EXHIBIT 4.1
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XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A,
as Issuer,
and
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Indenture Trustee
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INDENTURE
Dated as of May 31, 2002
-------------------------------------
HOME EQUITY LOAN-BACKED NOTES
HOME EQUITY LOAN-BACKED VARIABLE FUNDING NOTES
HOME EQUITY LOAN-BACKED SUBORDINATE NOTES
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.............................................................................1
Section 1.01. Definitions.......................................................................1
Section 1.02. Incorporation by Reference of Trust Indenture Act.................................2
Section 1.03. Rules of Construction.............................................................2
ARTICLE II ORIGINAL ISSUANCE OF NOTES..............................................................2
Section 2.01. Form..............................................................................2
Section 2.02. Execution, Authentication and Delivery............................................3
ARTICLE III COVENANTS...............................................................................3
Section 3.01. Reserved..........................................................................3
Section 3.02. Maintenance of Office or Agency...................................................4
Section 3.03. Money for Payments To Be Held in Trust; Paying Agent..............................4
Section 3.04. Existence.........................................................................5
Section 3.05. Payment of Principal and Interest; Defaulted Interest.............................5
Section 3.06. Protection of Trust Estate.......................................................10
Section 3.07. Opinions as to Trust Estate......................................................11
Section 3.08. Performance of Obligations; Sale and Servicing Agreement.........................11
Section 3.09. Negative Covenants...............................................................12
Section 3.10. Annual Statement as to Compliance................................................12
Section 3.11. Recordation of Assignments.......................................................13
Section 3.12. Representations and Warranties Concerning the Mortgage Loans.....................13
Section 3.13. Assignee of Record of the Mortgage Loans.........................................13
Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee............................13
Section 3.15. Investment Company Act...........................................................13
Section 3.16. Issuer May Not Consolidate, etc..................................................14
Section 3.17. Successor or Transferee..........................................................15
Section 3.18. No Other Business................................................................15
Section 3.19. No Borrowing.....................................................................16
Section 3.20. Guarantees.......................................................................16
Section 3.21. Capital Expenditures.............................................................16
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TABLE OF CONTENTS
(continued)
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Section 3.22. Indenture Trustee Not Liable for Notes or Related Documents......................16
Section 3.23. Notice of Events of Default......................................................16
Section 3.24. Further Instruments and Acts.....................................................16
Section 3.25. Statements to Noteholders........................................................16
Section 3.26. Allocation of Principal Payments to the Offered Notes and the
Variable Funding Notes ..........................................................17
Section 3.27. Payments under the Policy........................................................17
Section 3.28. Allocation of Losses on the Mortgage Loans.......................................18
Section 3.29. Additional Representations and Warranties of the Issuer..........................18
ARTICLE IV THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE.....................................19
Section 4.01. The Notes........................................................................19
Section 4.02. Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate Registrar.............................................20
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes.......................................23
Section 4.04. Persons Deemed Owners............................................................24
Section 4.05. Cancellation.....................................................................24
Section 4.06. Book-Entry Notes.................................................................24
Section 4.07. Notices to Depository............................................................25
Section 4.08. Definitive Notes.................................................................25
Section 4.09. Tax Treatment....................................................................26
Section 4.10. Reserved.........................................................................26
Section 4.11. Satisfaction and Discharge of Indenture..........................................26
Section 4.12. Application of Trust Money.......................................................27
Section 4.13. Reserved.........................................................................27
Section 4.14. Repayment of Monies Held by Paying Agent.........................................27
Section 4.15. Temporary Offered Notes..........................................................27
Section 4.16. Subrogation and Cooperation......................................................28
Section 4.17. Enhancer's Rights Regarding Actions, Proceedings or Investigations...............29
ARTICLE V DEFAULT AND REMEDIES...................................................................30
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TABLE OF CONTENTS
(continued)
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Section 5.01. Notification of Certain Events of Default........................................30
Section 5.02. Acceleration of Maturity; Rescission and Annulment...............................30
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee........32
Section 5.04. Remedies; Priorities.............................................................34
Section 5.05. Optional Preservation of the Trust Estate........................................38
Section 5.06. Limitation of Suits..............................................................39
Section 5.07. Unconditional Right of Noteholders To Receive Principal and Interest.............39
Section 5.08. Restoration of Rights and Remedies...............................................40
Section 5.09. Rights and Remedies Cumulative...................................................40
Section 5.10. Delay or Omission Not a Waiver...................................................40
Section 5.11. Control by Enhancer or Noteholders...............................................40
Section 5.12. Waiver of Past Defaults..........................................................41
Section 5.13. Undertaking for Costs............................................................42
Section 5.14. Waiver of Stay or Extension Laws.................................................42
Section 5.15. Sale of Trust Estate.............................................................42
Section 5.16. Action on Notes..................................................................44
Section 5.17. Performance and Enforcement of Certain Obligations...............................44
ARTICLE VI THE INDENTURE TRUSTEE..................................................................46
Section 6.01. Duties of Indenture Trustee......................................................46
Section 6.02. Rights of Indenture Trustee......................................................47
Section 6.03. Individual Rights of Indenture Trustee...........................................47
Section 6.04. Indenture Trustee's Disclaimer...................................................48
Section 6.05. Notice of Event of Default.......................................................48
Section 6.06. Reports by Indenture Trustee to Noteholders......................................48
Section 6.07. Compensation.....................................................................48
Section 6.08. Replacement of Indenture Trustee.................................................49
Section 6.09. Successor Indenture Trustee by Merger............................................49
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee................50
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TABLE OF CONTENTS
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Section 6.11. Eligibility; Disqualification....................................................51
Section 6.12. Preferential Collection of Claims Against Issuer.................................52
Section 6.13. Representations and Warranties...................................................52
Section 6.14. Directions to Indenture Trustee..................................................52
Section 6.15. Conflicting Instructions.........................................................53
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.........................................................53
Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders...........53
Section 7.02. Preservation of Information; Communications to Noteholders.......................53
Section 7.03. Reports by Issuer................................................................53
Section 7.04. Reports by Indenture Trustee.....................................................54
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES...................................................54
Section 8.01. Collection of Money..............................................................54
Section 8.02. Reserved.........................................................................54
Section 8.03. Officer's Certificate............................................................54
Section 8.04. Termination Upon Distribution to Noteholders.....................................55
Section 8.05. Release of Trust Estate..........................................................55
Section 8.06. Surrender of Notes Upon Final Payment............................................55
ARTICLE IX SUPPLEMENTAL INDENTURES................................................................56
Section 9.01. Supplemental Indentures Without Consent of Noteholders...........................56
Section 9.02. Supplemental Indentures With Consent of Noteholders..............................57
Section 9.03. Execution of Supplemental Indentures.............................................58
Section 9.04. Effect of Supplemental Indenture.................................................59
Section 9.05. Conformity with Trust Indenture Act..............................................59
Section 9.06. Reference in Notes to Supplemental Indentures....................................59
ARTICLE X MISCELLANEOUS..........................................................................59
Section 10.01. Compliance Certificates and Opinions, etc........................................59
Section 10.02. Form of Documents Delivered to Indenture Trustee.................................61
Section 10.03. Acts of Noteholders..............................................................62
Section 10.04. Notices..........................................................................62
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TABLE OF CONTENTS
(continued)
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Section 10.05. Notices to Noteholders; Waiver...................................................62
Section 10.06. Conflict with Trust Indenture Act................................................63
Section 10.07. Effect of Headings...............................................................63
Section 10.08. Successors and Assigns...........................................................63
Section 10.09. Severability of Provisions.......................................................63
Section 10.10. Benefits of Indenture............................................................63
Section 10.11. Legal Holidays...................................................................64
Section 10.12. Governing Law....................................................................64
Section 10.13. Counterparts.....................................................................64
Section 10.14. Recording of Indenture...........................................................64
Section 10.15. Issuer Obligation................................................................64
Section 10.16. No Petition......................................................................64
Section 10.17. Rights to the Enhancer to Exercise Rights of Group I Noteholders.................65
Section 10.18. Inspection.......................................................................65
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This INDENTURE, dated as of May 31, 2002, is between Xxxxx Whole Loan
Home Equity Trust 2002-A, a Delaware business trust, as issuer (the "Issuer"),
and Xxxxx Fargo Bank Minnesota, National Association, as trustee (the "Indenture
Trustee").
WITNESSETH:
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Issuer's Home Equity
Loan-Backed Notes, Series 2002-A (the "Offered Notes"), the Holders of the
Issuer's Home Equity Loan-Backed Variable Funding Notes, Series 2002-A (the
"Variable Funding Notes") and the Holders of the Issuer's Home Equity
Loan-Backed Subordinate Notes, Series 2002-A (the "Subordinate Notes" and,
together with the Variable Funding Notes and the Offered Notes, the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Noteholders and the Enhancer, all of the
Issuer's right, title and interest, whether now existing or hereafter created,
in and to (i) the Mortgage Loans and all Additional Balances, (ii) all funds on
deposit from time to time in the Collection Account and the Trustee Collection
Account (in each case as defined in Appendix A hereto) and all proceeds thereof,
(iii) the assignment of the Depositor's right, title and interest in the
representations and warranties made by the Seller in the Mortgage Loan Purchase
and Servicing Agreement and (iv) 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 that at any time constitute all or
part of or are included in the proceeds of any of the foregoing (collectively,
the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided herein.
The Indenture Trustee, as trustee on behalf of the Noteholders,
acknowledges such Grant, accepts the trust under this Indenture in accordance
with the provisions hereof and agrees to perform its duties as Indenture Trustee
as required herein.
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Indenture, except
as otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed thereto in
Appendix A attached hereto, which is incorporated by reference herein.
Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act of
1940, as amended (the "TIA"), such provision is incorporated by reference in and
made a part of this Indenture. The following TIA terms used in this Indenture
have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meanings assigned to them by such definitions.
Section 1.03. Rules of Construction. Unless the context otherwise
requires, (i) a term has the meaning assigned to it; (ii) an accounting term not
otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles as in effect from time to time; (iii) "or"
includes "and/or"; (iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural include the
singular; (vi) the term "proceeds" has the meaning ascribed thereto in the UCC;
(vii) any agreement, instrument or statute defined or referred to herein or in
any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; and
(viii) references to a Person are also to such Person's permitted successors and
assigns.
ARTICLE II
ORIGINAL ISSUANCE OF NOTES
Section 2.01. Form. The Offered Notes (other than the Class IIA-IO
Notes), the Class IIA-IO Notes, the Variable Funding Notes, the Non-Offered
Subordinate Notes (other than the Class IIX-IO Notes) and the Class IIX-IO
Notes, in each case together with the Indenture Trustee's certificate of
authentication, shall be in substantially the forms set forth in Exhibit X-0,
X-0, X-0, X-0 and A-5, respectively, 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
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may, consistently herewith, be determined by the officers executing such Notes,
as evidenced by their execution thereof. Any portion of the text of a Note may
be set forth on the reverse thereof, with an appropriate reference thereto on
the face thereof.
The Notes shall be typewritten, printed, lithographed or engraved, or
produced by any combination of such methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing the same, as
evidenced by their execution thereof.
The terms of the Notes set forth in Exhibits X-0, X-0, X-0, X-0 and A-5
are part of the terms of this Indenture.
Section 2.02. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them shall have ceased to hold
such offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and
deliver Offered Notes for original issuance in their Initial Class Note Balance
or Notional Amount as of the Cut-Off Date and Variable Funding Notes for
original issuance in an aggregate initial principal amount of zero. The
aggregate Variable Funding Balance may not exceed $5,000,000.00.
Each Note shall be dated the date of its authentication. The Notes,
other than the Class IIA-IO Notes and the Non-Offered Subordinate Notes, shall
be issuable as registered Notes in minimum initial Note Balances of $1,000 and
in integral multiples of $1 in excess thereof. The Class IIA-IO Notes and the
Non-Offered Subordinate Notes shall be issuable as registered Notes in minimum
percentage interests of 5% and in integral multiples of 5% in excess thereof.
Each Variable Funding Note shall be initially issued with a Variable
Funding Balance of $0 or, if applicable, with a Variable Funding Balance in an
amount equal to the sum of the Additional Balance Differential for the
Collection Period relating to the Payment Date following the date of issuance of
such Variable Funding Note pursuant to Section 4.01.
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. Reserved.
Section 3.02. Maintenance of Office or Agency. The Issuer shall
maintain an office or agency where, subject to the satisfaction of conditions
set forth herein, Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of the
Notes and this Indenture may be served. The Issuer hereby initially appoints the
Indenture Trustee to serve as its agent for the foregoing purposes. If at any
time the Issuer shall fail to maintain any such office or agency or shall fail
to furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Indenture Trustee, and the Issuer hereby appoints the Indenture Trustee as its
agent to receive all such surrenders, notices and demands.
Section 3.03. Money for Payments To Be Held in Trust; Paying Agent. All
payments of amounts due and payable with respect to any Notes pursuant to
Section 3.05 shall be made on behalf of the Issuer by the Indenture Trustee or
the Paying Agent, and no amounts shall be paid to the Issuer except as provided
in this Section. The Indenture Trustee shall initially be the Paying Agent.
The Issuer shall cause each Paying Agent (other than the Indenture
Trustee) to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and as Paying Agent,
the Indenture Trustee hereby so agrees), subject to the provisions of this
Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided;
(b) give the Indenture Trustee and the 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;
(c) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture Trustee
all sums so held in trust by such Paying Agent;
(d) immediately resign as Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for payments in respect of the
Notes if at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment;
(e) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith; and
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(f) deliver to the Indenture Trustee a copy of the statement to
Noteholders prepared with respect to each Payment Date pursuant to Section 4.01
of the Sale and Servicing Agreement.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which such sums were held by such Paying Agent;
and upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee may also adopt and employ,
at the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including mailing notice of such repayment to
Holders the Notes of which have been called but have not been surrendered for
redemption or the right of which to or interest in monies due and payable but
not claimed is determinable from the records of the Indenture Trustee or any
Paying Agent, at the last address of record for each such Holder).
Section 3.04. Existence. The Issuer shall keep in full force and effect
its existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States of
America, in which case the Issuer shall keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.
Section 3.05. Payment of Principal and Interest; Defaulted Interest.
(a) On each Payment Date (other than a Payment Date after an Event of
Default and an acceleration of the Notes), from amounts on deposit in the
Trustee Collection Account resulting from Interest Collections and Principal
Collections with respect to the Mortgage Loans in Loan Group I (after the
Indenture Trustee has removed any investment earnings to be retained by it
pursuant to Section 6.07), together with any draw on the Policy for such Payment
Date to be
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applied only to an Insured Payment, the Indenture Trustee shall apply the
following amounts in the following order of priority, in accordance with the
Servicing Certificate:
(i) to pay the Enhancer the accrued and unpaid premium for the
Policy and to pay the Depositor or an Affiliate thereof the Depositor
Administrative Services Fee with respect to the Group I Notes;
(ii) to pay accrued and unpaid interest due on the Note
Balances of the Class IA-1 Notes and the Variable Funding Notes, pro
rata, at their respective Note Rates;
(iii) to pay as principal on the Class IA-1 Notes and the
Variable Funding Notes, pro rata, an amount equal to the Principal
Collection Distribution Amount for the Group I Notes and that Payment
Date;
(iv) to pay as principal on the Class IA-1 Notes and the
Variable Funding Notes, pro rata, an amount equal to the Liquidation
Loss Distribution Amount for the Group I Notes and that Payment Date;
(v) to reimburse the Enhancer for any unreimbursed draws made
on the Policy for the Group I Notes, with interest thereon as provided
in the Insurance Agreement;
(vi) to the holders of the Non-Offered Subordinate Notes and the
Certificates in the priorities set forth in Section 3.26:
(A) on the Payment Dates in July and August 2002, 100% of
the Remaining Excess Spread for the Group I Notes and the
applicable Payment Date; and
(B) on the Payment Dates in September 2002 through and
including November 2002, 50% of the Remaining Excess Spread for
the Group I Notes and the applicable Payment Date;
(vii) to pay as principal on the Class IA-1 Notes and the
Variable Funding Notes, pro rata, an amount equal to the
Overcollaterization Increase Amount for the Group I Notes and that
Payment Date;
(viii)to pay the Enhancer any other amounts owed to it pursuant
to the Insurance Agreement, with interest thereon;
(ix) to pay the holders of the Class IA-1 Notes and the Variable
Funding Notes, pro rata, any applicable unpaid Interest Carry-Forward
Amounts, together with interest thereon;
(x) to pay the Indenture Trustee, the Owner Trustee, the Master
Servicer and the Administrator any unpaid expenses and other
reimbursable amounts owed to the Indenture Trustee, the Owner Trustee,
the Master Servicer and the Administrator with respect to the Group I
Notes; and
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(xi) any remaining amounts to the holders of the Non-Offered
Subordinate Notes and the Certificates in the amounts and priorities
set forth in Section 3.26;
provided, that in the event that on a Payment Date an Enhancer Default shall
have occurred and be continuing, then the priorities of distributions described
above will be adjusted such that payments of any amounts to be paid to the
Enhancer will not be paid until the full amount of interest and principal in
accordance with clauses (ii) through (iv) above that are due and required to be
paid by the Enhancer on the Notes on such Payment Date have been paid.
Notwithstanding the foregoing, on the Legal Final Payment Date of the
Class IA-1 Notes, the amounts to be paid pursuant to clause (iii) above shall be
equal to the sum of the Offered Note Balance of the Class IA-1 Notes and the
Variable Funding Balance of the Variable Funding Notes immediately prior to such
Payment Date.
(b) On each Payment Date (other than a Payment Date after an Event of
Default and an acceleration of the Notes), from amounts on deposit in the
Trustee Collection Account resulting from Interest Collections and Principal
Collections with respect to the Mortgage Loans in Loan Group II (after the
Indenture Trustee has removed any investment earnings to be retained by it
pursuant to Section 6.07), minus any permitted expenses reimbursable to the
Indenture Trustee and the Administrator pursuant to Section 6.07, the Indenture
Trustee shall apply the following amounts in the following order of priority, in
accordance with the Servicing Certificate:
(i) to pay the Depositor or an affiliate thereof the Depositor
Administrative Services Fee with respect to the Group II Notes;
(ii) to pay the accrued and unpaid interest due on the Note
Balances of the Group II Notes and the notional balance of the Class
IIA-IO Notes at their respective Note Rates as follows:
(A) first, to the Senior Group II Notes and the Class
IIA-IO Notes, on a pro rata basis in accordance with the amount
of accrued interest due thereon;
(B) second, to the Class IIM-1 Notes;
(C) third, to the Class IIM-2 Notes; and
(D) fourth, to the Class IIB-1 Notes;
(iii) to pay as principal on the Group II Notes (other than the
Class IIA-IO Notes), an amount equal to the Principal Collection
Distribution Amount for the Group II Notes and that Payment Date, as
follows:
(A) first, to the Senior Group II Notes, in the order
described in Section 3.26, until the aggregate Note Balance of
the Senior Group II Notes has been reduced to the Senior Group II
Optimal Principal Balance;
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(B) second, to the Class IIM-1 Notes, until the Note
Balance of the Class IIM-1 Notes has been reduced to the Class
IIM-1 Optimal Principal Balance;
(C) third, to the Class IIM-2 Notes, until the Note
Balance of the Class IIM-2 Notes has been reduced to the Class
IIM-2 Optimal Principal Balance; and
(D) fourth, to the Class IIB-1 Notes, until the Note
Balance of the Class IIB-1 Notes has been reduced to the Class
IIB-1 Optimal Principal Balance;
(iv) to pay as principal on the Senior Group II Notes, in the
order described in Section 3.26, until their aggregate Note Balance has
been reduced to the Senior Group II Optimal Principal Balance, an
amount equal to the Liquidation Loss Distribution Amount for the Group
II Notes and that Payment Date;
(v) to pay as principal on the Class IIM-1 Notes, until the
Note Balance thereof has been reduced to the Class IIM-1 Optimal
Principal Balance, an amount equal to the Liquidation Loss Distribution
Amount for the Group II Notes and that Payment Date, to the extent not
distributed to the holders of the Senior Group II Notes under clause
(iv) above;
(vi) to pay as principal on the Class IIM-2 Notes, until the
Note Balance thereof has been reduced to the Class IIM-2 Optimal
Principal Balance, an amount equal to the Liquidation Loss Distribution
Amount for the Group II Notes and that Payment Date, to the extent not
distributed to the holders of the Senior Group II Notes or the Class
IIM-1 Notes under clauses (iv) and (v) above, respectively;
(vii) to pay as principal on the Class IIB-1 Notes, until the
Note Balance thereof has been reduced to the Class IIB-1 Optimal
Principal Balance, an amount equal to the Liquidation Loss Distribution
Amount for the Group II Notes and that Payment Date, to the extent not
distributed to the holders of the Senior Group II Notes, the Class
IIM-1 Notes or the Class IIM-2 Notes under clauses (iv), (v) and (vi)
above, respectively;
(viii)to pay the accrued and unpaid interest due on the notional
balance of the Class IIX-IO Notes at its Note Rate;
(ix) to the holders of the Non-Offered Subordinate Notes and the
Certificates in the priorities set forth in Section 3.26:
(A) on the Payment Date in July 2002, 100% of the
Remaining Excess Spread for the Group II Notes and that Payment
Date; and
(B) on the Payment Dates in August 2002 through and
including November 2002, 25% of the Remaining Excess Spread for
the Group II Notes and the applicable Payment Date;
(x) to pay as principal on the Senior Group II Notes, in the
order described in Section 3.26, until their aggregate Note Balance has
been reduced to the Senior Group II
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Optimal Principal Balance, an amount equal to the Overcollaterization
Increase Amount for the Group II Notes and that Payment Date;
(xi) to pay as principal on the Class IIM-1 Notes, until the
Note Balance thereof has been reduced to the Class IIM-1 Optimal
Principal Balance, an amount equal to the Overcollaterization Increase
Amount for the Group II Notes and that Payment Date, to the extent not
distributed to the Senior Group II Notes under clause (x) above;
(xii) to pay as principal on the Class IIM-2 Notes, until the
Note Balance thereof has been reduced to the Class IIM-2 Optimal
Principal Balance, an amount equal to the Overcollaterization Increase
Amount for the Group II Notes and that Payment Date, to the extent not
distributed to the Senior Group II Notes or the Class IIM-1 Notes under
clauses (x) and (xi) above, respectively;
(xiii) to pay as principal on the Class IIB-1 Notes, until the
Note Balance thereof has been reduced to the Class IIB-1 Optimal
Principal Balance, an amount equal to the Overcollaterization Increase
Amount for the Group II Notes and that Payment Date, to the extent not
distributed to the Senior Group II Notes, the Class IIM-1 Notes or the
Class IIM-2 Notes under clauses (x), (xi) and (xii) above,
respectively;
(xiv) to pay the Indenture Trustee, the Owner Trustee, the Master
Servicer and the Administrator any unpaid expenses and other
reimbursable amounts owed to the Indenture Trustee, the Owner Trustee,
the Master Servicer and the Administrator with respect to the Group II
Notes; and
(xv) any remaining amounts to the holders of the Non-Offered
Subordinate Notes and the Certificates in the amounts and priorities
set forth in Section 3.26.
Notwithstanding the foregoing, on the Legal Final Payment Date for a
Class of Group II Notes, the amounts to be paid pursuant to clause (iii) above
shall be equal to the aggregate of the Offered Note Balances immediately prior
to such Payment Date for all Group II Notes with a Legal Final Payment Date on
such Payment Date.
In the event that any withholding tax is imposed on distributions (or
allocations of income) to a Holder of a Note or Certificate, such tax shall
reduce the amount otherwise distributable to such Holder in accordance with this
Section 3.05. The Indenture Trustee is hereby authorized and directed to retain
or cause to be retained from amounts otherwise distributable to the Holders of
the Notes or Certificates sufficient funds for the payment of any tax that is
legally owed by the Issuer; provided, that such authorization shall not prevent
the Indenture Trustee from contesting any such tax in appropriate Proceedings
and withholding payment thereof, if permitted by law, pending the outcome of
such Proceedings. The amount of any withholding tax imposed with respect to a
Holder of a Note or Certificate shall be treated as cash distributed to such
Holder at the time it is withheld by the Indenture Trustee and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution, the Indenture Trustee may in its sole
discretion withhold such amounts in accordance with this paragraph.
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Amounts paid to Noteholders shall be paid in respect of the Offered
Notes, the Variable Funding Notes or the Non-Offered Subordinate Notes, as the
case may be, in accordance with the applicable percentage as set forth in
paragraph (c) below. Any installment of interest or principal payable on any
Note that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall be paid to the Holder of record thereof on the
immediately preceding Record Date by check or money order mailed to the address
of such Noteholder reflected in the Note Register (or upon the request of a
Holder owning Offered Notes with a principal amount or notional balance of at
least $1,000,000 or a Holder of the Non-Offered Subordinate Notes, by wire
transfer to an account specified in writing by such Holder reasonably
satisfactory to the Indenture Trustee), in the amount required to be distributed
to such Holder on such Payment Date pursuant to such Holder's Notes; provided,
that the Indenture Trustee shall not pay to any such Holder any amounts required
to be withheld from a payment to such Holder by the Code.
