obligor on the
Notes, the Transferor, the Depositor, the Originator, the Master Servicer or
any Affiliate of any of the foregoing Persons, (b) does not have any direct
financial interest or any material indirect financial interest in the Issuer,
any such other obligor, the Transferor, the Depositor, the Originator, the
Master Servicer or any Affiliate of any of the foregoing Persons and (c) is
not connected with the Issuer, any such other obligor, the Transferor, the
Depositor, the Originator, the Master Servicer 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" means 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" herein and that the signer is Independent within
the meaning thereof.
"Initial Certificate Balance" means zero.
"Initial Class A-1 Note Balance" means $53,500,000.00.
"Initial Class A-2 Note Balance" means $85,000,000.00.
"Initial Class A-3 Note Balance" means $17,400,000.00
"Initial Class A-4 Note Balance" means $22,200,000.00
"Initial Cut-Off Date" means April 30, 1999 or, with respect to any
Mortgage Loan originated after such date, the date of origination of such
Mortgage Loan.
"Initial Cut-Off Date Principal Balance" means, with respect to any
Initial Mortgage Loan, the Principal Balance thereof as of the Initial Cut-Off
Date.
"Initial Mortgage Loans" means the Mortgage Loans initially transferred
by the Depositor to the Trust on the Closing Date, which Mortgage Loans are
listed on the Mortgage Loan Schedule on such date.
"Initial Note Balance" means $178,200,000.
"Initial Security Balance" means the Initial Note Balance or the Initial
Certificate Balance, as the context may require.
"Insurance Agreement" means the insurance and indemnity agreement dated
as of May 27, 1999, among the Enhancer, the Transferor, the Depositor, the
Originator, the Master Servicer and the Issuer, including any amendments and
supplements thereto.
"Insurance Proceeds" means proceeds paid by any insurer (other than the
Enhancer) pursuant to any insurance policy covering a Mortgage Loan that 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 Sale and Servicing Agreement, net of any component thereof (a) covering
any expenses incurred by or on behalf of the Master Servicer in connection
with obtaining such proceeds, (b) that is applied to the restoration or repair
of the related Mortgaged Property, (c) released to the Mortgagor in accordance
with the Master Servicer's normal servicing procedures or (d) required to be
paid to any holder of a mortgage senior to such Mortgage Loan.
"Interest Carry-Forward Amount" means, with respect to the Class A-1
Notes and the Class A-3 Notes and for any Payment Date for which the related
Note Rate has been determined pursuant to clause (i)(a) or (iii)(a), as
applicable, of the definition of "Note Rate", the excess of (a) the amount of
interest that would have accrued on the Notes during the related Interest
Period had such amount been determined pursuant to such clause (i)(a) or
(iii)(a), as applicable, of the definition of "Note Rate" over (b) the
interest actually accrued on such Notes during such Interest Period.
"Interest Collections" means, with respect to any Payment Date and Group,
the sum of all payments by or on behalf of Mortgagors and any other amounts
constituting interest (including such portion of Insurance Proceeds,
Liquidation Proceeds and Repurchase Prices as is allocable to interest on the
applicable Mortgage Loan) as are paid by the Transferor or the Master Servicer
in respect of Mortgage Loans in the applicable Group or is collected by the
Master Servicer under the Mortgage Loans in such Group, reduced by the
Servicing Fee for the related Collection Period and by any fees (including
annual fees), prepayment penalties or late charges or similar administrative
fees paid by Mortgagors with respect to Mortgage Loans in such Group during
such Collection Period. The terms of the related Mortgage Documents shall
determine the portion of each payment in respect of such Mortgage Loan that
constitutes principal and interest, respectively.
"Interest Period" means, with respect to the Class A-1 Notes, the Class
A-3 Notes and the Certificates and any Payment Date other than the first
Payment Date, the period commencing on the preceding Payment Date and ending
on the day preceding such Payment Date, in the case of the first Payment Date
and the Class A-1 Notes, the Class A-3 Notes and the Certificates, the period
commencing on the Closing Date and ending on the day preceding the first
Payment Date and with respect to any Class of Securities other than the Class
A-1 Notes, the Class A-3 Notes and the Certificates and any Payment Date, the
calendar month immediately preceding such Payment Date.
