HOME LOAN TRUST 2005-HI1
Issuer
AND
JPMORGAN CHASE BANK, N.A.
Indenture Trustee
INDENTURE
Dated as of January 27, 2005
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HOME LOAN-BACKED NOTES
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TABLE OF CONTENTS
Section Page
Article I
Definitions
Section 1.01 Definitions...............................................................................2
Section 1.02 Incorporation by Reference of Trust Indenture Act.........................................2
Section 1.03 Rules of Construction.....................................................................2
Article II
Original Issuance of Notes
Section 2.01 Form......................................................................................4
Section 2.02 Execution, Authentication and Delivery....................................................4
Article III
Covenants
Section 3.01 Collection of Payments with respect to the Home Loans.....................................5
Section 3.02 Maintenance of Office or Agency...........................................................5
Section 3.03 Money for Payments To Be Held in Trust; Paying Agent......................................5
Section 3.04 Existence.................................................................................6
Section 3.05 Payment of Principal and Interest; Defaulted Interest.....................................7
Section 3.06 Protection of Trust Estate................................................................9
Section 3.07 Opinions as to Trust Estate..............................................................10
Section 3.08 Performance of Obligations; Servicing Agreement..........................................10
Section 3.09 Negative Covenants.......................................................................11
Section 3.10 Annual Statement as to Compliance........................................................11
Section 3.11 Recording of Assignments.................................................................12
Section 3.12 Representations and Warranties Concerning the Home Loans.................................12
Section 3.13 Assignee of Record of the Home Loans.....................................................12
Section 3.14 Master Servicer as Agent and Bailee of the Indenture Trustee.............................12
Section 3.15 Investment Company Act...................................................................12
Section 3.16 Issuer May Consolidate, etc..............................................................13
Section 3.17 Successor or Transferee..................................................................14
Section 3.18 No Other Business........................................................................14
Section 3.19 No Borrowing.............................................................................15
Section 3.20 Guarantees, Loans, Advances and Other Liabilities........................................15
Section 3.21 Capital Expenditures.....................................................................15
Section 3.22 Owner Trustee Not Liable for Certificates or Related Documents...........................15
Section 3.23 Restricted Payments......................................................................15
Section 3.24 Notice of Events of Default..............................................................16
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Section 3.25 Further Instruments and Acts.............................................................16
Section 3.26 Statements to Noteholders................................................................16
Section 3.27 Payments under the Credit Enhancement Instrument.........................................16
Section 3.28 Reserved.................................................................................16
Section 3.29 Determination of Class A-1 Note Rate.....................................................16
Section 3.30 Liquidation on Final Insured Payment Date................................................16
Section 3.31 No Recourse..............................................................................17
Section 3.32 Additional UCC Representations and Warranties............................................17
Article IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01 The Notes................................................................................18
Section 4.02 Registration of and Limitations on Transfer and
Exchange of Notes; Appointment of Certificate Registrar..................................18
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes...............................................20
Section 4.04 Persons Deemed Owners....................................................................20
Section 4.05 Cancellation.............................................................................21
Section 4.06 Book-Entry Notes.........................................................................21
Section 4.07 Notices to Depository....................................................................22
Section 4.08 Definitive Notes.........................................................................22
Section 4.09 Tax Treatment............................................................................22
Section 4.10 Satisfaction and Discharge of Indenture..................................................23
Section 4.11 Application of Trust Money...............................................................24
Section 4.12 Subrogation and Cooperation..............................................................24
Section 4.13 Repayment of Monies Held by Paying Agent.................................................25
Section 4.14 Temporary Notes..........................................................................25
Article V
Default and Remedies
Section 5.01 Events of Default........................................................................26
Section 5.02 Acceleration of Maturity; Rescission and Annulment.......................................26
Section 5.03 Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee.....................................................................27
Section 5.04 Remedies; Priorities.....................................................................29
Section 5.05 Optional Preservation of the Trust Estate................................................30
Section 5.06 Limitation of Suits......................................................................31
Section 5.07 Rights of Noteholders to Receive Principal and Interest..................................31
Section 5.08 Restoration of Rights and Remedies.......................................................31
Section 5.09 Rights and Remedies Cumulative...........................................................32
Section 5.10 Delay or Omission Not a Waiver...........................................................32
Section 5.11 Control by Noteholders...................................................................32
Section 5.12 Waiver of Past Defaults..................................................................33
Section 5.13 Undertaking for Costs....................................................................33
Section 5.14 Waiver of Stay or Extension Laws.........................................................33
Section 5.15 Sale of Trust Estate.....................................................................33
Section 5.16 Action on Notes..........................................................................35
Section 5.17 Performance and Enforcement of Certain Obligations.......................................35
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Article VI
The Indenture Trustee
Section 6.01 Duties of Indenture Trustee..............................................................37
Section 6.02 Rights of Indenture Trustee..............................................................38
Section 6.03 Individual Rights of Indenture Trustee...................................................38
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 Holders..................................................39
Section 6.07 Compensation and Indemnity...............................................................39
Section 6.08 Replacement of Indenture Trustee.........................................................39
Section 6.09 Successor Indenture Trustee by Merger....................................................40
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee........................41
Section 6.11 Eligibility; Disqualification............................................................42
Section 6.12 Preferential Collection of Claims Against Issuer.........................................42
Section 6.13 Representations and Warranties...........................................................42
Section 6.14 Directions to Indenture Trustee..........................................................43
Section 6.15 Indenture Trustee May Own Securities.....................................................43
Article VII
Noteholders' Lists and Reports
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders...................44
Section 7.02 Preservation of Information; Communications to Noteholders...............................44
Section 7.03 Reports by Issuer........................................................................44
Section 7.04 Reports by Indenture Trustee.............................................................45
Section 7.05 Exchange Act Reporting...................................................................45
Article VIII
Accounts, Disbursements and Releases
Section 8.01 Collection of Money......................................................................46
Section 8.02 Trust Accounts...........................................................................46
Section 8.03 Officer's Certificate....................................................................46
Section 8.04 Termination Upon Distribution to Noteholders.............................................46
Section 8.05 Release of Trust Estate..................................................................47
Section 8.06 Surrender of Notes Upon Final Payment....................................................47
Article IX
Supplemental Indentures
Section 9.01 Supplemental Indentures Without Consent of Noteholders...................................48
Section 9.02 Supplemental Indentures With Consent of Noteholders......................................49
Section 9.03 Execution of Supplemental Indentures.....................................................51
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Section 9.04 Effect of Supplemental Indenture.........................................................51
Section 9.05 Conformity with Trust Indenture Act......................................................51
Section 9.06 Reference in Notes to Supplemental Indentures............................................52
Article X
Miscellaneous
Section 10.01 Compliance Certificates and Opinions, etc................................................53
Section 10.02 Form of Documents Delivered to Indenture Trustee.........................................54
Section 10.03 Acts of Noteholders......................................................................55
Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Credit Enhancer
and Rating Agencies......................................................................56
Section 10.05 Notices to Noteholders; Waiver...........................................................56
Section 10.06 Alternate Payment and Notice Provisions..................................................57
Section 10.07 Conflict with Trust Indenture Act........................................................57
Section 10.08 Effect of Headings.......................................................................57
Section 10.09 Successors and Assigns...................................................................57
Section 10.10 Separability.............................................................................57
Section 10.11 Benefits of Indenture....................................................................58
Section 10.12 Legal Holidays...........................................................................58
Section 10.13 Governing Law............................................................................58
Section 10.14 Counterparts.............................................................................58
Section 10.15 Recording of Indenture...................................................................58
Section 10.16 Issuer Obligation........................................................................58
Section 10.17 No Petition..............................................................................59
Section 10.18 Inspection...............................................................................59
Signatures and Seals
Acknowledgments
EXHIBITS
Exhibit A Form of Notes
Appendix A Definitions
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RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
----------- -----------------
310(a)(1) ........................... 6.11
(a)2) ........................... 6.11
(a)(3) ........................... 6.10
(a)(4) ........................... Not Applicable
(a)(5) ........................... 6.11
(b) ........................... 6.08, 6.11
(c) ........................... Not Applicable
311(a) ........................... 6.12
(b) ........................... 6.12
(c) ........................... Not Applicable
312(a) ........................... 7.01, 7.02(a)
(b) ........................... 7.02(b)
(c) ........................... 7.02(c)
313(a) ........................... 7.04
(b) ........................... 7.04
(c) ........................... 7.03(a)(iii), 7.04
(d) ........................... 7.04
314(a) ........................... 3.10, 7.03(a)
(b) ........................... 3.07
(c)(1) ........................... 8.05(c), 10.01(a)
(c)(2) ........................... 8.05(c), 10.01(a)
(c)(3) ........................... Not Applicable
(d)(1) ........................... 8.05(c), 10.01(b)
(d)(2) ........................... 8.05(c), 10.01(b)
(d)(3) ........................... 8.05(c), 10.01(b)
(e) ........................... 10.01(a)
315(a) ........................... 6.01(b)
(b) ........................... 6.05
(c) ........................... 6.01(a)
(d) ........................... 6.01(c)
(d)(1) ........................... 6.01(c)
(d)(2) ........................... 6.01(c)
(d)(3) ........................... 6.01(c)
(e) ........................... 5.13
316(a)(1)(A) ........................... 5.11
316(a)(1)(B) ........................... 5.12
316(a)(2) ........................... Not applicable
316(b) ........................... 5.07
317(a)(1) ........................... 5.04
317(a)(2) ........................... 5.03(d)
317(b) ........................... 3.03(a)
318(a) ........................... 10.07
*This reconciliation and tie shall not, for any purpose, be deemed to be part of
the within indenture.
This is the Indenture, dated as of January 27, 2005, between
HOME LOAN TRUST 2005-HI1, a Delaware statutory trust, as Issuer (the "Issuer"),
and JPMorgan Chase Bank, N.A., as Indenture Trustee (in such capacity, the
"Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the Issuer's
Series 2005-HI1 Home Loan-Backed Notes (the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the
Closing Date, as trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created (a) the Home Loans, (b) all funds on deposit from time to time in the
Payment Account and in all proceeds thereof; (c) the Credit Enhancement
Instrument and (d) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or under,
and all proceeds of every kind and nature whatsoever in respect of, any or all
of the foregoing and all payments on or under, and all proceeds of every kind
and nature whatsoever in the conversion thereof, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing (collectively, the "Trust Estate" or the
"Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The foregoing Grant shall inure to the benefit of the Credit
Enhancer in respect of draws made on the Credit Enhancement Instrument and
amounts owing from time to time pursuant to the Insurance Agreement (regardless
of whether such amounts relate to the Notes or the Certificates), and such Grant
shall continue in full force and effect for the benefit of the Credit Enhancer
until all such amounts owing to it have been repaid in full.
The Indenture Trustee, as trustee on behalf of the Holders of
the Notes, acknowledges such Xxxxx, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
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Article I
Definitions
Section 1.01 Definitions. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02 Incorporation by Reference of Trust Indenture Act. Whenever this
Indenture refers to a provision of the Trust Indenture Act (the "TIA"), the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or
defined by Commission rule have the meaning assigned to them by such
definitions.
Section 1.03 Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in
the plural include the singular; and
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(vi) any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as from
time to time amended, modified or supplemented and includes (in the
case of agreements or instruments) references to all attachments
thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
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Article II
Original Issuance of Notes
Section 2.01 Form. The Notes, together with the Indenture Trustee's certificate
of authentication, shall be in substantially the form set forth in Exhibit A,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may, consistently herewith, be determined by the officers executing
such Notes, as evidenced by their execution of the Notes. Any portion of the
text of any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes. The terms of the Notes set forth in
Exhibit A are part of the terms of this Indenture.
Section 2.02 Execution, Authentication and Delivery. The Notes shall be executed
on behalf of the Issuer by any of its Authorized Officers. The signature
of any such Authorized Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and
deliver Notes for original issue in an aggregate initial principal amount of
$70,460,000 with respect to the Class A-1 Notes, $18,983,000 with respect to the
Class A-2 Notes, $46,383,000 with respect to the Class A-3 Notes, $46,094,000
with respect to the Class A-4 Notes and $58,080,000 with respect to the Class
A-5 Notes.
The Notes shall be dated the date of their authentication. The Notes
shall be issuable as registered Notes and the Notes shall be issuable in the
minimum initial Note Balances of $25,000 and in integral multiples of $1 in
excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
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Article III
Covenants
Section 3.01 Collection of Payments with respect to the Home Loans. The
Indenture Trustee shall establish and maintain with itself the Payment Account
in which the Indenture Trustee shall, subject to the terms of this paragraph,
deposit, on the same day as it is received from the Master Servicer, each
remittance received by the Indenture Trustee with respect to the Home Loans. The
Indenture Trustee shall make all payments of principal of and interest on the
Notes, subject to Section 3.03, as provided in Section 3.05 herein from monies
on deposit in the Payment Account.
Section 3.02 Maintenance of Office or Agency. The Issuer will maintain in the
City of New York, an office or agency where, subject to satisfaction of
conditions set forth herein, Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
Section 3.03 Money for Payments To Be Held in Trust; Paying Agent. (a) As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture
Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment
Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03. The Issuer will cause each Paying Agent other
than the Indenture Trustee to execute and deliver to the Indenture Trustee an
instrument in which such Paying Agent shall agree with the Indenture Trustee
(and if the Indenture Trustee acts as Paying Agent it hereby so agrees), subject
to the provisions of this Section 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with respect to
the Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Indenture Trustee and the Credit Enhancer written notice of
any default by the Issuer of which it has actual knowledge in the
making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
5
(iv) immediately resign as Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for the payment of Notes if at any
time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment;
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith; and
(vi) deliver to the Indenture Trustee a copy of the report to Noteholders
prepared with respect to each Payment Date by the Master Servicer
pursuant to Section 4.01 of the Servicing Agreement.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee may also adopt and employ,
at the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
Section 3.04 Existence. The Issuer will keep in full effect its existence,
rights and franchises as a statutory trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Home Loans and each other
instrument or agreement included in the Trust Estate.
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Section 3.05 Payment of Principal and Interest; Defaulted Interest. (a) On each
Payment Date from amounts on deposit in the Payment Account (other than amounts
deposited constituting prepayment charges), the Paying Agent shall pay to the
Noteholders, the Certificate Paying Agent, on behalf of the Certificateholders,
and to other Persons the amounts to which they are entitled, as set forth in the
statements delivered to the Indenture Trustee pursuant to Section 4.01 of the
Servicing Agreement, as set forth below in the following order of priority:
(i) to the Credit Enhancer, the Premium Amount for the Credit Enhancement
Instrument, plus any unpaid Premium Amount from any prior Payment Date
(with interest thereon as provided in the Insurance Agreement);
(ii) to the Noteholders, interest at the related Note Rate for the related
Interest Accrual Period on the related Note Balance immediately prior
to such Payment Date, on a pro rata basis, based on the amount of
interest accrued during the related Interest Accrual Period, plus any
accrued interest remaining unpaid from any prior Payment Date, less any
Prepayment Interest Shortfalls and Relief Act Shortfalls allocated
thereto as provided in Section 3.05(d) below;
(iii) to the Noteholders as principal on the Notes, the Principal Collection
Distribution Amount for such Payment Date, in the order described in
Section 3.05(f) below, until the Note Balances thereof have been
reduced to zero;
(iv) to the Noteholders as principal on the Notes, the Liquidation Loss
Distribution Amount for such Payment Date and any Excess Loss Amount
included in the Insured Payment on such Payment Date, in the order
described in Section 3.05(f) below, until the Note Balances thereof
have been reduced to zero;
(v) to the Credit Enhancer, to reimburse it for prior draws made on the
Credit Enhancement Instrument (with interest thereon as provided in the
Insurance Agreement), except for draws attributable to Excess Loss
Amounts;
(vi) to the Noteholders as principal on the Notes, the Reserve Increase
Amount for such Payment Date, in the order described in Section 3.05(f)
below, until the Note Balances thereof have been reduced to zero;
(vii) to the Credit Enhancer, any other amounts owed to the Credit Enhancer
pursuant to the Insurance Agreement;
(viii) to the Indenture Trustee, any amounts owing to the Indenture Trustee
pursuant to Section 6.07 remaining unpaid; and
(ix) any remaining amount and any amounts constituting prepayment charges to
the Certificate Paying Agent, on behalf of the holders of the
Certificates.
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provided, however, in the event that on a Payment Date a Credit Enhancer Default
shall have occurred and be continuing, (a) no payments will be made to the
Credit Enhancer pursuant to clause (v) above until all Insured Payments that are
due and required to be paid by the Credit Enhancer on the Notes on such Payment
Date or were due and required to be paid by the Credit Enhancer on any prior
Payment Date have been paid in full, (b) any amounts payable to the Credit
Enhancer pursuant to clause (v) shall instead be paid pursuant to clause (vii)
and (c) any Excess Loss Amounts will be allocated on a pro rata basis to the
Notes based on their outstanding Note Balances, in reduction of the Note
Balances thereof, until the Note Balances thereof have been reduced to zero. In
addition, on the Final Insured Payment Date or other final Payment Date
(including the Payment Date following any purchase by the Master Servicer of the
Home Loans pursuant to Section 8.08 of the Servicing Agreement), the amount to
be paid pursuant to clause (ii) above shall be equal to the aggregate Note
Balance of the Notes immediately prior to such Payment Date.
(b) On each Payment Date, the Certificate Paying Agent shall deposit in the
Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of distributing such funds to the
Certificateholders.
(c) The amounts paid to Noteholders shall be paid to the Notes in accordance
with their respective Percentage Interests. Interest will accrue on the Notes
(other than the Class A-1 Notes) on the basis of a 360-day year consisting of
twelve 30-day months. Interest will accrue on the Class A-1 Notes on the basis
of a 360-day year and the actual number of days in the related Interest Accrual
Period.
(d) To the extent the amount for deposit in the Payment Account available for
interest distributions on the Notes is less than the aggregate amount of note
interest on the Notes, a draw on the Guaranty Insurance Policy will be made;
provided, however, that to extent such shortfall is a result of Prepayment
Interest Shortfalls and Relief Act Shortfalls, whether related to the current
Collection Period or a prior Collection Period, the shortfall will not be
covered by the Guaranty Insurance Policy, and the shortfall will be allocated to
the amount of accrued interest on the Notes on a pro rata basis.
(e) Any installment of interest or principal, if any, payable on any Note that
is punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall, if such Holder holds Notes of an aggregate initial Note Balance of
at least $1,000,000, be paid to each Holder of record on the preceding Record
Date, by wire transfer to an account specified in writing by such Holder
reasonably satisfactory to the Indenture Trustee as of the preceding Record Date
or in all other cases or if no such instructions have been delivered to the
Indenture Trustee, by check or money order to such Noteholder mailed to such
Holder's address as it appears in the Note Register the amount required to be
distributed to such Holder on such Payment Date pursuant to such Holder's
Securities; provided, however, that the Indenture Trustee shall not pay to such
Holders any amount required to be withheld from a payment to such Holder by the
Code.