(c) Principal of each Note shall be due and payable in full on the
Legal Final Payment Date for the related Class of Notes as provided in the
applicable form of Note set forth in Exhibits X-0, X-0, X-0 and A-5. All
principal payments on the Offered Notes and the Variable Funding Notes shall be
made pro rata to the Class of Noteholders entitled thereto in accordance with
the related Percentage Interests represented thereby. Upon written notice to the
Indenture Trustee by the Issuer, the Indenture Trustee shall notify the Person
in the name of which a Note is registered at the close of business on the Record
Date preceding the related Legal Final Payment Date. Such notice shall be mailed
no later than five Business Days prior to the related Legal Final Payment Date
and shall specify that payment of the principal amount and any interest due with
respect to such Note at the related Legal Final Payment Date will be payable
only upon presentation and surrender of such Note, and shall specify the place
where such Note may be presented and surrendered for such final payment.
Section 3.06. Protection of Trust Estate.
(a) The Issuer shall from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and shall take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) cause the Trust to enforce any of the Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders therein against the
claims of all Persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture
Trustee shall not remove any portion of the Trust Estate that consists of money
or that is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the
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most recent Opinion of Counsel delivered pursuant to Section 3.07 (or from the
jurisdiction in which it was held as described in the Opinion of Counsel
delivered at the Closing Date pursuant to Section 3.07(a), if no Opinion of
Counsel shall have yet been delivered pursuant to Section 3.07(b)), unless the
Indenture Trustee shall have first received an Opinion of Counsel to the effect
that the Lien and security interest created by this Indenture with respect to
such property will continue to be maintained after giving effect to such action
or actions.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section.
Section 3.07. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee, the Enhancer, and the Owner Trustee an Opinion of Counsel, at the
expense of the Issuer, stating that (i) in the opinion of such counsel, such
action has been taken with respect to the recording and filing of this
Indenture, any indentures supplemental hereto and any other requisite documents,
and with respect to the execution and filing of any financing statements and
continuation statements, as are necessary to perfect and make effective the Lien
and security interest in the Mortgage Loans and reciting the details of such
action, or (ii) in the opinion of such counsel, no such action is necessary to
make such Lien and security interest effective.
(b) On or before December 31st of each calendar year, commencing in
2003, the Issuer shall furnish to the Indenture Trustee and the Enhancer an
Opinion of Counsel at the expense of the Issuer stating that (i) in the opinion
of such counsel, such action has been taken with respect to the recording,
filing, re-recording and re-filing of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements as
is necessary to maintain the Lien and security interest in the Mortgage Loans
and reciting the details of such action or (ii) in the opinion of such counsel,
no such action is necessary to maintain such Lien and security interest. Such
Opinion of Counsel shall also describe the recording, filing, re-recording and
re-filing of this Indenture, any indentures supplemental hereto and any other
requisite documents, and the execution and filing of any financing statements
and continuation statements that will, in the opinion of such counsel, be
required to maintain the Lien and security interest in the Mortgage Loans until
December 31 of the following calendar year.
Section 3.08. Performance of Obligations; Sale and Servicing Agreement.
(a) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and the instruments and agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee and the Enhancer in an Officer's
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
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(c) The Issuer shall not take any action or permit any action to be
taken by others that would release any Person from any of such Person's
covenants or obligations under any document relating to the Mortgage Loans
(including the Mortgage Documents and the Related Documents) or under any
instrument included in the Trust Estate, or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such document or any such instrument, except
such actions as the Master Servicer is expressly permitted to take in the Sale
and Servicing Agreement.
(d) The Issuer may enter into contracts (with the prior written
consent of the Enhancer) with other Persons for the performance of the Issuer's
obligations hereunder, and performance of such obligations by such Persons shall
be deemed to be performance of such obligations by the Issuer.
Section 3.09. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(a) except as expressly permitted by this Indenture, sell, transfer,
exchange or otherwise dispose of the Trust Estate, unless directed to do so by
the Indenture Trustee with the consent of the Enhancer;
(b) claim any credit on or make any deduction from the principal or
interest payable in respect of the Notes (other than amounts properly withheld
from such payments under the Code) or assert any claim against any present or
former Noteholder by reason of the payment of the taxes levied or assessed upon
any part of the Trust Estate;
(c) permit the validity or effectiveness of this Indenture to be
impaired, or permit the Lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from
any covenants or obligations with respect to the Notes under this Indenture,
except as may be expressly permitted hereby, permit any Lien (other than the
Lien of this Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate, any part thereof, any interest therein or any proceeds
thereof or permit the Lien of this Indenture not to constitute a valid first
priority security interest in the Trust Estate; or
(d) impair or cause to be impaired the Issuer's interest in the
Mortgage Loans, the Mortgage Loan Purchase and Servicing Agreement or in any
other Basic Document, if any such action would materially and adversely affect
the interests of the Noteholders.
Section 3.10. Annual Statement as to Compliance. The Issuer shall
deliver to the Indenture Trustee and the Enhancer, on or before May 31 of each
year (commencing with 2003), an Officer's Certificate stating, as to the
Authorized Officer signing such Officer's Certificate, that:
(a) a review of the activities of the Issuer during such year (or
from the Closing Date in the case of the first such Certificate) and of its
performance under this Indenture and the Trust Agreement has been made under
such Authorized Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under this
Indenture and the Trust
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Agreement throughout such year (or from the Closing Date in the case of the
first such Certificate) or, if there has been a default in its compliance with
any such condition or covenant, specifying each such default known to such
Authorized Officer and the nature and status thereof.
Section 3.11. Recordation of Assignments. The Issuer shall enforce the
obligation of the Master Servicer under Section 3.13 of the Sale and Servicing
Agreement to submit or cause to be submitted for recording Assignments of
Mortgages in accordance with such Section.
Section 3.12. Representations and Warranties Concerning the Mortgage
Loans. The Indenture Trustee, as pledgee of the Mortgage Loans shall have the
benefit of the representations and warranties of the Seller in Sections 7.01 and
7.02 of the Mortgage Loan Purchase and Servicing Agreement and assigned to the
Issuer in Section 2.01 of the Sale and Servicing Agreement concerning the
Mortgage Loans and the right to enforce the remedies against the Seller provided
in such Sections and in Sections 7.03 and 12.01 of the Mortgage Loan Purchase
and Servicing Agreement and Section 2.08 of the Sale and Servicing Agreement 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 Mortgage Loans. As pledgee of
the Mortgage Loans, the Indenture Trustee shall hold record title to the
Mortgage Loans by being named as payee in the endorsements of the Mortgage Notes
and assignee in the Assignments of Mortgage recorded to the extent required by
Section 3.13 of the Sale and Servicing Agreement. Except as expressly provided
in the Mortgage Loan Purchase and Servicing Agreement or the Sale and Servicing
Agreement with respect to any Mortgage Loan, the Indenture Trustee shall not
execute any endorsement or assignment or otherwise release or transfer record
title to such Mortgage Loan until such time as the remaining Trust Estate, or
any portion thereof, may be released pursuant to Section 8.05 hereof.
Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee.
Solely for purposes of perfection under Section 9-313 of the UCC or other
similar applicable law, rule or regulation of the State in which such property
is held by the Master Servicer, the Indenture Trustee hereby acknowledges that
the Master Servicer is acting as agent and bailee of the Indenture Trustee in
holding amounts on deposit in the Collection Account pursuant to Section 5.02
and Section 3.04 of the Sale and Servicing Agreement that are allocable to the
Mortgage Loans, as well as the agent and bailee of the Indenture Trustee in
holding any Related Documents released to the Master Servicer pursuant to
Section 3.09 of the Sale and Servicing Agreement, and any other items
constituting a part of the Trust Estate that from time to time come into the
possession of the Master Servicer. It is intended that, by the Master Servicer's
acceptance of such agency pursuant to Section 3.01 of the Sale and Servicing
Agreement, the Indenture Trustee, as pledgee of the Mortgage Loans, will be
deemed to have possession of such Related Documents, such monies and such other
items for purposes of Section 9-313 of the UCC of the State in which such
property is held by the Master Servicer.
Section 3.15. Investment Company Act. The Issuer shall not become an
"investment company" or under the "control" of an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended, and the
rules and regulations thereunder (taking into account not only the general
definition of the term "investment company" but also any
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available exceptions to such general definition); provided, that the Issuer
shall be in compliance with this Section if it shall have obtained an order
exempting it from regulation as an "investment company" so long as it is in
compliance with the conditions imposed in such order.
Section 3.16. Issuer May Not Consolidate, etc.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any State,
and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee and the Enhancer, in
form reasonably satisfactory to the Indenture Trustee and the Enhancer,
the due and punctual payment of the principal of and interest on the
Notes, and to the Certificate Paying Agent, on behalf of the
Certificateholders, and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
(iii) each Rating Agency shall have notified the Issuer that such
transaction will not cause a Rating Event, without taking into account
the Policy, and the Enhancer shall have consented thereto;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the
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
and the Enhancer an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation or merger and such supplemental
indenture comply with this Article 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 and the
Enhancer, in form satisfactory to the Indenture Trustee and the
Enhancer, the due and punctual payment of
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the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein,
(C) expressly agree by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of the Noteholders, (D) unless otherwise
provided in such supplemental indenture, expressly agree to indemnify,
defend and hold harmless the Issuer from and against any loss,
liability or expense arising under or relating to this Indenture or the
Notes and (E) expressly agree by means of such supplemental indenture
that such Person (or if a group of Persons, then one specified Person)
shall make all filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Enhancer shall have consented thereto, and each Rating
Agency shall have notified the Issuer that such transaction will not
cause a Rating Event, if determined without regard to the Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the
Enhancer) to the effect that such transaction will not have any
material adverse tax consequence to the Issuer or any Senior
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
and the Enhancer an Officer's Certificate and an Opinion of Counsel
each stating that such conveyance or transfer and such supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with (including any filing required by the Exchange Act).
Section 3.17. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.16(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.16(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.
Section 3.18. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Mortgage Loans, the issuance of the
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Notes and the Certificate in the manner contemplated by this Indenture and the
other Basic Documents and all activities incidental thereto.
Section 3.19. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness, except for the Notes.
Section 3.20. Guarantees. Except as contemplated by this Indenture or
the other Basic Documents, the Issuer shall not make any loan or advance or
credit to, or guarantee (directly or indirectly or by an instrument having the
effect of assuring another's payment or performance on any obligation or
capability of so doing or otherwise), endorse or otherwise become contingently
liable, directly or indirectly, in connection with the obligations, stocks or
dividends of, or own, purchase, repurchase or acquire (or agree contingently to
do so) any stock, obligations, assets or securities of, or any other interest
in, or make any capital contribution to, any Person.
Section 3.21. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.22. Indenture Trustee Not Liable for Notes or Related
Documents. The recitals contained herein shall be taken as the statements of the
Depositor, and the Indenture Trustee assumes no responsibility for the
correctness thereof. The Indenture Trustee makes no representations as to the
validity or sufficiency of this Indenture, of any other Basic Document or of the
Notes (other than the signatures of the Indenture Trustee on the authentication
of the Notes) or of any other documents relating thereto. The Indenture Trustee
shall at no time have any responsibility or liability with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
distributed to the Noteholders under this Indenture, including the compliance by
the Depositor or the Seller with any representation or warranty made under any
Basic Document or in any related document or the accuracy of any such
representation or warranty, or any action of the Paying Agent or the Note
Registrar or the Indenture Trustee taken in the name of the Owner Trustee.
Section 3.23. Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Administrator, the Enhancer and each Rating Agency prompt
written notice of each Event of Default hereunder.
Section 3.24. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer shall execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
Section 3.25. Statements to Noteholders. On each Payment Date, the
Indenture Trustee will make the Servicing Certificate (and, at its option, any
additional files containing the same information in alternative format)
available to Noteholders, the Depositor, the Enhancer and the Issuer via the
Indenture Trustee's internet website. The Indenture Trustee's internet website
shall initially be located at xxx.xxxxxxx.xxx. Assistance in using the website
can be obtained by calling the Trustee's customer service desk at (301)
815-6600. Persons that are unable to use the above distribution options are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Indenture Trustee shall have the
right to change the way Servicing Certificates are distributed in order to make
such distribution more
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convenient and/or more accessible to the above Persons, and the Indenture
Trustee shall provide timely and adequate notification to all above Persons
regarding any such changes.
Section 3.26. Allocation of Principal Payments to the Offered Notes and
the Variable Funding Notes. (a) Payments made to the holders of the Group I
Notes and the Group II Notes on each Payment Date with respect to the Principal
Collection Distribution Amount, the Liquidation Loss Amount and the
Overcollateralization Increase Amount shall be distributed solely from the
Interest Collections and Principal Collections for Group I and Group II,
respectively, until the Note Balances of the Group I Notes in the aggregate and
the Group II Notes in the aggregate have been reduced to zero.
(b) Payments of principal that are allocated to the Group I Notes
will be paid to the Class IA-1 Notes and the Variable Funding Notes pro rata
based on the outstanding Note Balance or Variable Funding Balance, as
applicable, thereof until paid in full. Payments of principal that are allocated
to the Group II Notes will be paid sequentially (commencing with the Class IIA-1
Notes, as applicable until the Note Balance of such Class has been reduced to
zero) within the Group II Notes.
(c) Payments to the holders of the Non-Offered Subordinate Notes
(other than the Class IIX-IO Notes) and Certificates on each Payment Date will
be equal to the amount of remaining funds in the Trustee Collection Account
under clauses (vi) and (xi) of Section 3.05(a) and clauses (ix) and (xv) of
Section 3.05(b). Payment of such aggregate amount on each Payment Date will be
made to the Holder of the Non-Offered Subordinate Notes (other than the Class
IIX-IO Notes) as follows: first, to the Class X-1 Note, solely as a payment of
principal, until the Class X-1 Note Balance has been reduced to $0, and
thereafter, to the Class X-2A and Class X-2B Notes in the proportion of 20% and
80%, respectively, of the aggregate amount to be paid on each Payment Date. No
payment of any portion of such aggregate amount will be made to the Holder of
the Certificate on any Payment Date.
Section 3.27. Payments under the Policy.
(a) (i) If the Servicing Certificate specifies a Policy Draw
Amount for any Payment Date, the Indenture Trustee shall make a draw on the
Policy in an amount specified in the Servicing Certificate for such Payment Date
or, if no amount is specified, the Indenture Trustee shall make a draw on the
Policy in accordance with the terms of the Policy.
(ii) The Indenture Trustee shall deposit or cause to be
deposited such Policy Draw Amount into the Trustee Collection Account on such
Payment Date. On each Payment Date, the Indenture Trustee shall return any money
received under the Policy which does not constitute an Insured Payment to the
Enhancer. The Indenture Trustee shall distribute on each Payment Date, to the
Group I Noteholders, the Deficiency Amount for such Payment Date in accordance
with the priorities set forth in Section 3.05 hereof.
(b) The Indenture Trustee shall submit, if a Policy Draw Amount is
specified in the Servicing Certificate, the Notice (in the form attached as
Exhibit A to the Policy) to the Enhancer no later than 12:00 noon, New York City
time, on the second (2nd) Business Day prior to the applicable Payment Date.
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(c) The Indenture Trustee shall (i) receive as attorney-in-fact of
each Group I Noteholder any Insured Payment from the Enhancer and (ii)
distribute such Insured Payment as set forth in subsection (a)(ii) above.
Insured Payments disbursed by the Indenture Trustee from proceeds of the Policy
shall not be considered payment by the Issuer with respect to the Group I Notes,
nor shall such disbursement of such Insured Payments discharge the obligations
of the Issuer with respect to the amounts thereof, and the Insurer shall become
the owner of such amounts as the deemed assignee and subrogee of such Group I
Noteholders.
Section 3.28. Allocation of Losses on the Mortgage Loans. On each
Payment Date, the amount of Liquidation Loss Amounts incurred on the Mortgage
Loans in Group II in the related Collection Period that were not distributed
pursuant to Sections 3.05(b)(iv), (v), (vi) or (vii) will be applied as follows:
first, to reduce any Overcollateralization Amount for Group II (after allocation
of Principal Collections and Interest Collections on the Mortgage Loans for such
Payment Date) until such amount has been reduced to zero; second, to reduce the
Note Balance of the Class IIB-1 Notes, until the outstanding Note Balance
thereof has been reduced to zero; third, to reduce the Note Balance of the Class
IIM-2 Notes, until the outstanding Note Balance thereof has been reduced to
zero; fourth, to reduce the Note Balance of the Class IIM-1 Notes, until the
outstanding Note Balance thereof has been reduced to zero, and last to reduce
the Note Balance of the Senior Group II Notes until the outstanding Note
Balances thereof have been reduced to zero. Any such Liquidation Loss Amounts
allocated to Senior Group II Notes shall be allocated to the Senior Group II
Notes on a pro rata basis. The reduction of the Note Balance of any Class of
Notes by application of Liquidation Loss Amounts entitles such Class to
reimbursement for such amount, with interest thereon, in accordance with Section
3.05. Payment of that reimbursement amount will not further reduce the Note
Balance of the applicable Class. After the Note Balance of any Class has been
reduced to zero, that Class will no longer be entitled to reimbursement.
Section 3.29. Additional Representations and Warranties of the Issuer.
This Indenture creates a valid and continuing security interest (as defined in
the applicable UCC) in the Mortgage Loans in favor of the Indenture Trustee,
which security interest is prior to all other Liens, and is enforceable as such
as against creditors of and purchasers from the Issuer. The Mortgage Loans
constitute "instruments" or "accounts" within the meaning of the applicable UCC.
The Issuer owns and has good and marketable title to the Mortgage Loans free and
clear of any Lien, claim or encumbrance of any Person. All original executed
copies of each Mortgage Note (or a "lost note affidavit" in lieu thereof) that
constitute or evidence the Mortgage Loans have been delivered to the Indenture
Trustee. The Issuer has caused or will have caused, within ten days, the filing
of all appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the security
interest in the Collateral granted to the Indenture Trustee hereunder. Other
than the security interest granted to the Indenture Trustee pursuant to this
Indenture, the Issuer has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Mortgage Loans. The Issuer has not
authorized the filing of and is not aware of any financing statements against
the Issuer that include a description of collateral covering the Mortgage Loans
other than any financing statement relating to the security interest granted to
the Indenture Trustee hereunder or that has been terminated. The Issuer is not
aware of any judgment or tax lien filings against the Issuer. None of the
Mortgage Notes that constitute or evidence the Mortgage Loans has any marks or
notations indicating that they have been pledged, assigned or otherwise conveyed
to any Person
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other than the Indenture Trustee. The foregoing representations and warranties
shall survive the discharge of this Indenture.
ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01. The Notes.
(a) The Offered Notes shall be registered in the name of a nominee
designated by the Depository. Beneficial Owners shall hold interests in the
Offered Notes other than the Class IIA-IO Notes through the book-entry
facilities of the Depository in minimum initial Note Balances of $1,000 and
integral multiples of $1 in excess thereof. Beneficial Owners shall hold
interests in the Class IIA-IO Notes through the book-entry facilities of the
Depository in minimum initial Percentage Interests of 5% and integral multiples
of 5% in excess thereof. The Capped Funding Notes shall be issued as physical
notes in fully registered form in minimum initial Capped Funding Balances of
$10,000 and integral multiples of $1,000 in excess thereof, together with any
additional amount necessary to cover (i) the aggregate Variable Funding Balance
of the Variable Funding Notes at the time of the denominational exchange thereof
or (ii) the aggregate Capped Funding Balance of any Capped Funding Notes issued
in an exchange described in paragraph (d) below. The Variable Funding Balance of
the Variable Funding Notes at the time of such exchange shall be the initial
Capped Funding Balance of the Capped Funding Notes issued in exchange therefor.
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 Offered Notes for
the purposes of exercising the rights of Offered Noteholders hereunder. Except
as provided in the next succeeding paragraph, the rights of Beneficial Owners
with respect to the Offered 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 Offered Notes as to which they are
the Beneficial Owners. Requests and directions from, and votes of, the
Depository as Holder of the Offered 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 Offered Noteholders and give notice to the Depository
of such Record Date. Without the consent of the Issuer, the Enhancer and the
Indenture Trustee, the Depository may not transfer any Offered Note except to a
successor Depository that agrees to hold such Offered Note for the account of
the Beneficial Owners.
In the event that The Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee, with the approval of the Issuer and the
Enhancer, may appoint a successor Depository. If no successor Depository has
been appointed within 30 days after the effective date of the predecessor
Depository's resignation or removal, each Beneficial Owner shall be entitled to
certificates representing the Offered Notes it beneficially owns in the manner
prescribed in Section 4.08.
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The Owner Trustee (not in its individual capacity but solely as Owner
Trustee), shall, on original issue, execute the Offered Notes on behalf of the
Issuer, and the Indenture Trustee shall authenticate and deliver the Notes to or
upon the order of the Issuer.
(b) On each Payment Date, the aggregate Variable Funding Balance of
the Variable Funding Notes shall be increased by an amount equal to the
Additional Balance Differential for such Payment Date, subject to the terms and
conditions set forth below. The aggregate Variable Funding Balance of the
Variable Funding Notes, including the Capped Funding Balance of the Capped
Funding Notes, shall not exceed the Maximum Variable Funding Balance.
(c) The Variable Funding Note issued on the Closing Date shall bear
the Designation "VFN-1", and each Variable Funding Note issued thereafter shall
bear sequential numerical designations in the order of their issuance.
(d) Subject to the following conditions, the Variable Funding Notes
may be exchanged pursuant to Section 4.02 for one or more Capped Funding Notes.
Prior to any such exchange, the party requesting the exchange must provide an
Opinion of Counsel, addressed to the Issuer, the Enhancer and the Indenture
Trustee, to the effect that the Capped Funding Notes shall qualify for federal
income tax purposes as indebtedness of the Issuer and neither the Issuer nor any
portion thereof will be characterized as a taxable mortgage pool within the
meaning of Section 7701(i) of the Code. Upon receipt of the Opinion of Counsel,
the Indenture Trustee shall issue Capped Funding Notes with a Capped Funding
Balance equal to the Capped Funding Balance permitted under such Opinion of
Counsel, in minimum denominations as set forth in paragraph (a) above. The
Capped Funding Notes shall bear the designation "Capped" in addition to any
other applicable designation. The Capped Funding Notes shall be issued
concurrently with a reduction in the aggregate Variable Funding Balance. Any
Variable Funding Balance not represented by a Capped Funding Note shall result
in the issuance of a new Variable Funding Note having an initial Variable
Funding Balance equal to the excess of the outstanding Variable Funding Balance
of the Variable Funding Note so surrendered over the initial Capped Funding
Balances of the Capped Funding Notes. The Indenture Trustee and the Issuer agree
to cooperate with each other, the party requesting the exchange of Variable
Funding Notes for Capped Funding Notes and the Depositor, the Seller and the
Owner Trustee, and to cause no unreasonable delay in issuing Capped Funding
Notes in connection with this Section.
Section 4.02. Registration of and Limitations on Transfer and Exchange
of Notes; Appointment of Certificate Registrar. The Issuer shall cause to be
kept at the Corporate Trust Office of the Indenture Trustee a Note Register in
which, subject to such reasonable regulations as it may prescribe, the Note
Registrar shall provide for the registration of Notes and of transfers and
exchanges of Notes as herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust Office
of the Indenture Trustee, the Issuer shall execute, and the Note Registrar shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes in authorized initial Note Balances (or
Percentage Interests in the case of the Class IIA-IO Notes) evidencing the same
aggregate Percentage Interests.
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No transfer of a Non-Offered Subordinate Note, other than a Class
IIX-IO Note, shall be permitted, and no such transfer shall be registered in the
Note Register or be effective hereunder, unless evidenced by an Opinion of
Counsel that establishes that such transfer and the registration of such
transfer will not cause the Issuer, or any portion thereof, to be characterized
as an association (or a publicly traded partnership) taxable as a corporation
either by having more than 100 holders of the Certificates and the Non-Offered
Subordinate Notes, other than the Class IIX-IO Notes, at any time during the
taxable year of the Issuer or otherwise, a corporation or a taxable mortgage
pool for federal income tax purposes.
No Non-Offered Subordinate Note (other than a Class IIX-IO Note) or any
interest therein (the "Transferred Note or Interest") may be transferred unless
all of the Non-Offered Subordinate Notes (other than the Class IIX-IO Notes) and
all interests therein are transferred together with the Transferred Note or
Interest. Any purported transfers in violation of this provision shall be void.
In addition, no transfer, sale, assignment, pledge or other disposition
of a Non-Offered Subordinate Note, other than a Class IIX-IO Note, shall be made
unless the proposed transferee executes a representation letter substantially in
the form of Exhibit [E], that (i) such transferee is acquiring the Non-Offered
Subordinate Note for its own behalf and is not acting as agent or custodian for
any other Person or entity in connection with such acquisition, (ii) if such
transferee is a partnership, grantor trust or S corporation for federal income
tax purposes, Non-Offered Subordinate Notes represent not more than 50% of the
assets of the partnership, grantor trust or S corporation, (iii) such transferee
agrees to be bound by the Indenture and (iv) such transferee will not (x) incur
indebtedness secured by Non-Offered Subordinate Notes where payments on such
indebtedness bear a relationship to payments on either the Mortgage Loans in
Group I or the Mortgage Loans as a whole within the meaning of Treasury
Regulations Section 301.7701(i)-1(f) or (y) use a partnership, trust or other
entity to indirectly achieve the result described in clause (x).