"Xxxxx Underwriting Standards" means the underwriting standards of the
Originator developed at the direction of Xxxxx Union Bank and Trust Company,
as in effect from time to time.
"Issuer" or "Trust" means Xxxxx Home Equity Loan Trust 1999-2, a Delaware
business trust, and its successors.
"Issuer Request" means 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.
"Letter of Credit" means an unconditional and irrevocable letter of
credit (a) issued by a bank holding company, commercial bank or trust company
acceptable to the Enhancer, the short-term and long-term debt obligations of
which at the date of delivery of such letter of credit are rated "A-1" or
better and "AA-" or better, respectively, by Standard & Poor's and "P1" or
better and A1 or better, respectively, by Moody's, (b) in form and substance
reasonably acceptable to the Enhancer and the Indenture Trustee, (c) with a
maximum term of three years, (d) for the benefit of the Indenture Trustee and
(e) providing for the amount thereof to be available to the Indenture Trustee
in multiple drawings conditioned only upon presentation of the applicable
certificate in the form attached to such letter of credit.
"LIBOR" means, for any Interest Period other than the first Interest
Period, the rate for United States dollar deposits for one month which appears
on the Telerate Screen Page 3750 as of 11:00 A.M., London, England time, on
the second LIBOR Business Day prior to the first day of such Interest Period.
With respect to the first Interest Period, the rate for United States dollar
deposits for one month which appears on the Telerate Screen Page 3750 as of
11:00 A.M., London, England time, two LIBOR Business Days prior to the Closing
Date. If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered,
such other service for displaying LIBOR or comparable rates as may be
reasonably selected by the Indenture Trustee after consultation with the
Master Servicer), the rate will be the Reference Bank Rate. If no such
quotations can be obtained and no Reference Bank Rate is available, LIBOR will
be LIBOR applicable to the preceding Payment Date.
"LIBOR Business Day" means any day other than (a) a Saturday or a Sunday
or (b) a day on which banking institutions in the city of London, England are
required or authorized by law to be closed.
"Lien" means any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance,
lien (statutory or other), claim, charge, preference, priority, right,
interest or other security agreement or preferential arrangement of any kind
or nature whatsoever, including 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, that any assignment pursuant to Section 6.02 of the Sale and
Servicing Agreement shall not constitute a Lien.
"Liquidated Mortgage Loan" means, with respect to any Payment Date, any
Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified in the Sale and Servicing
Agreement, as of the end of the related Collection Period that substantially
all Liquidation Proceeds which it reasonably expects to recover, if any, with
respect to the disposition of the related REO Property have been recovered.
"Liquidation Expenses" means out-of-pocket expenses (exclusive of
overhead) which are incurred by or on behalf of the Master Servicer in
connection with the liquidation of any Mortgage Loan and not recovered under
any insurance policy, such expenses including, without limitation, legal fees
and expenses, any unreimbursed amount expended (including, without limitation,
amounts advanced to correct defaults on any mortgage loan which is senior to
such Mortgage Loan and amounts advanced to keep current or pay off a mortgage
loan that is senior to such Mortgage Loan) respecting the related Mortgage
Loan and any related and unreimbursed expenditures for real estate property
taxes or for property restoration, preservation or insurance against casualty
loss or damage.
"Liquidation Loss Amount" means, with respect to any Liquidated Mortgage
Loans, the unrecovered Principal Balance thereof at the end of the related
Collection Period in which such Mortgage Loan became liquidated, after giving
effect to the Liquidation Proceeds in connection therewith.
"Liquidation Proceeds" means the proceeds, including Insurance Proceeds,
but not including amounts drawn under the Policy, if any, received in
connection with the liquidation of any Mortgage Loan or any related Mortgaged
Property or REO Property, whether through trustee's sale, foreclosure sale or
otherwise, net of related Liquidation Expenses (but not including the portion,
if any, of such amount that exceeds the Principal Balance of the related
Mortgage Loan at the end of the Collection Period immediately preceding the
Collection Period in which such Mortgage Loan became a Liquidated Mortgage
Loan).
"Loan Affidavit" means, with respect to any Mortgage Loan as to which any
related original Mortgage Document has been permanently lost or destroyed and
has not been replaced, an affidavit from the Transferor certifying that the
original of such Mortgage Document has been lost, misplaced or destroyed
(together with a copy of such Mortgage Document).