(f) Any payments to the Notes pursuant to clauses 3.05(a)(ii), (iii) and (vi)
above plus amounts drawn on the Credit Enhancement Instrument in respect of
principal shall be distributed to the Class A-1, Class A-2, Class A-3, Class A-4
and Class A-5 Notes, in that order, in each case until the outstanding Note
Balance thereof has been reduced to zero.
8
(g) The principal of each Note shall be due and payable in full on the Final
Insured Payment Date as provided in the form of Note set forth in Exhibit A. All
principal payments on the Notes shall be made to the Noteholders entitled
thereto in accordance with the Percentage Interests represented by such Notes.
Upon written notice to the Indenture Trustee by the Issuer (or by the Master
Servicer on behalf of the Issuer, pursuant to Section 8.08(e) of the Servicing
Agreement) of the Final Insured Payment Date for the Notes or other final
Payment Date, the Indenture Trustee shall notify the related Noteholders of
record of the Final Insured Payment Date or other final Payment Date, by mail or
facsimile, no later than five Business Days prior to the Final Insured Payment
Date or other final Payment Date and shall specify:
(i) that the Record Date otherwise applicable to such Payment Date is not
applicable;
(ii) that payment of the principal amount and any interest due with respect to
such Note at the Final Insured Payment Date or other final Payment Date will be
payable only upon presentation and surrender of such Note to the Indenture
Trustee or the Paying Agent in accordance with Section 3.03 of this Indenture
and shall specify the place where such Note may be presented and surrendered for
such final payment; and
(iii) the amount of any such final payment, if known.
Section 3.06 Protection of Trust Estate. (a) The Issuer will from time to time
execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable
to:
(i) maintain or preserve the lien and security interest (and the priority
thereof) of this Indenture or carry out more effectively the purposes
hereof;
(ii) perfect, publish notice of or protect the validity of any Grant made or
to be made by this Indenture;
(iii) cause the Trust to enforce any of the Home Loans; or
(iv) preserve and defend title to the Trust Estate and the rights of the
Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture Trustee
shall not remove any portion of the Trust Estate that consists of money
or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the most recent
Opinion of Counsel delivered pursuant to Section 3.07 (or from the
jurisdiction in which it was held as described in the Opinion of
Counsel delivered at the Closing Date pursuant to Section 3.07(a), if
no Opinion of Counsel has yet been delivered pursuant to Section
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3.07(b)) unless the Trustee shall have first received an Opinion of
Counsel to the effect that the lien and security interest created by
this Indenture with respect to such property will continue to be
maintained after giving effect to such action or actions. The Issuer
hereby designates the Indenture Trustee its agent and attorney-in-fact
to execute any financing statement, continuation statement or other
instrument required to be executed pursuant to this Section 3.06.
Section 3.07 Opinions as to Trust Estate. (a) On the Closing Date, the Issuer
shall furnish to the Indenture Trustee and the Owner Trustee an Opinion of
Counsel at the expense of the Issuer either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and filing of
this Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the lien and security interest in the Home Loans and reciting the
details of such action, or stating that, in the opinion of such counsel, no such
action is necessary to make such lien and security interest effective.
(b) On or before December 31st in each calendar year, beginning in 2005, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, rerecording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and security interest in the Home Loans and reciting the details of such
action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and the execution and filing of any financing statements and continuation
statements that will, in the opinion of such counsel, be required to maintain
the lien and security interest in the Home Loans until December 31 in the
following calendar year.
Section 3.08 Performance of Obligations; Servicing Agreement. (a) The Issuer
will punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Basic Documents and in the instruments and
agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in performing its
duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer.
(c) The Issuer will not take any action or permit any action to be taken by
others which would release any Person from any of such Person's covenants or
obligations under any of the documents relating to the Home Loans or under any
instrument included in the Trust Estate, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the documents relating to the Home Loans or
any such instrument, except such actions as the Master Servicer is expressly
permitted to take in the Servicing Agreement.
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(d) The Issuer may retain an administrator and may enter into contracts with
other Persons for the performance of the Issuer's obligations hereunder, and
performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.
Section 3.09 Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, sell, transfer,
exchange or otherwise dispose of the Trust Estate, unless directed to
do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against
any present or former Noteholder by reason of the payment of the taxes
levied or assessed upon any part of the Trust Estate;
(iii) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to
the Notes under this Indenture except as may be expressly permitted
hereby, permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden the Trust
Estate or any part thereof or any interest therein or the proceeds
thereof or (B) permit the lien of this Indenture not to constitute a
valid first priority security interest in the Trust Estate; or
(iv) waive or impair, or fail to assert rights under the Home Loans, or
cause to be impaired the Home Loans or the Issuer's interest in the
Home Loans, the Home Loan Purchase Agreement or in any Basic Document,
if any such action would materially and adversely affect the interests
of the Noteholders.
Section 3.10 Annual Statement as to Compliance. The Issuer will deliver to the
Indenture Trustee, within 120 days after the end of each fiscal year of the
Issuer (commencing with the fiscal year 2005), an Officer's Certificate stating,
as to the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and of its
performance under this Indenture and the Trust Agreement has been made
under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture and the provisions of the Trust Agreement throughout
such year, or, if there has been a default in its compliance with any
such condition or covenant, specifying each such default known to such
Authorized Officer and the nature and status thereof.
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Section 3.11 Recording of Assignments. The Issuer shall enforce the obligation
of the Seller under the Home Loan Purchase Agreement to submit or cause to be
submitted for recording all Assignments of Mortgages within 60 days of receipt
of recording information by the Master Servicer.
Section 3.12 Representations and Warranties Concerning the Home Loans. The
Indenture Trustee, as pledgee of the Home Loans, has the benefit of the
representations and warranties made by the Seller in Section 3.1(a) and Section
3.1(b) of the Home Loan Purchase Agreement concerning the Home Loans and the
right to enforce the remedies against the Seller provided in such Section 3.1(a)
or Section 3.1(b) to the same extent as though such representations and
warranties were made directly to the Indenture Trustee.
Section 3.13 Assignee of Record of the Home Loans. The Issuer hereby directs and
authorizes the Indenture Trustee to hold record title to the Home Loans by being
named as payee in the endorsements of the Mortgage Notes and assignee in the
Assignments of Mortgage to be recorded under Section 2.1 of the Home Loan
Purchase Agreement. Except as expressly provided in the Home Loan Purchase
Agreement or in the Servicing Agreement with respect to any specific Home Loan,
the Indenture Trustee shall not execute any endorsement or assignment or
otherwise release or transfer such record title to any of the Home Loans until
such time as the remaining Trust Estate may be released pursuant to Section
8.05(b). The Indenture Trustee's holding of such record title shall in all
respects be subject to its fiduciary obligations to the Noteholders hereunder.
Section 3.14 Master Servicer as Agent and Bailee of the Indenture Trustee.
Solely for purposes of perfection under Section 9-305 of the Uniform Commercial
Code or other similar applicable law, rule or regulation of the state in which
such property is held by the Master Servicer, the Issuer and the Indenture
Trustee hereby acknowledge that the Master Servicer is acting as agent and
bailee of the Indenture Trustee in holding amounts on deposit in the Custodial
Account pursuant to Section 3.02 of the Servicing Agreement that are allocable
to the Home Loans, as well as its agent and bailee in holding any Related
Documents released to the Master Servicer pursuant to Section 3.06(c) of the
Servicing Agreement, and any other items constituting a part of the Trust Estate
which from time to time come into the possession of the Master Servicer. It is
intended that, by the Master Servicer's acceptance of such agency pursuant to
Section 3.02 of the Servicing Agreement, the Indenture Trustee, as a pledgee of
the Home Loans, will be deemed to have possession of such Related Documents,
such monies and such other items for purposes of Section 9-305 of the Uniform
Commercial Code of the state in which such property is held by the Master
Servicer.
Section 3.15 Investment Company Act. The Issuer shall not become an "investment
company" or "controlled by" an investment company as such terms are defined in
the Investment Company Act of 1940, as amended (or any successor or amendatory
statute), and the rules and regulations thereunder (taking into account not only
the general definition of the term "investment company" but also any available
exceptions to such general definition); provided, however, that the Issuer shall
be in compliance with this Section 3.15 if it shall have obtained an order
exempting it from regulation as an "investment company" so long as it is in
compliance with the conditions imposed in such order.
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Section 3.16 Issuer May Consolidate, etc. (a) The Issuer shall not consolidate
or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under
the laws of the United States of America or any state or the District
of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form
reasonably satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and to the
Certificate Paying Agent, on behalf of the Certificateholders and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction, no Event of
Default shall have occurred and be continuing;
(iii) the Issuer receives consent of the Credit Enhancer and the Rating
Agencies shall have notified the Issuer (with a copy to the Indenture
Trustee) that such transaction shall not cause the rating of the Notes
or the Certificates to be reduced, suspended or withdrawn or to be
considered by either Rating Agency to be below investment grade without
taking into account the Credit Enhancement Instrument;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have
delivered copies thereof to the Indenture Trustee and the Credit
Enhancer) to the effect that such transaction will not have any
material adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with
this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person,
unless:
(i) the Person that acquires by conveyance or transfer the properties and
assets of the Issuer, the conveyance or transfer of which is hereby
restricted shall (A) be a United States citizen or a Person organized
and existing under the laws of the United States of America or any
state, (B) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of
and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agree by
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means of such supplemental indenture that all right, title and interest
so conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agree to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense
arising under or related to this Indenture and the Notes and (E)
expressly agree by means of such supplemental indenture that such Person
(or if a group of Persons, then one specified Person) shall make all
filings with the Commission (and any other appropriate Person) required
by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing;
(iii) the Issuer receives consent of the Credit Enhancer and the Rating
Agencies shall have notified the Issuer (with a copy to the Indenture
Trustee) that such transaction shall not cause the rating of the Notes,
without regard to the Credit Enhancement Instrument, to be reduced,
suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have
delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to
the Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such conveyance
or transfer and such supplemental indenture comply with this Article
III and that all conditions precedent herein provided for relating to
such transaction have been complied with (including any filing required
by the Exchange Act).
Section 3.17 Successor or Transferee. (a) Upon any consolidation or merger of
the Issuer in accordance with Section 3.16(a), the Person formed by or surviving
such consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the Issuer
pursuant to Section 3.16(b), the Issuer will be released from every covenant and
agreement of this Indenture to be observed or performed on the part of the
Issuer with respect to the Notes immediately upon the delivery of written notice
to the Indenture Trustee of such conveyance or transfer.
Section 3.18 No Other Business. The Issuer shall not engage in any business
other than financing, purchasing, owning and selling and managing the Home Loans
and the issuance of the Notes and Certificates in the manner contemplated by
this Indenture and the Basic Documents and all activities incidental thereto.
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Section 3.19 No Borrowing. The Issuer shall not issue, incur, assume, guarantee
or otherwise become liable, directly or indirectly, for any indebtedness except
for the Notes.
Section 3.20 Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by this Indenture or the Basic Documents, the Issuer shall not make
any loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
Section 3.21 Capital Expenditures. The Issuer shall not make any expenditure (by
long-term or operating lease or otherwise) for capital assets (either realty or
personalty).
Section 3.22 Owner Trustee Not Liable for Certificates or Related Documents. The
recitals contained herein shall be taken as the statements of the Depositor, and
the Owner Trustee assumes no responsibility for the correctness thereof. The
Owner Trustee makes no representations as to the validity or sufficiency of this
Indenture, of any Basic Document or of the Certificates (other than the
signatures of the Owner Trustee on the Certificates) or the Notes, or of any
Related Documents. The Owner Trustee shall at no time have any responsibility or
liability with respect to the sufficiency of the Owner Trust Estate or its
ability to generate the payments to be distributed to Certificateholders under
the Trust Agreement or the Noteholders under this Indenture, including, the
compliance by the Depositor or the Seller with any warranty or representation
made under any Basic Document or in any related document or the accuracy of any
such warranty or representation, or any action of the Certificate Paying Agent,
the Certificate Registrar or the Indenture Trustee taken in the name of the
Owner Trustee.
Section 3.23 Restricted Payments. The Issuer shall not, directly or indirectly,
(i) pay any dividend or make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to
the Owner Trustee or any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest or security in or of
the Issuer, (ii) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; provided, however, that the Issuer
may make, or cause to be made, (x) distributions to the Owner Trustee and the
Certificateholders as contemplated by, and to the extent funds are available for
such purpose under the Trust Agreement, and (y) payments to the Master Servicer
pursuant to the terms of the Servicing Agreement. The Issuer will not, directly
or indirectly, make payments to or distributions from the Custodial Account
except in accordance with this Indenture and the Basic Documents.
15
Section 3.24 Notice of Events of Default. The Issuer shall give the Indenture
Trustee, the Credit Enhancer and the Rating Agencies prompt written notice of
each Event of Default hereunder and under the Trust Agreement.
Section 3.25 Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
Section 3.26 Statements to Noteholders. On each Payment Date, the Indenture
Trustee and the Certificate Registrar shall forward by mail or otherwise make
available electronically to each Noteholder and Certificateholder, respectively,
the statement delivered to it, on the Business Day following the related
Determination Date pursuant to Section 4.01 of the Servicing Agreement.
Section 3.27 Payments under the Credit Enhancement Instrument. (a) On any
Payment Date, including the Final Insured Payment Date, the Indenture Trustee
shall make a draw on the Credit Enhancement Instrument in an amount, if any,
equal to the Insured Payment. On any Dissolution Payment Date, the Indenture
Trustee shall make a draw on the Credit Enhancement Instrument in an amount, if
any, equal to the Dissolution Draw.
(b) The Indenture Trustee shall submit, if a Insured Payment or Dissolution Draw
is specified in any Servicing Certificate prepared by the Master Servicer
pursuant to Section 4.01 of the Servicing Agreement, the Notice of Non Payment
and Demand for Payment of Insured Amounts (in the form attached as Exhibit A to
the Credit Enhancement Instrument) in the amount of the Insured Payment or
Dissolution Draw to the Credit Enhancer no later than 2:00 P.M., New York City
time, on the second Business Day prior to the applicable Payment Date. Upon
receipt of such Insured Payment in accordance with the terms of the Credit
Enhancement Instrument or Dissolution Draw, the Indenture Trustee shall deposit
such Insured Payment in the Payment Account for distribution to Noteholders
pursuant to Section 3.05 and shall distribute such Dissolution Draw in
accordance with Section 5.04.
Section 3.28 Reserved.
Section 3.29 Determination of Class A-1 Note Rate. On the second LIBOR Business
Day immediately preceding (i) the Closing Date in the case of the first Interest
Accrual Period and (ii) the first day of each succeeding Interest Accrual
Period, the Indenture Trustee shall determine LIBOR and the Note Rate for the
Class A-1 Notes for such Interest Accrual Period and shall inform the Issuer,
the Master Servicer, the Credit Enhancer and the Depositor at their respective
facsimile numbers given to the Indenture Trustee in writing. All determinations
of LIBOR by the Indenture Trustee shall, in the absence of manifest error, be
conclusive for all purposes, and each holder of a Class A-1 Note, by accepting
this Class A-1 Note, agrees to be bound by such determination.
Section 3.30 Liquidation on Final Insured Payment Date. On the Final Insured
Payment Date, if the Notes are not paid in full on or prior to the Final Insured
Payment Date, the Indenture Trustee shall take full account of the assets and
liabilities of the Owner Trust, shall liquidate the assets, in a commercially
reasonable manner and on commercially reasonable terms, as promptly as is
consistent with obtaining the fair value thereof and in accordance with Section
5.15, and shall apply and distribute the proceeds therefrom net of expenses
incurred by the Indenture Trustee in connection with such liquidation in the
order of priority described in Section 3.05(b).
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Section 3.31 No Recourse. Upon the occurrence of an Event of Default under the
Notes, this Indenture or the other Basic Documents, Holders of the Notes shall
have recourse only to the Collateral and all proceeds thereof, as and to the
extent provided herein, and no recourse shall be had by such Holders against the
Issuer or its other assets or properties.
Section 3.32 Additional UCC Representations and Warranties. The Issuer hereby
represents and warrants that:
(i) this Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in the Trust Estate in favor of the
Indenture Trustee on behalf of the Holders of the Notes, which security
interest is prior to all other liens, and is enforceable as such as
against creditors of the Issuer.
(ii) the Issuer owns and has good and marketable title to the Trust Estate
free and clear of any lien, claim or encumbrance of any Person.
(iii) the Issuer will cause the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions
under applicable law within 10 days of the Closing Date in order to
perfect the security interest in the Trust Estate granted to the
Indenture Trustee on behalf of the Holders of the Notes.
(iv) other than the security interest granted to the Indenture Trustee on
behalf of the Holders of the Notes pursuant to the Basic Documents, the
Issuer has not pledged, assigned, sold, granted a security interest in,
or otherwise conveyed any of the Trust Estate. The Issuer is not aware
of any judgment or tax lien filings against it. The Issuer has not
authorized the filing of and is not aware of any financing statements
against the Issuer that include a description of collateral covering
the Trust Estate other than any financing statement (i) relating to the
security interest granted to Indenture Trustee on behalf of the Holders
of the Notes hereunder or (ii) that has been terminated.
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Article IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01 The Notes. The Notes shall be registered in the name of a nominee
designated by the Depository. Beneficial Owners will hold interests in the Notes
as set forth in Section 4.06 herein in minimum initial Note Balances of $25,000
and integral multiples of $1 in excess thereof.
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Notes for the
purposes of exercising the rights of Holders of Notes hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive certificates for the Notes
as to which they are the Beneficial Owners. Requests and directions from, and
votes of, the Depository as Holder of the Notes shall not be deemed inconsistent
if they are made with respect to different Beneficial Owners. The Indenture
Trustee may establish a reasonable record date in connection with solicitations
of consents from or voting by Noteholders and give notice to the Depository of
such record date. Without the consent of the Issuer and the Indenture Trustee,
no Note may be transferred by the Depository except to a successor Depository
that agrees to hold such Note for the account of the Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Notes it
beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer
by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Note Registrar and delivered by the Indenture
Trustee to or upon the order of the Issuer.
Section 4.02 Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate Registrar. The Issuer shall cause to be kept at the
Indenture Trustee's Corporate Trust Office a Note Register in which, subject to
such reasonable regulations as it may prescribe, the Note Registrar shall
provide for the registration of Notes and of transfers and exchanges of Notes as
herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office, the Issuer shall execute and the Note Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes in authorized initial Note Balances evidencing the same aggregate
Percentage Interests.