Except as described below, each holder of Non-Offered Subordinate
Notes, other than the Class IIX-IO Notes, shall establish its non-foreign status
by submitting to the Owner Trustee and the Indenture Trustee an IRS Form W-9 and
the Certificate of Non-Foreign Status (in substantially the form attached hereto
as Exhibit [F]).
A Non-Offered Subordinate Note, other than a Class IIX-IO Note, may be
transferred to a Person unable to establish its non-foreign status as described
in the preceding paragraph only if such Person provides an Opinion of Counsel to
the Depositor, the Enhancer, the Owner Trustee and the Indenture Trustee, which
Opinion of Counsel shall not be an expense of the Trust, the Depositor, the
Enhancer, the Owner Trustee or the Indenture Trustee, satisfactory to the Owner
Trustee, the Indenture Trustee and the Enhancer, that such transfer (i) will not
affect the federal income tax status of the Trust or any portion thereof and
(ii) will not adversely affect the interests of any Certificateholder,
Noteholder or the Enhancer, including as a result of the imposition of any
federal withholding taxes on the Trust (except to the extent that such
withholding taxes would be payable solely from amounts otherwise distributable
to the Non-Offered Subordinate Notes of the prospective transferee). If such
transfer occurs and such foreign Person becomes subject to such federal
withholding taxes, any such taxes will be withheld by the Indenture Trustee.
Each holder of Non-Offered Subordinate Notes unable to
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establish its non-foreign status shall submit to the Indenture Trustee a
properly completed copy of the type of Form W-8 that the Indenture Trustee shall
reasonably request and shall resubmit such form every three years or with the
frequency as required by then-applicable regulations.
No Variable Funding Note, other than any Capped Funding Note, may be
transferred. Subject to the provisions set forth below, Capped Funding Notes may
be transferred; provided, that with respect to the initial transfer thereof by
the Seller, prior written notification of such transfer shall have been given to
each Rating Agency and the Enhancer by the Seller.
No transfer, sale, pledge or other disposition of a Capped Funding Note
shall be made unless such transfer, sale, pledge or other disposition is exempt
from the registration requirements of the Securities Act, and any applicable
state securities laws, or is made in accordance with the Securities Act and such
state laws. In the event of any such transfer, the Indenture Trustee or the
Issuer shall require the transferee to execute either (i) an investment letter
in substantially the form attached hereto as Exhibit B (or in such form
reasonably satisfactory to the Indenture Trustee and the Issuer), which
investment letters shall not be an expense of the Issuer, the Owner Trustee, the
Indenture Trustee or the Depositor, and which investment letter shall state
that, among other things, such transferee is a "qualified institutional buyer"
as defined under Rule 144A, acting for its own account or for the accounts of
other "qualified institutional buyers" as defined under Rule 144A, and is aware
that the proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act provided by Rule 144A or (ii) a written
Opinion of Counsel (who may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Indenture Trustee and the Issuer that
such transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the Securities Act and such state laws or
is being made pursuant to the Securities Act and such state laws, which Opinion
of Counsel shall not be an expense of the Issuer, the Owner Trustee, the
Indenture Trustee or the Depositor, and the Indenture Trustee shall require the
transferee to execute an investment letter in substantially the form of Exhibit
C hereto, and the transferor shall execute a representation letter,
substantially in the form of Exhibit D hereto, acceptable to and in form and
substance reasonably satisfactory to the Issuer and the Indenture Trustee
certifying to the Issuer and the Indenture Trustee the facts surrounding such
transfer, which investment letter shall not be an expense of the Indenture
Trustee or the Issuer. The Holder of a Capped Funding Note desiring to effect
such transfer shall, and does hereby agree to, indemnify the Indenture Trustee
and the Issuer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal or state laws.
Notwithstanding the foregoing, the restriction of transfer specified in this
paragraph is not applicable to any Capped Funding Notes that have been
registered under the Securities Act.
Subject to the foregoing, at the option of the related Noteholders,
Notes may be exchanged for other Notes of like tenor and Class, in each case, in
authorized initial Note Balances (or Percentage Interests in the case of the
Class IIA-IO Notes) evidencing the same aggregate Percentage Interests upon
surrender of the Notes to be exchanged at the Corporate Trust Office of the
Indenture Trustee, as Note Registrar. With respect to any surrender of Capped
Funding Notes for exchange, the new Capped Funding Notes delivered in exchange
therefore shall bear the designation "Capped" in addition to any other
applicable designation. Whenever any Notes are so surrendered for exchange, the
Indenture Trustee shall execute, and
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the Note Registrar shall authenticate and deliver, the Notes that the Noteholder
making such exchange is entitled to receive. Each Note presented or surrendered
for registration of transfer or exchange shall (if so required by the Note
Registrar) be duly endorsed by, or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed by
the Holder thereof or his attorney duly authorized in writing, with such
signature guaranteed by a commercial bank or trust company. Notes delivered upon
any such transfer or exchange shall evidence the same obligations, and shall be
entitled to the same rights and privileges, as the Notes surrendered.
No service charge shall be made for any registration of transfer or
exchange of any Notes, but the Note Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any such registration of transfer or exchange. All Notes
surrendered for registration of transfer and exchange shall be cancelled by the
Note Registrar and delivered to the Indenture Trustee for subsequent destruction
without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.08 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges thereof pursuant to
Section 3.04 of the Trust Agreement. The Indenture Trustee hereby accepts such
appointment.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee and, with respect to
a Group I Note, the Enhancer such security or indemnity as may be required by it
to hold the Issuer, the Indenture Trustee and, if applicable, the Enhancer
harmless; then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; provided, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall be, or within
seven days shall be, due and payable, instead of issuing a replacement Note, the
Issuer may pay such destroyed, lost or stolen Note when so due or payable
without surrender thereof. If, after the delivery of a replacement Note or
payment of a destroyed, lost or stolen Note pursuant to the proviso to the
preceding sentence, a bona fide purchaser of the original Note in lieu of which
such replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement
Note or such payment from the Person to which it was delivered or any Person
taking such replacement Note from the Person to whom such replacement Note was
delivered or any assignee of such Person, except a bona fide purchaser, and
shall be entitled to recover the security or indemnity provided therefor to the
extent of any loss, damage, cost or expense incurred by the Issuer, the Enhancer
or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the related Noteholder of a sum sufficient to
cover any tax or other governmental
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charge that may be imposed in connection therewith and any other reasonable
related expenses (including the fees and expenses of the Indenture Trustee).
Each replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not such mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone each
such replacement Note shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude, to the
extent lawful, all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Enhancer, the Indenture
Trustee and any agent of the Issuer, the Enhancer or the Indenture Trustee may
treat the Person in the name of which such Note is registered as of the date of
determination as the owner of such Note for the purpose of receiving payments of
principal and interest, if any, on such Note and for all other purposes
whatsoever, whether or not such Note shall be overdue; and neither the Issuer,
the Enhancer, the Indenture Trustee nor any agent of the Issuer, the Enhancer or
the Indenture Trustee shall be affected by notice to the contrary.
Section 4.05. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee,
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder that the Issuer may have acquired in any
manner whatsoever, and the Indenture Trustee shall promptly cancel all Notes so
delivered. No Notes shall be authenticated in lieu of or in exchange for any
Notes cancelled as provided in this Section, except as expressly permitted by
this Indenture. All cancelled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time of cancellation thereof, unless the Issuer directs by Issuer
Request that the same be destroyed or returned to it; provided, that such Issuer
Request shall be timely and such Notes have not been previously disposed of by
the Indenture Trustee.
Section 4.06. Book-Entry Notes. The Offered Notes, upon original
issuance, will be issued in the form of typewritten notes representing
Book-Entry Notes, to be delivered to The Depository Trust Company, the initial
Depository, by or on behalf of the Issuer. The Offered Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Depository, and no Beneficial Owner shall receive a Definitive Note
representing such Beneficial Owner's interest in the related Offered Note,
except as provided in Section 4.08. Unless and until definitive,
fully-registered Offered Notes (the "Definitive Notes") have been issued to
Beneficial Owners pursuant to Section 4.08:
(a) the provisions of this Section shall be in full force and effect;
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(b) the Note Registrar and the Indenture Trustee shall be entitled to
deal with the Depository for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of instructions
or directions hereunder) as the sole Holder of the Offered Notes, and shall have
no obligation to Beneficial Owners;
(c) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section shall
control;
(d) the rights of Beneficial Owners shall be exercised only through
the Depository, and shall be limited to those established by law and agreements
between the related Beneficial Owners and the Depository or the Depository
Participants. Unless and until Definitive Notes are issued pursuant to Section
4.08, the initial Depository shall make book-entry transfers among the
Depository Participants and receive and transmit payments of principal of and
interest on the Offered Notes to such Depository Participants; and
(e) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes representing a
specified percentage of the aggregate Note Balance, the Depository shall be
deemed to represent such percentage only to the extent that it has received
instructions to such effect from Beneficial Owners or Depository Participants
owning or representing, respectively, such required percentage, and has
delivered such instructions to the Indenture Trustee.
Section 4.07. Notices to Depository. Whenever a notice or other
communication to the Offered Noteholders is required under this Indenture,
unless and until Definitive Notes shall have been issued to Beneficial Owners
pursuant to Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Offered Noteholders to the
Depository, and shall have no obligation to any Beneficial Owner.
Section 4.08. Definitive Notes. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Offered Notes and the Indenture Trustee is
unable to locate a qualified successor, (ii) the Indenture Trustee elects to
terminate the book-entry system through the Depository or (iii) after the
occurrence of an Event of Default, Beneficial Owners representing at least a
majority of the aggregate Offered Note Balance advise the Depository in writing
that the continuation of a book-entry system through the Depository is no longer
in the best interests of the Beneficial Owners, then the Depository shall notify
all Beneficial Owners, the Enhancer and the Indenture Trustee of the occurrence
of such event and of the availability of Definitive Notes to Beneficial Owners
requesting the same. Upon surrender to the Indenture Trustee of the typewritten
Offered Notes representing the Book-Entry Notes by the Depository, accompanied
by registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate Definitive Notes in accordance with the instructions of the
Depository. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
holders of such Definitive Notes as Offered Noteholders.
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Section 4.09. Tax Treatment. (a) Offered Notes, the Variable Funding
Notes and the Class IIX-IO Notes. The Issuer has entered into this Indenture,
and the Offered Notes and the Class IIX-IO Notes shall be issued, with the
intention that, for federal, state and local income, single business and
franchise tax purposes, such Notes will qualify as indebtedness of the Issuer.
The Issuer, by entering into this Indenture, and each holder of an
Offered Note, the Variable Funding Notes or a Class IIX-IO Note, by its
acceptance of such Note (and each Beneficial Owner by its acceptance of an
interest in such Note), agrees to treat such Note for federal, state and local
income, single business and franchise tax purposes as indebtedness of the
Issuer.
(b) Non-Offered Subordinate Notes (other than the Class IIX-IO
Notes). The Issuer has entered into this Indenture, and the Non-Offered
Subordinate Notes, other than the Class IIX-IO Notes, shall be issued, with the
intention that, for federal, state and local, income, single business and
franchise tax purposes, such Notes will qualify as equity of the Issuer.
The Issuer, by entering into this Indenture, and each holder of a
Non-Offered Subordinate Note other than a Class IIX-IO Note, by its acceptance
of such Note (and each Beneficial Owner by its acceptance of a beneficial
interest in such Note), agrees (i) to treat such Note for federal, state and
local income, single business and franchise tax purposes as equity of the Issuer
and (ii) to the terms of Section 4.09(c) hereof and Sections 3.12 and 5.03 of
the Trust Agreement.
(c) If Certificates and Non-Offered Subordinate Notes (other than the
Class IIX-IO Notes) are held by more than one Person, the net income of the
Issuer for any month as determined for federal income tax purposes (and each
item of income, gain, loss, credit and deduction entering into the computation
thereof) shall be allocated among the Certificateholders and the holders of the
Non-Offered Subordinate Notes (other than the holders of the Class IIX-IO Notes)
as of the first Record Date following the end of such month, in accordance with
each such holder's Percentage Interest in the Non-Offered Subordinate Notes
(other than the Class IIX-IO Notes). Net losses of the Issuer, if any, for any
month as determined for federal income tax purposes (and each item of income,
gain, loss, credit and deduction entering into the computation thereof) shall be
allocated among the Certificateholders and the holders of the Non-Offered
Subordinate Notes (other than the Class IIX-IO Notes) as of the first Record
Date following the end of such month, in accordance with each such holder's
Percentage Interest in the Non-Offered Subordinate Notes (other than the Class
IIX-IO Notes). The Indenture Trustee, on behalf of the Depositor and at the
direction of the Master Servicer, is authorized to modify the allocations in
this paragraph if necessary or appropriate for the allocations to fairly reflect
the economic income, gain or loss to the holders of the Certificates and the
Non-Offered Subordinate Notes (other than the Class IIX-IO Notes), or as
otherwise required by the Code. The Master Servicer shall act as agent of the
tax matters partner of the Trust.
Section 4.10. Reserved.
Section 4.11. Satisfaction and Discharge of Indenture. Upon the
occurrence of the events set forth in the immediately following sentence, this
Indenture shall cease to be of further effect with respect to the Notes except
as to (a) rights of registration of transfer and exchange, (b) substitution of
mutilated, destroyed, lost or stolen Notes, (c) rights of Noteholders to receive
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payments of principal thereof and interest thereon, (d) Sections 3.03, 3.04,
3.06, 3.09, 3.16, 3.18 and 3.19, (e) the rights, obligations and immunities of
the Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.07 and the obligations of the Indenture Trustee under Section
4.11) and (f) the rights of Noteholders as beneficiaries hereof with respect to
the property so deposited with the Indenture Trustee payable to all or any of
them. The Indenture Trustee, upon the demand and at the expense of the Issuer,
shall execute proper instruments acknowledging the satisfaction and discharge of
this Indenture with respect to the Notes, when:
(i) 367 days after either
(A) all Notes theretofore authenticated and delivered
(other than (1) Notes that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section 4.03
and (2) Notes for the payment of which money has theretofore been
deposited in trust or segregated and held in trust by the Issuer
and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 3.03) have been delivered to the
Indenture Trustee for cancellation; or
(B) all Notes not theretofore delivered to the Indenture
Trustee for cancellation (I) have become due and payable; (II)
will become due and payable at the last Legal Final Payment Date
within one year (III) or have been declared immediately due and
payable pursuant to Section 5.02;
and the Issuer, in the case of (I) or (II) above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America that will mature prior to the date such
amounts are payable, in trust for such purpose, in an amount sufficient
to pay and discharge the entire indebtedness on the Notes then
outstanding and not theretofore delivered to the Indenture Trustee for
cancellation when due on the last Legal Final Payment Date and all
amounts due to the Enhancer under the Insurance Agreement;
(ii) the Issuer has delivered to the Indenture Trustee and the
Enhancer an Officer's Certificate and an Opinion of Counsel, each
meeting the applicable requirements of Section 10.01 and stating that
all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
If such Opinion of Counsel relates to a deposit made in connection with
clause (i)(A)(2) above, such opinion shall further be to the effect
that such deposit will not have any material adverse tax consequences
to the Issuer, the Noteholders or the Certificateholders.
Section 4.12. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.11 shall be held in trust and applied by
the Indenture Trustee in accordance with the provisions of the Notes and this
Indenture to the payment, either directly or through the Paying Agent or the
Certificate Paying Agent, as the Indenture Trustee may determine, to the
Securityholders of all sums due and to become due thereon for principal and
interest and to the Enhancer all amounts due to the Enhancer under the Insurance
Agreement;
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provided, that such monies need not be segregated from other funds except to the
extent required herein or required by law.
Section 4.13. Reserved.
Section 4.14. Repayment of Monies Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to the Notes shall, upon demand of the
Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05, and thereupon the Paying Agent shall be released from all further
liability with respect to such monies.
Section 4.15. Temporary Offered Notes. Pending the preparation of
Definitive Notes, the Issuer may execute, and upon its written direction, the
Indenture Trustee may authenticate and make available for delivery, temporary
Offered 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 Offered Notes may determine, as evidenced by their execution of
such Term Notes.
If temporary Offered Notes are issued, the Issuer shall cause
Definitive Notes to be prepared without unreasonable delay. After the
preparation of the Definitive Notes, the temporary Offered Notes shall be
exchangeable for Definitive Notes upon surrender of such temporary Offered Notes
at the office or agency of the Indenture Trustee, without charge to the related
Offered Noteholder. Upon surrender for cancellation of any one or more temporary
Offered 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 Offered Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
Section 4.16. Subrogation and Cooperation.
(a) The Issuer and the Indenture Trustee acknowledge and each Group I
Noteholder by the acceptance of its Note agrees that (i) to the extent the
Enhancer makes payments under the Policy on account of principal of or interest
on the Group I Notes, the Enhancer will be fully subrogated to the rights of the
Group I Noteholders to receive such principal and interest, and (ii) the
Enhancer shall be paid such principal and interest 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 Enhancer for action to preserve or enforce the
Enhancer's rights or interest under this Indenture or the Insurance Agreement,
consistent with this Indenture and without limiting the rights of the Group I
Noteholders as otherwise set forth in the Indenture, including upon the
occurrence and continuance of a default under the Insurance Agreement, a request
(which request shall be in writing) to take or cause to be taken any one or more
of the following actions (subject to Article VI hereof):
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(i) institute Proceedings for the collection of all amounts
then payable on the Notes or under this Indenture in respect to the
Group I Notes and all amounts payable under the Insurance Agreement to
enforce any judgment obtained and collect from the Issuer monies
adjudged due;
(ii) sell the portion of the Trust Estate attributable to Group
I 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 UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Enhancer hereunder.
Following the payment in full of the Group I Notes, the Enhancer shall
continue to have all rights and privileges provided to it under this Section and
in all other provisions of this Indenture, until all amounts owing to the
Enhancer have been paid in full and all obligations of the Enhancer under the
Policy have terminated. Thereafter, all rights of the Enhancer under this
Agreement shall terminate in their entirety.
Section 4.17. Enhancer's Rights Regarding Actions, Proceedings or
Investigations. Until all Group I Notes have been paid in full, all amounts owed
to the Enhancer have been paid in full, the Indenture has terminated and the
Policy has been returned to the Enhancer for cancellation, the following
provisions shall apply exclusively to the Group I Notes and the portion of the
Trust and the Trust Estate attributable to Group I:
(a) Notwithstanding anything contained herein or in the other Basic
Documents to the contrary, the Enhancer shall have the right to participate in,
to direct the enforcement or defense of, and, at the Enhancer's sole option, to
institute or assume the defense of, any action, proceeding or investigation that
could adversely affect the Trust, the Trust Estate relating to Group I or the
rights or obligations of the Enhancer hereunder or under the Policy or the Basic
Documents, including (without limitation) any insolvency or bankruptcy
proceeding in respect of the Master Servicer, the Trust or any affiliate
thereof. Following notice to the Indenture Trustee, the Enhancer shall have
exclusive right to determine, in its sole discretion, the actions necessary to
preserve and protect the Trust or the Trust Estate relating to Group I. All
costs and expenses of the Enhancer in connection with such action, proceeding or
investigation, including (without limitation) any judgment or settlement entered
into affecting the Enhancer or the Enhancer's interests, shall be included in
the reimbursement amounts due to the Enhancer under Section 3.05(a)(viii) of
this Agreement.
(b) In connection with any action, proceeding or investigation that
could adversely affect the Trust, the Trust Estate relating to Group I or the
rights or obligations of the Enhancer hereunder or under the Policy or the Basic
Documents, including (without limitation) any insolvency or bankruptcy
proceeding in respect of the Master Servicer, the Trust or any affiliate
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thereof, the Indenture Trustee, upon receipt of written notice, hereby agrees to
cooperate with, and to take such action as directed by, the Enhancer, including
(without limitation) entering into such agreements and settlements as the
Enhancer shall direct, in its sole discretion, without the consent of any
Noteholder.
(c) To the extent the Indenture Trustee has actual knowledge of such
event, the Indenture Trustee hereby agrees to provide to the Enhancer prompt
written notice of any action, proceeding or investigation that names the Trust,
the Trust Estate relating to Group I or the Indenture Trustee as a party or that
could adversely affect the Trust, the Trust Estate relating to Group I or the
rights or obligations of the Enhancer hereunder or under the Policy or the Basic
Documents, including (without limitation) any insolvency or bankruptcy
proceeding in respect of the Master Servicer, the Seller, the Trust or any
affiliate thereof.
(d) Notwithstanding anything contained herein or in any of the other
Related Documents to the contrary, the Indenture Trustee shall not, without the
Enhancer's prior written consent or unless directed by the Enhancer, undertake
or join any litigation or agree to any settlement of any action, proceeding or
investigation affecting the Trust, the Trust Estate relating to Group I or the
rights or obligations of the Enhancer hereunder or under the Policy or the Basic
Documents.
(e) Each Group I Noteholder, by acceptance of its Note, and the
Indenture Trustee agree that Enhancer shall have such rights as set forth in
this Section, which are in addition to any rights of the Enhancer pursuant to
the other provisions of the Basic Documents, that the rights set forth in this
Section may be exercised by the Enhancer, in its sole discretion, without the
need for the consent or approval of any Group I Noteholder or the Indenture
Trustee, notwithstanding any other provision contained herein or in any of the
other Basic Documents, and that nothing contained in this Section shall be
deemed to be an obligation of the Enhancer to exercise any of the rights
provided for herein.
ARTICLE V
DEFAULT AND REMEDIES
Section 5.01. Notification of Certain Events of Default. The Issuer
shall deliver to the Indenture Trustee and the Enhancer, within five days after
learning of the occurrence of any event that with the giving of notice and the
lapse of time would become an Event of Default under paragraph (c) of the
definition of "Event of Default", written notice in the form of an Officer's
Certificate of the status thereof and what action the Issuer is taking or
proposes to take with respect thereto.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. (a)
If an Event of Default shall occur and be continuing with respect to the Group I
Notes or if the Depositor or the Master Servicer shall purchase all of the
Mortgage Loans in Group I pursuant to Section 8.08 of the Sale and Servicing
Agreement, then in every such case the Indenture Trustee, acting at the
direction of the Enhancer, or the Holders of Group I Notes representing not less
than a majority of the Note Balance of the Group I Notes (with the written
consent of the Enhancer), may (or shall, in the case of a Master Servicer
purchase under Section 8.08 of the Sale and Servicing
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Agreement) declare the Group I Notes to be immediately due and payable, by a
notice in writing to the Issuer (and to the Indenture Trustee if given by the
Group I Noteholders) (with a copy to the Enhancer); and upon any such
declaration, the unpaid Note Balance of the Group I Notes, together with accrued
and unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
At any time after a declaration of acceleration of maturity with
respect to an Event of Default has been made with respect to the Group I Notes
and before a judgment or decree for payment of the money due has been obtained
by the Indenture Trustee as hereinafter provided in this Article, the Enhancer
or the Holders of Group I Notes representing not less than a majority of the
aggregate Note Balance of the Group I Notes (with the written consent of the
Enhancer) that caused the acceleration of the Group I Notes, by written notice
to the Issuer and the Indenture Trustee, may in writing waive such Event of
Default and rescind and annul such declaration and its consequences if the
Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:
(i) all payments of principal of and interest on the Group I Notes
and all other amounts that would then be due hereunder or upon the Group I Notes
if the Event of Default giving rise to such acceleration had not occurred;
(ii) 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
(iii) all Events of Default, other than the nonpayment of principal of
the Group I 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.
(b) If an Event of Default shall occur and be continuing with respect
to the Group II Notes or if the Depositor or the Master Servicer shall purchase
all of the Mortgage Loans in Group II pursuant to Section 8.08 of the Sale and
Servicing Agreement, then in every such case the Indenture Trustee, acting at
the direction of the Holders of Group II Notes representing not less than a
majority of the Senior Group II Notes or the Subordinate Group II Notes, may (or
shall, in the case of a Master Servicer purchase under Section 8.08 of the Sale
and Servicing Agreement) declare the Group II Notes to be immediately due and
payable, by a notice in writing to the Issuer (and to the Indenture Trustee if
given by the Group II Noteholders); and upon any such declaration, the unpaid
Note Balance of the Group II Notes, together with (i) accrued and unpaid
interest thereon through the date of acceleration and (ii) amounts due to the
Class IIA-IO Notes and the Class IIX-IO Notes under the following sentence,
shall become immediately due and payable. If the Group II Notes are declared to
be due and payable under this Section 5.02(b), then (i) if the date on which the
Group II Notes are declared to be due and payable is prior to the payment date
in December 2004, the Class IIA-IO Notes will be entitled to receive their
adjusted issue price, which will equal the present value of the remaining
payments on the Class IIX-IO Notes, using a discount rate equal to the discount
rate reflected in the price paid by the initial
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purchaser of the Class IIA-IO Notes on the Closing Date and (ii) the Class
IIX-IO Notes will be entitled to receive their adjusted issue price, which will
equal the present value of the expected remaining payments on the Class IIX-IO
Notes, using a prepayment assumption equal to 100% of the prepayment assumption
set forth in the Prospectus Supplement with respect to the Group II Mortgage
Loans and a discount rate equal to 9%.