"Master Servicer" means Xxxxx Union Bank and Trust Company, and its
successors.
"Master Servicer Remittance Date" means with respect to any Payment Date,
the latest day that is a Business Day that is at least three days prior to
such Payment Date.
"Monthly Payment" means the monthly payment made by a Mortgagor in
respect of a Mortgage Loan.
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"Mortgage" means the mortgage, deed of trust or other instrument creating
a first or second lien on an estate in fee simple interest in the real
property securing a Mortgage Loan.
"Mortgage Documents" means with respect to any Mortgage Loan, the related
Mortgage and Mortgage Note.
"Mortgage File" means the file containing the Mortgage Documents and
Related Documents pertaining to a particular Mortgage Loan, and any additional
documents required to be added thereto pursuant to the Mortgage Loan Sale
Agreement or the Sale and Servicing Agreement.
"Mortgage Interest Rate" means, with respect to any Mortgage Loan and any
day, the per annum rate of interest applicable under the related Mortgage
Documents.
"Mortgage Loan" means (i) each closed-end, fixed rate 125% LTV mortgage
loan included in the Trust Estate; (ii) each closed-end, fixed rate home
equity loan included in the Trust Estate and (iii) each closed-end, fixed rate
first lien mortgage loan included in the Trust Estate, or in the case of (i),
(ii) or (iii) all of such mortgage loans, as the context may require. The
inclusion of any mortgage loan in the Trust Estate shall be, in the absence of
manifest error, conclusively established by its inclusion on the Mortgage Loan
Schedule.
"Mortgage Loan Sale Agreement" means the Mortgage Loan Sale Agreement
dated as of April 30, 1999, among Xxxxx Union Bank and Trust Company, the
Transferor and the Depositor.
"Mortgage Loan Schedule" means the schedule of Mortgage Loans set forth
in Exhibit A of the Sale and Servicing Agreement, which schedule sets forth as
to each Mortgage Loan (a) the Initial Cut-Off Date Principal Balance, (b) the
name of the related Mortgagor, (c) the loan number (d) the Mortgage Interest
Rate, (e) the Lien position of the related Mortgage, (f) whether such Mortgage
Loan is assigned to Group I or Group II, (g) whether such Mortgage Loan is a
High LTV Mortgage Loan, a Home Equity Mortgage Loan or a Thirty-year Maturity
Mortgage Loan and (h) whether such Mortgage Loan is assigned to Pool A, Pool B
or Pool C.
"Mortgage Note" means, with respect to a Mortgage Loan, the mortgage note
pursuant to which the related Mortgagor agrees to pay the indebtedness
evidenced thereby and secured by a Mortgage on the related Mortgaged Property,
as modified or amended.
"Mortgaged Property" means the underlying property, including real
property and improvements thereon, securing a Mortgage Loan.
"Mortgagor" means the obligor or obligors under the related Mortgage
Documents.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note or a
Class A-4 Note, or all of them as the context may require.
"Note Balance" means, with respect to any Payment Date and any Note, the
Initial Note Balance thereof reduced by all payments of principal on such Note
prior to such Payment Date.
"Note Payment Account" has the meaning set forth in Section 5.01 of the
Sale and Servicing Agreement.
"Note Rate" means, (i) with respect to the applicable Interest Period and
the Class A-1 Notes, the least of (a) LIBOR plus 0.10% per annum, (b) the
weighted average net Mortgage Interest Rate of the Mortgage Loans in Group I,
and (c) 14.50% per annum; (ii) with respect to any Interest Period and the
Class A-2 Notes, 6.830% per annum (or, on any Payment Date on which the
aggregate of the Principal Balances of the Mortgage Loans in Group I is less
than 10% of the sum of the Principal Balances of the Mortgage Loans in Group I
as of the initial Cut-Off Date plus the portion of the Pre-Funding Account
allocated to Group I, 7.580% per annum), (iii) with respect to the applicable
Interest Period and the Class A-3 Notes, the least of (a) LIBOR plus 0.18% per
annum, (b) the weighted average net Mortgage Interest Rate of the Mortgage
Loans in Group II, and (c) 14.50% per annum; and (iv) with respect to any
Interest Period and the Class A-4 Notes, 6.890% per annum (or, on any Payment
Date on which the aggregate of the Principal Balances of the Mortgage Loans in
Group II is less than 10% of the sum of the Principal Balances of the Mortgage
Loans in Group II as of the initial Cut-Off Date plus the portion of the
Pre-Funding Account allocated to Group II, 7.640% per annum).