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Subject to the foregoing, at the option of the Noteholders, Notes may
be exchanged for other Notes of like tenor, in authorized initial Note Balances
evidencing the same aggregate Percentage Interests upon surrender of the Notes
to be exchanged at the Corporate Trust Office of the Note Registrar. Whenever
any Notes are so surrendered for exchange, the Issuer shall execute and the Note
Registrar shall authenticate and deliver the Notes which the Noteholder making
the exchange is entitled to receive. Each Note presented or surrendered for
registration of transfer or exchange shall (if so required by the Note
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed by,
the Holder thereof or his attorney duly authorized in writing with such
signature guaranteed by a commercial bank or trust company located or having a
correspondent located in the city of New York. Notes delivered upon any such
transfer or exchange will evidence the same obligations, and will be entitled to
the same rights and privileges, as the Notes surrendered.
No service charge shall be imposed for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment by the
transferee of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall
be cancelled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges thereof pursuant to
Section 3.05 of the Trust Agreement. The Indenture Trustee hereby accepts such
appointment.
Each purchaser of a Note, by its acceptance of the Note, shall be
deemed to have represented that either (i) it is not a Plan nor is it acquiring
a Note with Plan Assets or (2) the acquisition of such Note by the purchaser
does not constitute or give rise to a prohibited transaction under Section 406
of ERISA or Section 4975 of the Code, for which no statutory, regulatory or
administrative exemption is available.
The Notes may not be purchased with the assets of an ERISA plan if the
Depositor, the Master Servicer, the owner of the Certificates, the Indenture
Trustee, the Owner Trustee or any of their Affiliates:
(i) has investment or administrative discretion with respect to the ERISA plan's
assets;
(ii) has authority or responsibility to give, or regularly gives, investment
advice regarding the ERISA plan's assets, for a fee and under an agreement or
understanding that the advice will serve as a primary basis for investment
decisions regarding the ERISA plan's assets and will be based on the particular
investment needs for the ERISA plan; or
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(iii) is an employer maintaining or contributing to the ERISA plan.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated
Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, and
(ii) there is delivered to the Indenture Trustee such security or indemnity as
may be required by it to hold the Issuer and the Indenture Trustee harmless,
then, in the absence of notice to the Issuer, the Note Registrar or the
Indenture Trustee that such Note has been acquired by a bona fide purchaser, and
provided that the requirements of Section 8-405 of the UCC are met, the Issuer
shall execute, and upon its request the Indenture Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a replacement Note; provided, however, that if any such destroyed,
lost or stolen Note, but not a mutilated Note, shall have become or within seven
days shall be due and payable, instead of issuing a replacement Note, the Issuer
may pay such destroyed, lost or stolen Note when so due or payable without
surrender thereof. If, after the delivery of such replacement Note or payment of
a destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
and the Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was delivered or
any assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder. The
provisions of this Section 4.03 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes.
Section 4.04 Persons Deemed Owners. Prior to due presentment for registration of
transfer of any Note, the Issuer, the Indenture Trustee and any agent of the
Issuer or the Indenture Trustee may treat the Person in whose name any Note is
registered (as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
none of the Issuer, the Indenture Trustee or any agent of the Issuer or the
Indenture Trustee shall be affected by notice to the contrary.
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Section 4.05 Cancellation. All Notes surrendered for payment, registration of
transfer, exchange or redemption shall, if surrendered to any Person other than
the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section 4.05, except as expressly permitted by
this Indenture. All cancelled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Request that they
be destroyed or returned to it; provided however, that such Issuer Request is
timely and the Notes have not been previously disposed of by the Indenture
Trustee.
Section 4.06 Book-Entry Notes. Each Class of Notes shall initially be issued as
one or more Notes held by the Book-Entry Custodian or, if appointed to hold such
Notes as provided below, the Depository Trust Company, the initial Depository,
and registered in the name of its nominee Cede & Co. Except as provided below,
registration of such Notes may not be transferred by the Indenture Trustee
except to another Depository that agrees to hold such Notes for the respective
Beneficial Owners. The Indenture Trustee is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and, if it is no longer qualified
to act as such, the Book-Entry Custodian shall, appoint, by a written instrument
delivered to the Depositor, the Master Servicer and, if the Indenture Trustee is
not the Book-Entry Custodian, the Indenture Trustee, any other transfer agent
(including the Depository or any successor Depository) to act as Book-Entry
Custodian under such conditions as the predecessor Book-Entry Custodian and the
Depository or any successor Depository may prescribe, provided that the
predecessor Book-Entry Custodian shall not be relieved of any of its duties or
responsibilities by reason of any new appointment, except if the Depository is
the successor to the Book-Entry Custodian. If the Indenture Trustee resigns or
is removed in accordance with the terms hereof, the successor trustee or, if it
so elects, the Depository shall immediately succeed to its predecessor's duties
as Book-Entry Custodian. The Depositor shall have the right to inspect, and to
obtain copies of, any Notes held as Book-Entry Notes by the Book-Entry
Custodian. No Beneficial Owner will receive a Definitive Note representing such
Beneficial Owner's interest in such Note, except as provided in Section 4.08.
Unless and until definitive, fully registered Notes (the "Definitive Notes")
have been issued to Beneficial Owners pursuant to Section 4.08:
(i) the provisions of this Section 4.06 shall be in full force and effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled to deal with
the Depository for all purposes of this Indenture (including the payment of
principal of and interest on the Notes and the giving of instructions or
directions hereunder) as the sole holder of the Notes, and shall have no
obligation to the Owners of Notes;
(iii) to the extent that the provisions of this Section 4.06 conflict with any
other provisions of this Indenture, the provisions of this Section 4.06 shall
control;
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(iv) the rights of Beneficial Owners shall be exercised only through the
Depository and shall be limited to those established by law and agreements
between such Owners of Notes and the Depository and/or the Depository
Participants. Unless and until Definitive Notes are issued pursuant to Section
4.08, the initial Depository will make Book-Entry transfers among the Depository
Participants and receive and transmit payments of principal of and interest on
the Notes to such Depository Participants; and
(v) whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of Holders of Notes evidencing a specified percentage
of the aggregate Note Balance of the Notes, the Depository shall be deemed to
represent such percentage only to the extent that it has received instructions
to such effect from Beneficial Owners and/or Depository Participants owning or
representing, respectively, such required percentage of the beneficial interest
in the Notes and has delivered such instructions to the Indenture Trustee.
Section 4.07 Notices to Depository. Whenever a notice or other communication to
the Note Holders is required under this Indenture, unless and until Definitive
Notes shall have been issued to Beneficial Owners pursuant to Section 4.08, the
Indenture Trustee shall give all such notices and communications specified
herein to be given to Holders of the Notes to the Depository, and shall have no
obligation to the Beneficial Owners.
Section 4.08 Definitive Notes. If (i) the Indenture Trustee determines that the
Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the Book-Entry system through the Depository or (iii) after the occurrence of an
Event of Default, Owners of Notes representing beneficial interests aggregating
at least a majority of the aggregate Note Balance of the Notes advise the
Depository in writing that the continuation of a Book-Entry system through the
Depository is no longer in the best interests of the Beneficial Owners, then the
Depository shall notify all Beneficial Owners and the Indenture Trustee of the
occurrence of any such event and of the availability of Definitive Notes to
Beneficial Owners requesting the same. Upon surrender to the Indenture Trustee
of the typewritten Notes representing the Book-Entry Notes by the Book-Entry
Custodian or the Depository, as applicable, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Depository. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
Section 4.09 Tax Treatment. The Issuer has entered into this Indenture, and the
Notes will be issued, with the intention that, for federal, state and local
income, single business and franchise tax purposes, the Notes will qualify as
indebtedness of the Issuer. The Issuer, by entering into this Indenture, and
each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
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Section 4.10 Satisfaction and Discharge of Indenture. This Indenture shall cease
to be of further effect with respect to the Notes except as to (i) rights of
registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.11) and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes, when
(A) either
(1) the Notes theretofore authenticated and delivered (other than (i) Notes
that have been destroyed, lost or stolen and that have been replaced or
paid as provided in Section 4.03 and (ii) Notes for whose payment money
has theretofore been deposited in trust or segregated and held in trust
by the Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.03) have been delivered to the
Indenture Trustee for cancellation; or
(2) the Notes not theretofore delivered to the Indenture Trustee for
cancellation
a. have become due and payable,
b. will become due and payable at the Final Insured
Payment Date within one year, or
c. have been declared immediately due and payable
pursuant to Section 5.02.
and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on
such Notes then outstanding not theretofore delivered to the Indenture Trustee
for cancellation when due on the Final Insured Payment Date;
(B) the Issuer has paid or caused to be paid all other sums payable
hereunder and under the Insurance Agreement by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee and the Credit
Enhancer an Officer's Certificate and an Opinion of Counsel, each
meeting the applicable requirements of Section 10.01 and each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with
and, if the Opinion of Counsel relates to a deposit made in connection
with Section 4.10(A)(2)b. above, such opinion shall further be to the
effect that such deposit will not have any material adverse tax
consequences to the Issuer, any Noteholders or any Certificateholders.
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Section 4.11 Application of Trust Money. All monies deposited with the Indenture
Trustee pursuant to Section 4.10 hereof shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent or Certificate Paying
Agent, as the Indenture Trustee may determine, to the Holders of Securities, of
all sums due and to become due thereon for principal and interest; but such
monies need not be segregated from other funds except to the extent required
herein or required by law.
Section 4.12 Subrogation and Cooperation. (a) The Issuer and the Indenture
Trustee acknowledge that (i) to the extent the Credit Enhancer makes payments
under the Credit Enhancement Instrument on account of principal of or interest
on the Home Loans, the Credit Enhancer will be fully subrogated to the rights of
the Noteholders to receive such principal and interest from the Home Loans, and
(ii) the Credit Enhancer shall be paid such principal and interest but only from
the sources and in the manner provided herein and in the Insurance Agreement for
the payment of such principal and interest.
The Indenture Trustee shall cooperate in all respects with any
reasonable request by the Credit Enhancer for action to preserve or enforce the
Credit Enhancer's rights or interest under this Indenture or the Insurance
Agreement, consistent with this Indenture and without limiting the rights of the
Noteholders as otherwise set forth in the Indenture, including, without
limitation, upon the occurrence and continuance of a default under the Insurance
Agreement, a request to take any one or more of the following actions:
(i) institute Proceedings for the collection of all amounts then payable on
the Notes, or under this Indenture in respect to the Notes and all
amounts payable under the Insurance Agreement and to enforce any
judgment obtained and collect from the Issuer monies adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or interest
therein, at one or more public or private Sales (as defined in Section
5.15 hereof) called and conducted in any manner permitted by law;
(iii) file or record all assignments that have not previously been recorded;
(iv) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the Uniform Commercial
Code and take any other appropriate action to protect and enforce the
rights and remedies of the Credit Enhancer hereunder.
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Following the payment in full of the Notes, the Credit
Enhancer shall continue to have all rights and privileges provided to it under
this Section and in all other provisions of this Indenture, until all amounts
owing to the Credit Enhancer have been paid in full.
Section 4.13 Repayment of Monies Held by Paying Agent. In connection with the
satisfaction and discharge of this Indenture with respect to the Notes, all
monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
Section 4.14 Temporary Notes. Pending the preparation of any Definitive Notes,
the Issuer may execute and upon its written direction, the Indenture Trustee may
authenticate and make available for delivery, temporary Notes that are printed,
lithographed, typewritten, photocopied or otherwise produced, in any
denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of the
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the office or agency of the Indenture
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Issuer shall execute and the Indenture Trustee
shall authenticate and make available for delivery, in exchange therefor,
Definitive Notes of authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
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Article V
Default and Remedies
Section 5.01 Events of Default. The Issuer shall deliver to the Indenture
Trustee and the Credit Enhancer, within five calendar days after learning of the
occurrence of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (iii) of the definition of "Event
of Default" written notice in the form of an Officer's Certificate of its status
and what action the Issuer is taking or proposes to take with respect thereto.
Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an Event of
Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Holders of Notes representing not less than a majority
of the aggregate Note Balance of all Notes with the written consent of the
Credit Enhancer, or the Credit Enhancer may declare the Notes to be immediately
due and payable, by a notice in writing to the Issuer (and to the Indenture
Trustee if given by Noteholders), and upon any such declaration the unpaid
principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Holders of Notes representing a
majority of the aggregate Note Balance of all Notes, by written notice to the
Issuer and the Indenture Trustee with the written consent of the Credit
Enhancer, or the Credit Enhancer, may in writing waive the related Event of
Default and rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient
to pay:
(A) all sums due and payable to the Credit Enhancer;
(B) all payments of principal of and interest on the
Notes and all other amounts that would then be due hereunder
or upon the Notes if the Event of Default giving rise to such
acceleration had not occurred;
(C) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal of
the Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
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Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee.
(a) Subject to Section 3.31, the Issuer covenants that if default in the
payment of (i) any interest on any Note when the same becomes due and
payable, and such default continues for a period of five days, or (ii)
the principal of or any installment of the principal of any Note when
the same becomes due and payable, the Issuer shall, upon demand of the
Indenture Trustee, pay to it, for the benefit of the Holders of Notes,
the whole amount then due and payable on the Notes for principal and
interest, with interest upon the overdue principal, and in addition
thereto such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its
agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an
express trust, subject to the provisions of Section 10.17 hereof may
institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree,
and may enforce the same against the Issuer or other obligor upon the
Notes and collect in the manner provided by law out of the property of
the Issuer or other obligor upon the Notes, wherever situated, the
monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee
subject to the provisions of Section 10.17 hereof may, as more
particularly provided in Section 5.04, in its discretion, proceed to
protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or
in aid of the exercise of any power granted herein, or to enforce any
other proper remedy or legal or equitable right vested in the Indenture
Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of
the Issuer or its property or such other obligor or Person, or in case
of any other comparable judicial Proceedings relative to the Issuer or
other obligor upon the Notes, or to the creditors or property of the
Issuer or such other obligor, the Indenture Trustee, irrespective of
whether the principal of any Notes shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee shall have made any demand pursuant to
the provisions of this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of principal
and interest owing and unpaid in respect of the Notes and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any claim for
27
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence, willful misconduct or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on behalf
of the Holders of Notes in any election of a trustee, a standby trustee
or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture
Trustee or the Holders of Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property; and any trustee,
receiver, liquidator, custodian or other similar official in any such
Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such
Noteholders, to pay to the Indenture Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Indenture Trustee,
each predecessor Indenture Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence, willful misconduct
or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any
Holder thereof or to authorize the Indenture Trustee to vote in respect
of the claim of any Noteholder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or
similar Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in
any trial or other Proceedings relative thereto, and any such action or
proceedings instituted by the Indenture Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment,
subject to the payment of the expenses, disbursements and compensation
of the Indenture Trustee, each predecessor Indenture Trustee and their
respective agents and attorneys, shall be for the ratable benefit of
the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the
Indenture Trustee shall be held to represent all the Holders of the
Notes, and it shall not be necessary to make any Noteholder a party to
any such Proceedings.
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Section 5.04 Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing, the Indenture Trustee subject to the provisions of
Section 10.17 hereof may with the written consent of the Credit Enhancer, or
shall at the written direction of the Credit Enhancer, do one or more of the
following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or
under this Indenture with respect thereto, whether by declaration or
otherwise, and all amounts payable under the Insurance Agreement,
enforce any judgment obtained, and collect from the Issuer and any
other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take any
other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or interest
therein, at one or more public or private sales called and conducted in
any manner permitted by law; provided, however, that the Indenture
Trustee may not sell or otherwise liquidate the Trust Estate following
an Event of Default, unless (A) the Indenture Trustee obtains the
consent of the Holders of 100% of the aggregate Note Balance of the
Notes and the Credit Enhancer, which consent will not be unreasonably
withheld, (B) the proceeds of such Sale distributable to Holders are
sufficient to discharge in full all amounts then due and unpaid upon the
Notes for principal and interest and to reimburse the Credit Enhancer
for any amounts drawn under the Credit Enhancement Instrument and any
other amounts due the Credit Enhancer under the Insurance Agreement or
(C) the Indenture Trustee determines that the Home Loans will not
continue to provide sufficient funds for the payment of principal of and
interest on the Notes as they would have become due if the Notes had not
been declared due and payable, and the Indenture Trustee obtains the
consent of the Credit Enhancer, which consent will not be unreasonably
withheld, and of the Holders of 66 2/3% of the aggregate Note Balance of
the Notes. In determining such sufficiency or insufficiency with respect
to clause (B) and (C), the Indenture Trustee may, but need not, obtain
and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such
purpose. Following an Event of Liquidation, on the related Dissolution
Payment Date the Indenture Trustee shall make a draw on the Credit
Enhancement Instrument in an amount equal to the Dissolution Draw
29
pursuant to Section 3.27 and shall distribute such amount as set forth
in Section 5.04(b) below. Notwithstanding the foregoing, so long as a
Servicing Default has not occurred, any Sale of the Trust Estate shall
be made subject to the continued servicing of the Home Loans by the
Master Servicer as provided in the Servicing Agreement.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due under Section
6.07;
SECOND: to the Holders of the Notes for amounts due and unpaid
on the Notes for interest, according to the amounts due and
payable on such Notes for interest from amounts available in the
Trust Estate for such Noteholders;
THIRD: on a pro rata basis, to Holders of the Notes for amounts
due and unpaid on the Notes for principal, from amounts
available in the Trust Estate for such Noteholders, according to
the amounts due and payable on the Notes for principal, until
the related Note Balances of the Notes are reduced to zero;
FOURTH: [reserved];
FIFTH: to the payment of all amounts due and owing to the Credit
Enhancer under the Insurance Agreement;
SIXTH: to the Certificate Paying Agent for amounts due under
Article VIII of the Trust Agreement; and
SEVENTH: to the payment of the remainder, if any, to the Issuer
or any other person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05 Optional Preservation of the Trust Estate. If the Notes have been
declared to be due and payable under Section 5.02 following an Event of Default
and such declaration and its consequences have not been rescinded and annulled,
the Indenture Trustee may, but need not, (but shall at the written direction of
the Credit Enhancer) elect to take and maintain possession of the Trust Estate.
It is the desire of the parties hereto and the Noteholders that there be at all
times sufficient funds for the payment of principal of and interest on the Notes
and other obligations of the Issuer including payment to the Credit Enhancer,
and the Indenture Trustee shall take such desire into account when determining
whether or not to take and maintain possession of the Trust Estate. In
determining whether to take and maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain (at the expense of the Issuer) and
rely upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
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Section 5.06 Limitation of Suits. No Holder of any Note shall have any right to
institute any Proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless and subject to the provisions of Section 10.17 hereof:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the aggregate Note Balance of the
Notes have made written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been given to
the Indenture Trustee during such 60-day period by the Holders of a
majority of the aggregate Note Balance of the Notes or by the Credit
Enhancer.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the aggregate Note Balance of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07 Rights of Noteholders to Receive Principal and Interest.