At any time after a declaration of acceleration of maturity with
respect to an Event of Default has been made with respect to the Group II Notes
and before a judgment or decree for payment of the money due has been obtained
by the Indenture Trustee as hereinafter provided in this Article, the Holders of
Group II Notes representing not less than a majority of the aggregate Note
Balance of the Senior Group II Notes or the Subordinate Group II Notes that
caused the acceleration of the Group II Notes, by written notice to the Issuer
and the Indenture Trustee, may in writing waive such Event of Default and
rescind and annul such declaration and its consequences if the Issuer has paid
or deposited with the Indenture Trustee a sum sufficient to pay:
(i) all payments of principal of and interest on the Group II Notes
and all other amounts that would then be due hereunder or upon the Group II
Notes if the Event of Default giving rise to such acceleration had not occurred;
(ii) 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
(iii) all Events of Default, other than the nonpayment of principal of
the Group II Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if a default occurs in the payment of
(i) interest on any Note when the same becomes due and payable, and such default
continues for a period of five (5) days, or (ii) principal of any Note when the
same becomes due and payable; then, in each case the Issuer shall, upon demand
of the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Noteholders, the entire amount then due and payable on the Notes for principal
and interest, with interest on the overdue principal at the applicable Note
Rate. In addition thereto, the foregoing shall include such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.
(b) As to the Group I Notes, in case the Issuer shall fail forthwith
to pay such amounts upon such demand, the Indenture Trustee, in its own name and
as trustee of an express trust, subject to the provisions of Section 10.16, may,
and at the direction of the Enhancer or of the Holders of Group I Notes
representing not less than a majority of the aggregate Note Balance
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of the Group I Notes (with the consent of the Enhancer), shall, institute
Proceedings for the collection of the sums so due and unpaid, and may prosecute
such Proceedings to judgment or final decree, and may enforce the same against
the Issuer or other obligor on the Group I Notes and collect in the manner
provided by law out of the property of the Issuer or such other obligor on the
Group I Notes, wherever situated, the monies adjudged or decreed to be payable.
(c) As to the Group II Notes, in case the Issuer shall fail forthwith
to pay such amounts upon such demand, the Indenture Trustee, in its own name and
as trustee of an express trust, subject to the provisions of Section 10.16, may,
and at the direction of the Holders of Group II Notes representing not less than
a majority of the aggregate Note Balance of the Group II Notes or Subordinate
Group II Notes, shall, institute Proceedings for the collection of the sums so
due and unpaid, and may prosecute such Proceedings to judgment or final decree,
and may enforce the same against the Issuer or other obligor on the Group II
Notes and collect in the manner provided by law out of the property of the
Issuer or such other obligor on the Group II Notes, wherever situated, the
monies adjudged or decreed to be payable.
(d) If an Event of Default shall occur and be continuing, the
Indenture Trustee, subject to the provisions of Section 10.16, may, as more
particularly provided in Section 5.04, in its discretion proceed to protect and
enforce its rights and the rights of the Noteholders by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.
(e) In case there shall be pending, relating to the Issuer, any other
obligor on the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or similar law; or in
case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable Proceedings relating to the Issuer or such
other obligor, or to the creditors or property of the Issuer or such other
obligor, the Indenture Trustee, irrespective of whether the principal of any
Notes shall then be due and payable as expressed in such Notes or by declaration
or otherwise, and irrespective of whether the Indenture Trustee shall have made
any demand pursuant to this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim for the entire amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each such predecessor
Indenture Trustee, except as a result of negligence, willful misconduct
or bad faith) and the Noteholders allowed in the related Proceeding;
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(ii) unless prohibited by applicable law or regulation, to vote
on behalf of the Noteholders in any election of a trustee, standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable
or deliverable in respect of the claims of the Noteholders and the
Indenture Trustee and to distribute all amounts received with respect
to any such claims on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Noteholders allowed in any judicial Proceeding
relating to the Issuer, its creditors or its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by the Noteholders to make payments to
the Indenture Trustee and, in the event the Indenture Trustee shall consent to
the making of payments directly to the Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation of
the Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each such predecessor
Indenture Trustee, except as a result of negligence, willful misconduct or bad
faith.
(f) Nothing contained herein shall be deemed to permit the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Noteholder, or to authorize
the Indenture Trustee to vote in respect of any claim of a Noteholder in any
such Proceeding, except to vote for the election of a trustee in bankruptcy or
similar Person as provided above.
(g) All rights of action and of asserting claims under this Indenture
or in respect of the Notes may be enforced by the Indenture Trustee without the
possession of any Notes or the production thereof in any Proceeding relating
thereto. Any such Proceeding instituted by the Indenture Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation
of the Indenture Trustee, each predecessor Indenture Trustee and their
respective agents and attorneys, shall be for the benefit of the Noteholders.
(h) In any Proceeding brought by the Indenture Trustee (including any
Proceeding involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceeding.
Section 5.04. Remedies; Priorities.
(a) As to the Group I Notes, if an Event of Default shall have
occurred and be continuing, the Indenture Trustee, subject to the provisions of
Section 10.16 and Section 5.05, with the written consent of the Enhancer, may,
or, shall, at the direction of the Enhancer or
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Group I Notes representing not less than a majority of the aggregate Note
Balance of the Group I Notes (with the written consent of the Enhancer), do one
or more of the following:
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Group I Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment thereby obtained and
collect from the Issuer or any other obligor on the Group I Notes any
monies thereby adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the portion of
the Trust Estate attributable to Group I;
(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 Group I Noteholders; and
(iv) sell the portion of the Trust Estate attributable to Group
I or any smaller portion thereof or any right or interest therein at
one or more public or private sales called and conducted in any manner
permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the portion of the Trust Estate attributable to Group I following an
Event of Default, unless (A) the Indenture Trustee obtains the consent of the
Enhancer, which consent shall not be unreasonably withheld, and the Holders of
Group I Notes representing 100% of the aggregate Note Balance of the Group I
Notes, (B) the proceeds of such sale or liquidation distributable to the Group I
Noteholders are sufficient to discharge in full all amounts then due and unpaid
on the Group I Notes for principal and interest and to reimburse the Enhancer
for any amounts drawn under the Policy and any other amounts due the Enhancer
under the Insurance Agreement, or (C) the Indenture Trustee determines that the
Mortgage Loans assigned to Group I will not continue to provide sufficient funds
for the payment of principal of and interest on the Group I Notes as the same
would have become due if the Group I Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of the Enhancer, which
consent shall not be unreasonably withheld, and the Holders of Group I Notes
representing not less than 66 2/3% of the aggregate Note Balance of the Group I
Notes. In determining such sufficiency or insufficiency with respect to clauses
(B) and (C) above, the Indenture Trustee may, but need not, obtain and rely upon
an opinion of an Independent investment banking or accounting firm of national
reputation addressed to the Indenture Trustee and the Enhancer as to the
feasibility of such proposed action and as to the sufficiency of the portion of
the Trust Estate attributable to Group I for such purpose. Notwithstanding the
foregoing, for so long as a Servicing Default shall not have occurred, any Sale
of the portion of the Trust Estate attributable to Group I shall be made subject
to the continued servicing of the Mortgage Loans by the Master Servicer as
provided in the Sale and Servicing Agreement. Notwithstanding any sale of the
Mortgage Loans assigned to Group I pursuant to this Section 5.04(a), the
Indenture Trustee shall, for so long as any principal or accrued interest on the
Notes remains unpaid, continue to act as Indenture Trustee hereunder and to draw
amounts payable under the Policy in accordance with the terms of the Policy.
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(b) As to the Group II Notes, if an Event of Default shall have
occurred and be continuing, the Indenture Trustee, subject to the provisions of
Section 10.16 and Section 5.05, may, or, shall, at the direction of the Group II
Notes representing not less than a majority of the aggregate Note Balance of the
Group II Notes, do one or more of the following:
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Group II Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment thereby obtained and
collect from the Issuer or any other obligor on the Group II Notes any
monies thereby adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the portion of
the Trust Estate attributable to Group II;
(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 Group II Noteholders; and
(iv) sell the portion of the Trust Estate attributable to Group
II or any smaller portion thereof or any right or interest therein at
one or more public or private sales called and conducted in any manner
permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the portion of the Trust Estate attributable to Group II following an
Event of Default, unless (A) the Indenture Trustee obtains the consent of the
Holders of Group II Notes representing 100% of the aggregate Note Balance of the
Group II Notes, (B) the proceeds of such sale or liquidation distributable to
the Group II Noteholders are sufficient to discharge in full all amounts then
due and unpaid on the Group II Notes for principal and interest, or (C) the
Indenture Trustee determines that the Mortgage Loans assigned to Group II will
not continue to provide sufficient funds for the payment of principal of and
interest on the Group II Notes as the same would have become due if the Group II
Notes had not been declared due and payable, and the Indenture Trustee obtains
the consent of the Holders of Group II Notes representing not less than 66 2/3%
of the aggregate Note Balance of the Group II Notes. In determining such
sufficiency or insufficiency with respect to clauses (B) and (C) above, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation
addressed to the Indenture Trustee as to the feasibility of such proposed action
and as to the sufficiency of the portion of the Trust Estate attributable to
Group II for such purpose. Notwithstanding the foregoing, for so long as a
Servicing Default shall not have occurred, any Sale of the portion of the Trust
Estate attributable to Group II shall be made subject to the continued servicing
of the Mortgage Loans by the Master Servicer as provided in the Sale and
Servicing Agreement.
(c) As to the Group I Notes, if the Indenture Trustee collects any
money or property pursuant to this Article (or in any case following an Event of
Default and an acceleration of the Group I Notes), it shall pay out such money
or property in the following order:
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(i) to the Enhancer the accrued and unpaid Premium for the
Policy;
(ii) to the Indenture Trustee, for amounts due under Section
6.07 and to the Administrator for amounts due under Section 4 of the
Administration Agreement and to the Owner Trustee, for amounts due to
it under the Basic Documents;
(iii) to the Group I Noteholders, for amounts due and unpaid on
the Group I Notes in respect of interest, ratably, without preference
or priority of any kind, according to the amounts then due and payable;
(iv) to the Group I Noteholders, for amounts due and unpaid on
the Group I Notes in respect of principal, ratably, without preference
or priority of any kind, according to the amounts then due and payable,
until the respective Note Balances of the Group I Notes have been
reduced to zero;
(v) to the payment of all amounts due and owing the Enhancer
under the Insurance Agreement;
(vi) to the Indenture Trustee any remaining amounts for
distribution to the Holders of Certificates and the Non-Offered
Subordinate Notes in accordance with Section 3.26(c).
The Indenture Trustee may fix a record date and payment date for any
payment to Group I Noteholders pursuant to this Section. At least 15 days before
such record date, the Indenture Trustee shall mail to each Group I Noteholder
and the Enhancer a notice that states such record date, and payment date and the
amount to be paid.
(d) As to the Group II Notes, if the Indenture Trustee collects any
money or property pursuant to this Article (or in any case following an Event of
Default and an acceleration of the Group II Notes), it shall pay out such money
or property in the following order:
(i) to the Indenture Trustee, for amounts due under Section
6.07 and to the Administrator for amounts due under Section 4 of the
Administration Agreement and to the Owner Trustee, for amounts due to
it under the Basic Documents;
(ii) to the Senior Group II Noteholders, the Class IIA-IO
Noteholders and the Class IIX-IO Noteholders, for amounts due and
unpaid on the related Group II Notes in respect of interest, ratably,
without preference or priority of any kind, according to the amounts
then due and payable;
(iii) to the Senior Group II Noteholders, for amounts due and
unpaid on the related Senior Group II Notes, respectively, in respect
of principal, ratably, without preference or priority of any kind,
according to the amounts then due and payable, until the respective
Note Balances of the Senior Group II Notes have been reduced to zero;
(iv) to the Class IIM-1 Noteholders, for amounts due and unpaid
on the Class IIM-1 Notes in respect of interest, ratably, without
preference or priority of any kind, according to the amounts then due
and payable;
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(v) to the Class IIM-1 Noteholders, for amounts due and unpaid
on the Class IIM-1 Notes in respect of principal, ratably, without
preference or priority of any kind, according to the amounts then due
and payable, until the respective Note Balances of the Class M-1 Notes
have been reduced to zero;
(vi) to the Class IIM-2 Noteholders, for amounts due and unpaid
on the Class IIM-2 Notes in respect of interest, ratably, without
preference or priority of any kind, according to the amounts then due
and payable;
(vii) to the Class IIM-2 Noteholders, for amounts due and unpaid
on the Class IIM-2 Notes in respect of principal, ratably, without
preference or priority of any kind, according to the amounts then due
and payable, until the respective Note Balances of the Class M-2 Notes
have been reduced to zero;
(viii)to the Class IIB-1 Noteholders, for amounts due and unpaid
on the Class IIB-1 Notes in respect of interest, ratably, without
preference or priority of any kind, according to the amounts then due
and payable;
(ix) to the Class IIB-1 Noteholders, for amounts due and unpaid
on the Class IIB-1 Notes in respect of interest, ratably, without
preference or priority of any kind, according to the amounts then due
and payable, until the respective Note Balances of the Class IIB-1
Notes have been reduced to zero;
(x) to the Class IIA-IO Noteholders, an amount equal to the
adjusted issue price of the Class IIA-IO Notes as determined under
Section 5.02(b), to the extent that such Noteholders are entitled to
such amount under Section 5.02(b);
(xi) to the Class IIX-IO Noteholders, an amount equal to the
adjusted issue price of the Class IIX-IO Notes as determined under
Section 5.02(b); and
(xii) to the Certificate Paying Agent any remaining amounts for
distribution to the Holders of Certificates and the Non-Offered
Subordinate Notes in accordance with Section 3.26(c).
The Indenture Trustee may fix a record date and payment date for any
payment to Group II Noteholders pursuant to this Section. At least 15 days
before such record date, the Indenture Trustee shall mail to each Group II
Noteholder a notice that states such record date, and payment date and the
amount to be paid.
Section 5.05. Optional Preservation of the Trust Estate. If either the
Group I Notes or Group II Notes have been declared due and payable under Section
5.02 following an Event of Default, and such declaration and its consequences
have not been rescinded and annulled, the Indenture Trustee may, but need not
(but shall at the written direction of the Enhancer in the case of the Group I
Notes), elect to take and maintain possession of the Trust Estate. As to the
Group I Notes, it is the desire of the Issuer and the Group I Noteholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Group I Notes and other obligations of the Issuer, including
payment to the Enhancer. As to the Group II Notes, it is the desire of the
Issuer and the Group II Noteholders that there be at all times sufficient funds
for the
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payment of principal of and interest on the Group II Notes and other
obligations of the Issuer. In determining whether to take and maintain
possession of the Trust Estate, the Indenture Trustee may, but need not, obtain
and rely upon an opinion of an Independent investment banking or accounting firm
of national reputation addressed to the Indenture Trustee and, in the case of
Group I, the Enhancer as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose.
Section 5.06. Limitation of Suits. No Noteholder shall have any right
to institute any Proceeding with respect to this Indenture, for the appointment
of a receiver or trustee or for any other remedy hereunder, unless (subject to
the provisions of Section 10.16):
(a) such Noteholder shall have previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(b) the Holders of Notes representing not less than 25% of the
aggregate Note Balance of the Group I Notes or Group II Notes, as applicable,
shall have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(c) such Noteholders shall have offered the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities that may be
incurred by it in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to institute such
Proceedings;
(e) no direction inconsistent with such written request shall have
been given to the Indenture Trustee during such 60-day period by the Holders of
Notes representing not less than a majority of the aggregate Note Balance of the
Group I Notes or Group II Notes, as applicable, or, in the case of the Group I
Notes, by the Enhancer; and
(f) in the case of the Group I Notes, the Enhancer has given its
prior written consent.
No Noteholder shall have any right in any manner whatsoever by virtue
of or by availing itself of any provision of this Indenture to affect, disturb
or prejudice the rights of any other Noteholder, to obtain or to seek to obtain
priority or preference over any other Noteholder or to enforce any right under
this Indenture, in each case except in the manner herein provided.
In the event that the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing less than a majority of the aggregate Note Balance of the Group I
Notes or Group II Notes, as applicable, the Indenture Trustee in its sole
discretion may determine what action, if any, shall be taken, notwithstanding
any other provision of this Indenture.
Section 5.07. Unconditional Right of Noteholders To Receive Principal
and Interest. Notwithstanding any other provision of this Indenture, each
Noteholder shall have the right, which is absolute and unconditional, to receive
payment of the interest and principal, if any, due on such Noteholder's Notes on
or after the due date expressed in such Notes or in this Indenture
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and to institute suit for the enforcement of any such payment. Such right shall
not be impaired without the consent of the related Noteholder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Indenture
Trustee or to such Noteholder, then in every such case the Issuer, the Enhancer,
the Indenture Trustee, and the Noteholders shall, subject to any determination
in such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee, the Enhancer 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 Enhancer or the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder or otherwise shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee, the Enhancer or any Noteholder to exercise any right or
remedy accruing upon an Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Indenture Trustee,
the Enhancer or the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee, the Enhancer or the
Noteholders, as the case may be.
Section 5.11. Control by Enhancer or Noteholders. (a) The Enhancer (so
long as no Enhancer Default exists and is continuing) or the Holders of Group I
Notes representing not less than a majority of the aggregate Note Balance of the
Group I Notes, with the consent of the Enhancer (unless this Indenture provides
that the Group I Notes may direct such action), 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 Group I Notes or exercising any
trust or power conferred on the Indenture Trustee; provided that:
(i) such direction shall not conflict with any rule of law or with
this Indenture;
(ii) subject to Section 5.04, any direction to the Indenture Trustee
to sell or liquidate the portion of the Trust Estate relating to Group I shall
be given by the Enhancer (so long as no Enhancer Default exists and is
continuing) or by the Holders of Group I Notes representing 100% of the
aggregate Note Balance of the Group I Notes with the consent of the Enhancer;
(iii) if the conditions set forth in Section 5.05 have been satisfied
and the Indenture Trustee elects to retain the portion of the Trust Estate
attributable to Group I pursuant to such Section, then any direction to the
Indenture Trustee by Holders of Group I Notes representing
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less than 100% of the aggregate Note Balance of the Group I Notes to sell or
liquidate the portion of the Trust Estate attributable to Group I shall be of no
force or effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of the Noteholders and the Enhancer as set forth in
this Subsection, and subject to Section 6.01, the Indenture Trustee need not
take any action that it determines might subject it to liability or might
materially and adversely affect the rights of any Group I Noteholders not
consenting thereto unless the Indenture Trustee has received indemnity
satisfactory to it from the Enhancer or a Group I Noteholder.
(b) The Holders of Group II Notes representing not less than a
majority of the aggregate Note Balance of the Group II Notes shall have the
right to direct the time, method and place of conducting any Proceeding for any
remedy available to the Indenture Trustee with respect to the Group II Notes or
exercising any trust or power conferred on the Indenture Trustee; provided that:
(i) such direction shall not conflict with any rule of law or with
this Indenture;
(ii) subject to Section 5.04, any direction to the Indenture Trustee
to sell or liquidate the portion of the Trust Estate relating to Group II shall
be given by the Holders of Group II Notes representing 100% of the aggregate
Note Balance of the Group II Notes;
(iii) if the conditions set forth in Section 5.05 have been satisfied
and the Indenture Trustee elects to retain the portion of the Trust Estate
attributable to Group II pursuant to such Section, then any direction to the
Indenture Trustee by Holders of Group II Notes representing less than 100% of
the aggregate Note Balance of the Group II Notes to sell or liquidate the
portion of the Trust Estate attributable to Group II shall be of no force or
effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of the Noteholders as set forth in this Subsection,
and subject to Section 6.01, the Indenture Trustee need not take any action that
it determines might subject it to liability or might materially and adversely
affect the rights of any Group II Noteholders not consenting thereto unless the
Indenture Trustee has received indemnity satisfactory to it from a Group II
Noteholder.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of either the Group I Notes or the Group II Notes
as provided in Section 5.02, the Enhancer (with respect to the Group I Notes
only and so long as no Enhancer Default exists and is continuing) or the Holders
of Notes representing not less than a majority of the aggregate Note Balance of
the Group I Notes or the Group II Notes, as applicable, (with the consent of the
Enhancer in the case of the Group I Notes) that caused the acceleration of such
Notes may waive any past Event of Default and its consequences, except an Event
of Default (a) with respect to payment of principal of or interest on such Notes
or (b) in respect of a covenant or provision hereof that cannot be modified or
amended without the consent of all Noteholders or each
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Noteholder affected thereby. In the case of any such waiver, the Issuer, the
Enhancer (in the case of the Group I Notes), the Indenture Trustee and the
applicable Noteholders shall be restored to their respective former positions
and rights hereunder; provided, that no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred for every purpose of this
Indenture; provided, that no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereto.
Section 5.13. Undertaking for Costs. The parties hereto agree, and each
Noteholder, by such Noteholder's acceptance of a Note, shall be deemed to have
agreed, that any court may in its discretion require, in any Proceeding for the
enforcement of any right or remedy under this Indenture, or in any Proceeding
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such Proceeding of an
undertaking to pay the costs of such Proceeding, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such Proceeding, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; provided,
that the provisions of this Section shall not apply to any Proceeding instituted
by (i) the Indenture Trustee, (ii) any Noteholder or group of Noteholders, in
each case holding Notes representing in the aggregate more than 10% of the
aggregate Note Balance (or in the case of a right or remedy under this Indenture
which is instituted by the Group I Notes, the Senior Group II Notes or the
Subordinate Group II Notes, more than 10% of the Note Balance of the Group I
Notes, the Senior Group II Notes or the Subordinate Group II Notes, as the case
may be) or (iii) any Noteholder for the enforcement of the payment of principal
of or interest on any Note on or after the due date expressed in such Note and
in this Indenture.
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, plead or in any manner whatsoever claim or take the benefit or advantage
of any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of each such power as though
no such law had been enacted.
Section 5.15. Sale of Trust Estate.
(a) The power to effect any sale or other disposition (each, a
"Sale") of any portion of the Trust Estate attributable to Group I or Group II,
as applicable, pursuant to Section 5.04 is expressly subject to the provisions
of Section 5.05 and this Section. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold. The power to effect any such Sale shall continue unimpaired
until the entire portion of the Trust Estate attributable to Group I or Group
II, as applicable, has been sold or all amounts payable on the related Class or
Classes of Notes under this Indenture have been paid. The Indenture Trustee may
from time to time postpone any public Sale by public announcement
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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
portion of the Trust Estate attributable to Group I or Group II, as applicable,
or any smaller portion thereof, unless:
(i) the Noteholders of all affected Notes and the Enhancer (in
the case of the Mortgage Loans assigned to Group I) direct the
Indenture Trustee to make such Sale;
(ii) the proceeds of such Sale would be not less than the entire
amount that would be payable to the affected Securityholders and the
Enhancer (in the case of the Mortgage Loans assigned to Group I) in
respect of amounts drawn under the Policy and any other amounts due the
Enhancer under the Insurance Agreement, in full payment thereof in
accordance with Section 5.02, on the Payment Date next succeeding the
date of such Sale; or
(iii) the Indenture Trustee determines, in its sole discretion,
that the conditions for retention of the Trust Estate set forth in
Section 5.05 cannot be satisfied (and in making any such determination,
the Indenture Trustee may rely upon an opinion of an Independent
investment banking firm obtained and delivered as provided in Section
5.05), and the Enhancer (in the case of the Mortgage Loans assigned to
Group I) consents to such Sale (which consent shall not be unreasonably
withheld), and Holders of Notes representing not less than 66 2/3% of
the aggregate Note Balance of the affected 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 paragraph.
(c) Unless the Noteholders and the Enhancer (in the case of the
Mortgage Loans assigned to Group I) have otherwise consented or directed the
Indenture Trustee, at any public Sale of all or any portion of the Trust Estate
at which a minimum bid equal to or greater than the amount described in clause
(ii) of paragraph (b) of this Section has not been established by the Indenture
Trustee, and no Person bids an amount equal to or greater than such amount, the
Indenture Trustee shall bid an amount at least $1.00 greater than the highest
other bid.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(i) any Noteholder may bid for and, with the consent of the
Enhancer (in the case of the Mortgage Loans assigned to Group I),
purchase the property offered for sale and, upon compliance with the
terms of sale, may hold, retain, possess and dispose of such property
without further accountability; and may, in paying the purchase price
therefor, deliver any Notes or claims for interest thereon in lieu of
cash up to the amount, upon distribution of the net proceeds of such
Sale, payable thereon. Such Notes, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be returned to
the Holders thereof after being appropriately stamped to show such
partial payment;
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(ii) the Indenture Trustee may bid for and acquire the property
offered for Sale, may, subject to any requirements of and to the extent
permitted by applicable law in connection therewith, purchase all or
any portion of the Trust Estate in a private Sale, and may, in lieu of
paying cash therefor, make settlement for the purchase price by
crediting the gross sale price against the sum of (A) the amount that
would be distributable to the Securityholders and amounts owing to the
Enhancer (in the case of the Mortgage Loans assigned to Group I) as a
result of such Sale in accordance with Section 5.04(b) on the Payment
Date next succeeding the date of such Sale and (B) the expenses of such
Sale and of any Proceeding in connection therewith that are
reimbursable to it, without being required to produce the Notes in
order to complete any such Sale or in order for the net sale price to
be credited against such Notes; and any property so acquired by the
Indenture Trustee shall be held and dealt with by it in accordance with
the provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Trust Estate in connection with a Sale thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney in-fact of the Issuer to transfer and convey its
interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale; and
(v) no purchaser or transferee at any such Sale shall be bound
to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any monies.