"Note Register" means 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" means 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.
"Notice and Demand Date" has the meaning set forth in Section 3.26(b) of
the Indenture.
"Officer's Certificate" means, 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; provided, that such certificate may be delivered by
an Affiliate of the Master Servicer on behalf of the Master Servicer. 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" means a written opinion of counsel. Any Opinion of
Counsel may be provided by in-house counsel if reasonably acceptable to the
Indenture Trustee and the Enhancer, or counsel for the Depositor, as the case
may be.
"Originator" means Xxxxx Home Equity Corporation, and its successors.
"Outstanding" means, with respect to any Notes, as of the date of
determination, all Notes theretofore executed, authenticated and delivered
under the Indenture except:
(a) Notes theretofore cancelled by the Note Registrar or delivered to the
Indenture Trustee for cancellation; and
(b) 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 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 Policy shall be deemed to be
Outstanding until the Enhancer has been reimbursed with respect thereto.
"Overcollateralization Amount" shall mean, with respect to any Payment
Date and Group, the excess, if any, of (i) the aggregate Principal Balance of
all Mortgage Loans assigned to such Group as of the close of business on the
last day of the related Collection Period over (ii) the aggregate of the Note
Balances of the Class A-1 Notes and the Class A-2 Notes, in the case of Group
I or the Class A-3 Notes and the Class A-4 Notes, in the case of Group II, in
each case after taking into account the payment of the Base Principal
Distribution Amount for such Payment Date.
"Overcollateralization Deficiency Amount" shall mean, with respect to any
date of determination and Group, the excess, if any, of the
Overcollateralization Target Amount for such Group over the
Overcollateralization Amount for such Group.
"Overcollateralization Target Amount" with respect to each Group, shall
have the meaning assigned thereto in the Insurance Agreement.
Notwithstanding the above, the Enhancer may, in its sole discretion,
modify the definition of Overcollateralization Target Amount. The Indenture
Trustee and the Rating Agencies shall be notified in writing of such
modification prior to the related Payment Date and any such modification shall
not result in a downgrading of the then-current ratings of any Note without
regard to the Policy.
"Overcollateralization Release Amount" shall mean, with respect to any
date of determination and Group, the excess, if any, of the
Overcollateralization Amount for such Group over the Overcollateralization
Target Amount for such Group.
"Owner Trustee" means Wilmington Trust Company, not in its individual
capacity but solely as trustee of the Trust, and its successors and assigns or
any successor thereto appointed pursuant to the terms of the Trust Agreement.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 3.03 of the Indenture, which initially shall be the
Indenture Trustee.
"Payment Date" means the 15th day of each month, or if such day is not a
Business Day, then the next succeeding Business Day, commencing with June 15,
1999.
"Percentage Interest" means, with respect to any Note, the percentage
obtained by dividing the Note Balance thereof by the aggregate of the Note
Balances of all Notes of the same Class prior to such Payment Date. With
respect to any Certificate, the percentage set forth on the face thereof.
"Periodic Advance" shall mean, with respect to any Payment Date, the
related Collection Period and a Thirty-year Maturity Mortgage Loan or a Home
Equity Mortgage Loan or at the sole election of the Master Servicer a High LTV
Mortgage Loan, an amount equal to the excess of (i) interest on the Principal
Balance of such Mortgage Loan at the related Mortgage Interest Rate, net of
the Servicing Fee, for the most recently ended Collection Period over (ii) any
amounts actually collected as interest by the Master Servicer with respect to
such Mortgage Loan during such Collection Period.
"Permitted Investments" means one or more of the following:
(a) mortgage loans; provided, that such mortgage loans shall have the
characteristics, and shall be subject to the terms and conditions, specified
in an agreement to be entered into between the Master Servicer and the
Enhancer on or after the Closing Date.