Notwithstanding any other provisions in this Indenture, but subject to Section
3.31, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
Section 5.08 Restoration of Rights and Remedies. If the Indenture Trustee or any
Noteholder has instituted any Proceeding to enforce any right or remedy under
this Indenture and such Proceeding has been discontinued or abandoned for any
reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and
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the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.
Section 5.09 Rights and Remedies Cumulative. No right or remedy herein conferred
upon or reserved to the Indenture Trustee, the Credit Enhancer or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.10 Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee, the Credit Enhancer or any Holder of any Note to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the
Indenture Trustee or to the Noteholders may be exercised from time to time, and
as often as may be deemed expedient, by the Indenture Trustee or by the
Noteholders, as the case may be.
Section 5.11 Control by Noteholders. The Holders of a majority of the aggregate
Note Balance of Notes with the consent of the Credit Enhancer, or the Credit
Enhancer (so long as no Credit Enhancer Default exists) shall have the right to
direct the time, method and place of conducting any Proceeding for any remedy
available to the Indenture Trustee with respect to the Notes or exercising any
trust or power conferred on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law or with
this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to the
Indenture Trustee to sell or liquidate the Trust Estate shall be by
Holders of Notes representing not less than 100% of the aggregate Note
Balance of Notes with the consent of the Credit Enhancer, or the Credit
Enhancer (so long as no Credit Enhancer Default exists);
(iii) if the conditions set forth in Section 5.05 have been satisfied and the
Indenture Trustee elects to retain the Trust Estate pursuant to such
Section, then any direction to the Indenture Trustee by Holders of
Notes representing less than 100% of the aggregate Note Balance of
Notes to sell or liquidate the Trust Estate shall be of no force and
effect; and
(iv) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction.
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Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines
might involve it in liability or might materially adversely affect the rights of
any Noteholders not consenting to such action.
Section 5.12 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the aggregate Note Balance of
the Notes with the consent of the Credit Enhancer, or the Credit Enhancer (so
long as no Credit Enhancer Default exists) may waive any past Event of Default
and its consequences except an Event of Default (a) with respect to payment of
principal of or interest on any of the Notes or (b) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Holder of each Note. In the case of any such waiver, the Issuer, the Indenture
Trustee and the Holders of the Notes shall be restored to their former positions
and rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Section 5.13 Undertaking for Costs. All parties to this Indenture agree, and
each Holder of any Note by such Xxxxxx's acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
aggregate Note Balance of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture.
Section 5.14 Waiver of Stay or Extension Laws. The Issuer covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
Section 5.15 Sale of Trust Estate. (a) The power to effect any sale, liquidation
or other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 is expressly subject to the provisions of Section 5.05 and this
Section 5.15. The power to effect any such Sale shall not be exhausted by any
one or more Sales as to any portion of the Trust Estate remaining unsold, but
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shall continue unimpaired until the entire Trust Estate shall have been sold or
all amounts payable on the Notes and under this Indenture and under the
Insurance Agreement shall have been paid. The Indenture Trustee may from time to
time postpone any public Sale by public announcement made at the time and place
of such Sale. The Indenture Trustee hereby expressly waives its right to any
amount fixed by law as compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust Estate,
or any portion thereof, unless:
(1) the Holders of all Notes and the Credit Enhancer consent to, or direct the
Indenture Trustee to make, such Sale, or
(2) the proceeds of such Sale would be not less than the entire amount which
would be payable to the Noteholders under the Notes, the Certificateholders
under the Certificates and the Credit Enhancer in respect of amounts drawn under
the Credit Enhancement Instrument and any other amounts due the Indenture
Trustee in connection with expenses incurred by reason of such sale and due the
Credit Enhancer under the Insurance Agreement, in full payment thereof in
accordance with Section 5.02, on the Payment Date next succeeding the date of
such Sale, or
(3) the Indenture Trustee determines, in its sole discretion, that the
conditions for retention of the Trust Estate set forth in Section 5.05 cannot be
satisfied (in making any such determination, the Indenture Trustee may rely upon
an opinion of an Independent investment banking firm obtained and delivered as
provided in Section 5.05), and the Credit Enhancer consents to such Sale, which
consent will not be unreasonably withheld and the Holders representing at least
66-2/3% of the aggregate Note Balance of the Notes consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) Unless the Holders and the Credit 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 paragraph (2) of subsection (b) of this Section 5.15 has not been
established by the Indenture Trustee and no Person bids an amount equal to or
greater than such amount, the Indenture Trustee shall bid an amount at least
$1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(1) any Holder or Holders of Notes may bid for and with the consent of the
Credit Enhancer purchase the property offered for sale, and upon compliance with
the terms of sale may hold, retain and possess and dispose of such property,
without further accountability, and may, in paying the purchase money therefor,
deliver any Notes or claims for interest thereon in lieu of cash up to the
amount which shall, upon distribution of the net proceeds of such sale, be
payable thereon, and such Notes, in case the amounts so payable thereon shall be
less than the amount due thereon, shall be returned to the Holders thereof after
being appropriately stamped to show such partial payment;
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(2) the Indenture Trustee may bid for and acquire the property offered for Sale
in connection with any Sale thereof, and, subject to any requirements of, and to
the extent permitted by, applicable law in connection therewith, may purchase
all or any portion of the Trust Estate in a private sale, and, in lieu of paying
cash therefor, may make settlement for the purchase price by crediting the gross
Sale price against the sum of (A) the amount which would be distributable to the
Holders of the Notes and Holders of Certificates and amounts owing to the Credit
Enhancer as a result of such Sale in accordance with Section 5.04(b) on the
Payment Date next succeeding the date of such Sale and (B) the expenses of the
Sale and of any Proceedings in connection therewith which are reimbursable to
it, without being required to produce the Notes in order to complete any such
Sale or in order for the net Sale price to be credited against such Notes, and
any property so acquired by the Indenture Trustee shall be held and dealt with
by it in accordance with the provisions of this Indenture;
(3) the Indenture Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Trust Estate in
connection with a Sale thereof;
(4) the Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the Trust Estate in connection with a Sale thereof, and to take all
action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.
Section 5.16 Action on Notes. The Indenture Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b).
Section 5.17 Performance and Enforcement of Certain Obligations. (a) Promptly
following a written request from the Credit Enhancer or the Indenture Trustee
with the written consent of the Credit Enhancer to do so, the Issuer, in its
capacity as holder of the Home Loans, shall, with the written consent of the
Credit Enhancer, take all such lawful action as the Indenture Trustee may
request to cause the Issuer to compel or secure the performance and observance
by the Seller and the Master Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Home Loan Purchase
Agreement and the Servicing Agreement, and to exercise any and all rights,
remedies, powers and privileges lawfully available to the Issuer under or in
connection with the Home Loan Purchase Agreement and the Servicing Agreement to
35
the extent and in the manner directed by the Indenture Trustee, as pledgee of
the Home Loans, including the transmission of notices of default on the part of
the Seller or the Master Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Master Servicer of each of their obligations under the Home Loan
Purchase Agreement and the Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee, as pledgee of the Home Loans, subject to the rights of the Credit
Enhancer under the Servicing Agreement may, and at the direction (which
direction shall be in writing or by telephone (confirmed in writing promptly
thereafter)) of the Holders of 66-2/3% of the aggregate Note Balance of the
Notes shall, exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Seller or the Master Servicer under or in connection with the
Home Loan Purchase Agreement and the Servicing Agreement, including the right or
power to take any action to compel or secure performance or observance by the
Seller or the Master Servicer, as the case may be, of each of their obligations
to the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Home Loan Purchase Agreement and the
Servicing Agreement, as the case may be, and any right of the Issuer to take
such action shall not be suspended. In connection therewith, as determined by
the Indenture Trustee, the Issuer shall take all actions necessary to effect the
transfer of the Home Loans to the Indenture Trustee.
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Article VI
The Indenture Trustee
Section 6.01 Duties of Indenture Trustee. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it (A) pursuant to Section 5.11 or (B) from the Credit
Enhancer, which it is entitled to give under any of the Basic
Documents.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing
with the Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of
this Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in
the performance of any of its duties hereunder or in the exercise of
any of its rights or powers, if it shall have reasonable grounds to
believe that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
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(g) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall
be subject to the provisions of this Section and to the provisions of
the TIA.
Section 6.02 Rights of Indenture Trustee. (a) The Indenture Trustee may rely on
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Indenture Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel. The Indenture Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Indenture Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
Section 6.03 Individual Rights of Indenture Trustee. The Indenture Trustee in
its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Indenture Trustee
must comply with Sections 6.11 and 6.12.
Section 6.04 Indenture Trustee's Disclaimer. The Indenture Trustee shall not be
(i) responsible for and makes no representation as to the validity or adequacy
of this Indenture or the Notes, (ii) accountable for the Issuer's use of the
proceeds from the Notes or (iii) responsible for any statement of the Issuer in
the Indenture or in any document issued in connection with the sale of the Notes
or in the Notes other than the Indenture Trustee's certificate of
authentication.
Section 6.05 Notice of Event of Default. If an Event of Default occurs and is
continuing and if it is known to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall give notice thereof to the Credit Enhancer. The
Indenture Trustee shall mail to each Noteholder notice of the Event of Default
38
within 90 days after it occurs. Except in the case of an Event of Default in
payment of principal of or interest on any Note, the Indenture Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Noteholders.
Section 6.06 Reports by Indenture Trustee to Holders. The Indenture Trustee
shall deliver to each Noteholder such information as may be required to enable
such holder to prepare its federal and state income tax returns. In addition,
upon the Issuer's written request, the Indenture Trustee shall promptly furnish
information reasonably requested by the Issuer that is reasonably available to
the Indenture Trustee to enable the Issuer to perform its federal and state
income tax reporting obligations.
Section 6.07 Compensation and Indemnity. The Issuer shall pay to the Indenture
Trustee on each Payment Date reasonable compensation for its services. The
Indenture Trustee shall be compensated and indemnified by the Master Servicer in
accordance with Section 6.06 of the Servicing Agreement, and all amounts owing
to the Indenture Trustee hereunder in excess of such amount shall be paid solely
as provided in Section 3.05 hereof (subject to the priorities set forth
therein). The Indenture Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuer shall reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall indemnify the Indenture Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify the
Issuer promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder. The Issuer shall defend any such claim, and the Indenture
Trustee may have separate counsel and the Issuer shall pay the fees and expenses
of such counsel. The Issuer is not obligated to reimburse any expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith. The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of an Event of Default
specified in clause (D) or (E) of the definition thereof with respect to the
Issuer, the expenses are intended to constitute expenses of administration under
Title 11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.
Section 6.08 Replacement of Indenture Trustee. No resignation or removal of the
Indenture Trustee and no appointment of a successor Indenture Trustee shall
become effective until the acceptance of appointment by the successor Indenture
Trustee pursuant to this Section 6.08. The Indenture Trustee may resign at any
time by so notifying the Issuer and the Credit Enhancer. The Holders of a
majority of the aggregate Note Balance of the Notes or the Credit Enhancer may
remove the Indenture Trustee by so notifying the Indenture Trustee and the
Credit Enhancer and may appoint a successor Indenture Trustee. The Issuer shall
remove the Indenture Trustee if:
39
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Indenture Trustee
or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of the Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee with the consent of the
Credit Enhancer which consent will not be unreasonably withheld. In addition,
the Indenture Trustee will resign to avoid being directly or indirectly
controlled by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of the aggregate Note
Balance of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.09 Successor Indenture Trustee by Xxxxxx. If the Indenture Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Indenture Trustee; provided, that such
corporation or banking association shall be otherwise qualified and eligible
under Section 6.11. The Indenture Trustee shall provide the Rating Agencies
written notice of any such transaction after the Closing Date.
40
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Trust Estate may at the time be located, the Indenture Trustee shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Owner Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Noteholders, such title to
the Trust Estate, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the
Indenture Trustee shall be conferred or imposed upon and exercised or
performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article VI. Each
separate trustee and co-trustee, upon its acceptance of the trusts
41
conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Indenture
Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of
this Indenture relating to the conduct of, affecting the liability of,
or affording protection to, the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act
under or in respect of this Agreement on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of
acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Indenture
Trustee, to the extent permitted by law, without the appointment of a
new or successor trustee.
Section 6.11 Eligibility; Disqualification. The Indenture Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition and it or its parent shall have
a long-term debt rating of A or better by Xxxxx'x. The Indenture Trustee shall
comply with TIA ss. 310(b), including the optional provision permitted by the
second sentence of TIA ss. 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA ss. 310(b)(1) are met.
Section 6.12 Preferential Collection of Claims Against Issuer. The Indenture
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). An Indenture Trustee who has resigned or been removed
shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13 Representations and Warranties. The Indenture Trustee hereby
represents that:
(i) The Indenture Trustee is a banking association duly organized, validly
existing and in good standing under the laws of the United States with
power and authority to own its properties and to conduct its business
as such properties are currently owned and such business is presently
conducted.
(ii) The Indenture Trustee has the power and authority to execute and
deliver this Indenture and to carry out its terms; and the execution,
delivery and performance of this Indenture have been duly authorized by
the Indenture Trustee by all necessary corporate action.
(iii) The consummation of the transactions contemplated by this Indenture and
the fulfillment of the terms hereof do not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles of
organization or bylaws of the Indenture Trustee or any agreement or
other instrument to which the Indenture Trustee is a party or by which
it is bound.
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(iv) To the Indenture Trustee's best knowledge, there are no proceedings or
investigations pending or threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Indenture Trustee or its properties: (A)
asserting the invalidity of this Indenture (B) seeking to prevent the
consummation of any of the transactions contemplated by this Indenture
or (C) seeking any determination or ruling that might materially and
adversely affect the performance by the Indenture Trustee of its
obligations under, or the validity or enforceability of, this
Indenture.
(v) The Indenture Trustee does not have notice of any adverse claim (as
such terms are used in Delaware UCC Section 8-302) with respect to the
Home Loans.
Section 6.14 Directions to Indenture Trustee. The Indenture Trustee is hereby
directed:
(a) to accept the pledge of the Home Loans and hold the assets of the Trust in
trust for the Noteholders and the Credit Enhancer;
(b) to authenticate and deliver the Notes substantially in the form prescribed
by Exhibit A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the terms of
this Indenture.
Section 6.15 Indenture Trustee May Own Securities. The Indenture Trustee, in its
individual or any other capacity may become the owner or pledgee of Securities
with the same rights it would have if it were not Indenture Trustee.
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Article VII
Noteholders' Lists and Reports
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Notes as of such Record Date and, (b) at such other times as the
Indenture Trustee and the Credit Enhancer may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.
Section 7.02 Preservation of Information; Communications to Noteholders. (a) The
Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.01
and the names and addresses of Holders of Notes received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the
protection of TIA ss. 312(c).
Section 7.03 Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual
reports and the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) that the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act;
(ii) file with the Indenture Trustee, and the Commission in accordance with
rules and regulations prescribed from time to time by the Commission
such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Noteholders described in TIA ss. 313(c)) such
summaries of any information, documents and reports required to be
filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) and by rules and regulations prescribed from time to time by
the Commission.
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(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall
end on December 31 of each year.
Section 7.04 Reports by Indenture Trustee. If required by TIA ss. 313(a), within
60 days after each January 1 beginning with January 1, 2006, the Indenture
Trustee shall mail to each Noteholder as required by TIA ss. 313(c) and to the
Credit Enhancer a brief report dated as of such date that complies with TIA ss.
313(a). The Indenture Trustee also shall comply with TIA ss. 313(b). A copy of
each report at the time of its mailing to Noteholders shall be filed by the
Indenture Trustee with the Commission and each stock exchange, if any, on which
the Notes are listed. The Issuer shall notify the Indenture Trustee if and when
the Notes are listed on any stock exchange.
Section 7.05 Exchange Act Reporting. In connection with the preparation and
filing of periodic reports by the Master Servicer pursuant to Section 4.04 of
the Servicing Agreement, the Indenture Trustee shall timely provide to the
Master Servicer (I) a list of Holders as shown on the Note Register or
Certificate Register as of the end of each calendar year, (II) copies of all
pleadings, other legal process and any other documents relating to any claims,
charges or complaints involving the Indenture Trustee, as indenture trustee
hereunder, or the Trust Estate that are received by the Indenture Trustee, (III)
notice of all matters that, to the actual knowledge of a Responsible Officer of
the Indenture Trustee, have been submitted to a vote of the Holders, other than
those matters that have been submitted to a vote of the Holders at the request
of the Depositor or the Master Servicer, and (IV) notice of any failure of the
Indenture Trustee to make any distribution to the Holders as required pursuant
to this Indenture. Neither the Master Servicer nor the Indenture Trustee shall
have any liability with respect to the Master Servicer's failure to properly
prepare or file such periodic reports resulting from or relating to the Master
Servicer's inability or failure to obtain any information not resulting from the
Master Servicer's own negligence or willful misconduct. In connection with the
Form 10-K Certification (as defined in the Servicing Agreement), the Indenture
Trustee shall provide the Master Servicer with a back-up certification
substantially in the form attached hereto as Exhibit B. A supplemental indenture
may be entered into in accordance with the provisions of this Indenture to
revise this Section 7.05 without the consent of the Holders.
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Article VIII
Accounts, Disbursements and Releases
Section 8.01 Collection of Money. Except as otherwise expressly provided herein,
the Indenture Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply
all such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of the
Trust Estate, the Indenture Trustee may take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02 Trust Accounts. (a) On or prior to the Closing Date, the Issuer
shall cause the Indenture Trustee to establish and maintain, in the name of the
Indenture Trustee, for the benefit of the Noteholders and the Certificate Paying
Agent, on behalf of the Certificateholders and the Credit Enhancer, the Payment
Account as provided in Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Payment Account pursuant to
the Servicing Agreement and all deposits therein pursuant to this Indenture are
for the benefit of the Noteholders and the Certificate Paying Agent, on behalf
of the Certificateholders and all investments made with such monies including
all income or other gain from such investments are for the benefit of the Master
Servicer as provided by the Servicing Agreement.
On each Payment Date, the Indenture Trustee shall distribute all
amounts on deposit in the Payment Account to Noteholders in respect of the Notes
and in its capacity as Certificate Paying Agent to Certificateholders in the
order of priority set forth in Section 3.05 (except as otherwise provided in
Section 5.04(b).