Section 5.16. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the Lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate
or any other assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.04(b).
Section 5.17. Performance and Enforcement of Certain Obligations.
(a) Promptly following a written request from the Enhancer (in the
case of the Mortgage Loans assigned to Group I) or the Indenture Trustee (with
the written consent of the Enhancer in the case of the Mortgage Loans assigned
to Group I) to do so, the Issuer, in its capacity as owner of the Mortgage
Loans, shall, with the written consent of the Enhancer (in the case of the
Mortgage Loans assigned to Group I), take all such lawful action as the
Indenture Trustee or the Enhancer (in the case of the Mortgage Loans assigned to
Group I) 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 Mortgage Loan
Purchase and Servicing Agreement and the Sale and Servicing
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Agreement, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Mortgage Loan
Purchase and Servicing Agreement, and the Sale and Servicing Agreement, to the
extent and in the manner directed by the Indenture Trustee, as pledgee of the
Mortgage Loans, including the transmission of notices of default on the part of
the Seller or the Master Servicer thereunder and the institution of Proceedings
to compel or secure performance by the Seller or the Master Servicer of each of
their obligations under the Mortgage Loan Purchase and Servicing Agreement and
the Sale and Servicing Agreement.
(b) As to the Group I Notes, if an Event of Default shall have
occurred and be continuing, the Indenture Trustee, as pledgee of the Mortgage
Loans assigned to Group I, subject to the rights of the Enhancer under the Sale
and 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 Notes representing not less than 66 2/3% of the aggregate Note Balance of the
Group I 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 Mortgage Loan Purchase and Servicing Agreement or the Sale
and Servicing Agreement, including the right or power to take any action to
compel or secure performance or observance by the Seller or the Master Servicer,
as the case may be, of each of their respective obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Mortgage Loan Purchase and Servicing Agreement or
the Sale and Servicing Agreement, as the case may be, and any right of the
Issuer to take such action shall not be suspended. In connection therewith, as
determined by the Indenture Trustee, the Issuer shall execute all documents
provided to it by the Indenture Trustee necessary to effect the transfer of the
Mortgage Loans assigned to Group I to the Indenture Trustee.
(c) As to the Group II Notes, if an Event of Default shall have
occurred and be continuing, the Indenture Trustee, as pledgee of the Mortgage
Loans assigned to Group II, may, and at the direction (which direction shall be
in writing or by telephone confirmed in writing promptly thereafter) of the
Holders of Notes representing not less than 66 2/3% of the aggregate Note
Balance of the Senior Group II Notes or the Subordinate Group II 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
Mortgage Loan Purchase and Servicing Agreement or the Sale and Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Seller or the Master Servicer, as the case may
be, of each of their respective obligations to the Issuer thereunder and to give
any consent, request, notice, direction, approval, extension or waiver under the
Mortgage Loan Purchase and Servicing Agreement or the Sale and Servicing
Agreement, as the case may be, and any right of the Issuer to take such action
shall not be suspended. In connection therewith, as determined by the Indenture
Trustee, the Issuer shall execute all documents provided to it by the Indenture
Trustee necessary to effect the transfer of the Mortgage Loans assigned to Group
II 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 shall have occurred and be continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent Person would exercise under the circumstances in the conduct of such
Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee that conform to the
requirements of this Indenture; provided, that the Indenture Trustee
shall examine such certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11 or any direction from
the Enhancer that the Enhancer 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
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believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
(h) For all purposes under this Indenture, the Indenture Trustee
shall not be deemed to have notice or knowledge of any Amortization Event or
Event of Default unless a Responsible Officer has actual knowledge thereof or
unless written notice of any event which is in fact an Amortization Event or an
Event of Default is received by the Indenture Trustee at the Corporate Trust
Office, and such notice references the Notes generally, the Issuer, or this
Indenture.
(i) The Indenture Trustee shall comply with all applicable
information reporting requirements with respect to payments on the Notes under
this Indenture.
Section 6.02. Rights of Indenture Trustee.
(a) The Indenture Trustee may rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Indenture Trustee need not investigate any fact or matter stated in such
document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on any such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers or
perform any duties hereunder either directly or by or through agents, attorneys,
a custodian or a nominee, and the Indenture Trustee shall not be responsible for
any misconduct or negligence on the part of, or for the supervision of, any such
agent, attorney, custodian or nominee appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within its
rights or powers, provided that the Indenture Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Securities and may otherwise deal with the Issuer and its Affiliates with the
same rights that it would have if it were not Indenture Trustee. Any Note
Registrar, co-registrar or co-paying agent may do the same with
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like rights. Notwithstanding the foregoing, the Indenture Trustee must comply
with Sections 6.11 and 6.12.
Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be (a) responsible for and makes no representation as to the validity
or adequacy of this Indenture or the Notes, (b) accountable for the Issuer's use
of the proceeds from the sale of the Notes or (c) responsible for any statement
of the Issuer in the Indenture, in any document issued in connection with the
sale of the Notes or in the Notes, other than the Indenture Trustee's
certificate of authentication.
Section 6.05. Notice of Event of Default. The Indenture Trustee shall
mail to each Noteholder notice of any Event of Default within 90 days promptly
after such Event of Default occurs. Except in the case of an Event of Default
relating to the payment of principal of or interest on any Note, the Indenture
Trustee may withhold such notice to the Noteholders only if and for so long as a
committee of its Responsible Officers in good faith determines that withholding
such notice is in the interests of the Noteholders. If an Event of Default with
respect to the Group I Notes shall occur and be continuing, and if such Event of
Default is known to a Responsible Officer of the Indenture Trustee, then the
Indenture Trustee shall give notice thereof to the Enhancer.
Section 6.06. Reports by Indenture Trustee to Noteholders. The
Indenture Trustee shall deliver to each Noteholder such information in the
possession of the Indenture Trustee as may be required to enable such Noteholder
to prepare its federal and state income tax returns. In addition, upon Issuer
Request, the Indenture Trustee shall promptly furnish information in the
possession of the Indenture Trustee reasonably requested by the Issuer that is
reasonably available to the Indenture Trustee to enable the Issuer to perform
its federal and state income tax reporting obligations.
Section 6.07. Compensation. The Indenture Trustee shall be compensated
and indemnified by the Master Servicer in accordance with Section 6.06 of the
Sale and Servicing Agreement, and all amounts owing to the Indenture Trustee
hereunder and not paid pursuant to Sections 3.17 and 6.06 of the Sale and
Servicing Agreement shall be paid solely as provided in Sections 3.05(a)(x),
3.05(b) and 5.04 (subject to the priorities set forth therein). The Indenture
Trustee's compensation shall not be limited by any law relating to compensation
of a trustee of an express trust. The Issuer shall reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses incurred or made by the
Indenture Trustee in addition to the compensation for its services as provided
in Sections 3.05(a)(x) and 3.05(b). Such expenses shall include costs of
collection and reasonable compensation and expenses, disbursements and advances
of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of an Event of Default specified in
paragraph (d) or (e) of the definition thereof with respect to the Issuer, such
expenses are intended to constitute expenses of administration under Title 11 of
the United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
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Section 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section. The Indenture Trustee may
resign at any time by so notifying the Issuer and the Enhancer. The Enhancer or
the Holders of Notes representing not less than a majority of the aggregate Note
Balance of the Group I Notes, the Senior Group II Notes or the Subordinate Group
II Notes (with the consent of the Enhancer) may remove the Indenture Trustee by
so notifying the Indenture Trustee, and the Enhancer (if given by such
Noteholders), and may appoint a successor Indenture Trustee. The Issuer shall
remove the Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(d) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee with the consent of
the Enhancer, which consent shall not be unreasonably withheld. In addition, the
Indenture Trustee shall resign to avoid being directly or indirectly controlled
by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Enhancer and the Issuer.
Thereupon, the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to the Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of Notes representing not less than
a majority of the aggregate Note Balance may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder (with the consent of the Enhancer) may petition a court of competent
jurisdiction for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.
Section 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into or transfers all or
substantially all its corporate trust business or assets to another corporation
or banking association, the resulting, surviving or transferee without any
further act shall be the successor Indenture Trustee hereunder; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under
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Section 6.11. The Indenture Trustee shall provide each Rating Agency and the
Enhancer with written notice of any such transaction after the Closing Date.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture, any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor Indenture Trustee, and deliver such Notes
so authenticated. In case at such time any of the Notes shall not have been
authenticated, any successor Indenture Trustee may authenticate such Notes
either in the name of any predecessor hereunder or in the name of the successor
Indenture Trustee; and in all such cases, such certificates shall have the full
force that it is anywhere in the Notes or in this Indenture provided that the
certificate of the Indenture Trustee shall have.
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
(a) Notwithstanding any other provision of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at such time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees or separate
trustee or separate trustees, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders and the Enhancer, such title to
the Trust Estate or any part thereof and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.11, and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee, with the consent of the Enhancer,
may at any time accept the resignation of or remove any separate
trustee or co-trustee.
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(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then-separate trustees
and co-trustees, as effectively as if given to each of them. Each instrument
appointing a separate trustee or co-trustee shall refer to this Indenture and to
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Indenture
Trustee or separately, as may be provided therein, subject to all provisions of
this Indenture, including each provision relating to the conduct of, affecting
the liability of or affording protection to the Indenture Trustee. Each such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification. (a) The Indenture Trustee
shall at all times satisfy the requirements of TIA ss.310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it or its
parent shall have a long-term debt rating of A or better by Xxxxx'x. The
Indenture Trustee shall comply with TIA ss.310(b), including the optional
provision permitted by the second sentence of TIA ss.310(b)(9); provided, that
there shall be excluded from the operation of TIA ss.310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA ss.310(b)(1) are met.
(b) Within ninety (90) days after ascertaining the occurrence of an
Event of Default which shall not have been cured or waived, unless authorized by
the TIA or the Commission, the Indenture Trustee shall resign with respect to
the Group I Notes, the Senior Group II Notes, the Class IIM-1 Notes, the IIM-2
Notes and/or the Class IIB-1 Notes in accordance with Section 6.08 of this
Indenture, and the Issuer shall appoint a successor Indenture Trustee
(acceptable to the Enhancer in the case of the Group I Notes) for two or more of
such Classes, as applicable, so that there will be separate Indenture Trustees
for the Group I Notes, the Senior Group II Notes, the Class IIM-1 Notes, the
Class IIM-2 Notes and the Class IIB-1 Notes. In the event the Indenture Trustee
fails to comply with the terms of the preceding sentence, the Indenture Trustee
shall comply with clauses (ii) and (iii) of TIA Section 310(b).
(c) In the case of the appointment hereunder of a successor Indenture
Trustee with respect to any Class of Notes pursuant to this Section 6.11,
Issuer, the retiring Indenture Trustee and the successor Indenture Trustee with
respect to such Class of Notes shall execute and deliver an indenture
supplemental hereto wherein each successor Indenture Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, the successor Indenture
Trustee all the rights, powers, trusts and duties of the retiring Indenture
Trustee with respect to the Notes of the Class to which the appointment of such
successor Indenture Trustee relates, (ii) if the retiring Indenture Trustee is
not retiring with respect to all Classes of Notes, shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the
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retiring Indenture Trustee with respect to the Notes of each Class as to which
the retiring Indenture Trustee is not retiring shall continue to be vested in
the Indenture Trustee and (iii) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Indenture Trustee, it
being understood that nothing herein or in such supplemental indenture shall
constitute such Indenture Trustees co-trustees of the same trust and that each
such Indenture Trustee shall be a trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Indenture Trustee; and upon the removal of the retiring Indenture Trustee
shall become effective to the extent provided herein.
Section 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss.311 (a), excluding any creditor
relationship listed in TIA ss.311 (b). Any Indenture Trustee that has resigned
or been removed shall be subject to TIA ss.311 (a) to the extent indicated
therein.
Section 6.13. Representations and Warranties. The Indenture Trustee
hereby represents and warrants that:
(a) the Indenture Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States, with full power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is presently
conducted;
(b) the Indenture Trustee has the power and authority to execute and
deliver this Indenture and to carry out its terms; and the execution, delivery
and performance of this Indenture have been duly authorized by the Indenture
Trustee by all necessary action;
(c) the consummation of the transactions contemplated by this
Indenture and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the charter or bylaws of the
Indenture Trustee or any agreement or other instrument to which the Indenture
Trustee is a party or by which it may be bound;
(d) to the Indenture Trustee's knowledge, there are no Proceedings or
investigations pending or threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Indenture Trustee or any of its properties: (i) asserting the
invalidity of this Indenture, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Indenture or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Indenture Trustee of its obligations under, or the validity
or enforceability of, this Indenture; and
(e) the Indenture Trustee does not have notice of any adverse claim
(as such terms are used in UCC Section 8-302) with respect to the Mortgage
Loans.
Section 6.14. Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the Trust
Estate in trust for the benefit of the Noteholders and the Enhancer;
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(b) to authenticate and deliver the Notes substantially in the form
of Exhibits X-0, X-0, X-0, X-0 and A-5 hereto in accordance with the terms of
this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
Section 6.15. Conflicting Instructions. If the Indenture Trustee
receives conflicting instructions from the Senior Group II Noteholders and the
Subordinate Group II Noteholders, the instructions of the Senior Group II
Noteholders shall control.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer shall furnish or cause to be furnished to the
Indenture Trustee or the Enhancer, as applicable, (i) not more than five days
after each Record Date, a list, in such form as the Indenture Trustee may
reasonably require, of the names and addresses of the Noteholders as of such
Record Date, and (ii) at such other times as the Indenture Trustee and the
Enhancer may request in writing, within 30 days after receipt by the Issuer of
any such request, a list in similar form and of similar content as of a date not
more than 10 days prior to the time such list is furnished; provided, that for
so long as the Indenture Trustee is the Note Registrar, no such list need be
furnished.
Section 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.01, and the names and addresses of the Noteholders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section upon receipt of a new list so
furnished.
(b) Noteholders may communicate pursuant to TIA ss.312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss.312(c).
Section 7.03. Reports by Issuer.
(a) Within 15 days after each Payment Date, the Indenture Trustee
shall file with the Commission via the Electronic Data Gathering and Retrieval
System (XXXXX), a Form 8-K with a copy of the statement to the Notheholders for
such Payment Date as an exhibit thereto. Prior to January 31, 2003 the Indenture
Trustee shall file a Form 15 Suspension Notification with respect to the Trust
Estate, if applicable. Prior to March 31, 2003, the Indenture Trustee shall file
a Form 10-K, in substance conforming to industry standards, with respect to the
Trust Estate. The Issuer hereby grants to the Indenture Trustee a limited power
of attorney to execute and file
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each such document on behalf of the Issuer. Such power of attorney shall
continue until either the earlier of (i) receipt by the Indenture Trustee from
the Issuer of written termination of such power of attorney and (ii) the
termination of the Issuer. The Issuer agrees to promptly furnish to the
Indenture Trustee, from time to time upon request, such further information,
reports, and financial statements within its control related to this Indenture
and the Mortgage Loans as the Indenture Trustee reasonably deems appropriate to
prepare and file all necessary reports with the Commission. The Indenture
Trustee shall have no responsibility to file any item other that those specified
in this section.
(b) The Issuer shall supply to the Indenture Trustee (and the
Indenture Trustee shall transmit by mail to all Noteholders described in TIA
ss.313(c)) such summaries of any information, documents and reports required to
be filed by the Issuer pursuant to clauses (i) and (ii) of this paragraph and by
rules and regulations prescribed from time to time by the Commission.
(c) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.04. Reports by Indenture Trustee. If required by TIA
ss.313(a), within 60 days after each January 1, commencing with January 1, 2003,
the Indenture Trustee shall mail to each Noteholder as required by TIA ss.313(c)
and to the 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 the Noteholders
shall be filed by the Indenture Trustee with the Commission and each stock
exchange, if any, on which the Offered Notes are listed. The Issuer shall notify
the Indenture Trustee if and when the Offered Notes are listed on any stock
exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02. Reserved.
Section 8.03. Officer's Certificate. The Indenture Trustee shall
receive at least seven days prior written notice when requested by the Issuer to
take any action pursuant to Section
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8.05(a), accompanied by copies of any instruments to be executed; and the
Indenture Trustee shall require, as a condition to such action, an Officer's
Certificate in form and substance satisfactory to the Indenture Trustee stating
the legal effect of any such action, outlining the steps required to complete
the same and concluding that all conditions precedent to the taking of such
action have been satisfied.
Section 8.04. Termination Upon Distribution to Noteholders. This
Indenture and the respective obligations and responsibilities of the Issuer and
the Indenture Trustee created hereby shall terminate upon the distribution to
Noteholders, the Enhancer and the Indenture Trustee of all amounts required to
be distributed pursuant to Article III or Article V. The rights of the Enhancer
shall terminate in accordance with Section 10.10.
Section 8.05. Release of Trust Estate.
(a) Subject to the payment of its fees and expenses, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the Lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in Article VIII shall be bound to ascertain the Indenture Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no
Group I Notes Outstanding and all sums due the Indenture Trustee and the
Enhancer pursuant to this Indenture have been paid, release the portion of the
Trust Estate that secured the Group I Notes from the Lien of this Indenture; and
(ii) there are no Group II Notes Outstanding and all sums due the Indenture
Trustee pursuant to this Indenture have been paid, release the portion of the
Trust Estate that secured the Group II Notes from the Lien of this Indenture;
(c) The Indenture Trustee shall release property from the Lien of
this Indenture pursuant to this Section only upon receipt of an Issuer Request
and, in the case of the Group I Notes only, a letter from the Enhancer stating
that the Enhancer has no objection to such request from the Issuer.
(d) In the case of the Group I Notes only, the Indenture Trustee
shall, at the request of the Issuer or the Depositor, surrender the Policy to
the Enhancer for cancellation, upon final payment of principal of and interest
on the Group I 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.
Without the consent of the Holders of any Notes, but with prior written notice
to each Rating Agency and the prior written consent of the Enhancer, unless an
Enhancer Default shall have occurred and is continuing, the Issuer and the
Indenture Trustee, when authorized by an Issuer Request, at any time and from
time to time, may enter into one or more indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as in force at the
date of the execution thereof), in form satisfactory to the Indenture Trustee,
for any of the following purposes:
(a) to correct or amplify the description of any property at any time
subject to the Lien of this Indenture, or better to assure, convey and confirm
unto the Indenture Trustee any property subject or required to be subjected to
the Lien of this Indenture, or to subject to the Lien of this Indenture
additional property;
(b) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the assumption by any
such successor of the covenants of the Issuer herein and in the Notes contained;
(c) to add to the covenants of the Issuer for the benefit of the
Noteholders or the Enhancer, or to surrender any right or power herein conferred
upon the Issuer;
(d) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(e) to cure any ambiguity or mistake, to correct or supplement any
provision herein or in any supplemental indenture that may be inconsistent with
any other provision herein or in any supplemental indenture;
(f) to make any other provisions with respect to matters or questions
arising under this Indenture or in any supplemental indenture; provided, that
such action shall not materially and adversely affect the interests of the
Noteholders or the Enhancer (as evidenced by an Opinion of Counsel addressed to
the Indenture Trustee and the Enhancer);
(g) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one trustee,
pursuant to the requirements of Article VI; or
(h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter enacted
and to add to this Indenture such other provisions as may be expressly required
by the TIA;
provided, however, that no such supplemental indentures shall be entered into
unless the Indenture Trustee and the Enhancer shall have received (1) an Opinion
of Counsel to the effect
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that entering into such supplemental indenture will not (i) cause the Issuer, or
any portion thereof, to be characterized as an association (or a publicly traded
partnership) taxable as a corporation, a corporation or a taxable mortgage pool
for federal income tax purposes or (ii) have any material adverse tax
consequence to the Noteholders or (2) confirmation from the Rating Agencies that
such Supplemental Indenture will not result in a Rating Event.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
Section 9.02. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, may,
with prior written notice to each Rating Agency and with the consent of the
Enhancer (in the case of the Group I Notes) and the Holders of Notes
representing not less than a majority of the aggregate Note Balance of (i) the
Group I Notes if any Group I Notes are the only Notes affected thereby, (ii) the
Senior Group II Notes if any Senior Group II Notes are the only Notes affected
thereby, (iii) the Subordinate Group II Notes if any Subordinate Group II Notes
are the only Notes affected thereby and (iv) all Notes, if the Group I Notes,
the Senior Group II Notes and the Subordinate Group II Notes, are all affected
thereby, by Act of such Noteholders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provision to, or changing in any manner or eliminating any
of the provisions of, this Indenture or of modifying in any manner the rights of
such Noteholders under this Indenture; provided, that no such supplemental
indenture may, without the consent of the Holder of each Note affected thereby:
(a) change the date of payment of any installment of principal of or
interest on any Note, reduce the principal amount thereof or the interest rate
thereon, change the provisions of this Indenture relating to the application of
collections on or the proceeds of the sale of the Trust Estate to payment of
principal of or interest on the Notes, change any place of payment where, or the
coin or currency in which, any Note or the interest thereon is payable, or
impair the right to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes on or after the
respective due dates thereof;
(b) reduce the percentage of the Note Balances or Percentage Interest
of the Notes, the consent of the Holders of which is required for any such
supplemental indenture or for any waiver of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition
of the term "Outstanding" or modify or alter the exception in the definition of
the term "Holder";
(d) reduce the percentage of the aggregate Note Balance or the
Percentage Interest with respect to which the consent of the Holders of Notes
representing such Note Balance is required to direct the Indenture Trustee to
direct the Issuer to sell or liquidate the Trust Estate pursuant to Section
5.04;
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(e) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional provisions of
this Indenture or the other Basic Documents cannot be modified or waived without
the consent of the Holder of each Note affected thereby;
(f) modify any provision of this Indenture in such a manner as to
affect the calculation of the amount of any payment of interest or principal due
on any Note on any Payment Date (including the calculation of any of the
individual components of such calculation); or
(g) permit the creation of any Lien ranking prior to or on a parity
with the Lien of this Indenture with respect to any part of the Trust Estate or,
except as otherwise permitted or contemplated herein, terminate the Lien of this
Indenture on any property at any time subject hereto or deprive the Holder of
any Note of the security provided by the Lien of this Indenture.
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 all Noteholders, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Noteholders to which such amendment or supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Notwithstanding the foregoing, any failure of the
Indenture Trustee to mail such notice or any defect therein shall not in any way
impair or affect the validity of any such supplemental indenture.
No supplemental indentures may be entered into under this Section 9.02
unless the Indenture Trustee and the Enhancer shall have received an Opinion of
Counsel to the effect that such supplemental indenture will not (i) cause the
Issuer, or any portion thereof, to be characterized as an association (or a
publicly traded partnership) taxable as a corporation, a corporation or a
taxable mortgage pool for federal income tax purposes or (ii) have any material
adverse tax consequence to the Noteholders.
Section 9.03. Execution of Supplemental Indentures. In executing or
permitting the additional trusts created by any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Indenture Trustee shall be entitled to receive, and subject to
Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
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Section 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby; and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Noteholders shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all terms and conditions of
any such supplemental indenture shall be and be deemed to be part of the terms
and conditions of this Indenture for any and all purposes.
Section 9.05. Conformity with Trust Indenture Act. Each amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the TIA as then in effect for so
long as this Indenture shall then be qualified under the TIA.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and, if required by the Indenture Trustee, shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
MISCELLANEOUS
Section 10.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee and to the 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:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
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(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with;
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with; and
(v) if the signer of such certificate or opinion is required to
be Independent, the statement required by the definition of the term
"Independent".
(b) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made as 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 and the Enhancer
an Officer's Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such deposit)
to the Issuer of the Collateral or other property or securities to be so
deposited.
(c) Whenever the Issuer is required to furnish to the Indenture
Trustee and the Enhancer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in paragraph (b)
above, the Issuer shall also deliver to the Indenture Trustee and the Enhancer
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 as the basis of any such withdrawal or release since the commencement of
the then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to paragraph (b) above and this paragraph, is 10% or more of
the aggregate Note Balance, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value thereof to the Issuer
as set forth in the related Officer's Certificate is less than $25,000 or less
than one percent of the aggregate Note Balance.
(d) Whenever any property or securities are to be released from the
Lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee
and, if the property or securities to be released secures the Group I Notes, the
Enhancer an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released and stating that
in the opinion of such person the proposed release will not impair the security
under this Indenture in contravention of the provisions hereof.
(e) Whenever the Issuer is required to furnish to the Indenture
Trustee and the Enhancer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in paragraph
(d) above, the Issuer shall also furnish to the Indenture Trustee and the
Enhancer an Independent Certificate as to the same matters if the fair value of
the property or securities and of all other property, other than property as
contemplated by paragraph
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(f) below or securities released from the Lien of this Indenture since the
commencement of the then-current calendar year, as set forth in the certificates
required by paragraph (d) above and this paragraph equals 10% or more of the
aggregate Note Balance, but such certificate need not be furnished in the case
of any release of property or securities if the fair value thereof as set forth
in the related Officer's Certificate is less than $25,000 or less than one
percent of the aggregate Note Balance.