(b) 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;
(c) repurchase agreements on obligations specified in clause (a) 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 available
short-term rating;
(d) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original maturity
of not more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining maturity
of more than 30 days) denominated in United States dollars of any U.S.
depository institution or trust company incorporated under the laws of the
United States or any state thereof or of any domestic branch of a foreign
depository institution or trust company; provided, that the debt obligations
of such depository institution or trust company (or, if the only Rating Agency
is Standard & Poor's, in the case of the principal depository institution in a
depository institution holding company, debt obligations of the depository
institution holding company) at the date of acquisition thereof have been
rated by each Rating Agency in its highest short-term rating available; and
provided further, that if the only Rating Agency is Standard & Poor's and if
the depository or trust company is a principal subsidiary of a bank holding
company and the debt obligations of such subsidiary are not separately rated,
the applicable rating shall be that of the bank holding company; and provided
further, that if the original maturity of such short-term obligations of a
domestic branch of a foreign depository institution or trust company shall
exceed 30 days, the short-term rating of such institution shall be A-1 + in
the case of Standard & Poor's, if Standard & Poor's is the Rating Agency;
(e) 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 available; provided, that only
with respect to amounts held in the Pre-Funding Account, such amounts may be
invested in commercial paper shall have a remaining maturity of not more than
90 days; with respect to all other commercial paper, such commercial paper
shall have a remaining maturity of not more than 30 days;
(f) a money market fund or a qualified investment fund rated by each
Rating Agency in one of its two highest available long-term rating; and
(g) other obligations or securities that are acceptable to the Enhancer
as a Permitted Investment hereunder and as will not result in a Rating Event;
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, such obligation or security must have an interest
rate or yield that is fixed or is variable based on an objective index that is
not affected by the rate or amount of losses on the Mortgage Loans;
provided, however, that no instrument shall be a Permitted Investment if it
represents, either (i) the right to receive only interest payments with
respect to the underlying debt instrument or (ii) the right to receive both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity greater than 120% of the yield to
maturity at par of such underlying obligations. References herein to the
highest rating available on unsecured long-term debt shall mean AAA in the
case of Standard & Poor's and Aaa in the case of Moody's, and references
herein to the highest rating available on unsecured commercial paper and
short-term debt obligations shall mean A-1 in the case of Standard & Poor's
and P-1 in the case of Moody's.
"Permitted Liens" shall mean liens for (i) real estate taxes and special
assessments not yet delinquent (provided, that property taxes may be
delinquent up to one year); (ii) as to the junior Mortgage Loans, any senior
mortgage loan secured by such Mortgaged Property; (iii) covenants, conditions
and restrictions, rights of way, easements and other matters of public record
as of the date of recording that are acceptable to mortgage lending
institutions generally; (iv) with respect to junior Mortgage Loans with
principal balances less than or equal to $35,000 and that were originated on
or after April 13, 1998 with combined loan-to-values of 100% or less, (a)
liens prior to the related first mortgage, if verified as paid, and (b) liens
and judgments of $5,000 or less, including sewer or maintenance liens,
mechanics' liens or UCC filings; and (v) other matters to which like
properties are commonly subject that do not materially interfere with the
benefits of the security intended to be provided by the related Mortgage
Documents.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
business trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Plan Assets" has the meaning set forth in Section 3.04 of the Trust
Agreement.
"Pledge Agreement" has the meaning set forth in the Insurance Agreement.
"Policy" means the Guarantee Insurance Policy ABO26OBE, dated as of the
Closing Date, issued by the Enhancer.
"Policy Draw Amount" means, (x) with respect to any Loan Group and as of
any Payment Date other than the Final Insured Payment Date, the excess, if
any, of (i) the sum of (a) the amount of interest accrued on the Note Balances
of the related Class or Classes of Notes, at the applicable Note Rates during
the related Interest Period (excluding any Interest Carry-Forward Amounts and
Relief Act Shortfalls) and (b) the related Subordination Deficit minus an
amount equal to the Overcollaterization Amount for the other Group (to the
extent not in excess of such Subordination Deficit) over (ii) the amount on
deposit in the Note Payment Account on such Payment Date and (y) on the Final
Insured Payment Date, the outstanding Note Balance of all Classes of Notes
then outstanding to the extent not otherwise paid on such date, together with
interest accrued on the Note Balances of the related Class or Classes of
Notes, at the applicable Note Rates during the related Interest Period
(excluding any Interest Carry-Forward Amounts and Relief Act Shortfalls).