The Master Servicer shall direct the Indenture Trustee in writing to
invest any funds in the Payment Account in Permitted Investments maturing no
later than the Business Day preceding each Payment Date and shall not be sold or
disposed of prior to the maturity.
Section 8.03 Officer's Certificate. The Indenture Trustee shall receive at least
seven days notice when requested by the Issuer to take any action pursuant to
Section 8.05(a), accompanied by copies of any instruments to be executed, and
the Indenture Trustee shall also require, as a condition to such action, an
Officer's Certificate, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with.
Section 8.04 Termination Upon Distribution to Noteholders. This Indenture and
the respective obligations and responsibilities of the Issuer and the Indenture
Trustee created hereby shall terminate upon the distribution to the Noteholders,
the Certificate Paying Agent (on behalf of the Certificateholders) and the
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Indenture Trustee of all amounts required to be distributed pursuant to Article
III; provided, however, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. Xxxxx, living on the date hereof.
Section 8.05 Release of Trust Estate. (a) Subject to the payment of its fees and
expenses, the Indenture Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the lien of this
Indenture, or convey the Indenture Trustee's interest in the same, in a manner
and under circumstances that are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture Trustee
as provided in Article VIII hereunder shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent,
or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding, (ii) all sums due the Indenture Trustee pursuant to this Indenture
and other Basic Documents have been paid, and (iii) all sums due the Credit
Enhancer have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.05 only upon receipt of a request from the Issuer
accompanied by an Officers' Certificate and a letter from the Credit Enhancer,
stating that the Credit Enhancer has no objection to such request from the
Issuer.
(d) The Indenture Trustee shall, at the request of the Issuer or the Depositor,
surrender the Credit Enhancement Instrument to the Credit Enhancer for
cancellation, upon final payment on the Notes.
Section 8.06 Surrender of Notes Upon Final Payment. By acceptance of any Note,
the Holder thereof agrees to surrender such Note to the Indenture Trustee
promptly, prior to such Noteholder's receipt of the final payment thereon.
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Article IX
Supplemental Indentures
Section 9.01 Supplemental Indentures Without Consent of Noteholders. (a) Without
the consent of the Holders of any Notes but with prior notice to the Rating
Agencies and the Credit Enhancer, the Issuer and the Indenture Trustee, when
authorized by an Issuer Request, at any time and from time to time, may enter
into one or more indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as in force at the date of the execution
thereof), in form satisfactory to the Indenture Trustee, for any of the
following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to
be subjected to the lien of this Indenture, or to subject to the lien
of this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption
by any such successor of the covenants of the Issuer herein and in the
Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of the Holders
of the Notes or the Credit Enhancer, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to or with
the Indenture Trustee;
(v) to cure any ambiguity, to correct any error, or to correct or
supplement any provision herein or in any supplemental indenture that
may be inconsistent with any other provision herein, in any
supplemental indenture or in the Prospectus Supplement;
(vi) to make any other provisions with respect to matters or questions
arising under this Indenture or in any supplemental indenture;
provided, that such action shall not materially and adversely affect
the interests of the Holders of the Notes or the Credit Enhancer;
(vii) to evidence and provide for the acceptance of the appointment hereunder
by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(viii) to modify, eliminate or add to the provisions of this Indenture to such
extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
48
expressly required by the TIA; provided, however, that no such indenture
supplements shall be entered into unless the Indenture Trustee shall
have received an Opinion of Counsel that entering into such indenture
supplement will not have any material adverse tax consequences to the
Noteholders. The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any further
appropriate agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the
Notes but with prior notice to the Rating Agencies and the Credit
Enhancer, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in
any manner the rights of the Holders of the Notes under this Indenture;
provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, (i) adversely affect in any material respect the
interests of any Noteholder or the Credit Enhancer or (ii) cause the
Issuer to be subject to an entity level tax.
(c) The Issuer and the Indenture Trustee shall, as directed by the Holders
of Certificates which represent not less than 100% of the Certificate
Percentage Interests thereof, enter into an indenture or indentures
supplemental hereto for the purpose of providing for the issuance of
one or more additional classes of Notes entitled to payments derived
solely from all or a portion of the payments to which the Certificates
issued on the Closing Date pursuant to the Trust Agreement are
entitled; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel, (i) adversely affect in any material respect
the interests of any Noteholder or the Credit Enhancer or (ii) cause
the Issuer to be subject to an entity level tax. Each such class of
Notes shall be a non-recourse obligation of the Issuer and shall be
entitled to interest and principal in such amounts, and to such
security for the repayment thereof, as shall be specified in such
amendment or amendments. Promptly after the execution by the Issuer and
the Indenture Trustee of any amendments pursuant to this Section or the
creation of a new indenture and the issuance of the related class or
classes of Notes, the Issuer shall require the Indenture Trustee to
give notice to the Holders of the Notes and the Rating Agencies setting
forth in general terms the substance of the provisions of such
amendment. Any failure of the Indenture Trustee to provide such notice
as is required under this paragraph, or any defect therein, shall not,
however, in any way impair or affect the validity of such amendment or
any class of Notes issued pursuant thereto. Unless the Credit Enhancer
agrees in writing, (i) any classes of Notes issued pursuant to a
supplemental indenture shall not be entitled to the insurance provided
by the Credit Enhancement Instrument and (ii) the Holders of any such
classes of Notes shall be entitled only to such distributions or a
portion of such distributions as the Holders would have received as
Holders of Certificates.
Section 9.02 Supplemental Indentures With Consent of Noteholders. The Issuer and
the Indenture Trustee, when authorized by an Issuer Request, also may, with
prior notice to the Rating Agencies and with the consent of the Holders of not
less than a majority of the aggregate Note Balance of the Notes affected thereby
and the Credit Enhancer, by Act of such Holders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Note affected thereby:
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(i) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof or the
interest rate thereon, change the provisions of this Indenture relating
to the application of collections on, or the proceeds of the Sale of,
the Trust Estate to payment of principal of or interest on the Notes, or
change any place of payment where, or the coin or currency in which, any
Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes on or
after the respective due dates thereof;
(ii) reduce the percentage of the related Note Balance of any Class of
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition of the
term "Outstanding" or modify or alter the exception in the definition
of the term "Holder";
(iv) reduce the percentage of the aggregate Note Balance of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell
or liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section 9.02 except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified
or waived without the consent of the Holder of each Note affected
thereby;
(vi) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the
calculation of any of the individual components of such calculation);
or
(vii) permit the creation of any lien ranking prior to or on a parity with
the lien of this Indenture with respect to any part of the Trust Estate
or, except as otherwise permitted or contemplated herein, terminate the
lien of this Indenture on any property at any time subject hereto or
deprive the Holder of any Note of the security provided by the lien of
this Indenture; and provided, further, that such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be subject to
an entity level tax.
and provided, further, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
entering into such indenture supplement will not adversely affect in any
material respect the interests of the Certificateholder or shall have received
the express written consent of the Certificateholder to the indenture
supplement.
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The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders (as defined in
Section 10.03) under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes and the Custodian to which such amendment
or supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 9.03 Execution of Supplemental Indentures. In executing, or permitting
the additional trusts created by, any supplemental indenture permitted by this
Article IX or the modification thereby of the trusts created by this Indenture,
the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01
and 6.02, shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture and conforms to the requirements of the Trust
Indenture Act. The Indenture Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that affects the Indenture Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
Section 9.04 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.05 Conformity with Trust Indenture Act. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.
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Section 9.06 Reference in Notes to Supplemental Indentures. Notes authenticated
and delivered after the execution of any supplemental indenture pursuant to this
Article IX may, and if required by the Indenture Trustee shall, bear a notation
in form approved by the Indenture Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Indenture Trustee shall so
determine, new Notes so modified as to conform, in the opinion of the Indenture
Trustee and the Issuer, to any such supplemental indenture may be prepared and
executed by the Issuer and authenticated and delivered by the Indenture Trustee
in exchange for Outstanding Notes.
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Article X
Miscellaneous
Section 10.01 Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee and to the Credit Enhancer (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and (ii) an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that, in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished. Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or opinion has read
or has caused to be read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory, such signatory
has made such examination or investigation as is necessary to enable
such signatory to express an informed opinion as to whether or not such
covenant or condition has been complied with;
(4) a statement as to whether, in the opinion of each such signatory, such
condition or covenant has been complied with; and
(5) if the Signer of such Certificate or Opinion is required to be
Independent, the Statement required by the definition of the term
"Independent".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for
the release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in
Section 10.01(a) or elsewhere in this Indenture, furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or
other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (i) above, the Issuer
shall also deliver to the Indenture Trustee an Independent Certificate
as to the same matters, if the fair value to the Issuer of the
securities to be so deposited and of all other such securities made the
basis of any such withdrawal or release since the commencement of the
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then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the aggregate Note Balance of the Notes, but
such a certificate need not be furnished with respect to any securities
so deposited, if the fair value thereof to the Issuer as set forth in
the related Officer's Certificate is less than $25,000 or less than one
percent of the aggregate Note Balance of the Notes.
(iii) Whenever any property or securities are to be released from the lien of
this Indenture, the Issuer shall also furnish to the Indenture Trustee
an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of
such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will
not impair the security under this Indenture in contravention of the
provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (iii) above, the Issuer
shall also furnish to the Indenture Trustee an Independent Certificate
as to the same matters if the fair value of the property or securities
and of all other property, other than property as contemplated by
clause (v) below or securities released from the lien of this Indenture
since the commencement of the then-current calendar year, as set forth
in the certificates required by clause (iii) above and this clause
(iv), equals 10% or more of the aggregate Note Balance of the Notes,
but such certificate need not be furnished in the case of any release
of property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the then aggregate Note Balance of the Notes.
(v) Notwithstanding any provision of this Indenture, the Issuer may,
without compliance with the requirements of the other provisions of
this Section 10.01, (A) collect, sell or otherwise dispose of the Home
Loans as and to the extent permitted or required by the Basic Documents
or (B) make cash payments out of the Payment Account as and to the
extent permitted or required by the Basic Documents, so long as the
Issuer shall deliver to the Indenture Trustee every six months,
commencing July 30, 2005, an Officer's Certificate of the Issuer
stating that all the dispositions of Collateral described in clauses
(A) or (B) above that occurred during the preceding six calendar months
were in the ordinary course of the Issuer's business and that the
proceeds thereof were applied in accordance with the Basic Documents.
Section 10.02 Form of Documents Delivered to Indenture Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
54
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Seller or the Issuer, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 10.03 Acts of Noteholders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any such instrument or
writing may be proved in any manner that the Indenture Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent, waiver or
other action by the Holder of any Notes shall bind the Holder of every Note
55
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Credit Enhancer and
Rating Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders is to be made upon,
given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee at the Corporate
Trust Office. The Indenture Trustee shall promptly transmit any notice
received by it from the Noteholders to the Issuer, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to: Home Loan
Trust 2005-HI1, in care of Wilmington Trust Company, or at any other
address previously furnished in writing to the Indenture Trustee by the
Issuer. The Issuer shall promptly transmit any notice received by it
from the Noteholders to the Indenture Trustee, or
(iii) the Credit Enhancer by the Issuer, the Indenture Trustee or by any
Noteholders shall be sufficient for every purpose hereunder to in
writing and mailed, first class postage pre-paid, or personally
delivered or telecopied to: Financial Guaranty Insurance Company, 000
Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Research and Risk
Management, telecopier number (000) 000-0000. The Credit Enhancer shall
promptly transmit any notice received by it from the Issuer, the
Indenture Trustee or the Noteholders to the Issuer or Indenture
Trustee, as the case may be.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified mail, return receipt requested, to (i) in the case of
Moody's, at the following address: Xxxxx'x Investors Service, Inc., ABS
Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ii) in
the case of Standard & Poor's, at the following address: Standard & Poor's, A
Division of the XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx - 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention of Asset Backed Surveillance Department; or as
to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
Section 10.05 Notices to Noteholders; Waiver. Where this Indenture provides for
notice to Noteholders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class, postage prepaid to each Noteholder affected by such event, at such
Person's address as it appears on the Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Noteholders is given by mail, neither the
56
failure to mail such notice nor any defect in any notice so mailed to any
particular Noteholder shall affect the sufficiency of such notice with respect
to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
Section 10.06 Alternate Payment and Notice Provisions. Notwithstanding any
provision of this Indenture or any of the Notes to the contrary, the Issuer may
enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee to such Holder, that is different
from the methods provided for in this Indenture for such payments or notices.
The Issuer shall furnish to the Indenture Trustee a copy of each such agreement
and the Indenture Trustee shall cause payments to be made and notices to be
given in accordance with such agreements.
Section 10.07 Conflict with Trust Indenture Act. If any provision hereof limits,
qualifies or conflicts with another provision hereof that is required to be
included in this Indenture by any of the provisions of the Trust Indenture Act,
such required provision shall control. The provisions of TIA xx.xx. 310 through
317 that impose duties on any Person (including the provisions automatically
deemed included herein unless expressly excluded by this Indenture) are a part
of and govern this Indenture, whether or not physically contained herein.
Section 10.08 Effect of Headings. The Article and Section headings herein are
for convenience only and shall not affect the construction hereof.
Section 10.09 Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents.
Section 10.10 Separability. In case any provision in this Indenture or in the
Notes shall be invalid, illegal or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
57
Section 10.11 Benefits of Indenture. Nothing in this Indenture or in the Notes,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, and the Noteholders, the Credit Enhancer, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 10.12 Legal Holidays. In any case where the date on which any payment is
due shall not be a Business Day, then (notwithstanding any other provision of
the Notes or this Indenture) payment need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the date on which nominally due, and no interest shall accrue for the
period from and after any such nominal date.
Section 10.13 Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.14 Counterparts. This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
Section 10.15 Recording of Indenture. If this Indenture is subject to recording
in any appropriate public recording offices, such recording is to be effected by
the Issuer and at its expense accompanied by an Opinion of Counsel (which may be
counsel to the Indenture Trustee or any other counsel reasonably acceptable to
the Indenture Trustee) to the effect that such recording is necessary either for
the protection of the Noteholders or any other Person secured hereunder or for
the enforcement of any right or remedy granted to the Indenture Trustee under
this Indenture.
Section 10.16 Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
58
Section 10.17 No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Depositor or the Issuer, or
join in any institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
Section 10.18 Inspection. The Issuer agrees that, on reasonable prior notice, it
shall permit any representative of the Indenture Trustee, during the Issuer's
normal business hours, to examine all the books of account, records, reports and
other papers of the Issuer, to make copies and extracts therefrom, to cause such
books to be audited by Independent certified public accountants, and to discuss
the Issuer's affairs, finances and accounts with the Issuer's officers,
employees, and Independent certified public accountants, all at such reasonable
times and as often as may be reasonably requested. The Indenture Trustee shall
and shall cause its representatives to hold in confidence all such information
except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the extent
that the Indenture Trustee may reasonably determine that such disclosure is
consistent with its obligations hereunder.
59
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
HOME LOAN TRUST 2005-HI1,
as Issuer
By: Wilmington Trust Company not in
its individual capacity but
solely as Owner Trustee
By:
Name:
--------------------------------------------
Title:
JPMORGAN CHASE BANK, N.A.,
as Indenture Trustee
By:
Name: Xxxxx X. Xxxx
--------------------------------------------
Title: Trust Officer
JPMORGAN CHASE BANK, N.A.
xxxxxx accepts the appointment as Paying Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section 4.02 hereof.
By:
Name: Xxxxx X. Xxxx
---------------------------------------------
Title: Trust Officer
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 27th day of January, 2005, before me personally appeared Xxxxx
X. Xxxx, to me known, who being by me duly sworn, did depose and say, that she
resides at New York , NY, that she is the Trust Officer of the Indenture
Trustee, one of the corporations described in and which executed the above
instrument; and that she signed her name thereto by like order.
-----------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 27th day of January, 2005, before me the undersigned, Notary
Public of said State, personally appeared Xxxxx X. Xxxx, personally known to me
to be a duly authorized officer of JPMorgan Chase Bank, N.A. that executed the
within instrument and personally known to me to be the person who executed the
within instrument on behalf of JPMorgan Chase Bank, N.A. xxxxxxx named, and
acknowledged to me such JPMorgan Chase Bank, N.A. executed the within instrument
pursuant to its by-laws.
-----------------------
Notary Public
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this 27th day of January, 2005, before me personally appeared Xxxxxx
X. Xxxxxx, to me known, who being by me duly sworn, did depose and say, that he
resides at Wilmington, DE, that he is the Vice President of Wilmington Trust
Company, as Owner Trustee, one of the corporations described in and which
executed the above instrument; and that he signed his name thereto by like
order.
-----------------------
Notary Public
NOTARIAL SEAL
EXHIBIT A
FORM OF NOTES
CLASS A-__ NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE TRUSTEE, THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT
EITHER (1) IT IS NOT A PLAN NOR IS IT ACQUIRING THIS NOTE WITH PLAN ASSETS OR
(2) THE ACQUISITION OF THIS NOTE BY THE HOLDER DOES NOT CONSTITUTE OR GIVE RISE
TO A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE, FOR WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION IS
AVAILABLE.
HOME LOAN TRUST 2005-HI1
Home Loan-Backed Note
Registered Principal Amount: $___________
Class A-__
No. __ Percentage Interest: _____%
CUSIP No. ___________ Note Rate: [_____%][Adjustable Rate]
Home Loan Trust 2005-HI1, a statutory trust duly organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of $___________, payable on each Payment
Date in an amount equal to the Percentage Interest specified above of the
aggregate amount, if any, payable from the Payment Account in respect of
principal on the Class A-__ Notes pursuant to Section 3.05 of the Indenture
dated as of January 27, 2005 (the "Indenture") between the Issuer, as Issuer,
and JPMorgan Chase Bank, N.A., as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Payment Date in August 2034, to the extent not previously
paid on a prior Payment Date. Capitalized terms used but not defined herein are
defined in Appendix A of the Indenture.
[Interest on the Class A-__ Notes will be paid monthly on each
Payment Date at the Note Rate. The Note Rate for the Class A-__ Notes will be
_____% per annum. Interest will be computed on the basis of a 30-day month and a
360-day year. Principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof. On the Step-Up Date, the Note Rate on the Class
A-5 Notes will increase by 0.50% per annum.]
[Interest on the Class A-1 Notes will be paid monthly on each
Payment Date at the Note Rate for the related Interest Accrual Period. The Note
Rate for each Interest Accrual Period will be equal to the lesser of (i) LIBOR
plus [_.__]% per annum and (ii) 8.00% per annum. LIBOR for each applicable
Interest Accrual Period will be determined on the second LIBOR Business Day
immediately preceding (i) the Closing Date in the case of the first Interest
Accrual Period and (ii) the first day of each succeeding Interest Accrual Period
by the Indenture Trustee as set forth in the Indenture. All determinations of
LIBOR by the Indenture Trustee shall, in the absence of manifest error, be
conclusive for all purposes, and each holder of this Class A-1 Note, by
accepting this Class A-1 Note, agrees to be bound by such determination.