(f) Notwithstanding any provision of this Indenture, the Issuer may,
without compliance with the requirements of the other provisions of this
Section, (i) collect, sell or otherwise dispose of the Mortgage Loans as and to
the extent permitted or required by the Basic Documents or (ii) make cash
payments out of the Trustee Collection Account as and to the extent permitted or
required by the Basic Documents, so long as the Issuer shall deliver to the
Indenture Trustee and the Enhancer every six months, commencing December 31,
2002, an Officer's Certificate of the Issuer stating that all the dispositions
of Collateral described in clauses (i) or (ii) above that occurred during the
preceding six calendar months were in the ordinary course of the Issuer's
business and that the proceeds thereof were applied in accordance with the Basic
Documents.
Section 10.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Depositor or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Depositor or the Issuer, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such
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application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained
in any such document as provided in Article VI.
Section 10.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by the
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee; and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and, subject to Section 6.01, shall be conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The Note Register shall prove ownership of Notes.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Noteholder shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
Section 10.04. Notices. Notices required to be given hereunder shall be
given in the manner set forth in Section 8.03 of the Sale and Servicing
Agreement.
Section 10.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder's address as it
appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Noteholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given regardless of whether such notice is in fact actually
received.
Where this Indenture provides for notice in any manner, any Person
entitled to receive such notice may waive such notice in writing, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
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In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to each Rating Agency, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of Default.
Section 10.06. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with any other provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA ss.ss.310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded hereby) are a part of and govern this Indenture, whether or
not physically contained herein.
Section 10.07. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 10.08. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes of the Issuer shall bind its successors and
assigns, whether or not so expressed. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
Section 10.09. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Indenture shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Indenture, and shall in no way affect the validity
or enforceability of the other provisions of this Indenture or of the Notes or
the rights of the Noteholders.
Section 10.10. Benefits of Indenture. Except to the extent otherwise
provided in this Indenture, (i) the rights and benefits of the Enhancer in this
Indenture (including Appendix A hereto) or in the Notes relate only to the Group
I Notes and the Mortgage Loans assigned to Group I and (ii) all provisions in
this Indenture (including Appendix A hereto) or in the Notes referring to the
consent or approval of the Enhancer or actions with respect to the Enhancer
shall apply and be implemented only to the extent that such consent, approval or
actions affect or concern the Group I Notes (or the Enhancer's obligations in
respect thereof) or the Mortgage Loans assigned to Group I. Notwithstanding any
provision in this Indenture to the contrary, all rights and benefits of the
Enhancer in this Indenture (including Appendix A hereto) or in the Notes
(including but not limited to consent rights, rights to notices and rights with
respect to opinions) shall terminate upon the later of (a) the repayment in full
of the Group I Notes and the payment to the Enhancer of any unpaid amounts owed
to it under the Insurance Agreement with interest thereon at the Late Payment
Rate as specified in the Insurance Agreement and (b) the termination of all of
the Enhancer's obligations under the Policy.
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Section 10.11. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 10.12. Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT CONSIDERATION OF THE
CHOICE OF LAW PRINCIPLES THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.13. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 10.14. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
Section 10.15. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their respective individual capacities) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity. For
all purposes of this Indenture, in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Articles V, VI and VII of the Trust
Agreement.
Section 10.16. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by its acceptance of a Note, hereby
covenant and agree that they will not at any time institute against the
Depositor or the Issuer, or join in any institution against the Depositor or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation Proceedings, or other Proceedings under any federal or state
bankruptcy or similar law in
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connection with any obligation relating to the Notes, this Indenture or any of
the other Basic Documents.
Section 10.17. Rights to the Enhancer to Exercise Rights of Group I
Noteholders. By accepting its Group I Note, each Group I Noteholder agrees that
unless an Enhancer Default exists and is continuing, the Enhancer shall have the
right to exercise all rights of the Group I Noteholders as specified under the
Basic Document without any further consent of the Group I Noteholders. Any
rights conferred to the Enhancer hereunder shall be suspended and shall run to
the benefit of the Group I Noteholders during any period in which there exists
an Enhancer Default, provided, however, that during an Enhancer Default, the
consent of the Enhancer must be obtained with respect to any amendments that may
materially adversely affect the Enhancer.
Section 10.18. Inspection. The Issuer agrees that, on reasonable prior
written notice, it will permit any representative of the Indenture Trustee or
the Enhancer, during the Issuer's normal business hours, to examine all the
books of account, records, reports and other papers of the Issuer, to make
copies and extracts therefrom, to cause such books to be audited by Independent
certified public accountants, and to discuss the Issuer's affairs, finances and
accounts with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall, and shall cause its representatives to,
hold in confidence all such information except to the extent disclosure may be
required by applicable law (and all reasonable applications for confidential
treatment are unavailing), and except to the extent the Indenture Trustee may
reasonably determine that such disclosure is consistent with its obligations
hereunder.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
XXXXX WHOLE LOAN HOME EQUITY TRUST
2002-A,
as Issuer
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: /s/ XXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Financial Services Officer
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ XXXXX X. XXXXXX
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION hereby accepts the
appointment as Paying Agent pursuant to Section
3.03 hereof and as Note Registrar pursuant
to Section 4.02 hereof.
By: /s/ XXXXX X. XXXXXX
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
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STATE OF _________ )
) SS.:
COUNTY OF ________ )
On this __ day of June, 2002, before me personally appeared _______, to
me known, who being by me duly sworn, did depose and say, that he resides at
_______, that he is the ______of Xxxxx Fargo Bank Minnesota, National
Association, as Indenture Trustee, one of the parties described in and that
executed the above instrument; that he knows the seal of said party; that the
seal affixed to said instrument is the seal of such party; that it was so
affixed by order of said party; and that he signed his name thereto by like
order.
Sworn to and subscribed before me this ____ day of June, 2002,
by _________________.
______________________________________________
Notary Public
Name: ________________________________________
[Notarial Seal] My Commission Expires: _______________________
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EXHIBIT A-1
FORM OF CLASS [[I] [II] A-[ ]] [[M][B]-[--]] NOTE
UNLESS THIS CLASS [[I] [II] A-[ ]] [[M][B]-[--]] NOTE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CLASS [[I] [II] A-[ ]] [[M][B]-[--]] NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS CLASS [[I] [II] A-[ ]] [[M][B]-[--]] NOTE IS
PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS CLASS [[I] [II] A-[ ]] [[M][B]-[--]] NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CLASS [[I] [II] A-[ ]] [[M][B]-[--]] NOTE DOES NOT REPRESENT AN
INTEREST IN OR OBLIGATION OF THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE
TRUSTEE, THE OWNER TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS
EXPRESSLY PROVIDED IN THE INDENTURE OR THE OTHER BASIC DOCUMENTS.
XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A
HOME EQUITY LOAN-BACKED NOTE, SERIES 2002-A
Registered
No. [[I] [II] A-[ ]] [[M][B]-[--]] Percentage Interest: 100%
Note Balance: $
Note Rate: As set forth herein. CUSIP NO.
First Payment Date: July 25, 2002
Legal Final Payment Date: _____________
A-1-1
Xxxxx Whole Loan Home Equity Trust 2002-A, a business trust duly
organized and existing under the laws of the State of Delaware (the "Issuer"),
for value received, hereby promises to pay to Cede & Co. or its registered
assigns, the principal sum of ________ Million Dollars ($ ) payable on each
Payment Date in an amount equal to the Percentage Interest specified above of
the aggregate amount, if any, payable in respect of principal of the Class [[I]
[II] A-[ ]] [[M][B]-[--]] Notes pursuant to Section 3.05 of the Indenture dated
as of May 31, 2002 (the "Indenture"), between the Issuer and Xxxxx Fargo Bank
Minnesota, National Association, as indenture trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Class [[I]
[II] A-[ ]] [[M][B]-[--]] Note shall be due and payable on the ________ ___,
_____ Payment Date to the extent not previously paid on a prior Payment Date.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in Appendix A to the Indenture.
Interest on the Class [[I] [II] A-[ ]] [[M][B]-[--]] Notes will be paid
monthly on each Payment Date at the Note Rate for the related Interest Period.
Interest on this Class [[I] [II] A-[ ]] [[M][B]-[--]] Note will accrue at the
Note Rate for the Class [ ] A-[ ] Notes [[M][B]--[--]]. Principal of and
interest on this Class [[I] [II] A-[ ]] [[M][B]-[--]] Note shall be paid in the
manner specified on the reverse hereof. "Payment Date" means the 25th day of
each month or, if any such day is not a Business Day, the immediately succeeding
Business Day.
If an Event of Default shall have occurred and be continuing, then the
Indenture Trustee, acting at the direction of the Enhancer, or the Holders of
Notes representing not less than a majority of the aggregate Note Balance of the
Group I Notes, the Senior Group II Notes or the Subordinate Group II Notes, with
the written consent of the Enhancer, may declare the Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture.
Principal of and interest on this Class [[I] [II] A-[ ]] [[M][B]-[--]]
Note will be payable in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts.
All payments made by the Issuer with respect to this Class [[I] [II] A-[ ]]
[[M][B]-[--]] Note will generally be applied first to interest due and payable
on this Class [[I] [II] A-[ ]] [[M][B]-[--]] Note as provided above and then to
the unpaid principal of this Class [[I] [II] A-[ ]] [[M][B]-[--]] Note.
Reference is made to the further provisions of this Class [[I] [II] A-[
]] [[M][B]-[--]] Note set forth on the reverse hereof, which shall have the same
effect as though fully set forth on the face of this Class [[I] [II] A-[ ]]
[[M][B]-[--]] Note.
Unless the Indenture Trustee has executed the certificate of
authentication hereon by manual signature, this Class [[I] [II] A-[ ]]
[[M][B]-[--]] Note shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.
To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supercede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.
A-1-2
REVERSE OF CLASS [[I] [II] A-[ ]] [[M][B]-[--]] NOTE
This Class [[I] [II] A-[ ]] [[M][B]-[--]] Note is one of a duly
authorized issue of Class [[I] [II] A-[ ]] [[M][B]-[--]] Notes of the Issuer,
designated as its Home Equity Loan-Backed Notes, Series 2002-A (the "Class [[I]
[II] A-[ ]] [[M][B]-[--]] Notes"), all issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Noteholders. The Class [[I] [II] A-[ ]] [[M][B]-[--]]
Notes are subject to all of the terms of the Indenture.
The Class IIM-1 Notes are subordinate to the Senior Group II Notes, the
Class IIM-2 Notes are subordinate to the Senior Group II Notes and the Class
IIM-1 Notes and the Class IIB-1 Notes are subordinate to the Senior Group II
Notes, the Class IIM-1 Notes and the Class IIM-2 Notes, in each case to the
extent specified in the Indenture.
This Class [[I] [II] A-[ ]] [[M][B]-[--]] Note may be transferred by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended, and thereupon
one or more new Class [[I] [II] A-[ ]] [[M][B]-[--]] Notes in authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class [[I] [II] A-[ ]]
[[M][B]-[--]] Note, but the Note Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of this Class [[I] [II]
A-[ ]] [[M][B]-[--]] Note.
Each Holder or Beneficial Owner of a Class [[I] [II] A-[ ]]
[[M][B]-[--]] Note, by its acceptance of a Class [[I] [II] A-[ ]] [[M][B]-[--]]
Note (or, in the case of a Beneficial Owner of a Class [[I] [II] A-[ ]]
[[M][B]-[--]] Note, a beneficial interest in such Class [[I] [II] A-[ ]]
[[M][B]-[--]] 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 Master Servicer, the Depositor or the Indenture Trustee on the Class [[I]
[II] A-[ ]] [[M][B]-[--]] Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in their respective individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture Trustee or
the Owner Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer, the Owner Trustee or the Indenture Trustee or any
successor or assign of the Indenture Trustee or the Owner Trustee in their
respective individual capacities, except as any such Person may have expressly
agreed, and provided that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
A-1-3
Each Beneficial Owner or Class [[I] [II] A-[ ]] [[M][B]-[--]]
Noteholder, by its acceptance of a Class [[I] [II] A-[ ]] [[M][B]-[--]] Note
(or, in the case of a Beneficial Owner of a Class [[I] [II] A-[ ]] [[M][B]-[--]]
Note, a beneficial interest in such Class [[I] [II] A-[ ]] [[M][B]-[--]] Note)
covenants and agrees by accepting the benefits of the Indenture that such Class
[[I] [II] A-[ ]] [[M][B]-[--]] Noteholder or Beneficial Owner will not at any
time institute against the Depositor, the Master Servicer or the Issuer, or join
in any institution against the Depositor, the Master Servicer or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any federal or state bankruptcy or similar law in connection
with any obligation relating to the Class [[I] [II] A-[ ]] [[M][B]-[--]] Notes,
the Indenture or the other Basic Documents.
Each Beneficial Owner or Class [[I] [II] A-[ ]] [[M][B]-[--]]
Noteholder, by its acceptance of a Class [[I] [II] A-[ ]] [[M][B]-[--]] Note (or
in the case of a Beneficial Owner of a Class [[I] [II] A-[ ]] [[M][B]-[--]]
Note, a beneficial interest in such Class [[I] [II] A-[ ]] [[M][B]-[--]] Note)
represents either (i) that it is not, and is not purchasing the Class [[I] [II]
A-[ ]] [[M][B]-[--]] Note with assets of, an employee benefit plan subject to
Section 406 of ERISA or a plan subject to Section 4975 of the Code or a
governmental plan or church plan that is subject to applicable federal, state or
local law similar to the foregoing provisions of ERISA and/or the Code or (ii)
that a class or individual exemption under Section 406 of ERISA or Section 4975
of the Code is applicable to the acquisition and holding of the Class [[I] [II]
A-[ ]] [[M][B]-[--]] Note by such Beneficial Owner or Noteholder or the
acquisition and holding of the Class [[I] [II] A-[ ]] [[M][B]-[--]] Note by such
Beneficial Owner or Noteholder does not constitute or give rise to a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or other
applicable federal, state or local law, for which no statutory, regulatory or
administrative exemption is available.
The Issuer has entered into the Indenture, and this Class [[I] [II] A-[
]] [[M][B]-[--]] Note is issued with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Class [[I] [II]
A-[ ]] [[M][B]-[--]] Notes will qualify as indebtedness of the Issuer. Each
Class [[I] [II] A-[ ]] [[M][B]-[--]] Noteholder, by its acceptance of a Class
[[I] [II] -[ ]] [[M][B]-[--]] Note (and each Beneficial Owner of a Class [[I]
[II] A-[ ]] [[M][B]-[--]] Note by its acceptance of a beneficial interest in
such Class [[I] [II] A-[ ]] [[M][B]-[--]] Note), agrees to treat the Class [[I]
[II] A-[ ]] [[M][B]-[--]] Notes for federal, state and local income, single
business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Class
[[I] [II] A-[ ]] [[M][B]-[--]] Note, the Issuer, the Enhancer, the Indenture
Trustee and any agent thereof may treat the Person in the name of which this
Class [[I] [II] A-[ ]] [[M][B]-[--]] Note is registered (as of the date of
determination or as of such other date as may be specified in the Indenture) as
the owner hereof for all purposes, whether or not this Class [[I] [II] A-[ ]]
[[M][B]-[--]] Note shall be overdue; and none of the Issuer, the Enhancer, the
Indenture Trustee or any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the Class [[I] [II] A-[ ]]
[[M][B]-[--]] Noteholders under the Indenture at any time by the Issuer and the
Indenture Trustee with prior written notice to each Rating Agency and
A-1-4
with the consent of the Enhancer and the Holders of Notes representing not less
than a majority of the aggregate Note Balance of the Notes affected thereby. The
Indenture also contains provisions permitting the Enhancer (so long as no
Enhancer Default exists) or the Holders of Notes representing a specified
percentage of the aggregate Note Balance with the consent of the Enhancer, on
behalf of all Noteholders, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Class [[I]
[II] A-[ ]] [[M][B]-[--]] Note (or any one or more Predecessor Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class [[I] [II] A-[ ]] [[M][B]-[--]] Note and of any Class [[I] [II] A-[ ]]
[[M][B]-[--]] Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made hereon. The Indenture also permits the Issuer and the Indenture
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of the Noteholders, but with prior written notice
to each Rating Agency and the prior written consent of the Enhancer, unless an
Enhancer Default shall have occurred.
The term "Issuer" as used in this Class [[I] [II] A-[ ]] [[M][B]-[--]]
Note includes any successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee, the
Enhancer and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Class [[I] [II] A-[ ]] [[M][B]-[--]] Note and the Indenture shall
be construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Class
[[I] [II] A-[ ]] [[M][B]-[--]] Note or of the Indenture shall alter or impair
the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Class [[I] [II] A-[ ]] [[M][B]-[--]] Note at
the times, place and rate and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company or Xxxxx Fargo
Bank Minnesota, National Association in their respective individual capacities,
any owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Class [[I] [II] A-[ ]]
[[M][B]-[--]] Note or performance of, or omission to perform, any of the
covenants, obligations or indemnifications contained in the Indenture. The
Holder of this Class [[I] [II] A-[ ]] [[M][B]-[--]] Note, by its acceptance
hereof, agrees that, except as expressly provided in the Basic Documents, in the
case of an Event of Default under the Indenture, such Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement
A-1-5
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class [[I] [II] A-[ ]]
[[M][B]-[--]] Note.
A-1-6
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Class [[I] [II] A-[ ]] [[M][B]-[--]]
Note to be duly executed.
XXXXX WHOLE LOAN HOME EQUITY TRUST
2002-A
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee
By: ____________________________________________
Authorized Signatory
Dated: __, ___________.
A-1-7
CERTIFICATE OF AUTHENTICATION
This is one of the Class [[I] [II] A-[ ]] [[M][B]-[--]] Notes referred
to in the within-mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By: ____________________________________
Authorized Signatory
Dated: ___, ___________.
A-1-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
____________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
________________________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: ___________________________________ _________________________________*/
_________________________________*/
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
X-0-0
XXXXXXX X-0
FORM OF CLASS IIA-IO NOTE
UNLESS THIS CLASS IIA-IO NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CLASS IIA-IO 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.
PRINCIPAL SHALL NOT BE PAYABLE IN RESPECT OF THIS NOTE. INTEREST IS
CALCULATED ON THIS NOTE BASED ON THE NOTIONAL AMOUNT SPECIFIED HEREIN.
THIS CLASS IIA-IO NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE
OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE
INDENTURE OR THE OTHER BASIC DOCUMENTS.
XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A
HOME EQUITY LOAN-BACKED NOTE, SERIES 2002-A
Registered
No. IIA-IO-1 Percentage Interest: 100%
Initial Notional Balance: $[9,879,000]
Note Rate: As set forth herein. CUSIP NO.
First Payment Date: July 25, 2002
Legal Final Payment Date: December 25, 2004
A-2-1
Xxxxx Whole Loan Home Equity Trust 2002-A, a business trust duly
organized and existing under the laws of the State of Delaware (the "Issuer"),
for value received, hereby promises to pay to Cede & Co. or its registered
assigns, an amount equal to the Percentage Interest specified above of the
aggregate amount, if any, payable in respect of the Class IIA-IO Notes pursuant
to Section 3.05 of the Indenture dated as of May 31, 2002 (the "Indenture"),
between the Issuer and Xxxxx Fargo Bank Minnesota, National Association, as
indenture trustee (the "Indenture Trustee"); provided, however, that no amount
in respect of this Class IIA-IO Note shall be payable after the December 2004
Payment Date. Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in Appendix A to the Indenture.
Interest on the Class IIA-IO Notes will be paid monthly on each Payment
Date at the Note Rate times the Class IIA-IO Notional Balance for the related
Interest Period. Interest on the Class IIA-IO Notional Balance of this Class
IIA-IO Note will accrue at the Note Rate for each Payment Date from the most
recent Payment Date on which interest has been paid (in the case of the first
Payment Date, from the Closing Date) to but excluding such Payment Date. The
"Note Rate" for each Interest Period will be 10.000% per annum. Interest will be
computed on the basis of an assumed year of 360 days consisting of twelve 30-day
months. Interest on this Class IIA-IO Note shall be paid in the manner specified
on the reverse hereof. "Payment Date" means the 25th day of each month or, if
any such day is not a Business Day, the immediately succeeding Business Day.
If an Event of Default shall have occurred and be continuing, then the
Indenture Trustee, acting at the direction of the Enhancer or the Holders of
Notes representing not less than a majority of the aggregate Note Balance of the
Group I Notes, the Senior Group II Notes or the Subordinate Group II Notes, with
the written consent of the Enhancer, may declare all Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture.
Interest on this Class IIA-IO Note will be payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Class IIA-IO Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class IIA-IO Note.
Unless the Indenture Trustee has executed the certificate of
authentication hereon by manual signature, this Class IIA-IO Note shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.
To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supercede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.
A-2-2
REVERSE OF CLASS IIA-IO NOTE
This Class IIA-IO Note is one of a duly authorized issue of Class
IIA-IO Notes of the Issuer, designated as its Home Equity Loan-Backed Notes,
Series 2002-A (the "Class IIA-IO Notes"), all issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Noteholders. The Class IIA-IO Notes are
subject to all of the terms of the Indenture.
This Class IIA-IO Note may be transferred by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended, and thereupon one or more new
Class IIA-IO Notes in authorized denominations and in the same aggregate
percentage interest will be issued to the designated transferee or transferees.
No service charge will be charged for any registration of transfer or exchange
of this Class IIA-IO Note, but the Note Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of this Class IIA-IO
Note.
Each Holder or Beneficial Owner of a Class IIA-IO Note, by its
acceptance of a Class IIA-IO Note (or, in the case of a Beneficial Owner of a
Class IIA-IO Note, a beneficial interest in such Class IIA-IO 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 Master Servicer, the
Depositor or the Indenture Trustee on the Class IIA-IO Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in their respective
individual capacities, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or any successor or assign of the Indenture Trustee or the
Owner Trustee in their respective individual capacities, except as any such
Person may have expressly agreed, and provided that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Beneficial Owner or Class IIA-IO Noteholder, by its acceptance of
a Class IIA-IO Note (or, in the case of a Beneficial Owner of a Class IIA-IO
Note, a beneficial interest in such Class IIA-IO Note) covenants and agrees by
accepting the benefits of the Indenture that such Class IIA-IO Noteholder or
Beneficial Owner will not at any time institute against the Depositor, the
Master Servicer or the Issuer, or join in any institution against the Depositor,
the Master Servicer or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any federal or state
bankruptcy or similar law in connection with any obligation relating to the
Class IIA-IO Notes, the Indenture or the other Basic Documents.
A-2-3
Each Beneficial Owner or Class IIA-IO Noteholder, by its acceptance of
a IIA-IO Note (or in the case of a Beneficial Owner of a IIA-IO Note, a
beneficial interest in such IIA-IO Note) represents either (i) that it is not,
and is not purchasing the IIA-IO Note with assets of, an employee benefit plan
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code or
a governmental plan or church plan that is subject to applicable federal, state
or local law similar to the foregoing provisions of ERISA and/or the Code or
(ii) that a class or individual exemption under Section 406 of ERISA or Section
4975 of the Code is applicable to the acquisition and holding of the IIA-IO Note
by such Beneficial Owner or Noteholder or the acquisition and holding of the
IIA-IO Note by such Beneficial Owner or Noteholder does not constitute or give
rise to a prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code or other applicable federal, state or local law, for which no
statutory, regulatory or administrative exemption is available.
The Issuer has entered into the Indenture, and this Class IIA-IO Note
is issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Class IIA-IO Notes will qualify as
indebtedness of the Issuer. Each Class IIA-IO Noteholder, by its acceptance of a
Class IIA-IO Note (and each Beneficial Owner of a Class IIA-IO Note by its
acceptance of a beneficial interest in such Class IIA-IO Note), agrees to treat
the Class IIA-IO Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Class
IIA-IO Note, the Issuer, the Enhancer, the Indenture Trustee and any agent
thereof may treat the Person in the name of which this Class IIA-IO Note is
registered (as of the date of determination or as of such other date as may be
specified in the Indenture) as the owner hereof for all purposes, whether or not
this Class IIA-IO Note shall be overdue; and none of the Issuer, the Enhancer,
the Indenture Trustee or any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the Class IIA-IO Noteholders
under the Indenture at any time by the Issuer and the Indenture Trustee with
prior written notice to each Rating Agency and with the consent of the Enhancer
and the Holders of Notes representing not less than a majority of the aggregate
Note Balance of the Notes affected thereby. The Indenture also contains
provisions permitting the Enhancer (so long as no Enhancer Default exists) or
the Holders of Notes representing a specified percentage of the aggregate Note
Balance with the consent of the Enhancer, on behalf of all Noteholders, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Class IIA-IO Note (or any one or more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future
Holders of this Class IIA-IO Note and of any Class IIA-IO Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made hereon. The Indenture also
permits the Issuer and the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders,
but with prior written notice to each Rating Agency and the prior written
consent of the Enhancer, unless an Enhancer Default shall have occurred.
A-2-4
The term "Issuer" as used in this Class IIA-IO Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee, the
Enhancer and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Class IIA-IO Note and the Indenture shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws.
No reference herein to the Indenture and no provision of this Class
IIA-IO Note or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay interest on this Class
IIA-IO Note at the times, place and rate and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company or Xxxxx Fargo
Bank Minnesota, National Association in their respective individual capacities,
any owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of interest on this Class IIA-IO Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Holder of this Class IIA-IO Note, by its
acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, such Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Class IIA-IO Note.
A-2-5
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Class IIA-IO Note to be duly
executed.
XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee
By:____________________________________________
Authorized Signatory
Dated: ____ __________.
A-2-6
CERTIFICATE OF AUTHENTICATION
This is one of the Class IIA-IO Notes referred to in the within-
mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By:_______________________________________
Authorized Signatory
Dated: ____ __________.
A-2-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
________________________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: ________________________________ ____________________________________*/
____________________________________*/
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
A-2-8
EXHIBIT A-3a
FORM OF VARIABLE FUNDING NOTE
THIS VARIABLE FUNDING NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE
STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 4.02 OF THE INDENTURE REFERRED TO HEREIN.
THE PRINCIPAL OF THIS VARIABLE FUNDING NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS VARIABLE FUNDING NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS VARIABLE FUNDING 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 OTHER
BASIC DOCUMENTS.
XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A
HOME EQUITY LOAN-BACKED VARIABLE FUNDING NOTE, SERIES 2002-A
No. VFN-___
Note Rate: as set forth herein.
Initial Variable Funding Balance: $0
Xxxxx Whole Loan Home Equity Trust 2002-A, a business 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 [Xxxxx Union
Bank and Trust Company] or its registered assigns, the principal amount set
forth on Schedule A attached hereto (or otherwise owing hereunder as determined
pursuant to the Indenture), payable on each Payment Date in an amount equal to
the pro rata portion allocable hereto (based on the Variable Funding Balances of
all Variable Funding Notes immediately prior to such Payment Date) of the
aggregate amount, if any, payable in respect of principal of the Variable
Funding Notes pursuant to Section 3.05 of the indenture dated as of May 31, 2002
(the "Indenture"), between the Issuer and Xxxxx Fargo Bank Minnesota, National
Association, as indenture trustee (the "Indenture Trustee"); provided, however,
that the entire unpaid principal amount of this Variable Funding Note shall be
due and payable on the [February 25, 2012] Payment Date to the extent not
previously paid on a prior
A-3a-1
Payment Date. Capitalized terms used herein that are not otherwise defined shall
have the meaning set forth in Appendix A to the Indenture.
Interest on this Variable Funding Note will be paid monthly on each
Payment Date at the Note Rate for the related Interest Period subject to
limitations that may result in Interest Carry-Forward Amounts (as further
described in the Indenture). Interest on this Variable Funding Note will accrue
for each Payment Date from the most recent Payment Date on which interest has
been paid (in the case of the first Payment Date, from the Closing Date) to but
excluding such Payment Date. Interest will be computed on the basis of the
actual number of days in each Interest Period and 360-day year.
Principal of and interest on this Variable Funding Note will be payable
on the related Payment Date as described in the Indenture. "Payment Date" means
the 25th day of each month or, if any such day is not a Business Day, the
immediately succeeding Business Day.
If an Event of Default shall have occurred and be continuing, then the
Indenture Trustee, acting at the direction of the Enhancer or the Holders of
Notes representing not less than a majority of the aggregate Note Balance of the
Group I Notes, the Senior Group II Notes or the Subordinate Group II Notes, with
the written consent of the Enhancer, may declare all Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Variable Funding Notes shall be made pro rata to the
Holders of Variable Funding Notes entitled thereto.
Payments of interest on this Variable Funding Note due and payable on
each Payment Date, together with the installment of principal, if any, to the
extent not in full payment of this Variable Funding Note, shall be made by check
mailed to the Person whose name appears as the Registered Holder of this
Variable Funding Note (or one or more Predecessor Notes) on the Note Register as
of the close of business on each Record Date. Any reduction in the principal
amount of this Variable Funding Note (or any one or more Predecessor Notes)
effected by any payments made on any Payment Date shall be binding upon all
future Holders of this Variable Funding Note and of any Variable Funding Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Variable Funding Note on a Payment Date, then the
Indenture Trustee, in the name of and on behalf of the Issuer, will notify the
Person who was the Registered Holder hereof as of the Record Date preceding such
Payment Date by notice mailed or transmitted by facsimile prior to such Payment
Date and the amount then due and payable shall be payable only upon presentation
and surrender of this Variable Funding Note at the address specified in such
notice of final payment.
Principal of and interest on this Variable Funding Note will be payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. All payments
made by the Issuer with respect to this Variable Funding Note will generally be
applied first to interest due and payable on this Variable Funding Note and then
to the unpaid principal of this Variable Funding Note.
A-3a-2
Reference is made to the further provisions of this Variable Funding
Note set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Variable Funding Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Variable Funding Note shall not
be entitled to any benefit under the Indenture, or be valid or obligatory for
any purpose.
To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supercede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.
A-3a-3
[REVERSE OF VARIABLE FUNDING NOTE]
This Variable Funding Note is one of a duly authorized issue of
Variable Funding Notes of the Issuer, designated as its Home Equity Loan-Backed
Variable Funding Notes, Series 2002-A (the "Variable Funding 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 Variable Funding Notes. The Variable Funding Notes are subject to all terms
of the Indenture.
The Variable Funding Notes and the Offered Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Variable Funding Note may be registered on
the Note Register upon surrender of this Variable Funding Note for registration
of transfer at the Corporate Trust Office of the Indenture Trustee, duly
endorsed by, and 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 Variable Funding
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 Variable
Funding 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 Variable Funding Note.
Each Holder of a Variable Funding Note, by its acceptance of a Variable
Funding 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
Variable Funding 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 of a Variable Funding Note, by its acceptance of a Variable
Funding Note, covenants and agrees by accepting the benefits of the Indenture
that such Holder will not at any time institute against the Depositor, the
Seller, the Master Servicer or the Issuer, or join in any
A-3a-4
institution against the Depositor, the Seller, the Master Servicer or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any federal or state bankruptcy or similar law in connection
with any obligations relating to the Variable Funding Notes, the Indenture or
the other Basic Documents.
Each Beneficial Owner or Variable Funding Noteholder, by its acceptance
of a Variable Funding Note (or in the case of a Beneficial Owner of a Variable
Funding Note, a beneficial interest in such Variable Funding Note) represents
either (i) that it is not, and is not purchasing the Variable Funding Note with
assets of, an employee benefit plan subject to Section 406 of ERISA or a plan
subject to Section 4975 of the Code or a governmental plan or church plan that
is subject to applicable federal, state or local law similar to the foregoing
provisions of ERISA and/or the Code or (ii) that a class or individual exemption
under Section 406 of ERISA or Section 4975 of the Code is applicable to the
acquisition and holding of the Variable Funding Note by such Beneficial Owner or
Noteholder or the acquisition and holding of the Variable Funding Note by such
Beneficial Owner or Noteholder does not constitute or give rise to a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or other
applicable federal, state or local law, for which no statutory, regulatory or
administrative exemption is available.
The Issuer has entered into the Indenture and this Variable Funding
Note is issued with the intention that, for federal, state and local income,
single business and franchise tax purposes, the Variable Funding Notes will
qualify as indebtedness of the Issuer. Each Holder of a Variable Funding Note,
by its acceptance of a Variable Funding Note, agrees to treat the Variable
Funding 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
Variable Funding Note, the Issuer, the Enhancer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in the name of
which this Variable Funding Note (as of the day of determination or as of such
other date as may be specified in the Indenture) is registered as the owner
hereof for all purposes, whether or not this Variable Funding Note be overdue,
and none of the Issuer, the Enhancer, 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 Variable
Funding Notes under the Indenture at any time by the Issuer and the Indenture
Trustee with the consent of the Enhancer and the Holders of Notes representing
not less than a majority of the aggregate Note Balance of the Notes affected
thereby, and with prior written notice to each Rating Agency. The Indenture also
contains provisions permitting the Enhancer (so long as no Enhancer Default
exists) or the Holders of Notes representing specified aggregate Note Balances
with the consent of the Enhancer, on behalf of all Noteholders, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Variable Funding Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Variable Funding Note and of any Variable Funding Note
issued upon the registration of transfer hereof or in
A-3a-5
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Variable Funding Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of the Noteholders but with prior written
notice to each Rating Agency and the prior written consent of the Enhancer,
unless an Enhancer Default shall have occurred.
The term "Issuer" as used in this Variable Funding Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee, the
Enhancer and the Holders of Variable Funding Notes under the Indenture.
The Variable Funding Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Variable Funding Note and the Indenture shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws.
No reference herein to the Indenture and no provision of this Variable
Funding 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 Variable Funding Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company or Xxxxx Fargo
Bank Minnesota, National Association in their respective individual capacities,
any owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Variable Funding Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Variable Funding
Note by its acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, such
Holder shall have no claim against any of the foregoing for any deficiency, loss
or claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the Issuer
for any and all liabilities, obligations and undertakings contained in the
Indenture or in this Variable Funding Note.
A-3a-6
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Variable Funding Note to be duly
executed.
XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
By:____________________________________
Authorized Signatory
Dated:
A-3a-7
CERTIFICATE OF AUTHENTICATION
This is one of the Variable Funding Notes referred to in the within-
mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By: ____________________________________
Authorized Signatory
Dated:
A-3a-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
______________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
________________________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: ________________________________ ____________________________________*/
____________________________________*/
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
A-3a-9
SCHEDULE A
HOME EQUITY LOAN-BACKED VARIABLE FUNDING NOTES
=====================================================================================================
AUTHORIZED
VARIABLE FUNDING SIGNATURE OF
BALANCE INDENTURE
DATE PERCENTAGE INTEREST PRINCIPAL PAYMENT OUTSTANDING TRUSTEE
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Schedule X-0
XXXXXXX X-0x
FORM OF CAPPED VARIABLE FUNDING NOTE
THIS CAPPED VARIABLE FUNDING NOTE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED
UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE INDENTURE
REFERRED TO HEREIN.
THE PRINCIPAL OF THIS CAPPED VARIABLE FUNDING NOTE IS PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS CAPPED VARIABLE FUNDING NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CAPPED VARIABLE FUNDING 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 OTHER
BASIC DOCUMENTS.
XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A
HOME EQUITY LOAN-BACKED CAPPED VARIABLE FUNDING NOTE, SERIES 2002-A
No. VFN Capped -___
Note Rate: as set forth herein.
Initial Principal Balance: ___
Xxxxx Whole Loan Home Equity Trust 2002-A, a business 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 Xxxxx Union
Bank and Trust Company or its registered assigns, the principal amount set forth
on Schedule A attached hereto (or otherwise owing hereunder as determined
pursuant to the Indenture), payable on each Payment Date in an amount equal to
the pro rata portion allocable hereto (based on the Variable Funding Balances of
all Variable Funding Notes immediately prior to such Payment Date) of the
aggregate amount, if any, payable in respect of principal of the Variable
Funding Notes pursuant to Section 3.05 of the indenture dated as of May 31, 2002
(the "Indenture"), between the Issuer and Xxxxx Fargo Bank Minnesota, National
Association, as indenture trustee (the "Indenture Trustee"); provided, however,
that the entire unpaid principal amount of this Capped Variable Funding Note
shall be due and payable on the [February 25, 2012] Payment Date to the extent
not previously paid on a
A-3b-1
prior Payment Date. Capitalized terms used herein that are not otherwise defined
shall have the meaning set forth in Appendix A to the Indenture.
Interest on this Capped Variable Funding Note will be paid monthly on
each Payment Date at the Note Rate for the related Interest Period subject to
limitations that may result in Interest Carry-Forward Amounts (as further
described in the Indenture). Interest on this Capped Variable Funding Note will
accrue for each Payment Date from the most recent Payment Date on which interest
has been paid (in the case of the first Payment Date, from the Closing Date) to
but excluding such Payment Date. Interest will be computed on the basis of the
actual number of days in each Interest Period and 360-day year.
Principal of and interest on this Capped Variable Funding Note will be
payable on the related Payment Date as described in the Indenture. "Payment
Date" means the 25th day of each month or, if any such day is not a Business
Day, the immediately succeeding Business Day.
If an Event of Default shall have occurred and be continuing, then the
Indenture Trustee, acting at the direction of the Enhancer or the Holders of
Notes representing not less than a majority of the aggregate Note Balance of the
Group I Notes, the Senior Group II Notes or the Subordinate Group II Notes, with
the written consent of the Enhancer, may declare all Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Variable Funding Notes shall be made pro rata to the
Holders of Variable Funding Notes entitled thereto.
Payments of interest on this Capped Variable Funding Note due and
payable on each Payment Date, together with the installment of principal, if
any, to the extent not in full payment of this Capped Variable Funding Note,
shall be made by check mailed to the Person whose name appears as the Registered
Holder of this Capped Variable Funding Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date. Any
reduction in the principal amount of this Capped Variable Funding Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Capped Variable Funding Note
and of any Variable Funding Note issued upon the registration of transfer hereof
or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds
are expected to be available, as provided in the Indenture, for payment in full
of the then remaining unpaid principal amount of this Capped Variable Funding
Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf
of the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date preceding such Payment Date by notice mailed or transmitted by
facsimile prior to such Payment Date and the amount then due and payable shall
be payable only upon presentation and surrender of this Capped Variable Funding
Note at the address specified in such notice of final payment.
Principal of and interest on this Capped Variable Funding Note will be
payable in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. All payments
made by the Issuer with respect to this Capped Variable Funding Note will
generally be applied first to interest due and payable on this Capped Variable
Funding Note and then to the unpaid principal of this Capped Variable Funding
Note.
A-3b-2
Reference is made to the further provisions of this Capped Variable
Funding Note set forth on the reverse hereof, which shall have the same effect
as though fully set forth on the face of this Capped Variable Funding Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Capped Variable Funding Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supercede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.
A-3b-3
REVERSE OF CAPPED VARIABLE FUNDING NOTE
This Capped Variable Funding Note is one of a duly authorized issue of
Variable Funding Notes of the Issuer, designated as its Home Equity Loan-Backed
Variable Funding Notes, Series 2002-A (the "Variable Funding 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 Variable Funding Notes. The Variable Funding Notes are subject to all terms
of the Indenture.
The Variable Funding Notes and the Offered Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Capped Variable Funding Note may be
registered on the Note Register upon surrender of this Capped Variable Funding
Note for registration of transfer at the Corporate Trust Office of the Indenture
Trustee, duly endorsed by, and 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 Variable Funding
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 Capped
Variable Funding 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 Capped Variable
Funding Note.
Each Holder of a Variable Funding Note, by its acceptance of a Variable
Funding 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
Variable Funding 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 of a Variable Funding Note, by its acceptance of a Variable
Funding Note, covenants and agrees by accepting the benefits of the Indenture
that such Holder will not at any
A-3b-4
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 federal or state bankruptcy or
similar law in connection with any obligations relating to the Capped Variable
Funding Notes, the Indenture or the other Basic Documents.
Each Beneficial Owner or Variable Funding Noteholder, by its acceptance
of a Variable Funding Note (or in the case of a Beneficial Owner of a Variable
Funding Note, a beneficial interest in such Variable Funding Note) represents
either (i) that it is not, and is not purchasing the Variable Funding Note with
assets of, an employee benefit plan subject to Section 406 of ERISA or a plan
subject to Section 4975 of the Code or a governmental plan or church plan that
is subject to applicable federal, state or local law similar to the foregoing
provisions of ERISA and/or the Code or (ii) that a class or individual exemption
under Section 406 of ERISA or Section 4975 of the Code is applicable to the
acquisition and holding of the Variable Funding Note by such Beneficial Owner or
Noteholder or the acquisition and holding of the Variable Funding Note by such
Beneficial Owner or Noteholder does not constitute or give rise to a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or other
applicable federal, state or local law, for which no statutory, regulatory or
administrative exemption is available.
The Issuer has entered into the Indenture and this Capped Variable
Funding Note is issued with the intention that, for federal, state and local
income, single business and franchise tax purposes, the Variable Funding Notes
will qualify as indebtedness of the Issuer. Each Holder of a Variable Funding
Note, by its acceptance of a Variable Funding Note, agrees to treat the Variable
Funding 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
Capped Variable Funding Note, the Issuer, the Enhancer, the Indenture Trustee
and any agent of the Issuer or the Indenture Trustee may treat the Person in the
name of which this Capped Variable Funding Note (as of the day of determination
or as of such other date as may be specified in the Indenture) is registered as
the owner hereof for all purposes, whether or not this Capped Variable Funding
Note be overdue, and none of the Issuer, the Enhancer, 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 Variable
Funding Notes under the Indenture at any time by the Issuer and the Indenture
Trustee with the consent of the Enhancer and the Holders of Notes representing
not less than a majority of the aggregate Note Balance of the Notes affected
thereby, and with prior written notice to each Rating Agency. The Indenture also
contains provisions permitting the Enhancer (so long as no Enhancer Default
exists) or the Holders of Notes representing specified aggregate Note Balances
with the consent of the Enhancer, on behalf of all Noteholders, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Capped Variable Funding Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Capped Variable
A-3b-5
Funding Note and of any Variable Funding 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 Capped Variable Funding Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders but
with prior written notice to each Rating Agency and the prior written consent of
the Enhancer, unless an Enhancer Default shall have occurred.
The term "Issuer" as used in this Capped Variable Funding Note includes
any successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee, the
Enhancer and the Holders of Variable Funding Notes under the Indenture.
The Variable Funding Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Capped Variable Funding Note and the Indenture shall be construed
in accordance with the laws of the State of New York, and the obligations,
rights and remedies of the parties hereunder and thereunder shall be determined
in accordance with such laws. No reference herein to the Indenture and no
provision of this Capped Variable Funding 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 Capped Variable Funding Note at the
times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company or Xxxxx Fargo
Bank Minnesota, National Association in their respective individual capacities,
any owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Capped Variable Funding
Note or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Holder of this
Capped Variable Funding Note by its acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, such Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Capped Variable Funding Note.
A-3b-6
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Capped Variable Funding Note to be
duly executed.
XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee
By:_____________________________________________
Authorized Signatory
Dated:
A-3b-7
CERTIFICATE OF AUTHENTICATION
This is one of the Capped Variable Funding Notes referred to in the
within-mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By: ____________________________________
Authorized Signatory
Dated:
A-3b-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
________________________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: ________________________________ ____________________________________*/
____________________________________*/
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
A-3b-9
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
________________________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: ________________________________ ____________________________________*/
____________________________________*/
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
X-0x-00
XXXXXXX X-0
FORM OF CLASS [X-[ ]-[--]] NOTE
THIS CLASS [X-[ ]-[--]] NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO
SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT
FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE INDENTURE
REFERRED TO HEREIN.
THIS CLASS [X-[ ]-[--]] NOTE DOES NOT REPRESENT AN INTEREST IN OR
OBLIGATION OF THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE TRUSTEE, THE
OWNER TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY
PROVIDED IN THE INDENTURE OR THE OTHER BASIC DOCUMENTS.
THIS NOTE IS NOT TRANSFERABLE EXCEPT UPON SATISFACTION OF THE
CONDITIONS SET FORTH IN SECTION 4.02 OF THE INDENTURE. NEITHER THIS NOTE NOR ANY
INTEREST THEREIN MAY BE TRANSFERRED SEPARATELY FROM THE CLASS X[-1][2-A] AND
CLASS X2-[A][B] NOTES AND ALL OF THE INTERESTS THEREIN.
THE TRANSFEREE OF THIS NOTE WILL BE SUBJECT TO FEDERAL WITHHOLDING TAX
UNLESS THE NOTE REGISTRAR SHALL HAVE RECEIVED A CERTIFICATE OF NON-FOREIGN
STATUS CERTIFYING AS TO THE TRANSFEREE'S STATUS AS A UNITED STATES PERSON UNDER
UNITED STATES TAX LAW.
THIS NOTE IS NOT TRANSFERABLE TO AN EMPLOYEE BENEFIT PLAN (AS DEFINED
IN SECTION 3(3) OF ERISA) OR A PLAN (AS DEFINED IN SECTION 4975 OF THE CODE).
THE CLASS [X-[ ]-[--]] NOTE IS NOT ENTITLED TO DISTRIBUTIONS OF [[INTEREST]
[PRINCIPAL]].
XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A
HOME EQUITY LOAN-BACKED SUBORDINATE NOTE, SERIES 2002-A
Registered
No. [X-[ ]-[--]] Percentage Interest: 100%
Note Balance: $
A-4-1
Note Rate: As set forth herein. CUSIP NO.
First Payment Date: July 25, 2002
Legal Final Payment Date: _____________
A-4-2
Xxxxx Whole Loan Home Equity Trust 2002-A, a business trust duly
organized and existing under the laws of the State of Delaware (the "Issuer"),
for value received, hereby promises to pay to ____________ or its registered
assigns, [the amount, if any, payable to the Class [X-[ ]-[--]] Note on each
Payment Date determined in accordance with Section 3.26] [the principal sum of
________ Million Dollars ($ ) payable on each Payment Date in an amount equal to
the Percentage Interest specified above of the aggregate amount, if any, payable
in respect of principal of the Class [X-[ ]-[--]] Notes pursuant to Section
3.05] of the Indenture dated as of May 31, 2002 (the "Indenture"), between the
Issuer and Xxxxx Fargo Bank Minnesota, National Association, as indenture
trustee (the "Indenture Trustee"); provided, however, that the entire unpaid
principal amount of this Class [X-[ ]-[--]] Note shall be due and payable on the
________ ___, _____ Payment Date to the extent not previously paid on a prior
Payment Date. Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in Appendix A to the Indenture.
[Principal of] [Payments on] this Class [X-[ ]-[--]] Note shall be paid
in the manner specified on the reverse hereof. "Payment Date" means the 25th day
of each month or, if any such day is not a Business Day, the immediately
succeeding Business Day.
If an Event of Default shall have occurred and be continuing with
respect to the Group I Notes, then the Indenture Trustee, acting at the
direction of the Enhancer, or the Holders of Group I Notes representing not less
than a majority of the aggregate Note Balance of the Group I Notes (with the
written consent of the Enhancer, may declare the Group I Notes to be immediately
due and payable in the manner provided in Section 5.02 of the Indenture.
If an Event of Default shall have occurred and be continuing, then the
Indenture Trustee, acting at the direction of the Enhancer or the Holders of
Notes representing not less than a majority of the aggregate Note Balance of the
Group I Notes, the Senior Group II Notes or the Subordinate Group II Notes, with
the written consent of the Enhancer, may declare all Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture.
[Principal of] [Payments on] this Class [X-[ ]-[--]] Note will be
payable in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
Reference is made to the further provisions of this Class [X-[ ]-[--]]
Note set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class [X-[ ]-[--]] Note.
Unless the Indenture Trustee has executed the certificate of
authentication hereon by manual signature, this Class [X-[ ]-[--]] Note shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supercede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.
A-4-3
REVERSE OF CLASS [X-[ ]-[--]] NOTE
This Class [X-[ ]-[--]] Note is one of a duly authorized issue of Class
[X-[ ]-[--]] Notes of the Issuer, designated as its Home Equity Loan-Backed
Notes, Series 2002-A (the "Class [X-[ ]-[--]] Notes"), all issued under the
Indenture, to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Noteholders. The Class
[X-[ ]-[--]] Notes are subject to all of the terms of the Indenture.
The Class IIM-1 Notes are subordinate to the Senior Group II Notes, the
Class IIM-2 Notes are subordinate to the Senior Group II Notes and the Class
IIM-1 Notes and the Class IIB-1 Notes are subordinate to the Senior Group II
Notes, the Class IIM-1 Notes and the Class IIM-2 Notes, in each case to the
extent specified in the Indenture.
This Class [X-[ ]-[--]] Note may be transferred by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended, and thereupon one or more new
Class [X-[ ]-[--]] Notes in authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No
service charge will be charged for any registration of transfer or exchange of
this Class [X-[ ]-[--]] Note, but the Note Registrar may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of this Class [X-[
]-[--]] Note.
Each Holder or Beneficial Owner of a Class [X-[ ]-[--]] Note, by its
acceptance of a Class [X-[ ]-[--]] Note (or, in the case of a Beneficial Owner
of a Class [X-[ ]-[--]] Note, a beneficial interest in such Class [X-[ ]-[--]]
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 Master Servicer, the Depositor or the Indenture Trustee on the Class [X-[
]-[--]] Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in their respective individual capacities, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Indenture Trustee or any successor or assign of
the Indenture Trustee or the Owner Trustee in their respective individual
capacities, except as any such Person may have expressly agreed, and provided
that any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each Beneficial Owner or Class [X-[ ]-[--]] Noteholder, by its
acceptance of a Class [X-[ ]-[--]] Note (or, in the case of a Beneficial Owner
of a Class [X-[ ]-[--]] Note, a beneficial interest in such Class [X-[ ]-[--]]
Note) covenants and agrees by accepting the benefits of the
A-4-4
Indenture that such Class [X-[ ]-[--]] Noteholder or Beneficial Owner will not
at any time institute against the Depositor, the Master Servicer or the Issuer,
or join in any institution against the Depositor, the Master Servicer or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any federal or state bankruptcy or similar law in
connection with any obligation relating to the Class [X-[ ]-[--]] Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture, and this Class [X-[ ] - [ ]
Note is issued, with the intention that, for federal, state and local, income,
single business and franchise tax purposes, the Class [X- [ ] - [ ]] Notes will
qualify as equity of the Issuer. Each Class [X - [ ] - [ ]] Noteholder, by its
acceptance of a Class [X - [ ] - [ ]] Note (and each Beneficial Owner of a Class
[X - [ ] - [ ]] Note by its acceptance of a beneficial interest in such Class [X
- [ ] - [ ]] Note), agrees to (i) treat the Class [X - [ ] - [ ] Notes for
federal, state and local income, single business and franchise tax purposes as
equity of the Issuer and (ii) the allocations of tax items determined in
accordance with the provisions of Section 4.09(c) of the Indenture and Section
3.12 of the Trust Agreement.