"Pool A" means the segregated pool of Mortgage Loans assigned to Pool A
as indicated on the Mortgage Loan Schedule (as amended from time to time).
"Pool B" means the segregated pool of Mortgage Loans assigned to Pool B
as indicated on the Mortgage Loan Schedule (as amended from time to time).
"Pool C" means the segregated pool of Mortgage Loans assigned to Pool C
as indicated on the Mortgage Loan Schedule (as amended from time to time).
"Pool Balance" means, with respect to any date and Group, the aggregate
of the Principal Balances of all Mortgage Loans assigned to such Group as of
such date.
"Predecessor Note" means, 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.
"Pre-Funded Amount" means $30,227,739.41.
"Pre-Funding Account" has the meaning set forth in Section 5.01 of the
Sale and Servicing Agreement.
"Pre-Funding Period" means the period commencing on the Closing Date and
ending on the earliest to occur of (a) the date on which the amount on deposit
in the Pre-Funding Account is less than $100,000, (b) October 31, 1999 or (c)
the occurrence of an event of default under the Sale and Servicing Agreement.
"Premium" and "Premium Percentage" shall have the meanings assigned
thereto in the Insurance Agreement.
"Prepayment Interest Shortfall" shall mean, with respect to any Payment
Date, for each Mortgage Loan that was the subject during the related
Collection Period of a principal prepayment, an amount equal to the excess, if
any, of (i) 30 days' interest on the Principal Balance of such Mortgage Loan
at a per annum rate equal to the Mortgage Interest Rate (or at such lower rate
as may be in effect for such Mortgage Loan pursuant to application of the
Civil Relief Act, any Deficient Valuation and/or any Debt Service Reduction)
minus the rate at which the Servicing Fee is calculated, over (ii) the amount
of interest actually remitted by the Mortgagor in connection with such
principal prepayment.
"Principal Balance" means, with respect to any Mortgage Loan, other than
a Liquidated Mortgage Loan, and as of any day, the related Cut-Off Date
Principal Balance, minus, all collections credited as principal in respect of
any such Mortgage Loan in accordance with the related Mortgage Documents and
applied in reduction of the Principal Balance thereof. For purposes of this
definition, a Liquidated Mortgage Loan shall be deemed to have a Principal
Balance equal to the Principal Balance of the related Mortgage Loan
immediately prior to the final recovery of substantially all related
Liquidation Proceeds, and a Principal Balance of zero thereafter.
"Principal Collections" means, with respect to any Payment Date and any
Mortgage Loan, the aggregate of the following amounts:
(a) the total amount of payments made by or on behalf of the related
Mortgagor, received and applied as payments of principal on such Mortgage Loan
during the related Collection Period, as reported by the Master Servicer or
the related Subservicer;
(b) any Liquidation Proceeds allocable as a recovery of principal
received in connection with such Mortgage Loan during the related Collection
Period;
(c) if such Mortgage Loan was purchased by the Transferor pursuant to the
Mortgage Loan Sale Agreement during the related Collection Period, 100% of the
Principal Balance thereof as of the date of such purchase; and
(d) other amounts received as payments on or proceeds of such Mortgage
Loan during the Collection Period, to the extent applied in reduction of the
Principal Balance thereof;
provided, that Principal Collections shall be reduced by any amounts withdrawn
from the Collection Account pursuant to clause (d) of Section 3.04 of the Sale
and Servicing Agreement.
"Principal Distribution Amount" means with respect to any Payment Date
and Group the sum of the Base Principal Distribution Amount for such Payment
Date and Group and the Additional Principal Distribution Amount for such
Payment Date and Group.
"Principal Prepayment" means, with respect to any Mortgage Loan, a
payment of principal by the related Mortgagor in advance of the scheduled Due
Date of such amount.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Rating Agency" means any nationally recognized statistical rating
organization, or its successor, that rated the Notes at the request of the
Depositor at the time of the initial issuance of the Securities. 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
Moody's; 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 Moody's; and in the case of any other Rating Agency, such
equivalent rating.