Interest on this Class A-1 Note will accrue for each Payment Date from the most
recent Payment Date on which interest has been paid (in the case of the first
Payment Date, from the Closing Date) to but excluding such Payment Date.
Interest will be computed on the basis of the actual number of days in each
Interest Accrual Period and a year assumed to consist of 360 days. Principal of
and interest on this Class A-1 Note shall be paid in the manner specified in the
Indenture.]
Principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Home Loan-Backed Notes (herein called the "Notes"),
all issued under the Indenture, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
holders of the Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
This Note is entitled to the benefits of an irrevocable and
unconditional financial guaranty insurance policy issued by Financial Guaranty
Insurance Company.
Principal of and interest on this Note will be payable on each
Payment Date, commencing on February 25, 2005, as described in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due
and payable in full on the Payment Date in August 2034 pursuant to the
Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, then the Indenture Trustee or the holders of Notes representing not
less than a majority of the aggregate Note Balance of all Notes with the consent
of the Credit Enhancer, or the Credit Enhancer may declare the Notes to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Notes shall be distributed in the
manner and priority set forth in Section 3.05 of the Indenture.
Any installment of interest or principal, if any, payable on
any Note that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall, if such Holder holds Notes of an aggregate
initial Note Balance of at least $1,000,000, be paid to each Holder of record on
the preceding Record Date, by wire transfer to an account specified in writing
by such Holder reasonably satisfactory to the Indenture Trustee as of the
preceding Record Date or in all other cases or if no such instructions have been
delivered to the Indenture Trustee, by check or money order to such Noteholder
mailed to such Holder's address as it appears in the Note Register the amount
required to be distributed to such Holder on such Payment Date pursuant to such
Holder's Securities; provided, however, that the Indenture Trustee shall not pay
to such Holders any amount required to be withheld from a payment to such Holder
by the Code.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the Corporate Trust Office, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the holder hereof or such holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended, and thereupon
one or more new Notes in authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No
service charge will be charged for any registration of transfer or exchange of
this Note, but the Note Registrar shall require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
registration of transfer or exchange of this Note.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Master Servicer, the Depositor or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Master Servicer or the Issuer, or join in any
institution against the Depositor, the Seller, the Master Servicer or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
the Credit Enhancer and with prior notice to the Rating Agencies. The Indenture
also contains provisions permitting the holders of Notes representing specified
percentages of the aggregate Note Balance of all Notes, on behalf of the holders
of all the Notes, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon such holder and
upon all future holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The Indenture
also permits the Issuer and the Indenture Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of holders
of the Notes issued thereunder but with prior notice to the Rating Agencies and
the Credit Enhancer.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, JPMorgan Chase Bank, N.A., in its individual capacity,
any owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder shall have no claim against
any of the foregoing for any deficiency, loss or claim therefrom; provided,
however, that nothing contained herein shall be taken to prevent recourse to,
and enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
HOME LOAN TRUST 2005-HI1
By WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee
By ___________________________________________________
Authorized Signatory
Dated: January 27, 2005
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-__ Notes referred to in the within mentioned
Indenture.
JPMORGAN CHASE BANK, N.A., not in its individual
capacity but solely as Indenture Trustee
By _______________________________________________
Authorized Signatory
Dated: January 27, 2005
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
_______________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: _______________________
__________________________________*/
Signature Guaranteed:
____________________________/ *
----------------------------
1 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 of the 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
Administrative Fees: The Servicing Fees and the fees payable to
the Owner Trustee and the Indenture Trustee.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
Appraised Value: For any Home Loan the value of the related
Mortgaged Property determined by the appraisal, sales price for such Mortgaged
Property or alternative valuation method used in the origination of such Home
Loan (which may have been obtained at an earlier time); provided that if such
Home Loan was originated simultaneously with or not more than 12 months after a
senior lien on the related Mortgaged Property which was originated in a purchase
or cash-out refinance transaction, the appraised value shall be the lesser of
the appraised value at the origination of the senior lien and the sales price
for such Mortgaged Property.
Assignment of Mortgage: With respect to any Mortgage, an
assignment, notice of transfer or equivalent instrument, in recordable form,
sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to reflect the sale of the Mortgage, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering Mortgages secured by Mortgaged Properties located
in the same jurisdiction.
Authorized Newspaper: A newspaper of general circulation in the
Borough of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
Authorized Officer: With respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basic Documents: The Trust Agreement, the Indenture, the Home
Loan Purchase Agreement, the Insurance Agreement, the Credit Enhancement
Instrument, the Servicing Agreement, the Custodial Agreement and the other
documents and certificates delivered in connection with any of the above.
Beneficial Owner: With respect to any Note, the Person who is the
beneficial owner of such Note as reflected on the books of the Depository or on
1
the books of a Person maintaining an account with such Depository (directly as a
Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).
Book-Entry Custodian: The custodian appointed pursuant to Section
4.06 of the Indenture.
Book-Entry Notes: Beneficial interests in the Notes, ownership
and transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the States of New York, California,
Texas, Minnesota, Pennsylvania, Illinois or Delaware are required or authorized
by law to be closed.
Calendar Quarter: A Calendar Quarter shall consist of one of the
following time periods in any given year: January 1 through March 31, April 1
through June 30, July 1 though September 30, and October 1 through December 31.
Certificate Distribution Account: The account or accounts created
and maintained by the Certificate Paying Agent pursuant to Section 3.10(c) of
the Trust Agreement. The Certificate Paying Agent will make all distributions on
the Certificates from money on deposit in the Certificate Distribution Account.
The Certificate Distribution Account shall be an Eligible Account.
Certificate Distribution Amount: The amount payable to the
Certificate Paying Agent under Section 3.05(a)(ix) of the Indenture for payment
to the Certificates under the Trust Agreement.
Certificate Paying Agent: The meaning specified in Section 3.10
of the Trust Agreement.
Certificate Percentage Interest: With respect to any Certificate
and any date of determination, the percentage interest as stated on the face of
such Certificate, which percentage may be recalculated in accordance with
Section 3.03 of the Trust Agreement.
Certificate Principal Balance: As of any Payment Date, with
respect to any Certificate, an amount equal to the then applicable Certificate
Percentage Interest of such Certificate multiplied by the Outstanding Reserve
Amount immediately prior to such Payment Date.
Certificate Register: The register maintained by the Certificate
Registrar in which the Certificate Registrar shall provide for the registration
of Certificates and of transfers and exchanges of Certificates.
Certificate Registrar: Initially, the Indenture Trustee, in its
capacity as Certificate Registrar, or any successor to the Indenture Trustee in
such capacity.
2
Certificate of Trust: The Certificate of Trust filed for the
Trust pursuant to Section 3810(a) of the Statutory Trust Statute, including all
amendments and restatements.
Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register except that, any Certificate registered
in the name of the Issuer, the Owner Trustee or the Indenture Trustee or any
Affiliate of any of them shall be deemed not to be outstanding and the
registered holder will not be considered a Certificateholder or a holder for
purposes of giving any request, demand, authorization, direction, notice,
consent or waiver under the Indenture or the Trust Agreement provided that, in
determining whether the Indenture Trustee or the Owner Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that the Indenture Trustee or the
Owner Trustee knows to be so owned shall be so disregarded. Owners of
Certificates that have been pledged in good faith may be regarded as Holders if
the pledgee establishes to the satisfaction of the Indenture Trustee or the
Owner Trustee, as the case may be, the pledgee's right so to act with respect to
such Certificates and that the pledgee is not the Issuer, any other obligor upon
the Certificates or any Affiliate of any of the foregoing Persons.
Certificates: The Certificates in substantially the form set
forth in Exhibit A to the Trust Agreement.
Class: Collectively, all of the Notes bearing the same
designation.
Closing Date: January 27, 2005.
Code: The Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
Collateral: The meaning specified in the Granting Clause of the
Indenture.
Collection Period: With respect to any Payment Date, the calendar
month immediately preceding the month of such Payment Date.
Combined Loan-to-Value Ratio: With respect to each Home Loan, the
ratio, expressed as a percentage, of (i) the sum of (A) the original principal
balance of such Home Loan, and (B) any outstanding principal balance, at
origination of such Home Loan, of all other mortgage loans, if any, secured by
senior or subordinate liens on the related Mortgaged Property, to (ii) the
Appraised Value, or, if permitted by the Program Guide, a statistical valuation
or the Stated Value.
Corporate Trust Office: With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Note Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at 0 Xxx Xxxx
Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 10004, Attention: Institutional Trust
Services/Global Debt - Home Loan Trust 2005-HI1. With respect to the Owner
3
Trustee, the principal corporate trust office of the Owner Trustee at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this Trust Agreement is located at Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention:
Corporate Trust Administration.
Credit Enhancement Instrument: The Guaranty Insurance Policy
number 05030001, dated as of the Closing Date, issued by the Credit Enhancer to
the Indenture Trustee.
Credit Enhancer: Financial Guaranty Insurance Company, a New York
stock insurance corporation or any successor thereto.
Credit Enhancer Default: If the Credit Enhancer fails to make a
payment required under the Credit Enhancement Instrument in accordance with its
terms.
Credit Repository: Equifax, TransUnion and Experian, or their
successors in interest.
Credit Scores: The figure assigned to a Home Loan that is
designed to assess the Mortgagor's credit history which is obtained from credit
reports provided by various credit reporting organizations and obtained by many
lenders in connection with Home Loan applications to help assess a Xxxxxxxxx's
creditworthiness.
Custodial Account: The account or accounts created and maintained
by the Master Servicer pursuant to Section 3.02(b) of the Servicing Agreement,
in which the Master Servicer shall deposit or cause to be deposited certain
amounts in respect of the Home Loans.
Custodial Agreement: Any Custodial Agreement among the Custodian,
the Indenture Trustee, the Issuer and the Master Servicer relating to the
custody of the Home Loans and the Related Documents.
Custodian: Xxxxx Fargo Bank, N.A., a national association, and
its successors and assigns.
Cut-off Date: January 1, 2005.
Cut-off Date Loan Balance: With respect to any Home Loan, the
unpaid principal balance thereof as of the close of business on the Business Day
immediately prior to the Cut-off Date.
Default: Any occurrence which is or with notice or the lapse of
time or both would become an Event of Default.
Deficiency Amount: With respect to the Notes and any Payment
Date, the sum of (i) the excess, if any, of (A) (1) the aggregate amount of
accrued interest for the Notes on such Payment Date less (2) an amount equal to
any Prepayment Interest Shortfalls and Relief Act Shortfalls on the Home Loans
during the related Collection Period, over (B) the amount on deposit in the
Payment Account available for interest distributions on the Notes on that
Payment Date, (ii) any Liquidation Loss Amount (other than any Excess Loss
4
Amount), to the extent not distributed as part of the Liquidation Loss
Distribution Amount or covered by a reduction of the Outstanding Reserve Amount,
(iii) any Excess Loss Amount for such Payment Date and (iv) amounts due on the
Notes on the Final Insured Payment Date.
Deficient Valuation: With respect to any Home Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under the Home Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled payment that
constitutes a permanent forgiveness of principal, which valuation or reduction
results from a proceeding under the Bankruptcy Code.
Definitive Notes: The meaning specified in Section 4.06 of the
Indenture.
Deleted Loan: A Home Loan replaced or to be replaced with an
Eligible Substitute Loan.
Delinquent: As used herein, a Home Loan is considered to be "30
to 59 days" or "30 or more days" delinquent when a payment due on any due date
remains unpaid as of the close of business on the next following monthly due
date. Since the determination as to whether a Home Loan falls into these
categories is made as of the close of business on the last business day of each
month, a Home Loan with a payment due on July 1 that remained unpaid as of the
close of business on July 31 would still be considered current as of July 31. If
that payment remained unpaid as of the close of business on August 31, the Home
Loan would then be considered 30-59 days delinquent. Delinquency information as
of the Cut-off Date is determined and prepared as of the close of business on
the last business day immediately prior to the Cut-off Date.
Depositor: Residential Funding Mortgage Securities II, Inc., a
Delaware corporation, or its successor in interest.
Depository or Depository Agency: The Depository Trust Company or
a successor appointed by the Indenture Trustee with the approval of the
Depositor. Any successor to the Depository shall be an organization registered
as a "clearing agency" pursuant to Section 17A of the Exchange Act and the
regulations of the Securities and Exchange Commission thereunder.
Depository Participant: A Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.
Derivative Contract: Any ISDA Master Agreement, together with the
related schedule and confirmation, entered into by the Owner Trustee and a
Derivative Counterparty in accordance with Section 5.06 of the Trust Agreement.
Derivative Counterparty: Any counterparty to a Derivative
Contract as provided in Section 5.06 of the Trust Agreement.
Determination Date: With respect to any Payment Date, the 20th
day of the month in which such Payment Date occurs or if such day is not a
Business Day, the next succeeding Business Day.
5
Dissolution Draw: Following an Event of Liquidation, on the
related Dissolution Payment Date, the amount, if any, by which the proceeds of
the sale, liquidation or other disposition of the assets of the Owner Trust in
connection with the liquidation of the Trust Estate which are available for
distribution to the Securityholders is less than the sum of (1) an amount equal
to the aggregate of all accrued and unpaid interest on the Notes at the
respective Note Rates through such Payment Date and (2) 100% of the aggregate
Note Balance of the Notes outstanding immediately prior to such Dissolution
Payment Date.
Dissolution Payment Date: Following an Event of Liquidation, the
Business Day following the date on which the proceeds of the sale, liquidation
or other disposition of the assets of the Owner Trust in connection with the
liquidation of the Trust Estate are paid to the Securityholders.
Due Date: The date on which the Monthly Payment on the related
Home Loan is due in accordance with the terms of the related Mortgage Note.
Eligible Account: An account that is any of the following: (i)
maintained with a depository institution the short-term debt obligations of
which have been rated by each Rating Agency in its highest rating category
available, or (ii) an account or accounts in a depository institution in which
such accounts are fully insured to the limits established by the FDIC, provided
that any deposits not so insured shall, to the extent acceptable to each Rating
Agency, as evidenced in writing, be maintained such that (as evidenced by an
Opinion of Counsel delivered to the Indenture Trustee and each Rating Agency)
the Indenture Trustee has a claim with respect to the funds in such account or a
perfected first security interest against any collateral (which shall be limited
to Permitted Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution with which such
account is maintained, or (iii) in the case of the Custodial Account, either (A)
a trust account or accounts maintained at the corporate trust department of the
Indenture Trustee or (B) an account or accounts maintained at the corporate
trust department of the Indenture Trustee, as long as its short term debt
obligations are rated P-1 by Xxxxx'x and A-1+ by Standard & Poor's (or the
equivalent) or better by each Rating Agency and its long term debt obligations
are rated A2 by Xxxxx'x and AA- by Standard & Poor's (or the equivalent) or
better, by each Rating Agency, or (iv) in the case of the Custodial Account and
the Payment Account, a trust account or accounts maintained in the corporate
trust division of the Indenture Trustee, or (v) an account or accounts of a
depository institution acceptable to each Rating Agency (as evidenced in writing
by each Rating Agency that use of any such account as the Custodial Account or
the Payment Account will not reduce the rating assigned to any of the Securities
by such Rating Agency (if determined without regard to the Credit Enhancement
Instrument) below the lower of the then-current rating or the rating assigned to
such Securities (if determined without regard to the Credit Enhancement
Instrument) as of the Closing Date by such Rating Agency).
Eligible Substitute Loan: A Home Loan substituted by the Seller
for a Deleted Loan which must, on the date of such substitution, as confirmed in
an Officers' Certificate delivered to the Indenture Trustee, (i) have an
outstanding principal balance, after deduction of the principal portion of the
monthly payment due in the month of substitution (or in the case of a
substitution of more than one Home Loan for a Deleted Loan, an aggregate
outstanding principal balance, after such deduction), not in excess of the
outstanding principal balance of the Deleted Loan (the amount of any shortfall
to be deposited by the Seller in the Custodial Account in the month of
6
substitution); (ii) comply with each representation and warranty other than a
statistical representation or warranty set forth in Section 3.1(b) of the Home
Loan Purchase Agreement as of the date of substitution; (iii) have a Loan Rate
no lower than and not more than 1% in excess of the Loan Rate of such Deleted
Loan; (iv) have a Combined Loan-to-Value Ratio at the time of substitution no
higher than that of the Deleted Loan at the time of substitution; (v) have, at
the time of substitution, a remaining term to stated maturity not greater than
(and not more than one year less than) that of the Deleted Loan; (vi) be
ineligible for inclusion in a real estate mortgage investment conduit ("REMIC")
(a "REMIC Ineligible Loan") if the Deleted Loan was a REMIC Ineligible Loan
(because (a) the value of the real property securing the Deleted Loan was not at
least equal to eighty percent of the adjusted issue price of such loan at the
time of origination, calculated by subtracting the amount of any liens that are
senior to such Home Loan and a proportionate amount of any lien of equal
priority from the value of such property when the Deleted Loan was originated
and (b) substantially all of the proceeds of the Deleted Loan were not used to
acquire, improve or protect an interest in the real property securing such loan
and such real property was the only security for such Deleted Loan); and (vii)
not be 30 or more days delinquent.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default: With respect to the Indenture, any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(A) a default in the payment of any interest on any Note when the
same becomes due and payable other than as a result of Prepayment Interest
Shortfalls or Relief Act Shortfalls, and such default shall continue for a
period of five days; or
(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; or
(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
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 or
the Credit Enhancer, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that such
notice is a notice of default hereunder; or
7
(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; or
(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.
Event of Liquidation: Following the occurrence of an Event of
Default under the Indenture, the determination by the Indenture Trustee, as
evidenced by a written notice provided to the Owner Trustee, the Depositor, the
Issuer and the Credit Enhancer, that all conditions precedent to the sale or
other liquidation of the Trust Estate pursuant to Section 5.04 of the Indenture
have been satisfied.
Event of Servicer Termination: With respect to the Servicing
Agreement, a Servicing Default as defined in Section 7.01 of the Servicing
Agreement.
Excess Loss Amount: As to any Payment Date, any Liquidation Loss
Amounts for the related Collection Period which, when added to the aggregate of
such Liquidation Loss Amounts for all preceding Collection Periods, exceed
$76,800,000.
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
Expenses: The meaning specified in Section 7.02 of the Trust
Agreement.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Final Insured Payment Date: The Payment Date in August 2034.
FNMA: The Federal National Mortgage Association, or any successor
thereto.