Prior to the due presentment for registration of transfer of this Class
[X-[ ]-[--]] Note, the Issuer, the Enhancer, the Indenture Trustee and any agent
thereof may treat the Person in the name of which this Class [X-[ ]-[--]] Note
is registered (as of the date of determination or as of such other date as may
be specified in the Indenture) as the owner hereof for all purposes, whether or
not this Class [X-[ ]-[--]] Note shall be overdue; and none of the Issuer, the
Enhancer, the Indenture Trustee or any such agent shall be affected by notice to
the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the Class [X-[ ]-[--]]
Noteholders under the Indenture at any time by the Issuer and the Indenture
Trustee with prior written notice to each Rating Agency and with the consent of
the Enhancer and the Holders of Notes representing not less than a majority of
the aggregate Note Balance of the Notes affected thereby. The Indenture also
contains provisions permitting the Enhancer (so long as no Enhancer Default
exists) or the Holders of Notes representing a specified percentage of the
aggregate Note Balance with the consent of the Enhancer, on behalf of all
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Class [X-[ ]-[--]] Note (or any
one or more Predecessor Notes) shall be conclusive and binding upon such Holder
and upon all future Holders of this Class [X-[ ]-[--]] Note and of any Class
[X-[ ]-[--]] Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made hereon. The Indenture also permits the Issuer and the Indenture Trustee to
amend or waive certain terms and conditions set forth in the Indenture without
the consent of the Noteholders, but with prior written notice to each Rating
Agency and the prior written consent of the Enhancer, unless an Enhancer Default
shall have occurred.
The term "Issuer" as used in this Class [X-[ ]-[--]] Note includes any
successor to the Issuer under the Indenture.
A-4-5
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee, the
Enhancer and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Class [X-[ ]-[--]] Note and the Indenture shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws.
No reference herein to the Indenture and no provision of this Class
[X-[ ]-[--]] Note or of the Indenture shall alter or impair the obligation of
the Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Class [X-[ ]-[--]] Note at the times, place and rate and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company or Xxxxx Fargo
Bank Minnesota, National Association in their respective individual capacities,
any owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Class [X-[ ]-[--]] Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Class [X-[
]-[--]] Note, by its acceptance hereof, agrees that, except as expressly
provided in the Basic Documents, in the case of an Event of Default under the
Indenture, such Holder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Class [X-[ ]-[--]] Note.
A-4-6
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Class [X-[ ]-[--]] Note to be duly
executed.
XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee
By: __________________________________________
Authorized Signatory
Dated: ___, ___________.
A-4-7
CERTIFICATE OF AUTHENTICATION
This is one of the Class [X-[ ]-[--]] Notes referred to in the within-
mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By: _____________________________________
Authorized Signatory
Dated: ___, ___________.
A-4-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_____________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
________________________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: ________________________________ ____________________________________*/
____________________________________*/
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
X-0-0
XXXXXXX X-0
FORM OF CLASS IIX-IO NOTE
THIS CLASS IIX-IO NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE INDENTURE REFERRED TO
HEREIN.
PRINCIPAL SHALL NOT BE PAYABLE IN RESPECT OF THIS NOTE. INTEREST IS
CALCULATED ON THIS NOTE BASED ON THE NOTIONAL AMOUNT SPECIFIED HEREIN.
THIS CLASS IIX-IO NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE
OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE
INDENTURE OR THE OTHER BASIC DOCUMENTS.
THIS NOTE IS NOT TRANSFERABLE TO AN EMPLOYEE BENEFIT PLAN (AS DEFINED
IN SECTION 3(3) OF ERISA) OR A PLAN (AS DEFINED IN SECTION 4975 OF THE CODE).
XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A
HOME EQUITY LOAN-BACKED NOTE, SERIES 2002-A
Registered
No. IIX-IO-1 Percentage Interest: 100%
Initial Notional Balance: $[__,___,000]
Note Rate: As set forth herein. CUSIP NO.
First Payment Date: July 25, 2002
Legal Final Payment Date: October 25, 2004
A-5-1
Xxxxx Whole Loan Home Equity Trust 2002-A, a business trust duly
organized and existing under the laws of the State of Delaware (the "Issuer"),
for value received, hereby promises to pay to ________ or its registered
assigns, an amount equal to the Percentage Interest specified above of the
aggregate amount, if any, payable in respect of the Class IIX-IO Notes pursuant
to Section 3.05 of the Indenture dated as of May 31, 2002 (the "Indenture"),
between the Issuer and Xxxxx Fargo Bank Minnesota, National Association, as
indenture trustee (the "Indenture Trustee"). Capitalized terms used herein that
are not otherwise defined shall have the meanings ascribed thereto in Appendix A
to the Indenture.
Interest on the Class IIX-IO Notes will be paid monthly on each Payment
Date at the Note Rate times the Class IIX-IO Notional Balance for the related
Interest Period. Interest on this Class IIX-IO Note shall be paid in the manner
specified on the reverse hereof. "Payment Date" means the 25th day of each month
or, if any such day is not a Business Day, the immediately succeeding Business
Day.
If an Event of Default shall have occurred and be continuing, then the
Indenture Trustee, acting at the direction of the Enhancer or the Holders of
Notes representing not less than a majority of the aggregate Note Balance of the
Group I Notes, the Senior Group II Notes or the Subordinate Group II Notes, with
the written consent of the Enhancer, may declare all Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture.
Interest on this Class IIX-IO Note will be payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Class IIX-IO Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class IIX-IO Note.
Unless the Indenture Trustee has executed the certificate of
authentication hereon by manual signature, this Class IIX-IO Note shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.
To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supercede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.
A-5-2
REVERSE OF CLASS IIX-IO NOTE
This Class IIX-IO Note is one of a duly authorized issue of Class
IIX-IO Notes of the Issuer, designated as its Home Equity Loan-Backed Notes,
Series 2002-A (the "Class IIX-IO Notes"), all issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Noteholders. The Class IIX-IO Notes are
subject to all of the terms of the Indenture.
This Class IIX-IO Note may be transferred by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended, and thereupon one or more new
Class IIX-IO Notes in authorized denominations and in the same aggregate
percentage interest will be issued to the designated transferee or transferees.
No service charge will be charged for any registration of transfer or exchange
of this Class IIX-IO Note, but the Note Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of this Class IIX-IO
Note.
Each Holder or Beneficial Owner of a Class IIX-IO Note, by its
acceptance of a Class IIX-IO Note (or, in the case of a Beneficial Owner of a
Class IIX-IO Note, a beneficial interest in such Class IIX-IO 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 Master Servicer, the
Depositor or the Indenture Trustee on the Class IIX-IO Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in their respective
individual capacities, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or any successor or assign of the Indenture Trustee or the
Owner Trustee in their respective individual capacities, except as any such
Person may have expressly agreed, and provided that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Beneficial Owner or Class IIX-IO Noteholder, by its acceptance of
a Class IIX-IO Note (or, in the case of a Beneficial Owner of a Class IIX-IO
Note, a beneficial interest in such Class IIX-IO Note) covenants and agrees by
accepting the benefits of the Indenture that such Class IIX-IO Noteholder or
Beneficial Owner will not at any time institute against the Depositor, the
Master Servicer or the Issuer, or join in any institution against the Depositor,
the Master Servicer or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any federal or state
bankruptcy or similar law in connection with any obligation relating to the
Class IIX-IO Notes, the Indenture or the other Basic Documents.
A-5-3
The Issuer has entered into the Indenture, and this Class IIX-IO Note
is issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Class IIX-IO Notes will qualify as
indebtedness of the Issuer. Each Class IIX-IO Noteholder, by its acceptance of a
Class IIX-IO Note (and each Beneficial Owner of a Class IIX-IO Note by its
acceptance of a beneficial interest in such Class IIX-IO Note), agrees to treat
the Class IIX-IO Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Class
IIX-IO Note, the Issuer, the Enhancer, the Indenture Trustee and any agent
thereof may treat the Person in the name of which this Class IIX-IO Note is
registered (as of the date of determination or as of such other date as may be
specified in the Indenture) as the owner hereof for all purposes, whether or not
this Class IIX-IO Note shall be overdue; and none of the Issuer, the Enhancer,
the Indenture Trustee or any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the Class IIX-IO Noteholders
under the Indenture at any time by the Issuer and the Indenture Trustee with
prior written notice to each Rating Agency and with the consent of the Enhancer
and the Holders of Notes representing not less than a majority of the aggregate
Note Balance of the Notes affected thereby. The Indenture also contains
provisions permitting the Enhancer (so long as no Enhancer Default exists) or
the Holders of Notes representing a specified percentage of the aggregate Note
Balance with the consent of the Enhancer, on behalf of all Noteholders, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Class IIX-IO Note (or any one or more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future
Holders of this Class IIX-IO Note and of any Class IIX-IO Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made hereon. The Indenture also
permits the Issuer and the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders,
but with prior written notice to each Rating Agency and the prior written
consent of the Enhancer, unless an Enhancer Default shall have occurred.
The term "Issuer" as used in this Class IIX-IO Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee, the
Enhancer and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Class IIX-IO Note and the Indenture shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws.
A-5-4
No reference herein to the Indenture and no provision of this Class
IIX-IO Note or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay interest on this Class
IIX-IO Note at the times, place and rate and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company or Xxxxx Fargo
Bank Minnesota, National Association in their respective individual capacities,
any owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of interest on this Class IIX-IO Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Holder of this Class IIX-IO Note, by its
acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, such Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Class IIX-IO Note.
A-5-5
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Class IIX-IO Note to be duly
executed.
XXXXX WHOLE LOAN HOME EQUITY TRUST 2002-A
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee
By: ___________________________________________
Authorized Signatory
Dated: ____ __________.
A-5-6
CERTIFICATE OF AUTHENTICATION
This is one of the Class IIX-IO Notes referred to in the within-
mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By: ___________________________________
Authorized Signatory
Dated: ____ __________.
A-5-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
______________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
________________________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: ________________________________ ____________________________________*/
____________________________________*/
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
A-5-8
EXHIBIT B
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
_______________________________________
_______________________________________
_______________________________________
_______________________________________
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").
(a) In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Securities were issued, the Seller hereby
certifies the following facts: Neither the Seller nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of' general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 0000 Xxx.
(b) The Buyer warrants and represents to, and covenants with, the Indenture
Trustee and the Issuer (as defined in the Indenture (the "Indenture"), dated as
of May 31, 2002, between Xxxxx Whole Loan Home Equity Trust 2002-A, as Issuer,
and Xxxxx Fargo Bank Minnesota, National Association, as Indenture Trustee),
pursuant to Section 4.02 of the Indenture, as follows:
a. The Buyer understands that the Rule 144A Securities have not
been registered under the 1933 Act or the securities laws of any
state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating
the merits and risks of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information regarding the
Rule 144A Securities that it has requested from the Seller, the
Indenture Trustee, the Owner Trustee or the Master Servicer.
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any
other similar security to, or solicited any offer to
B-1
buy or accept a transfer, pledge or other disposition of the
Rule 144A Securities, any interest in the Rule 144A Securities
or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar
security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the 1933 Act or
that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration
pursuant thereto, nor will it act, nor has it authorized or will
it authorize any person to act, in such manner with respect to
the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the 1933 Act and has completed either
of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. The Buyer is aware that the sale to it is
being made in reliance on Rule 144A. The Buyer is acquiring the
Rule 144A Securities for its own account or the accounts of
other qualified institutional buyers, understands that such Rule
144A Securities may be resold, pledged or transferred only (i)
to a person reasonably believed to be a qualified institutional
buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration
under the 1933 Act.
(c) This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
B-2
IN WITNESS WHEREOF, each of the parties has executed this document as
of the date set forth below.
_____________________________________ _________________________________________
Print Name of Seller Print Name of Buyer
By: _______________________________ By:______________________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No: _______________________________ No: ___________________________________
Date: _______________________________ Date: ___________________________________
X-0
XXXXX 0 XX XXXXXXX X
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer
owned and/or invested on a discretionary basis $_________________* in
securities (except for the excluded securities referred to below) as of the
end of the Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Buyer satisfies the criteria in the
category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization described
in Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (i) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is supervised by
the State or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (ii) has an audited net worth
of at least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (i) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a state or federal
authority having supervision over any such institutions or is a foreign
savings and loan association or equivalent institution and (ii) has an
audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934, as amended.
___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring
of risks underwritten by insurance companies and which is subject to
supervision by the insurance commissioner or a similar official or agency
of a State or territory of the United States.
Annex 1-1
___ State or Local Plan. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality of
such State or its political subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as amended.
___ Investment Adviser. The Buyer is an investment adviser registered under
the Investment Advisers Act of 1940, as amended.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958, as amended.
___ Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers Act of
1940, as amended.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (i) plans established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit
of its employees, or (ii) employee benefit plans within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as amended,
but is not a trust fund that includes as participants individual retirement
accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part
of an unsold allotment to or subscription by the Buyer, if the Buyer is a
dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Buyer, the Buyer used the cost of
such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such
aggregate amount, the Buyer may have included securities owned by
subsidiaries of the Buyer, but only if such subsidiaries are consolidated
with the Buyer in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such
securities were not included if the Buyer is a majority-owned, consolidated
subsidiary of another enterprise and the Buyer is not itself a reporting
company under the Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands
that the seller to it and other parties related to the Rule 144A Securities
are relying and will continue to rely on the statements made herein because
one or more sales to the Buyer may be in reliance on Rule 144A.
Annex 1-2
Yes _____ No ______ Will the Buyer be purchasing the Rule 144A
Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that, in
connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on
Rule 144A, the Buyer will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of
Rule 144A. In addition, the Buyer agrees that the Buyer will not purchase
securities for a third party unless the Buyer has obtained a current
representation letter from such third party or taken other appropriate
steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set
forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification is
made of any changes in the information and conclusions herein. Until such
notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
___________________________________________
Print Name of Buyer
By: _____________________________________
Name:
Title:
Date:
Annex 1-3
ANNEX 2 TO EXHIBIT B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers that are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the
Buyer is a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act of 1933, as amended ("Rule 144A")
because the Buyer is part of a Family of Investment Companies (as
defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer
is an investment company registered under the Investment Company Act of
1940, as amended, and (ii) as marked below, the Buyer alone, or the
Buyer's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year. For purposes of
determining the amount of securities owned by the Buyer or the Buyer's
Family of Investment Companies, the cost of such securities was used.
___ The Buyer owned $____________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
___ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $_____________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that
have the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the same
parent or because one investment adviser is a majority owned subsidiary
of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of
the Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase agreement
and (vi) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will
continue to rely on the statements
Annex 2-1
made herein because one or more sales to the Buyer will be in reliance
on Rule 144A. In addition, the Buyer will only purchase for the Buyer's
own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities
will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
__________________________________________
Print Name of Buyer
By: _____________________________________
Name:
Title:
Date:
IF AN ADVISER
__________________________________________
Print Name of Buyer
By: _____________________________________
Name:
Title:
Date:
Annex 2-2
EXHIBIT C
FORM OF INVESTOR REPRESENTATION LETTER
---------, ----
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxx Fargo Bank Minnesota, National Association
Xxxxx Fargo Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Administration
Re: Home Equity Loan-Backed Capped Funding Notes,
Series 2002-A
Ladies and Gentlemen:
________________ (the "Purchaser") intends to purchase $_________ Home
Equity Loan-Backed Capped Funding Notes], Series 2002-A (the "Capped Funding
Notes"), issued pursuant to the indenture dated as of May 31, 2002 (the
"Indenture"), between Xxxxx Whole Loan Home Equity Trust 2002-A, as issuer (the
"Issuer"), and Xxxxx Fargo Bank Minnesota, National Association, as indenture
trustee (the "Indenture Trustee"). Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in Appendix A to the
Indenture. The Purchaser hereby certifies, represents and warrants to, and
covenants with, the Issuer and the Indenture Trustee that:
(a) The Purchaser understands that (i) the Capped Funding Notes have
not been and will not be registered or qualified under the Securities Act of
1933, as amended (the "Act") or any state securities law, (ii) the Issuer is not
required to so register or qualify the Capped Funding Notes, (iii) the Capped
Funding Notes may be resold only if registered and qualified pursuant to the
provisions of the Act or any state securities law, or if an exemption from such
registration and qualification is available, (iv) the Indenture contains
restrictions regarding the transfer of the Capped Funding Notes and (v) the
Capped Funding Notes will bear a legend to the foregoing effect.
(b) The Purchaser is acquiring the Capped Funding Notes for its own
account for investment only and not with a view to or for sale in connection
with any distribution thereof in any manner that would violate the Act or any
applicable state securities laws.
(c) The Purchaser is (i) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the Capped
Funding Notes, such that it is capable of evaluating the merits and risks of
investment in the Capped Funding Notes, (ii) able to bear the economic risks
C-1
of such an investment and (iii) an "accredited investor" within the meaning of
Rule 501(a) promulgated pursuant to the Act.
(d) The Purchaser has been furnished with, and has had an opportunity
to review (i) a copy of the Indenture and (ii) such other information concerning
the Capped Funding Notes, the Mortgage Loans and the Issuer as has been
requested by the Purchaser from the Issuer or the Seller and is relevant to the
Purchaser's decision to purchase the Capped Funding Notes. The Purchaser has had
any questions arising from such review answered by the Issuer or the Seller to
the satisfaction of the Purchaser.
(e) The Purchaser has not and will not nor has it authorized or will
it authorize any person to (i) offer, pledge, sell, dispose of or otherwise
transfer any Note, any interest in any Note or any other similar security to any
person in any manner, (ii) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Note, any interest in any Note or any other
similar security from any person in any manner, (iii) otherwise approach or
negotiate with respect to any Note, any interest in any Note or any other
similar security with any person in any manner, (iv) make any general
solicitation by means of general advertising or in any other manner or (v) take
any other action, that (as to any of (i) through (v) above) would constitute a
distribution of any Capped Funding Note under the Act, that would render the
disposition of any Capped Funding Note a violation of Section 5 of the Act or
any state securities law, or that would require registration or qualification
pursuant thereto. The Purchaser will not sell or otherwise transfer any of the
Capped Funding Notes, except in compliance with the provisions of the Indenture.
(f) The Purchaser is not a non-United States person.
Very truly yours,
By: __________________________________
Name:
Title:
C-2
EXHIBIT D
FORM OF TRANSFEROR REPRESENTATION LETTER
---------, ----
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxx Fargo Bank Minnesota, National Association
Xxxxx Fargo Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Administration
Re: Home Equity Loan-Backed Capped Funding Notes,
Series 2002-A
Ladies and Gentlemen:
___________ (the "Purchaser") intends to purchase $________ Home Equity
Loan-Backed Capped Funding Notes, Series 2002-A (the "Notes"), issued pursuant
to an indenture dated as of May 31, 2002 (the "Indenture"), between Xxxxx Whole
Loan Home Equity Trust 2002-A, as issuer (the "Issuer"), and Xxxxx Fargo Bank
Minnesota, National Association, as indenture trustee (the "Indenture Trustee").
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in Appendix A to the Indenture. The Seller hereby
certifies, represents and warrants to, and covenants with, the Issuer and the
Indenture Trustee that:
D-1
Neither the Seller nor anyone acting on its behalf has (i) offered,
pledged, sold, disposed of or otherwise transferred any Capped Funding Note, any
interest in any Capped Funding Note or any other similar security to any person
in any manner, (ii) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Capped Funding Note, any interest in any
Capped Funding Note or any other similar security from any person in any manner,
(iii) has otherwise approached or negotiated with respect to any Capped Funding
Note, any interest in any Capped Funding Note or any other similar security with
any person in any manner, (iv) has made any general solicitation by means of
general advertising or in any other manner, or (v) has taken any other action,
that (as to any of (i) through (v) above) would constitute a distribution Capped
Funding Notes under the Securities Act of 1933, as amended (the "Act"), that
would render the disposition of any Capped Funding Note a violation of Section 5
of the Act or any state securities law, or that would require registration or
qualification pursuant thereto. The Seller will not act in any manner set forth
in the foregoing sentence with respect to any Capped Funding Note. The Seller
has not and will not sell or otherwise transfer any of the Notes, except in
compliance with the provisions of the Indenture.
Very truly yours,
By: __________________________________
Name:
Title:
D-2
EXHIBIT E
FORM OF REPRESENTATION LETTER
---------, ----
Bear Xxxxxxx Asset Backed Securities, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Wilmington Trust Company,
as Owner Trustee
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxx Fargo Bank Minnesota, National Association
as Administrator and Indenture Trustee
Xxxxx Fargo Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Bear Xxxxxxx Asset Backed Securities Inc.
Xxxxx Whole Loan Home Equity Trust 2002-A;
Non-Offered Subordinate Notes
Dear Sirs:
One or more Non-Offered Subordinate Notes (the "Transferee") intends to
acquire from ____________ (the "Seller"), issued pursuant to an indenture dated
as of May 31, 2002 (the "Indenture"), between Xxxxx Whole Loan Home Equity Trust
2002-A, as Issuer (the "Issuer") and Xxxxx Fargo Bank Minnesota, National
Association, as Indenture Trustee. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in Appendix A to the
Indenture.
The Transferee hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Owner Trustee, the Administrator and the
Indenture Trustee that:
(a) the Transferee is acquiring the Non-Offered Subordinate Note for
its own behalf and is not acting as agent or custodian for any other person or
entity in connection with such acquisition;
(b) the Transferee is not a partnership, grantor trust or S
corporation for federal income tax purposes, or, if the Transferee is a
partnership, grantor trust or S corporation for federal income tax purposes, the
Non-Offered Subordinate Notes are not more than 50% of the assets of the
partnership, grantor trust or S corporation;
(c) the Transferee will not (x) incur indebtedness secured by
Non-Offered Subordinate Notes where payments on such indebtedness bear a
relationship to payments
E-1
on either the Mortgage Loans in Group I or the Mortgage Loans as a whole within
the meaning of Treasury Regulations Section 301.7701(i)-1(f) or (y) use a
partnership, trust or other entity to indirectly achieve the result described in
clause (x); and
(d) the Transferee has been furnished with, and has had an
opportunity to review a copy of the Indenture. The Transferee agrees to be bound
by the Indenture.
Very truly yours,
By: _____________________________
Name:
Title:
E-2
EXHIBIT F
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status (the "Certificate") is delivered
pursuant to Section 4.02 of the indenture dated as of May 31, 2002 (the
"Indenture"), between Xxxxx Whole Loan Home Equity Trust 2002-A, as Issuer (the
"Issuer") and Xxxxx Fargo Bank Minnesota, National Association, as Indenture
Trustee, in connection with the acquisition of, transfer to or possession by the
undersigned, whether as beneficial owner (the "Beneficial Owner"), or nominee on
behalf of the Beneficial Owner of the Non-Offered Subordinate Note. Capitalized
terms used herein but not otherwise defined shall have the meanings ascribed
thereto in Appendix A to the Indenture.
Each holder must complete Part I, Part II (if the holder is a nominee),
and in all cases sign and otherwise complete Part III.
In addition, each holder shall submit with this Certificate an IRS Form
W-9 relating to such holder.
To confirm to the Indenture Trustee, the Owner Trustee and the Issuer
that the provisions of Sections 871, 881 or 1446 of the Internal Revenue Code
(relating to withholding tax on foreign partners) do not apply in respect of the
Non-Offered Subordinate Note held by the undersigned, the undersigned hereby
certifies:
Part I - Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is) not a non-
resident alien for purposes of U.S. income taxation;
2. My (The Beneficial Owner's) name and home
address are:
_____________________________
_____________________________; and
3. My (The Beneficial Owner's) U.S. taxpayer
identification number (Social Security Number) is ___________________.
B. Corporate, Partnership or Other Entity as Beneficial
Owner
1. _________________ (Name of the Beneficial
Owner) is not a foreign corporation, foreign partnership, foreign trust or
foreign estate (as those terms are defined in the Code and Treasury Regulations;
2. The Beneficial Owner's office address and
place of incorporation (if applicable) is _____________; and
F-1
3. The Beneficial Owner's U.S. employer
identification number is ________________.
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner, the
undersigned certifies that this Certificate has been made in reliance upon
information contained in:
___ an IRS Form W-9
___ a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trust at least 30 days prior to the date that the form
relied upon becomes obsolete, and (ii) in connection with change in Beneficial
Owners, the undersigned agrees to submit a new Certificate to the Trust promptly
after such change.
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof, agrees
to notify the Trust within 60 days of the date that the Beneficial Owner becomes
a foreign person. The undersigned understands that this Certificate may be
disclosed to the Internal Revenue Service by the Trust and any false statement
contained therein could be punishable by fines, imprisonment or both.
Under penalties of perjury, I declare that I have examined this
Certificate and to the best of my knowledge and belief it is true, correct and
complete and will further declare that I will inform the Trust of any change in
the information provided above, and, if applicable, I further declare that I
have the authority* to sign this document.
-----------------------------------------------
Name
-----------------------------------------------
Title (if applicable)
-----------------------------------------------
Signature and Date
*NOTE: If signed pursuant to a power of attorney, the power of attorney must
accompany this Certificate.
F-2