"Rating Event" means the qualification, reduction or withdrawal by a
Rating Agency of its then-current rating of the Notes.
"Record Date" means, with respect to the Class A-1 Notes, the Class A-3
Notes or the Certificates and any Payment Date, the Business Day next
preceding such Payment Date, and with respect to the Securities other than the
Class A-1 Notes, the Class A-3 Notes or the Certificates, the last Business
Day of the month preceding the month of such Payment Date.
"Reference Bank Rate" means, with respect to any Interest Period, as
follows: the arithmetic mean (rounded upwards, if necessary, to the nearest
one sixteenth of a percent) of the offered rates for United States dollar
deposits for one month which are offered by the Reference Banks as of 11:00
A.M., London, England time, on the second LIBOR Business Day prior to the
first day of such Interest Period to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the sum of
the outstanding Note Balances of the Class A-1 Notes and the Class A-3 Notes;
provided, that at least two such Reference Banks provide such rate. If fewer
than two offered rates appear, the Reference Bank Rate will be the arithmetic
mean of the rates quoted by one or more major banks in New York City, selected
by the Indenture Trustee after consultation with the Master Servicer, as of
11:00 a.m., New York time, on such date for loans in U.S. Dollars to leading
European Banks for a period of one month in amounts approximately equal to the
sum of the outstanding Note Balances of the Class A-1 Notes and the Class A-3
Notes. If no such quotations can be obtained, the Reference Bank Rate shall be
the Reference Bank Rate applicable to the preceding Interest Period.
"Reference Banks" means three major banks that are engaged in
transactions in the London interbank market, selected by the Indenture Trustee
after consultation with the Master Servicer.
"Registered Holder" means the Person in whose name a Note is registered
in the Note Register on the applicable Record Date.
"Related Documents" means, with respect to each Mortgage Loan, the
documents specified in Section 2.5 of the Mortgage Loan Sale Agreement, and
any documents required to be added to such documents pursuant to the Mortgage
Loan Sale Agreement, the Trust Agreement or the Sale and Servicing Agreement.
"REO Property" means a Mortgaged Property that is acquired by the Trust
in foreclosure or by deed in lieu of foreclosure.
"Repurchase Event" means, with respect to any Mortgage Loan, either (a) a
discovery that, as of the Closing Date, the related Mortgage Documents did not
constitute a valid Lien on the related Mortgaged Property subject only to
Permitted Liens or (b) with respect to any Mortgage Loan as to which the
Transferor delivers a Loan Affidavit, a subsequent default on such Mortgage
Loan if the enforcement thereof or of the related Mortgage Documents are
materially and adversely affected by the absence of such original Mortgage
Document.
"Repurchase Price" with respect to any Mortgage Loan, an amount equal to
the Principal Balance of such Mortgage Loan as of the date of repurchase, plus
the greater of (1) all accrued and unpaid interest on such Principal Balance
and (2) 30 days' interest on such Principal Balance, computed at the Mortgage
Interest Rate.
"Request for Release" means the request for release, in the form of
Exhibit C to the Sale and Servicing Agreement.
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer of the Indenture Trustee with direct responsibility for the
administration of the Indenture and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale" has the meaning set forth in Section 5.15 of the Indenture.
"Sale and Servicing Agreement" means the sale and servicing agreement
dated as of April 30, 1999, among the Depositor, the Transferor, the Issuer,
the Master Servicer and the Indenture Trustee.
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Security" means a Certificate or a Note, as the context may require.
"Security Balance" means the Note Balance or the Certificate Balance, as
the context may require.
"Securityholder" means any Noteholder or Certificateholder.
"Seller" means Xxxxx Union Bank and Trust Company as seller under the
Mortgage Loan Sale Agreement.
"Servicing Certificate" means a certificate completed and executed by a
Servicing Officer on behalf of the Master Servicer in accordance with Section
4.01 of the Sale and Servicing Agreement.
"Servicing Default" has the meaning set forth in Section 7.01 of the Sale
and Servicing Agreement.