Foreclosure Profit: With respect to a Liquidated Home Loan, the
excess, if any, of (x) Net Liquidation Proceeds over (y) the sum of (a) the Loan
Balance of the related Home Loan immediately prior to the date it became a
8
Liquidated Home Loan, less any Net Liquidation Proceeds previously received with
respect to such Home Loan and applied as a recovery of principal, and (b)
accrued and unpaid interest on the related Home Loan at the Net Loan Rate
through the date of receipt of the proceeds.
Xxxxx: Pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, and xxxxx x xxxx upon and a security interest
in and right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
Holder: Any of the Noteholders or Certificateholders.
Home Loans: At any time, the Home Loans that have been sold by
the Seller under the Home Loan Purchase Agreement, together with the Related
Documents, and that remain subject to the terms thereof.
Home Loan Purchase Agreement: The Home Loan Purchase Agreement,
between the Seller, as seller, and the Depositor, as purchaser, with respect to
the Home Loans, dated as of the Cut-off Date.
Home Loan Schedule: The initial schedule of Home Loans as of the
Cut-off Date set forth in Exhibit A-1 of the Servicing Agreement, which schedule
sets forth as to each Home Loan, among other things:
(i) the Home Loan identifying number ("RFC LOAN #");
(ii) the state, city and zip code of the Mortgaged Property;
(iii) the maturity of the Mortgage Note ("MATURITY DATE");
(iv) the Loan Rate ("CUR RATE");
(v) the Principal Balance at origination ("ORG AMT");
(vi) the type of property securing the Mortgage Note ("PROPERTY
TYPE");
(vii) the appraised value ("APPRSL");
(viii) the initial scheduled monthly payment of principal, if
any, and interest ("ORIGINAL P & I");
(ix) the Cut-off Date Loan Balance ("CUT-OFF BAL");
9
(x) the Combined Loan-to-Value Ratio at origination ("CLTV");
(xi) the date of the Mortgage Note ("NOTE DATE");
(xii) the original term to maturity of the Home Loan ("ORIGINAL
TERM");
(xiii) under the column "OCCP CODE," a code indicating whether
the Home Loan is secured by a non-owner occupied
residence;
(xiv) the Principal Balance of any Home Loan senior thereto ("SR
BAL");
(xv) the Credit Score ("CR SCORE");
(xvi) the debt to income ratio ("DTI");
(xvii) product code ("PRODUCT CODE");
(xviii) loan purpose ("PURPOSE");
(xix) the lien position of the related Mortgage ("LIEN");
(xx) the Subservicer loan number (SERVICER LOAN #); and
(xxi) the remaining term of the Home Loan (REMAINING TERM).
Such schedule may consist of multiple reports that collectively set forth all of
the information required.
Indemnified Party: The meaning specified in Section 7.02 of the
Trust Agreement.
Indenture: The indenture dated as of January 27, 2005 between the
Issuer, as debtor, and the Indenture Trustee, as indenture trustee.
Indenture Trustee: JPMorgan Chase Bank, N.A. and its successors
and assigns or any successor indenture trustee appointed pursuant to the terms
of the Indenture.
Independent: When used with respect to any specified Person, the
Person (i) is in fact independent of the Issuer, any other obligor on the Notes,
the Seller, the Issuer, the Depositor and any Affiliate of any of the foregoing
Persons, (ii) does not have any direct financial or any material indirect
financial interest in the Issuer, any such other obligor, the Seller, the
Issuer, the Depositor or any Affiliate of any of the foregoing Persons and (iii)
is not connected with the Issuer, any such other obligor, the Seller, the
Issuer, the Depositor or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Independent Certificate: A certificate or opinion to be delivered
to the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
10
made by an Independent appraiser or other expert appointed by an Issuer Order
and approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the definition
of "Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
Initial Certificates: The Home Loan-Backed Certificates, Series
2005-HI1, issued on the Closing Date, each evidencing undivided beneficial
interests in the Issuer and executed by the Owner Trustee.
Initial Note Balance: With respect to the Class A-1 Notes,
$70,460,000, with respect to the Class A-2 Notes, $18,983,000, with respect to
the Class A-3 Notes, $46,383,000, with respect to the Class A-4 Notes,
$46,094,000 and with respect to the Class A-5 Notes, $58,080,000.
Insolvency Event: With respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such Person to the
entry of an order for relief in an involuntary case under any such law, or the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture Trustee shall have notice)
of its inability to pay its debts generally, or the adoption by the Board of
Directors or managing member of such Person of a resolution which authorizes
action by such Person in furtherance of any of the foregoing.
Insurance Agreement: The Insurance and Indemnity Agreement dated
as of January 27, 2005, among the Master Servicer, the Seller, the Depositor,
the Issuer, the Indenture Trustee and the Credit Enhancer, including any
amendments and supplements thereto.
Insured Payment: With respect to any distribution date, (i) any
Deficiency Amount and (ii) any Preference Amount.
Insurance Proceeds: Proceeds paid by any insurer (other than the
Credit Enhancer) pursuant to any insurance policy covering a Home Loan which are
required to be remitted to the Master Servicer, or amounts required to be paid
by the Master Servicer pursuant to the next to last sentence of Section 3.04 of
the Servicing Agreement, net of any component thereof (i) covering any expenses
incurred by or on behalf of the Master Servicer in connection with obtaining
such proceeds, (ii) that is applied to the restoration or repair of the related
Mortgaged Property, (iii) released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures or (iv) required to be paid to any
holder of a mortgage senior to such Home Loan.
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Interest Accrual Period: With respect to the Notes (other than
the Class A-1 Notes) and as to any Payment Date, will be the calendar month
preceding the month in which the related Payment Date occurs. With respect to
the Class A-1 Notes and any Payment Date other than the first Payment Date, the
period beginning on the preceding Payment Date and ending on the day preceding
such Payment Date, and in the case of the first Payment Date, the period
beginning on the Closing Date and ending on the day preceding the first Payment
Date.
Interest Collections: With respect to any Payment Date, the sum
of (i) the portion allocable to interest of all scheduled monthly payments on
the Home Loans received during the related Collection Period reduced by the
Administrative Fees for such Collection Period, (ii) the portion of all Net
Liquidation Proceeds allocated to interest under the terms of the related
Mortgage Notes, reduced by the Administrative Fees for such Collection Period,
(iii) the interest portion of the Repurchase Price for any Deleted Loans and the
interest portion of the cash purchase price paid in connection with any optional
purchase of the Home Loans by the Master Servicer and (iv) any proceeds and
recoveries received during the related Collection Period on a Home Loan after it
becomes a Liquidated Home Loan allocated to Interest Collections in accordance
with the last paragraph of Section 3.07 of the Servicing Agreement, reduced by
the Administrative Fees for such Collection Period.
Issuer or Trust: The Home Loan Trust 2005-HI1, a Delaware
statutory trust, or its successor in interest.
Issuer Request: A written order or request signed in the name of
the Issuer by any one of its Authorized Officers and delivered to the Indenture
Trustee.
LIBOR: For any Interest Accrual Period other than the first
Interest Accrual Period, the rate for United States dollar deposits for one
month which appears on the Dow Xxxxx Telerate Screen Page 3750 as of 11:00 A.M.,
London, England time, on the second LIBOR Business Day prior to the first day of
such Interest Accrual Period. With respect to the first Interest Accrual Period,
the rate for United States dollar deposits for one month which appears on the
Dow Xxxxx Telerate Screen Page 3750 as of 11:00 A.M., London, England time, two
LIBOR Business Days prior to the Closing Date. If such rate does not appear on
such page (or such other page as may replace that page on that service, or if
such service is no longer offered, such other service for displaying LIBOR or
comparable rates as may be reasonably selected by the Indenture Trustee after
consultation with the Master Servicer and the Credit Enhancer), the rate will be
the Reference Bank Rate. If no such quotations can be obtained and no Reference
Bank Rate is available, LIBOR will be LIBOR applicable to the preceding Payment
Date.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday
or (ii) a day on which banking institutions in the city of London, England are
required or authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority right or interest or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
12
any of the foregoing and the filing of any financing statement under the UCC
(other than any such financing statement filed for informational purposes only)
or comparable law of any jurisdiction to evidence any of the foregoing;
provided, however, that any assignment pursuant to Section 6.02 of the Servicing
Agreement shall not be deemed to constitute a Lien.
Limited Repurchase Right Holder: The Master Servicer.
Liquidated Home Loan: With respect to any Payment Date, any Home
Loan in respect of which the Master Servicer has determined, based on the
servicing procedures specified in the Servicing Agreement, as of the end of the
preceding Collection Period, that all Liquidation Proceeds which it expects to
recover with respect to the disposition of the related Mortgaged Property have
been recovered. In addition, the Master Servicer will treat any Home Loan that
is 180 days or more delinquent as having been finally liquidated.
Liquidation Expenses: Out-of-pocket expenses (exclusive of
overhead) which are incurred by or on behalf of the Master Servicer in
connection with the liquidation of any Home Loan and not recovered under any
insurance policy, such expenses including, without limitation, legal fees and
expenses, any unreimbursed amount expended (including, without limitation,
amounts advanced to correct defaults on any loan which is senior to such Home
Loan and amounts advanced to keep current or pay off a loan that is senior to
such Home Loan) respecting the related Home Loan and any related and
unreimbursed expenditures for real estate property taxes or for property
acquisition, restoration, preservation or disposition, or insurance against
casualty loss or damage.
Liquidation Loss Amount: With respect to any Payment Date and any
Home Loan that became a Liquidated Home Loan during the related Collection
Period, the unrecovered portion of the related Loan Balance thereof at the end
of such Collection Period, after giving effect to the Net Liquidation Proceeds
applied in reduction of the Loan Balance. In addition, as to any Home Loan for
which the Loan Balance has been reduced in connection with bankruptcy
proceedings, the amount of the reduction will be treated as a Liquidation Loss
Amount.
Liquidation Loss Distribution Amount: With respect to any Payment
Date, an amount equal to the sum of (A) 100% of the Liquidation Loss Amounts
(other than any Excess Loss Amounts) on the Home Loans on such Payment Date, and
(B) any Liquidation Loss Amounts (other than any Excess Loss Amounts) remaining
unpaid from any preceding Payment Date, to the extent not reflected on such
preceding Payment Date by a reduction of the Outstanding Reserve Amount.
Liquidation Proceeds: Proceeds (including Insurance Proceeds but
not including amounts drawn under the Credit Enhancement Instrument) if any
received in connection with the liquidation of any Home Loan or related REO,
whether through trustee's sale, foreclosure sale, the exercise of the power of
eminent domain or condemnation or otherwise.
Loan Balance: With respect to any Home Loan, other than a
Liquidated Home Loan, and as of any day, the related Cut-off Date Loan Balance,
minus all collections in respect of principal in accordance with the related
Mortgage Note and applied in reduction of the Loan Balance thereof. For purposes
of this definition, a Liquidated Home Loan shall be deemed to have a Loan
Balance equal to zero.
13
Loan Rate or Mortgage Rate: With respect to any Home Loan and any
day, the per annum rate of interest set forth in the related Mortgage Note.
Lost Note Affidavit: With respect to any Home Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note).
Master Servicer: Residential Funding Corporation, a Delaware
corporation, and its successors and assigns.
Master Servicing Fee: With respect to any Home Loan and any
Collection Period, the product of (i) the Master Servicing Fee Rate divided by
12 and (ii) the Loan Balance of such Home Loan as of the first day of such
Collection Period.
Master Servicing Fee Rate: With respect to any Home Loan, 0.08%
per annum.
Monthly Payment: With respect to any Home Loan (including any REO
Property) and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization schedule at the time applicable thereto (after
adjustment, if any, for partial prepayments and for Deficient Valuations
occurring prior to such Due Date but before any adjustment to such amortization
schedule by reason of any bankruptcy, other than a Deficient Valuation, or
similar proceeding or any moratorium or similar waiver or grace period).
Moody's: Xxxxx'x Investors Service, Inc. or its successor in
interest.
Mortgage: The mortgage, deed of trust or other instrument
creating a first or second lien on an estate in fee simple interest in real
property securing a Home Loan.
Mortgage File: The file containing the Related Documents
pertaining to a particular Home Loan and any additional documents required to be
added to the Mortgage File pursuant to the Home Loan Purchase Agreement or the
Servicing Agreement.
Mortgage Note: With respect to a Home Loan, the mortgage note
pursuant to which the related mortgagor agrees to pay the indebtedness evidenced
thereby and secured by the related Mortgage as modified or amended.
Mortgaged Property: The underlying property, including real
property and improvements thereon, securing a Home Loan.
Mortgagor: The obligor or obligors under a Mortgage Note.
Net Liquidation Proceeds: With respect to any Liquidated Home
Loan, Liquidation Proceeds (including Insurance Proceeds but excluding amounts
drawn on the Credit Enhancement Instrument) net of Liquidation Expenses.
14
Net Loan Rate: With respect to any Home Loan and any date of
determination, a per annum rate of interest equal to the then applicable Loan
Rate for such Home Loan minus the Servicing Fee Rate.
Note Balance: With respect to any Payment Date and any Class of
Notes, the Initial Note Balance thereof reduced by all payments of principal
thereon prior to and as of such Payment Date.
Note Owner: The Beneficial Owner of a Note.
Note Rate: With respect to the Class A-1 Notes, will be the
lesser of (a) LIBOR plus 0.15% per annum and (b) 7.50% per annum; with respect
to the Class A-2 Notes, 3.89% per annum; with respect to the Class A-3 Notes,
4.16% per annum; with respect to the Class A-4 Notes, 4.70% per annum; and with
respect to the Class A-5 Notes, 5.45% per annum; provided, that on the Step-Up
Date, if the Master Servicer does not exercise the Optional Redemption the Note
Rate on the Class A-5 Notes shall increase by 0.50% per annum.
Note Register: The register maintained by the Note Registrar in
which the Note Registrar shall provide for the registration of Notes and of
transfers and exchanges of Notes.
Note Registrar: The Indenture Trustee, in its capacity as Note
Registrar.
Noteholder: The Person in whose name a Note is registered in the
Note Register, except that, any Note registered in the name of the Depositor,
the Issuer or the Indenture Trustee or any Affiliate of any of them shall be
deemed not to be outstanding and the registered holder will not be considered a
Noteholder or holder for purposes of giving any request, demand, authorization,
direction, notice, consent or waiver under the Indenture or the Trust Agreement
provided that, in determining whether the Indenture Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Notes that the Indenture Trustee or the Owner Trustee
knows to be so owned shall be so disregarded. Owners of Notes that have been
pledged in good faith may be regarded as Holders if the pledgee establishes to
the satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes or any Affiliate of any of the
foregoing Persons. Any Notes on which payments are made under the Credit
Enhancement Instrument shall be deemed Outstanding until the Credit Enhancer has
been reimbursed with respect thereto and the Credit Enhancer shall be deemed the
Noteholder thereof to the extent of such unreimbursed payment.
Notes: Any one of the Class A-1, Class A-2, Class A-3, Class A-4
or Class A-5 Notes issued and outstanding at any time pursuant to the Indenture.
Officer's Certificate: With respect to the Master Servicer, a
certificate signed by the President, Managing Director, a Director, a Vice
President or an Assistant Vice President, of the Master Servicer and delivered
to the Indenture Trustee. With respect to the Issuer, a certificate signed by
any Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, and delivered to the Indenture Trustee. Unless otherwise specified,
any reference in the Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
15
Opinion of Counsel: A written opinion of counsel. Any Opinion of
Counsel for the Master Servicer may be provided by in-house counsel for the
Master Servicer if reasonably acceptable to the Indenture Trustee, the Credit
Enhancer and the Rating Agencies or counsel for the Depositor, as the case may
be.
Optional Redemption: The right of the Master Servicer to purchase
the Home Loans on any Payment Date on which the aggregate Principal Balance of
the Home Loans as of the end of the related Collection Period is less than 10%
of the Cut-off Date Balance, pursuant to Section 8.08 of the Servicing
Agreement.
Original Trust Agreement: The Trust Agreement, dated as of
January 27, 2005, between the Owner Trustee and the Depositor.
Outstanding: With respect to the Notes, as of the date of
determination, all Notes theretofore executed, authenticated and delivered under
this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes
have been executed, authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a holder in due course;
provided, however, that for purposes of effectuating the Credit Enhancer's right
of subrogation as set forth in Section 4.12 of the Indenture only, all Notes
that have been paid with funds provided under the Credit Enhancement Instrument
shall be deemed to be Outstanding until the Credit Enhancer has been reimbursed
with respect thereto.
Outstanding Reserve Amount: With respect to any Payment Date, the
amount, if any, by which (i) the Pool Balance after applying payments received
in the related Collection Period exceeds (ii) the aggregate Note Balance of the
Notes on such Payment Date after application of Principal Collections and
Liquidation Loss Distribution Amounts for such Payment Date. The Outstanding
Reserve Amount will be increased by distributions of the Reserve Increase
Amount, if any, to the Notes. Any Excess Loss Amounts are required to be covered
by a draw on the Credit Enhancement Instrument in all cases, without regard to
the availability of the Outstanding Reserve Amount.
Owner Trust: Home Loan Trust 2005-HI1, created by the Certificate
of Trust pursuant to the Trust Agreement and the Original Trust Agreement.
Owner Trust Estate: The corpus of the Issuer created by the Trust
Agreement which consists of the Home Loans and the Credit Enhancement
Instrument.
16
Owner Trustee: Wilmington Trust Company not in its individual
capacity but solely as Owner Trustee of the Trust, and its successors and
assigns or any successor owner trustee appointed pursuant to the terms of the
Trust Agreement.
Paying Agent: Any paying agent or co-paying agent appointed
pursuant to Section 3.03 of the Indenture, which initially shall be the
Indenture Trustee.
Payment Account: The account established by the Indenture Trustee
pursuant to Section 8.02 of the Indenture and Section 5.01 of the Servicing
Agreement. Amounts deposited in the Payment Account will be distributed by the
Indenture Trustee in accordance with Section 3.05 of the Indenture.
Payment Date: The 25th day of each month, or if such day is not a
Business Day, then the next Business Day.
Percentage Interest: With respect to any Note and any date of
determination, the percentage obtained by dividing the Note Balance of such Note
by the aggregate of the Note Balances of all Notes of the same Class.
Permitted Investments: One or more of the following:
---------------------
(i) obligations of or guaranteed as to principal and interest by
the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition thereof,
provided that the unsecured obligations of the party agreeing to
repurchase such obligations are at the time rated by each Rating Agency
in its highest short-term rating category available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution or
trust company; provided that the debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard
& Poor's, in the case of the principal depository institution in a
depository institution holding company, debt obligations of the
depository institution holding company) at the date of acquisition
thereof have been rated by each Rating Agency in its highest short-term
rating category available; and provided further that, if the only Rating
Agency is Standard & Poor's and if the depository or trust company is a
principal subsidiary of a bank holding company and the debt obligations
of such subsidiary are not separately rated, the applicable rating shall
be that of the bank holding company; and, provided further that, if the
original maturity of such short-term obligations of a domestic branch of
a foreign depository 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;
17
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by each Rating Agency in its highest short-term rating
category available; provided that such commercial paper shall have a
remaining maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by
each Rating Agency in its highest long-term rating category available;
and
(vi) other obligations or securities that are acceptable to each
Rating Agency as an Permitted Investment hereunder and will not reduce
the rating assigned to any Securities by such Rating Agency below the
lower of the then-current rating or the rating assigned to such
Securities as of the Closing Date by such Rating Agency, and which are
acceptable to the Credit Enhancer, as evidenced in writing, provided
that if the Master Servicer or any other Person controlled by the Master
Servicer is the issuer or the obligor of any obligation or security
described in this clause (vi) such obligation or security must have an
interest rate or yield that is fixed or is variable based on an
objective index that is not affected by the rate or amount of losses on
the Home Loans;
provided, however, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations References herein to the highest rating available on unsecured
long-term debt shall mean AAA in the case of Standard & Poor's and Aaa in the
case of Xxxxx'x, and references herein to the highest rating available on
unsecured commercial paper and short-term debt obligations shall mean A-1+ in
the case of Standard & Poor's and P-1 in the case of Xxxxx'x.
Person: Any legal individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Plan: Any employee benefit plan subject to ERISA and any plan or
other arrangement described in Section 4975(e)(1) of the Code.
Plan Assets: The assets of a Plan as determined under Department
of Labor regulation section 2510.3-101 or other applicable law.
Pool Balance: With respect to any date, the aggregate of the Loan
Balances of all Home Loans as of such date.
Predecessor Note: With respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 4.03 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
18
Preference Amount: Any amount previously distributed to a
Noteholder that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy court pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with a
final non-appealable order of a court exercising proper jurisdiction.
Premium Amount: The amount of premium due to the Credit Enhancer
in accordance with the terms of the Insurance Agreement.
Premium Percentage: As set forth in the Insurance Agreement.
Prepayment Assumption: A 100% Prepayment Assumption used solely
for determining the accrual of original issue discount, market discount and
premium, if any, on the Notes for federal income tax purposes. A 100% Prepayment
Assumption assumes a constant prepayment rate of 2% per annum for the first
month, increasing each month by an additional 1.071429% until the fifteenth
month. Beginning in the fifteenth month and in each month thereafter during the
life of the Home Loans, a 100% Prepayment Assumption assumes a constant
prepayment rate of 17% per annum each month.
Prepayment Interest Shortfall: With respect to any Payment Date,
the aggregate shortfall, if any, in collections of interest, adjusted to the
related Net Loan Rate, resulting from borrower prepayments during the related
Collection Period. These shortfalls will not be covered by the Master Servicer,
the Credit Enhancer or any other person.
Principal Collection Distribution Amount: For any Payment Date,
the Principal Collections (reduced by any portion used to pay interest on the
Notes) for such Payment Date; provided, however, on any Payment Date as to which
the Outstanding Reserve Amount that would result, if determined without regard
to this proviso, exceeds the Reserve Amount Target, the Principal Collection
Distribution Amount will be reduced by the amount of such excess, but not below
zero, until the Outstanding Reserve Amount equals the Reserve Amount Target.
Principal Collections: As to any Payment Date, an amount equal to
the sum of the following amounts:
(i) the principal portion of all scheduled Monthly Payments on
the Home Loans received during the related Collection Period;
(ii) the principal portion of all proceeds of the repurchase of
any Home Loans (or, in the case of a substitution, any Substitution
Adjustment Amounts) as required by the Servicing Agreement received
during the related Collection Period and the principal portion of the
cash purchase price paid in connection with any optional purchase of the
Home Loans by the Master Servicer; and
(iii) the principal portion of all other unscheduled collections
received on the Home Loans during the related Collection Period (or
deemed to be received during the related Collection Period) (including,
without limitation, full and partial Principal Prepayments made by the
respective Mortgagors, Insurance Proceeds and Net Liquidation Proceeds),
to the extent not previously distributed;
19
provided, however, that Principal Collections shall be reduced by any amounts
withdrawn from the Custodial Account pursuant to Section 3.03(ii), (v), (vi) and
(vii) of the Servicing Agreement.
Principal Prepayment: Any payment of principal made by the
Mortgagor on a Home Loan which is received in advance of its scheduled Due Date
and which is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment.
Proceeding: Any suit in equity, action at law or other judicial
or administrative proceeding.
Program Guide: Together, the Seller's Seller Guide and Servicing
Guide, as in effect from time to time.
Prospectus Supplement: The prospectus supplement, dated January
19, 2005, relating to the issuance of the Home Loan-Backed Notes, Series
2005-HI1.
Purchase Price: The meaning specified in Section 2.2(a) of the
Home Loan Purchase Agreement.
Purchaser: Residential Funding Mortgage Securities II, Inc., a
Delaware corporation, and its successors and assigns.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as
an insurer by the Master Servicer and as a FNMA-approved mortgage insurer.
Rating Agency: Any nationally recognized statistical rating
organization, or its successor, that rated the Securities at the request of the
Depositor at the time of the initial issuance of the Securities, which initially
shall be Xxxxx'x or Standard & Poor's. If such organization or a successor is no
longer in existence, "Rating Agency" shall be such nationally recognized
statistical rating organization, or other comparable Person, designated by the
Depositor, notice of which designation shall be given to the Indenture Trustee.
References herein to the highest short term unsecured rating category of a
Rating Agency shall mean A-1 or better in the case of Standard & Poor's and P-1
or better in the case of Xxxxx'x and in the case of any other Rating Agency
shall mean such equivalent ratings. References herein to the highest long-term
rating category of a Rating Agency shall mean "AAA" in the case of Standard &
Poor's and "Aaa" in the case of Xxxxx'x and in the case of any other Rating
Agency, such equivalent rating.
Record Date: With respect to the Class A-1 Notes and any Payment
Date, the Business Day next preceding such Payment Date and with respect to the
Notes (other than the Class A-1 Notes) and the Certificates and any Payment
Date, the last Business Day of the month preceding the month of such Payment
Date.
20
Reference Bank Rate: With respect to any Interest Accrual Period,
as follows: the arithmetic mean (rounded upwards, if necessary, to the nearest
one sixteenth of a percent) of the offered rates for United States dollar
deposits for one month which are offered by the Reference Banks as of 11:00
A.M., London, England time, on the second LIBOR Business Day prior to the first
day of such Interest Accrual Period to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the sum of
the outstanding Note Balance of the Class A-I-1 Notes; provided that at least
two such Reference Banks provide such rate. If fewer than two offered rates
appear, the Reference Bank Rate will be the arithmetic mean of the rates quoted
by one or more major banks in New York City, selected by the Indenture Trustee
after consultation with the Master Servicer and the Credit Enhancer, as of 11:00
a.m., New York time, on such date for loans in U.S. Dollars to leading European
Banks for a period of one month in amounts approximately equal to the aggregate
Note Balance of the Class A-I-1 Notes. If no such quotations can be obtained,
the Reference Bank Rate shall be LIBOR applicable to the preceding Payment Date;
provided however, that if, under the priorities indicated above, LIBOR for a
Payment Date would be based on LIBOR for the previous Payment Date for the third
consecutive Payment Date, the Indenture Trustee shall select an alternative
comparable index over which the Indenture Trustee has no control, used for
determining one-month Eurodollar lending rates that is calculated and published
or otherwise made available by an independent party.
Reference Banks: Barclays Bank PLC, Credit Suisse and Abbey
National PLC.
Registered Holder: The Person in whose name a Note is registered
in the Note Register on the applicable Record Date.
Related Documents: With respect to each Home Loan, the documents
specified in Section 2.1(c) of the Home Loan Purchase Agreement and any
documents required to be added to such documents pursuant to the Home Loan
Purchase Agreement, the Trust Agreement or the Servicing Agreement.
Release Agreement: A Release Agreement as defined in Section 3.05
of the Servicing Agreement.
Relief Act Shortfall: With respect to any Payment Date, the
aggregate shortfall, if any, in collections of interest, as a result of the
application of the Servicemembers Civil Relief Act or similar legislation or
regulations. These shortfalls will reduce the amount of Interest Collections on
the Home Loans and will not be amounts paid by the Master Servicer, the Credit
Enhancer or any other person.
REO: A Mortgaged Property that is acquired by the Issuer in
foreclosure or by deed in lieu of foreclosure.
Repurchase Event: With respect to any Home Loan, one of the
following: (i) a discovery that, as of the Closing Date, the related Mortgage
was not a valid lien on the related Mortgaged Property subject only to (A) the
lien of any prior mortgage indicated on the Home Loan Schedule, (B) the lien of
real property taxes and assessments not yet due and payable, (C) covenants,
conditions, and restrictions, rights of way, easements and other matters of
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public record as of the date of recording of such Mortgage and such other
permissible title exceptions as are listed in the Program Guide and (D) other
matters to which like properties are commonly subject which do not materially
adversely affect the value, use, enjoyment or marketability of the related
Mortgaged Property, or (ii) with respect to any Home Loan as to which the Seller
delivers a Lost Note Affidavit, a subsequent default on such Home Loan if the
enforcement thereof or of the related Mortgage is materially and adversely
affected by the absence of the original Mortgage Note.
Repurchase Price: With respect to any Home Loan required to be
repurchased on any date pursuant to the Home Loan Purchase Agreement or
purchased by the Master Servicer or the Limited Repurchase Right Holder pursuant
to the Servicing Agreement, an amount equal to the sum of (i) 100% of the Loan
Balance thereof (without reduction for any amounts charged off) and (ii) unpaid
accrued interest at the Loan Rate (or with respect to the last day of the month
in the month of repurchase, the Loan Rate will be the Loan Rate in effect as to
the second to last day in such month) on the outstanding principal balance
thereof from the Due Date to which interest was last paid by the Mortgagor to
the first day of the month following the month of purchase.
Request for Release: The form attached as Exhibit 4 to the
Custodial Agreement or an electronic request in a form acceptable to the
Custodian.
Reserve Amount Floor: An amount equal to 0.50% of the aggregate
Pool Balance of the Home Loans as of the Cut-off Date.
Reserve Amount Target: As to any Payment Date prior to the
Stepdown Date, an amount equal to 5.00% of the aggregate Cut-off Date Pool
Balance. On or after the Stepdown Date, the Reserve Amount Target will be equal
to the lesser of:
(a) the Reserve Amount Target as of the Cut-off Date; and
(b) 10.00% of the aggregate Pool Balance after applying payments
received in the related Collection Period;
provided, however, that the Reserve Amount Target shall not be less than the
Reserve Amount Floor;
provided further, that any scheduled reduction to the Reserve Amount Target on
or after the Stepdown Date as described above shall not be made on any Payment
Date unless:
(i) either (a) the aggregate cumulative Liquidation Loss Amount on the
Home Loans from the Cut-off Date through the end of the Collection
Period immediately prior to such Payment Date is less than:
(A) 7.50% of the Pool Balance as of the Cut-off Date, if such
Payment Date is the 31st through 36th Payment Dates,
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(B) 8.00% of the Pool Balance as of the Cut-off Date, if such
Payment Date is the 37th through 48th Payment Dates, or
(C) 9.00% of the Pool Balance as of the Cut-off Date, if such
Payment Date is the 49th through 60th Payment Dates, or
(D) 12.00% of the Pool Balance as of the Cut-off Date, if such
Payment Date is the 61st through 72nd Payment Dates, or
(E) 14.00% of the Pool Balance as of the Cut-off Date, if such
Payment Date is the 73rd Payment Date (or any Payment Date thereafter)
or
(b) the average of the aggregate Liquidation Loss Amount on the
Home Loans that became Liquidated Home Loans during the related
Collection Period, as determined for the current and five previous
Payment Dates, is less than 50% of the average of the amount remaining
in the Payment Account on such Payment Date following distributions
pursuant to clauses (i)-(v) of Section 3.05 of the Indenture (other than
distributions made pursuant to clause (iii) thereof), as determined for
the current and five previous Payment Dates and
(ii) there has been no draw on the Credit Enhancement Instrument on such
Payment Date that remains unreimbursed.
In addition, the Reserve Amount Target may be reduced with the prior written
consent of the Credit Enhancer and notice to the Rating Agencies.
Reserve Increase Amount: On each Payment Date, an amount equal to
the lesser of (i) the amount remaining in the Payment Account following
distributions pursuant to Section 3.05(a)(v) of the Indenture and (ii) the
amount necessary to bring the Outstanding Reserve Amount up to the Reserve
Amount Target.
Responsible Officer: With respect to the Indenture Trustee, any
officer of the Indenture Trustee with direct responsibility for the
administration of the Trust Agreement and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
Sale: The meaning specified in Section 5.15 of the Indenture.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
Security: Any of the Certificates or Notes.
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Securityholder or Holder: Any Noteholder or a Certificateholder.
Security Instrument: A written instrument creating a valid first
lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.
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Seller: Residential Funding Corporation, a Delaware corporation,
and its successors and assigns.
Servicing Agreement: The Servicing Agreement dated as of January
27, 2005 among the Indenture Trustee, the Issuer and the Master Servicer, as
master servicer.
Servicing Certificate: A certificate prepared by a Servicing
Officer on behalf of the Master Servicer in accordance with Section 4.01 of the
Servicing Agreement.
Servicing Default: The meaning specified in Section 7.01 of the
Servicing Agreement.
Servicing Fee: With respect to any Home Loan, the sum of the
related Master Servicing Fee and the related Subservicing Fee.
Servicing Fee Rate: With respect to any Home Loan, the sum of the
related Master Servicing Fee Rate and the related Subservicing Fee Rate.
Servicing Officer: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Home Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Indenture Trustee (with a copy to the Credit Enhancer) by the Master
Servicer, as such list may be amended from time to time.
Servicing Trigger: As of any Payment Date, for purposes of
Section 7.04, "Servicing Trigger; Removal of Master Servicer," the aggregate
cumulative Liquidation Loss Amount on the Home Loans from the Cut-off Date
through the end of the Collection Period immediately prior to such Payment Date
is greater than:
(A) 13.50% of the Pool Balance as of the Cut-off Date, if such
Payment Date is the 31st through 36th Payment Dates,
(B) 14.00% of the Pool Balance as of the Cut-off Date, if such
Payment Date is the 37th through 48th Payment Dates, or
(C) 16.00% of the Pool Balance as of the Cut-off Date, if such
Payment Date is the 49th through 60th Payment Dates, or
(D) 22.00% of the Pool Balance as of the Cut-off Date, if such
Payment Date is the 61st through 72nd Payment Dates, or
(E) 26.00% of the Pool Balance as of the Cut-off Date, if such
Payment Date is the 73rd Payment Date (or any Payment Date thereafter).
Standard & Poor's: Standard & Poor's, a Division of The
XxXxxx-Xxxx Companies, Inc. or its successor in interest.
Stated Value: The value of the Mortgaged Property as stated by
the related Mortgagor in his or her application.
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Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss.ss.3801 et seq., as the same may be amended from time to
time.
Step-Up Date: The second Payment Date immediately following the
first Payment Date on which the Master Servicer can purchase all or some of the
Home Loans from the Trust pursuant to Section 8.08 of the Servicing Agreement.
Stepdown Date: The Payment Date occurring on the later of (i) the
Payment Date in August 2007 and (ii) the first Payment Date on which the Pool
Balance, after applying payments received in the related Collection Period, is
less than 50% of the Pool Balance as of the Cut-off Date.
Subservicer: Any Person with whom the Master Servicer has entered
into a Subservicing Agreement as a Subservicer by the Master Servicer.
Subservicing Account: An Eligible Account established or
maintained by a Subservicer as provided for in Section 3.02(c) of the Servicing
Agreement.
Subservicing Agreement: The written contract between the Master
Servicer and any Subservicer relating to servicing and administration of certain
Home Loans as provided in Section 3.01 of the Servicing Agreement.
Subservicing Fee: With respect to any Collection Period, the fee
retained monthly by the Subservicer (or, in the case of a nonsubserviced Home
Loan, by the Master Servicer) equal to the product of (i) the Subservicing Fee
Rate divided by 12 and (ii) the Pool Balance as of the first day of such
Collection Period.
Subservicing Fee Rate: With respect to each Home Loan, the amount
payable to the related Subservicer, equal to 0.50% per annum.
Substitution Adjustment Amounts: With respect to any Eligible
Substitute Loan, the amount as defined in Section 3.1(b) of the Home Loan
Purchase Agreement and any Deleted Loan, the amount, if any, as determined by
the Master Servicer, by which the aggregate principal balance of all such
Eligible Substitute Loans as of the date of substitution is less than the
aggregate principal balance of all such Deleted Loans (after application of the
principal portion of the Monthly Payments due in the month of substitution that
are to be distributed to the Payment Account in the month of substitution).
Termination Price: In the event that all of the Home Loans are
purchased by the Master Servicer, the Termination Price will be an amount equal
to 100% of the unpaid Loan Balance of each Home Loan so purchased, plus accrued
and unpaid interest thereon at the weighted average of the Loan Rates through
the day preceding the Payment Date on which such purchase occurs, plus any
amounts owed by the Seller pursuant to the second paragraph of Section 3.1(c) of
the Home Loan Purchase Agreement in respect of any liability, penalty or expense
that resulted from a breach of the representation and warranty set forth in
clause (x) of Section 3.1(b) of the Home Loan Purchase Agreement, that remain
unpaid on the date of such purchase.
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Treasury Regulations: Regulations, including proposed or
temporary Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Trust Agreement: The Amended and Restated Trust Agreement, dated
as of January 27, 2005 between the Owner Trustee and the Depositor.
Trust Estate: The meaning specified in the Granting Clause of the
Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as
amended from time to time, as in effect on any relevant date.
UCC: The Uniform Commercial Code, as amended from time to time,
as in effect in any specified jurisdiction.
Underwriters: Bear, Xxxxxxx & Co. Inc. and Residential Funding
Securities Corporation.
Uniform Single Attestation Program for Mortgage Bankers: The
Uniform Single Attestation Program for Mortgage Bankers, as published by the
Mortgage Bankers Association of America and effective with respect to fiscal
periods ending on or after December 15, 1995.
United States Person: A citizen or resident of the United States,
a corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
or an estate whose income is subject to United States federal income tax
regardless of its source, or a trust other than a "foreign trust" within the
meaning of Section 7701(a)(30) of the Code.
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