"Servicing Fee" means, with respect to any Collection Period and Mortgage
Loan, the product of (a) the Servicing Fee Rate multiplied by a fraction, the
numerator of which is the actual number of days in such Collection Period and
the denominator of which is 360 and (b) the Principal Balance of such Mortgage
Loan as of the first day of such Collection Period; provided however, that the
Servicing Fee shall be reduced (but not below zero) by an amount equal to
Prepayment Interest Shortfalls for such Collection Period.
"Servicing Fee Rate" means with respect to Mortgage Loan that is a
Thirty-year Maturity Mortgage Loan, .50% and with respect to each other
Mortgage Loan, .75%.
"Servicing Officer" means any officer of the Master Servicer involved in,
or responsible for, the administration and servicing of the Mortgage Loans
whose name and specimen signature appear on a list of servicing officers
furnished to the Indenture Trustee by the Master Servicer, as such list may be
amended from time to time.
"Standard & Poor's" means Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"State" means any state of the United States of America, or the District
of Columbia.
"Subordination Deficit" shall mean, with respect to any Payment Date and
Group, the excess, if any, of (i) the aggregate of the Class A-1 Note Balance
and the Class A-2 Note Balance, in the case of Group I or the aggregate of the
Class A-3 Note Balance and the Class A-4 Note Balance, in the case of Group II
on such Payment Date, after taking into account payment of the Base Principal
Distribution Amount and Additional Principal Distribution Amount on such
Payment Date (without taking into account any amount payable under the Policy
on such Payment Date) over (ii) the Pool Balance for such Group as of the
close of business on the last day of the related Collection Period.
"Subsequent Cut-Off Date" shall have the meaning ascribed thereto in each
Subsequent Transfer Agreement.
"Subsequent Mortgage Loans" means the Mortgage Loans transferred by the
Transferor to the Trust pursuant to a Subsequent Transfer Agreement on the
related Subsequent Transfer Date, which Mortgage Loans are listed on Schedule
A to such Subsequent Transfer Agreement.
"Subsequent Transfer Agreement" means each subsequent transfer agreement,
dated as of the related Subsequent Cut-Off Date, between the Transferor and
the Issuer, pursuant to which Subsequent Mortgage Loans are conveyed to the
Trust.
"Subsequent Transfer Date" means the Business Day specified by the
Transferor relating to a Subsequent Cut-Off Date.
"Subservicer" means each Person that enters into a Subservicing Agreement
as a subservicer of Mortgage Loans.
"Subservicing Agreement" means the written contract between the Master
Servicer and a Subservicer that relates to the servicing and administration of
Mortgage Loans as provided in Section 3.02(a) of the Sale and Servicing
Agreement.
"Substitution Adjustment Amount" means, with respect to any Eligible
Substitute Mortgage Loan and Deleted Loan, the amount determined by the Master
Servicer, if any, by which the aggregate Principal Balance of all such
Eligible Substitute Mortgage 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 in the month of substitution).
"Tax Matters Partner" has the meaning set forth in Section 5.03 of the
Trust Agreement.
"Telerate Screen Page 3750" means the display designated as page 3750 on
the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks). If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered,
such other service for displaying LIBOR or comparable rates as may be selected
by the Issuer after consultation with the Indenture Trustee), the rate will be
the Reference Bank Rate.
"Thirty-year Maturity Mortgage Loans" means those Mortgage Loans
identified on the Mortgage Loan Schedule as being Thirty-year Maturity
Mortgage Loans, which Mortgage Loans shall consist of each and every Mortgage
Loan assigned to the Issuer that was originated by the Seller (or one of its
Affiliates) as a first lien mortgage loan with an original term to maturity of
360 months.
"Transferor" means Xxxxx Funding Corp., and its successors.
"Treasury Regulations" means 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" means the trust agreement dated as of April 30, 1999,
between the Owner Trustee and the Depositor.
"Trust Estate" has the meaning set forth in the Granting Clause of the
Indenture.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended, as in effect on any relevant date.
"Trustee Collection Account" has the meaning set forth in Section 5.01
(f) of the Sale and Servicing Agreement.
"UCC" means the Uniform Commercial Code, as amended, as in effect in any
specified jurisdiction.
"Underwriter" means Bear, Steams & Co. Inc.
"Underwriting Agreement" means the Underwriting Agreement dated May 6,
1999, between the Underwriter and the Depositor.
